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    Putin praises financial watchdog for efficiency, warns against damaging businesses

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    NOVO-OGAREVO, June 1 (RIA Novosti) - President Vladimir Putin today at a meeting with the head of Russia's financial watchdog FSFM praised the agency for efficiency but warned that it should keep from damaging businesses and take responsibility for confidential information.

    "Your agency has power, and I can see that your staff works stably, coherently, and effectively," the president told Viktor Zubkov, head of FSFM, or Federal Service for Financial Monitoring. However, he pointed out, the FSFM "should not work to damage businesses; in fact, it should help businesses work normally and legally."

    Putin said he expected the FSFM to protect state interests without damaging businesses and be cautious about confidential information, calling information protection "one of the main missions of the agency."

    Zubkov reported tactical success, saying that the practice of companies' signing fake contracts for abroad services with the purpose to pull out assets from Russia was virtually stopped.

    "In 2003, there was $9 billion of such money; last year two times as little, and this year this practice has ceased," the official said.

    Acknowledging that money traffickers were seeking other channels to pull out assets, he said the FSFM was "monitoring [these channels] as well, and will act accordingly, together with the Bank of Russia, to stop these channels."

    According to Zubkov, the FSFM is engaged in 22 international investigations together with such developed states as Belgium, Germany, Switzerland, the UK, and the U.S., most of which will most certainly reach courtroom.

    He also praised Russian banks for conscientious enforcement of money-laundering legislation.

    "The number of banks' reports [about suspicious transactions] has doubled in the past year. Today we receive 10,000 to 12,000 reports every day," he said, "The federal database includes four million reports, most of which are really highly suspicious. This is a good base for current financial inquiries."

    According to Zubkov, his staff forwarded 859 such reports to the police this year to prevent frauds worth in total 120 billion rubles ($4.27 billion, or �3.41 billion - Ed.).

    "Year on year, this is two times as many reports, and three times as much money," Zubkov said.

    The FSFM is responsible in Russia for what Financial Action Task Force (FATF) does internationally.

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