Russia seeks India’s help to avoid global financial isolation | News from India

NEW DELHI/MOSCOW: Kremlin is lobbying governments, including India, behind the scenes, threatening to overturn defense and energy deals unless they help block expected moves to turn Russia into a financial state pariah for his invasion of the Ukraine.
Documents viewed by Bloomberg and accounts by NATO country officials familiar with the situation offer a rare insight into how Russia is targeting trading partners ahead of the June meeting of the global anti-money laundering watchdog money.
The Financial Action Task Force, an intergovernmental organization that sets the standards for fighting dirty money, suspended Russia from membership in February and Ukraine is pushing for the body to impose further restrictions by adding Moscow to its “blacklist ” or “grey list”. ”
FATF blacklisting would put Putin’s government in the same company as North Korea, Iran and Myanmar, the only countries with such a designation, and plunge its economy into even deeper isolation due to war. If the measure were to pass, member states as well as banks, investment firms and payment processing companies would be obliged to conduct enhanced due diligence and in the most serious cases adopt countermeasures to protect the international financial system.
Many countries in the so-called global South, including India, have remained largely neutral to Russia’s aggression against Ukraine. This balancing act was on display at the Group of Seven summit in Japan last weekend, where Prime Minister Narendra Modi and the Ukrainian president Volodymyr Zelensky met in person for the first time since the beginning of the war.

While there is no indication of an immediate change in India’s stance, the meeting likely made uncomfortable viewing Russian President Vladimir Putin, whose travel has been limited by the invasion and a warrant for his arrest for alleged war crimes issued in March by the International Criminal Court.
Zelenskyy, by contrast, spent the weekend at the G7 with many of the leaders Putin has been trying to woo as Russian allies, and that is far more significant than any tension on the sidelines of the summit, a senior British official said.
A Russian state agency earlier this month warned counterparts in India of a cascade of unpredictable and negative consequences for defence, energy and transport cooperation if the FATF takes new measures against Russia, according to officials, who said asked not to be identified because the matter is sensitive.
The agency urged India in May to “vocally” oppose any move by Ukraine to add Russia to the “blacklist” of high-risk countries at the meeting, and said adding it to the ” gray list” minor would cause difficulty.
Bloomberg is unable to verify whether India has responded to the warnings. The Russian and Indian governments did not respond to requests for comment.
In a document, the Russian agency called the FATF’s unprecedented suspension of the country politicized and illegal, without making any reference to whether it was a response to Putin’s invasion of Ukraine.
While the United States and its allies have already turned Russia into the most sanctioned country in the world for war, the Kremlin has cushioned the blow to its economy by strengthening ties with China, India and other countries that have remained neutral.
Blacklisting by the FATF, however, would make it extremely difficult for these countries to continue doing business with Russia and would intensify the economic pain for the Kremlin.
Sectors identified by Russia as at risk are particularly sensitive in the strategic partnership with India. Russia is India’s largest arms supplier, although defense supplies have stalled for lack of a payment mechanism that doesn’t violate US sanctions.
Another 23 countries are on the FATF’s “grey list”, including Albania, Turkey, South Africa and the United Arab Emirates. An International Monetary Fund report in 2021 found that being graylisted, which carries stricter monitoring requirements, results in a “large and statistically significant reduction in capital inflows”.
Senior Russian officials have corresponded with counterparts from partner governments asking them to oppose such proposals, said other people familiar with the situation, who asked not to be identified as the issue is sensitive.
Russia has warned that being on the “grey list” would make it difficult to fulfill commitments on arms supplies and other projects to India, an official familiar with the situation said. Moscow has repeatedly appealed to Delhi for assistance in watchdog meetings following the invasion, the official said.
Russia noted in a document in early May that India held “special credibility” within the FATF and it was regrettable that Delhi did not speak out to oppose Russia’s suspension.
The Paris-based FATF said Moscow remained “accountable” for implementing the organization’s standards following its suspension and that the body would consider whether to lift or amend restrictions at each plenary meeting.
Ukraine has welcomed the suspension and said it will continue to push for Russia’s inclusion in the blacklist. The Russian ambassador to the United States called it a dangerous step that could lead to the destruction of the global architecture to counter terrorist financing.


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