On 3 December 2025, the European Commission designated the russian federation as a high-risk third country with strategic deficiencies in its anti-money laundering and counter-terrorist financing (“AML/CFT”) frameworks.
AVELLUM acted as legal counsel to the working group led by the Ministry of Finance of Ukraine, helping to bring the numerous violations and threats posed by the russian federation to the attention of the European Union and the international community, and to advocate for the adoption of restrictive measures against russia.
Under Directive (EU) 2015/849 of the European Parliament and of the Council, the European Commission is empowered to identify high-risk third countries, taking into account strategic deficiencies in the AML/CFT spheres.
On 8 July 2025, the European Commission adopted Delegated Regulation (EU) 2025/1393, which required the Commission to complete, by the end of 2025, a review of third countries that are not listed by the Financial Action Task Force (“FATF”) but whose FATF membership is suspended. Following this review, the Commission concluded that russia has strategic deficiencies in its AML/CFT framework and should therefore be designated as a high-risk third country.
This regulation will enter into force after the European Parliament and the Council complete their scrutiny and raise no objections within one month, a period which may be extended by an additional month.
Following this decision, EU entities subject to AML obligations must apply enhanced due diligence measures to transactions involving this jurisdiction. Financial institutions will be required to strengthen vigilance and adopt further de-risking measures where necessary.
This step will significantly impede russia’s ability to conduct illicit financial operations within European markets and will help disrupt channels used to evade sanctions and finance acts of aggression.
This decision by the European Commission recognises the significant shortcomings of russia’s AML/CFT system. It sends a clear message to the international community and to businesses that any dealings with russia entail an elevated level of risk. As a result, businesses and financial institutions must carefully identify and evaluate these risks and determine whether the current conditions render continued operations in or with russia unacceptably high-risk.
The AVELLUM team was led by partner Vadim Medvedev, supported by senior associate Kristina Mysenko and associate Oleksandr Stadnyk.
