Russia's anti-money laundering regime rarely stands still. In 2025, the country's financial intelligence authorities issued revised guidance under the existing AML (anti-money laundering) legislative regime. The revisions significantly tighten beneficial owner disclosure requirements, extend KYC (know your customer) obligations to a broader set of non-bank entities, and introduce shorter verification timelines for correspondent banking relationships and credit facility origination. Companies that fail to adapt before the effective date risk account suspension, regulatory censure, and reputational damage that is difficult to reverse.
Russia's updated AML legislation, effective from the second quarter of 2025, requires all covered entities. including banks, payment service providers, leasing companies. Additionally. Certain professional service firms. to re-verify beneficial owner information and refresh KYC files within 90 days of the regulatory change entering into force. Entities maintaining correspondent banking arrangements must complete enhanced due diligence on foreign counterparties within the same window. Non-compliance exposes covered organisations to administrative penalties and potential suspension of bank account opening privileges.
This alert explains which business categories are affected, sets out the threshold criteria that trigger enhanced obligations, and identifies the immediate actions international companies operating in Russia should take now.
What changed and when it takes effect
Russia's financial monitoring legislation has long imposed AML and KYC obligations on credit institutions and a defined list of non-credit financial organisations. The 2025 amendments expand the list of covered entities in two important ways.
First, the threshold for mandatory beneficial owner identification has been lowered. Previously, entities were required to identify and record any individual holding a direct or indirect ownership interest above a stated percentage. The revised rules reduce that threshold, bringing a wider class of corporate structures – including layered holding vehicles and nominee arrangements – squarely within the disclosure regime.
Second, the revised rules introduce a new obligation for entities that maintain correspondent banking relationships with foreign financial institutions. Those entities must now conduct enhanced due diligence on their foreign counterparties at least annually. Previously, periodic review was required only upon trigger events. The annual cycle becomes mandatory regardless of whether a triggering event has occurred.
A third change affects credit facility origination. Lenders and leasing companies must now complete full KYC verification – including beneficial owner mapping – before disbursing funds, not within a grace period after disbursement. This shift from post-disbursement to pre-disbursement verification materially shortens the operational window for deal teams.
The effective date for the primary amendments is 1 April 2025. Transitional provisions allow covered entities that are already in an active review cycle up to 90 days from that date to bring legacy files into conformity. New relationships established after 1 April 2025 carry no transitional relief and must comply immediately.
Who is affected – threshold criteria and business categories
The following categories of entities are subject to the updated requirements. Each triggers a distinct set of obligations.
- Credit institutions – banks and non-bank credit organisations licensed by the central bank. Full KYC, beneficial owner verification, and enhanced correspondent banking due diligence all apply.
- Payment service providers and electronic money operators – subject to streamlined KYC for low-value transactions but full beneficial owner disclosure for business customers above defined transaction thresholds.
- Leasing companies and microfinance organisations – now required to complete pre-disbursement KYC. The prior grace period has been removed.
- Professional service providers – accountants, auditors, notaries, and legal advisers who conduct certain financial transactions on behalf of clients are brought within the regime where they hold or manage client funds.
- Foreign-controlled entities – Russian subsidiaries of international groups face an additional layer of scrutiny. Regulators now require that beneficial owner disclosures reflect the full upstream ownership chain, including ultimate beneficial owners located outside Russia.
The threshold criteria that determine whether enhanced obligations apply include: the nature of the customer relationship (corporate versus individual), the transaction volume over a rolling 12-month period. The presence of foreign ownership in the customer's structure. Additionally, whether the counterparty is domiciled in a jurisdiction listed on Russia's elevated-risk country register.
International companies should note that operating through a Russian subsidiary does not insulate the group from these requirements. The subsidiary is the covered entity, and its compliance failures can disrupt bank account opening, credit facility access, and correspondent banking access for the entire Russian operation.
To discuss whether your Russian operations fall within the affected categories, contact us at info@ferrazwhitmore.com.
Immediate actions for international companies
Companies with Russian operations should treat the 90-day transitional window as a firm deadline, not a buffer. The following actions are required.
1. Audit existing KYC files. Review all customer and counterparty files held by your Russian entity. Identify records where beneficial owner information is incomplete, outdated, or based on the prior higher threshold. These files require immediate refresh.
2. Map the full beneficial ownership chain. Under the revised rules, a beneficial owner disclosure that stops at an intermediate holding company will be treated as non-compliant. The chain must be traced to the natural person who ultimately exercises control or holds the economic interest. For international groups with complex structures, this mapping exercise can take several weeks – begin it immediately.
3. Review correspondent banking arrangements. If your Russian entity maintains relationships with foreign financial institutions, schedule the annual enhanced due diligence review now. Do not wait for the anniversary date of the relationship. Completing the review proactively demonstrates good faith to regulators.
4. Adjust credit facility and leasing workflows. Deal teams originating new credit facilities or leasing arrangements in Russia must treat KYC completion as a condition precedent to disbursement. Amend internal approval checklists and mandate sign-off from the compliance function before funds are released.
5. Engage local AML counsel without delay. The revised rules contain interpretive ambiguities – particularly around the definition of beneficial owner for multi-tier foreign holding structures. A lawyer in Russia with current AML practice experience can identify where your structure creates exposure and advise on the most defensible disclosure approach. Engaging a law firm in Russia experienced in banking regulation reduces the risk of a compliance gap that only becomes visible during a regulatory inspection.
For a preliminary review of your Russian compliance position under the updated AML rules, our CIS banking and finance team is available at info@ferrazwhitmore.com. For context on parallel developments in the region, see our alert on AML updates in Kazakhstan, where similar beneficial owner disclosure reforms have been introduced on a comparable timeline.
About Ferraz & Whitmore
Ferraz & Whitmore is an international law firm based in Lisbon, advising business clients across 46 jurisdictions. Our banking and finance practice covers AML compliance, KYC structuring, correspondent banking due diligence, and credit facility documentation across CIS markets, including Russia. We support international companies, financial institutions, and in-house legal teams who need practical, results-oriented counsel on Russian banking regulation and cross-border financial compliance. The firm's banking and finance practice in Russia is supported by practitioners with direct experience before Russian financial monitoring authorities. Additionally. Our broader capital markets practice in Russia covers the intersection of AML obligations with securities issuance and investment structuring. As an international law firm advising on Russia, Ferraz & Whitmore combines Portuguese and English legal tradition with on-the-ground CIS regulatory knowledge. To discuss your AML compliance position in Russia, contact us at info@ferrazwhitmore.com.
Disclaimer: This publication is provided for informational purposes only and does not constitute legal advice. The information herein should not be relied upon as a substitute for professional legal counsel tailored to your specific circumstances. Ferraz & Whitmore assumes no liability for actions taken or not taken based on the contents of this material. For advice regarding your particular situation, please contact info@ferrazwhitmore.com.