Russia says its money laundering crackdown has halved suspicious cash operations

MOSCOW (Reuters) - Russia has considerably reduced suspicious cash operations in the last nine months, preventing 886 billion roubles ($14 billion) from being taken into the shadow economy, the head of Russia’s financial monitoring agency said on Wednesday.

FILE PHOTO: A woman holds new 200 and 2,000 rouble banknotes in a bank in Moscow, Russia November 21, 2017. REUTERS/Maxim Shemetov/File Photo

Suspicious cash withdrawals in Russia have fallen 52% in the last nine months, said Rosfinmonitoring head Yuri Chikhanchin, adding that the amount of suspicious withdrawals abroad has fallen to 522 billion roubles in the last nine months from 1.5 trillion roubles in 2016.

A money laundering scandal over suspicious payments totaling 200 billion euros ($220.4 billion), some of which came from Russia and flowed through a Danske Bank DANSKE.CO branch in Estonia, has triggered worldwide probes since the Danish bank admitted to the transactions last year.

Earlier in December, Reuters revealed the U.S. Department of Justice has stepped up its investigation into Deutsche Bank's DBKGn.DE role in the scandal.

The German lender processed the bulk of Danske’s suspicious payments, sources have previously told Reuters.

Deutsche Bank’s spokesman said earlier this month it had significantly improved controls in recent years.

Deutsche has already paid nearly $700 million in fines by New York and British regulators in a separate money laundering case involving $10 billion in so-called mirror trades from Russia, which the DoJ is still investigating.

Speaking in the Parliament, Chikhanchin did not directly mention Deutsche Bank or Danske Bank but said that via the ‘so-called Moldavian scheme, via a Latvian bank, Estonian scheme etc over 1 trillion roubles were taken out (of Russia) in 2007-2014.”

In general, he said, the withdrawal of funds from Russia abroad for suspicious operations remains a problem.

“As the monitoring data shows, these operations reached their peak in 2017,” he said. “As of today, transactions have fallen by almost half and the reduction in sums of money transferred has tripled.”

Despite these improvements however, Chikhanchin raised concerns about ever increasing shadow cash collection schemes in Russia sometimes abused by large retail chains, car dealerships, wholesale and retail markets.

Reporting by Elena Fabrichnaya; writing by Alexander Marrow; editing by Katya Golubkova and Alexandra Hudson