Countering Illicit Transfer of Funds Abroad Improving the System of Countering Money Laundering

Every country has to deal with the problem of managing and monitoring cross-border cash flows. The purpose of the study is to analyse tendencies in cross-border transactions, determine potential risks arising from the on-going introduction of digital technologies and innovative financial flows and propose measures to counter illicit transfer of funds abroad. The study focuses on net outward transfers of financial resources by the private sector and natural persons. The dynamics of funds being transferred from the Russian Federation in the last decade in absolute and relative terms are alarming for two reasons. First of all, the amount of money leaving Russia remains significant. When comparing the total net outward transfers made by the private sector to GDP values, it could be seen that they showed the highest numbers during difficult phases of the financial crisis. In 2008 and 2014, net outward transfers were estimated at 7.5% of Russia's GDP. Moreover, during the most favourable periods for the economy, their number increases, hereby approaching the decreasing number of net outward transfers by the private sector. This pattern proves the significance of such cash flows for the Russian economy. Secondly, when dealing with the problem of large amounts of funds being transferred from the country, it becomes crucial to identify not only their sources, but also their recipients and destination. In the study, tendencies in the transactions marked suspicious by primary financial monitoring bodies were described and analysed according to the imposed restrictive measures. Finally, it was decided that additional restrictive measures and improved schemes of countering illicit transfer of funds from Russia are needed now that the financial support to affected industries is allocated from the state budget, and more digital technologies are used in providing cash flows.