EU Formally Lists Russia as a High-Risk Country for Money Laundering and Terrorist Financing

The European Commission 3rd of December 2925 has completed the process of designating Russia as a high-risk jurisdiction for money laundering and terrorist financing. What began as internal discussions and draft regulatory planning has now resulted in the European Commission formally adding Russia to the EU’s list of high-risk third countries with strategic AML/CFT deficiencies.

This decision requires all EU-regulated financial institutions to apply enhanced due diligence to any transaction connected to Russian individuals or legal entities. Banks will need to strengthen monitoring systems, verify the origins of funds more rigorously, and implement additional safeguards aimed at preventing illicit financial flows.

How the EU Reached This Decision

Concerns over Russia’s financial conduct intensified after the full-scale invasion of Ukraine. Although the Financial Action Task Force (FATF) suspended Russia’s membership in 2023, the organization has not placed Russia on its blacklist due to opposition from several member states — particularly among major BRICS economies.

Ukraine has repeatedly stressed that Russia poses a significant threat to global financial stability and maintains illicit networks linked to already-blacklisted jurisdictions. However, FATF members were unable to agree on a consensus decision.

Members of the European Parliament urged the European Commission multiple times to act independently. They argued that Russia relies on corruption schemes, sanction-evasion networks, and links between organized crime and the state to finance its military operations in Ukraine.

In mid-2025, EU officials indicated that Russia could be moved to the bloc’s grey list while the Commission carried out a broader review of high-risk jurisdictions. That review was tied to Commission Delegated Regulation (EU) 2025/1393.

Delegated Regulation 2025/1393 and the Final Review

Under Delegated Regulation 2025/1393, adopted on 8 July 2025, the Commission committed to reviewing all third countries whose FATF membership is suspended — including Russia — by the end of 2025.

As part of this process, the Commission conducted a detailed technical assessment based on established methodologies and information gathered from:

• Member States’ competent authorities
• The European External Action Service (EEAS)
• Publicly available data

The review concluded that Russia meets the criteria for inclusion on the EU’s list of high-risk third countries due to strategic deficiencies in its anti-money laundering and counter-terrorist financing systems.

Legal Basis and Consequences

Under the EU’s 4th Anti-Money Laundering Directive (4AMLD), the Commission is responsible for protecting the integrity of the European financial system. Adding Russia to the high-risk list means that EU-regulated entities must now apply enhanced vigilance to all Russian-linked transactions.

Next Steps

The delegated act will enter into force after the scrutiny period by the European Parliament and the Council, lasting one month with the possibility of a one-month extension. Once effective, the Commission will continue monitoring Russia’s progress along with all other listed countries.