Federal Law No. 115-FZ

Background

Federal Law No. 115-FZ is a Russian federal law that provides the main legal framework for countering money laundering and the financing of terrorism. In banking practice, it is often cited as the basis for customer due diligence, transaction monitoring, and restrictions on payments or transfers when a bank identifies elevated risk or needs additional information. The law affects financial institutions and other organizations covered by Russia’s anti-money-laundering rules, as well as their customers, because it determines when checks must be carried out and when operations may be delayed, limited, or refused.

The law was adopted in 2001 by the Federal Assembly of the Russian Federation and signed into force by the president as part of Russia’s creation of a modern anti-money-laundering and counter-terrorist-financing regime. It was introduced in the context of broader international efforts to strengthen financial transparency, prevent the use of banks and other institutions for illicit transfers, and align domestic regulation with global standards. Its core policy aim was to give authorities and reporting entities a legal mechanism to detect suspicious transactions and reduce the movement of criminal or terrorist funds through the financial system.

In practical terms, 115-FZ changed the status quo by making enhanced compliance procedures a routine part of banking and many other regulated financial operations. It established obligations for organizations to identify clients, monitor transactions, preserve records, and report suspicious activity to the competent authorities, while also allowing restrictions on certain operations that cannot be adequately verified. As a result, it became one of the principal legal references used by Russian banks when explaining why a customer’s transaction may be blocked, delayed, or subjected to additional scrutiny under anti-money-laundering rules.