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Special Bulletin on Russia-linked money laundering activities

Reference number: SIRA-2023-009
May 2023

Under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act, the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) produces strategic intelligence on the nature and scope of money laundering and terrorist activity financing. This Special Bulletin provides background and updated information relevant to Russia-linked money laundering. It aims to inform reporting entities on the characteristics of completed or attempted financial transactions related to the laundering of the proceeds of crime. It updates and replaces the previous bulletin on Russia-linked money laundering related to sanctions evasion published in March 2022.

The content of this Bulletin can be leveraged by reporting entities to identify and assess money laundering and terrorist activity financing risks, apply controls and measures to mitigate these risks, and effectively detect and report suspicious transactions to FINTRAC.


On February 24, 2022, Russian forces initiated an unjustified and illegal invasion of Ukraine. Russian attacks over the last year have caused widespread devastation of Ukrainian infrastructure and property, and unnecessary deaths of Ukrainian nationals, including high numbers of civilians.

Canada, in coordination with its partners and allies, has imposed a significant number of new sanctions on Russia-linked individuals and entities in response to Russia’s egregious violation of international law and the rules-based international order.

Russia-based individuals and entities sanctioned by the Government of Canada, particularly those whose financial assets have been acquired through corruption and other illegal activity, are likely to deploy established money laundering techniques and channels to evade sanctions and to use alternative financial channels to move financial assets outside of Russia should traditional methods be unavailable to them.

In addition to sanctions measures imposed under the Special Economic Measures Act (SEMA), Canada also advocated strongly for the European Union to remove Russian banks from the Society for Worldwide Interbank Financial Telecommunications (SWIFT), a payment-messaging system used by more than 11,000 financial institutions around the world. EightFootnote * Russian banks have subsequently been removed from the system.

Russia has attempted to circumvent these measures by promoting the use of its home-grown alternative to SWIFT, the System for Transfer of Financial Messages (Система передачи финансовых сообщений) better known as SPFS, which was developed in 2014 after Russia’s invasion of Crimea. Russia’s central bank claimed in September 2022 that 50 financial institutions had joined SPFS in the previous year, taking the total number of members to 440.

Financial transactions in the context of Canada’s sanctions landscape

The Special Economic Measures (Russia) Regulations consist of a dealings ban on listed individuals and entities, as well as prohibitions on specified goods and financial, technical or other services related to those goods. The regulations also impose restrictions on certain sectors, such as the financial, defence and energy sectors, and impose broad prohibitions on ships associated with Russia or Russian companies from docking in or passing through Canada.

In most cases, the dealings ban restricts persons in Canada and Canadians outside Canada from engaging in activity related to any property of listed persons or providing financial or related services to them. It is important to note that a number of Russian financial institutions are listed in these regulations and it is therefore prohibited for Canadians to engage in certain transactions (including payments and fund transfers) with these listed entities.

To determine whether an individual or entity is a listed person, the Consolidated Canadian Autonomous Sanctions List is available for ease of reference. The consolidated list includes individuals and entities subject to specific sanctions regulations made under the SEMA and the Justice for Victims of Corrupt Foreign Officials Act (JVCFOA). While listings under the JVCFOA are not made in reference to a specific country, a number of Russian foreign nationals are listed, which may have implications for certain activities or transactions. However, please note that the inclusion of the names on this list is for administrative purposes only. For accurate information on which provisions from a given sanctions regulation apply to a specific individual or entity, reference must be made to the relevant regulations in which that individual or entity is listed.

Global Affairs Canada is responsible for the administration of Canada’s sanctions under the JVCFOA, SEMA and United Nations Act. The Royal Canadian Mounted Police (RCMP) and the Canada Border Services Agency enforce these statutes and associated regulations. All Canadians must disclose to the RCMP the existence of property that is owned or controlled by a designated person, as well as any proposed transactions related that property. Voluntary and mandatory disclosures, particularly from Canadian financial institutions, enhance the effectiveness of Canadian sanctions.

Characteristics associated with a higher risk of exposure to Russia-linked money laundering activities

FINTRAC analysis has highlighted the continued use of intermediary jurisdictions to set up complex networks of shell and front companies (often registered to addresses in offshore financial centres or tax havens) and non-resident bank accounts (generally located in secrecy jurisdictions or those known to cater to Russian-speaking customers) as a key feature of Russia-linked money laundering methodologies.

Alternative financial channels—among them, cryptocurrencies and other emerging financial technologies—have also played an important role in Russia-linked illicit financial flows related to the proceeds of crime, albeit on a lesser scale.

Opaque corporate structures, high-risk jurisdictions and non-resident banking

Russian entities and individuals seeking to hide the origin or ownership of the proceeds of crime are known to use complex networks of corporate structures in various jurisdictions to mask their involvement in the international financial system. Such structures include shell and front companies designed to obscure ownership, sources of funds, and the countries involved in the financial transactions. Russia-linked money laundering is also known to use trade-based money laundering and other techniques to move, hide and use assets around the world.

Individuals seeking to launder the proceeds of crime and corruption, particularly those subject to sanctions by Canada or its allies, may also increasingly attempt to hide the ultimate beneficial ownership of assets by transferring legal ownership to family members, close associates and other nominees.

Potential characteristics of suspicious transactions include:

Virtual currencies and other alternative financial channels

Alternative financial channels—including cryptocurrencies and other emerging financial technologies—may play a role in Russia-linked illicit financial flows related to the proceeds of crime. Criminals and criminal organizations may use cryptocurrencies as a financial vehicle to obfuscate the source of the proceeds of crime in order to integrate them into the traditional financial system.

Potential characteristics associated with suspicious Russia-linked virtual currency transactions may include:

Open source analysis of cryptocurrency transactions indicates that Russian entities and individuals represent a disproportionate share of cryptocurrency-enabled crime, including online fraud and ransomware.

Potential characteristics associated with transactions involving the proceeds of ransomware and other cyber-enabled crime may include:

Financial transactions related to sanctions evasion

In addition to anti-money laundering and anti-terrorist financing obligations, reporting entities may have other legal obligations under the Special Economic Measures Act and associated regulations with respect to monitoring and reporting of relevant property and activity in connection with sanctioned individuals and entities. Reporting entities are encouraged to take steps to know their obligations with respect to Canada’s sanctions regime and visit the Canadian Sanctions website for more information.

While sanctions evasion may not constitute a money laundering offence in and of itself, financial transactions with Russia or with entities and jurisdictions engaged in financial activity involving Russia may be at a higher risk of being related to the laundering of the proceeds of crime. As such, reporting entities should undertake greater due diligence associated with such transactions.

Please note that sanctions are subject to change without notice. Additional information is also available on the Sanctions – Russian invasion of Ukraine webpage.

Reporting to FINTRAC

Reporting entities must submit a suspicious transaction report to FINTRAC if there are reasonable grounds to suspect that a financial transaction that occurs or is attempted in the course of their activities is related to the commission or the attempted commission of an ML/TF offence.

For guidance on submitting suspicious transaction reports to FINTRAC, see Reporting suspicious transactions to FINTRAC.


FINTRAC Special Bulletins provide information related to new, emerging and particularly topical methods of money laundering and terrorist activity financing. However, these Bulletins should not be considered legal advice. Please refer to the Proceeds of Crime (Money Laundering) and Terrorist Financing Act and its associated Regulations for the full description of the reporting entities’ obligations.

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