Russia delays dirty money debate

The second reading of the bill in the State Duma, lower house of parliament will now take place in July

MOSCOW, Russia (CNN) -- Russian deputies postponed a debate on Wednesday aimed at cracking down on international money laundering.

The crucial second reading of the bill in the State Duma lower house of parliament was pushed back to July 4 after lawmakers expressed concern the bill might lead to the government's "total control" over future financial transactions.

The bill was initially pushed into parliament by the government in fear of a sanctions threat by the international crime fighting body, the Financial Action Task Force (FATF) .

FATF, set up by the G7 group of the world's richest nations to monitor and eliminate dirty money, threatened Moscow on Friday with a September 30 deadline to improve their money laundering problem or face punishment.

The bill would give authorities the power to monitor individuals spending large sums of money, and oversee financial transactions over a certain threshold.

Expected to win acceptance, the bill was delayed due to complaints by centrist and liberal members that it lacked details of how the monitoring of groups and individuals' large spending would be carried out.

The bill also allows officials to exchange information on suspected money laundering operations with law enforcement agencies abroad.

Finance Minister Alexei Kudrin conceded to the chamber that "some time was needed" to clear up contradictions in the legislation.

The debate was expected to focus on who would be authorised to monitor how individuals and companies spend their money, Vladimir Shokhn, head of the Duma's committee on credit organisations and financial markets, said.

"The new body should not be a regular law-and-order institution, but a financial and economic structure gathering information," Shokhin told NTV television.

Shokhin added that the central bank or a special centre under supervision of the Interior Ministry could carry out such duties during the transitional period.

Law enforcement agents insist that the new monitoring body be given extensive powers to investigate the origin of suspect money.

The bill meets most requirements of FATF and the agency has supported some of the amendments ahead of the second reading, said Alexander Zhukov, head of the Duma budget committee.

President Vladimir Putin has declared a crusade against money laundering and capital flight, which he estimates at $20 billion a year, though government and central bank figures vary between $10-25 billion a year.

The Philippines and the Pacific Island of Nauru are the only other nations bound by the same threat by FATF. Both have promised to take immediate action to meet the deadline.