G20 push for faster payments risks weakening Russia sanctions, experts warn

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A G20-led push to speed up international payments risks enabling financial crime and hindering the enforcement of sanctions against Russia and other states, industry experts have warned.

The plans to make digital payment systems more efficient by 2027 do not take into account their increasing vulnerability to criminal networks and the heightened money laundering risks posed by a surge in war-related sanctions, according to the Future of Financial Intelligence Sharing, a UK-based research programme.

“A key institutional failure at the G20 level is the lack of responsibility among payments reform policymakers to consider fraud prevention and financial crime security,” said Nick Maxwell, head of FFIS, which on Sunday published a report on the issues.

The report urged increased public and private sector collaboration to “hardwire” financial crime prevention systems into cross-border payment infrastructure and harness national data to spot money laundering networks.

A failure to address these concerns could have “wide-ranging negative impacts [for] consumer financial safety, law enforcement effectiveness against organised crime and national security in terms of sanctions implementation”, he added.

The value of cross-border transactions, including wholesale payments between financial institutions, retail transfers and remittances, is forecast to hit $250tn by 2027 from $150tn a decade earlier, according to the Bank of England.

The Financial Stability Board, an international body that monitors and makes recommendations about the global financial system, has developed a road map for enhancing cross-border payments. The G20-led initiative is supported by the World Bank, the IMF and about 40 central banks.

The FSB published an update to the plan in October, focusing on practical measures that will enable G20 countries to fulfil a 2020…