When it comes to the United States' response to the Russian annexation of Crimea, there's a gap between what's being said and what's being done.
The rhetoric has been decisive and certain. The President told an audience in Brussels that "the world knows [the annexation] is wrong."
The actions, on the other hand, have been more subtle: Western leaders have imposed sanctions on Bank Rossiya and Mr. Timchenko, but have yet to strike a completely decisive financial blow against the Russian elite.
Going forward, however, that could change. One possible key to adding some teeth to these sanctions involves the Financial Action Task Force (FATF).
FATF is a global organization that sets guidelines for AML compliance and counter-terrorist financing. When Russia became a member over a decade ago, it inherently agreed to comply with any associated legislation. That meant opening itself up to scrutiny from other FATF members, specifically to ensure that it is passing and enforcing laws that meet relevant AML/CTF standards.
It is this concession that could form the backbone of a harsher policy.
If the United States government were stricter about applying KYC requirements to its own financial institutions, it would send a clear message to a Russian elite used to relying on American institutions to stash untaxed funds. An article on Business Insider described the practice:
"Members of the Russian elite are renowned for laundering ill-gotten gains, often in the U.S.," explains contributor Ethan Burger. "Many have suggested that the dramatic increase in the prices of luxury real estate in London, New York, Los Angeles, Miami, Sydney and elsewhere is due to money-laundering by Russian and Eurasian nationals."
Ultimately, greater domestic enforcement would alleviate the need for any further countermeasures: it would be completely in line with Russia's current international obligations, while at the same time serving as an undeniable signal that the American position on Crimea is backed by more than eloquence.
