A dog guards the gates to the Central Bank of Russia (CBR) on Neglinnaya St., Moscow.
Photo: Alexey Kudenko
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Prosecutors Spot Violations in CBR Business
Russia’s Prosecutor General Office has spotted violations in supervisory actions of the Central Bank of Russia (CBR), First Deputy Prosecutor General Alexander Buksman said during State Duma’s hearings dedicated to conformity of CBR’s supervision with the federal laws.
The probe of prosecutors, Buksman said, showed that CBR failed to duly execute the supervisory function. Most of CBR’s regulations could be interpreted in different ways, creating prerequisites for corrupt practice.
As it turned out, more than a thousand and a half of CBR officials own stocks of some credit institutions, which is “a precondition for the conflict of interest,” according to Buksman.
Buksman’s suggestion is restricting the ownership of stocks for the CBR officials, the more so that such restrictions have been introduced for certain categories of bureaucrats already. Another proposal is launching additional regulations for determining requirements for the chiefs of credit institutions.
The prosecutors think it necessary to define the scope of banking supervision to be executed by the CBR, spelling it out in the laws. Buksman also proposed to amend the Laundering Act in part of the right of credit institutions to refuse to open an account for the client.
The problem of laundering is truly acute in today’s Russia. CBR chief Sergey Ignatiev told the State Duma that the monthly laundering amounts to 50 billion rubles to 90 billion rubles in the country.
Each month, non-residents transfer from $3 billion to $4 billion from Russia, Ignatiev said. “Under my cautious estimate, the annual laundering is between 1.5 trillion rubles and 2 trillion rubles overall with the losses of the RF budget and off-budget funds standing at 500 billion rubles to 800 billion rubles a year,” the CBR chief said, adding that the number of such deals is going down.
As many as 2,000 new entities monthly emerge in Russia, Ignatiev said. Russia’s Federal Customs Service claims that half of those companies are created to evade taxes and for other illegal business.
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