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The South Asian Times | সাউথ এশিয়ান টাইমস

Russia pushes India to avert global financial isolation

SAT Desk

Published: 02:47, 24 May 2023

Russia pushes India to avert global financial isolation

The Kremlin is pressuring governments including India behind the scenes, threatening to upend defence and energy deals unless they help block expected moves aimed at turning Russia into a financial pariah state over its invasion of Ukraine. Documents seen by Bloomberg and accounts by officials in NATO countries familiar with the situation offer a rare insight into how Russia is targeting commercial partners ahead of a June meeting of the global watchdog against money-laundering. 
The Financial Action Task Force, an inter-governmental organisation that sets standards for combating dirty money, suspended Russia from membership in February and Ukraine is pushing for the body to impose further restrictions by adding Moscow to its "black list" or "gray list." 
Blacklisting by the FATF would put Putin's government in the same company as North Korea, Iran and Myanmar, the only countries with that designation, and plunge his economy even deeper into isolation over the war. If the measure comes to pass, member states as well as banks, investment houses and payment-processing companies would be obliged to conduct enhanced due diligence and in the most serious cases take counter-measures to protect the international financial system.
Many countries in the so-called Global South including India have stayed mostly neutral over Russia's aggression against Ukraine. That balancing act was on display at a Group of Seven summit in Japan this past weekend, where Indian Prime Minister Narendra Modi and Ukrainian President Volodymyr Zelenskyy met in person for the first time since the war began. 
While there's no indication of any immediate shift in India's position, the meeting likely made uncomfortable viewing for Russian President Vladimir Putin, whose own travels have been restricted since the invasion and an arrest warrant for alleged war crimes issued in March by the International Criminal Court.
Zelenskyy, by contrast, spent the weekend at the G-7 with several of the leaders that Putin has sought to woo as Russian allies, and that is far more significant than any tensions on the sidelines of the summit, a senior UK official said.
A Russian state agency earlier this month warned counterparts in India of a cascade of unpredictable and negative consequences for cooperation in defense, energy and transportation if the FATF adopts new measures against Russia, according to the officials, who asked not be identified because the issue is sensitive. 
The agency urged India in May to "vocally" oppose any moves by Ukraine to add Russia to the "black list" of high-risk countries at the meeting, and said even being placed on the lesser "gray list" would cause difficulties.
Bloomberg is unable to verify whether India responded to the warnings. The Russian and Indian governments didn't respond to requests to comment. 
In one document, the Russian agency called the FATF's unprecedented suspension of the country politicised and illegal, while making no reference to the fact that it was in response to Putin's invasion of Ukraine.