The Financial Action Task Force (FATF) will decide on October 22 whether to add Russia to its blacklist. Publicly, the FATF has stated that it considers Russia’s aggression unacceptable, but in practice, downgrading Russia’s rating requires a consensus of all members. The organization includes about 40 countries, including those that have abandoned sanctions against Russia – China, India, Brazil, South Africa and Saudi Arabia. Therefore, it is unknown whether a consensus will be reached.
Russia’s exclusion by the FATF will lead to: a significant increase in the cost of doing business with Russia, in particular “legal logistics”; restrictions on Russia’s trade with the world – it would be more challenging to settle export-import transactions; an outflow of foreign direct investment; and a reduction in sanctions evasion opportunities.
“Being blacklisted or graylisted by the FATF can seriously damage a country’s financial reputation and is considered economically devastating for most countries,” Politico noted.