One More Step Towards FATF (in the Fight Against Money Launderers)

Опубликовано: 11.08.2020

FATF (Financial Action Task Force) is the group for the development of financial measures to combat money laundering and terrorist financing and one of the most influential intergovernmental bodies, whose members are 34 countries and 2 regional organizations. Its goal is to develop and improve policies at both the national and international levels to combat money laundering and terrorist financing.

Ukraine already has a certain history of relations with the FATF, or rather, its Lists. Thus, Ukraine was on the FATF black list in 2002-2004, then went into the gray list and again ended up in the black one, from which it was finally excluded on October 29, 2011. Over the past few years, Ukraine has moved to more active steps to adapt its domestic legislation to the FATF standards, so as not to end up at the pillory again, and the new Law “On Preventing and Countering the Legalization (Laundering) of Criminally Obtained Incomes, Financing of Terrorism and Financing the Proliferation of Mass destruction” (Law on Financial Monitoring) is one of the eloquent steps in this direction.

High risks of money laundering through illegal economic activity and corruption still lead our state to the lower positions of international ratings. For example, according to research by Transparency International for 2019, Ukraine was ranked 126th out of 180 in terms of the corruption perception index. Some of the recommendations of Transparency International, not implemented by Ukraine, relate to strengthening control over the financing of political parties, as well as ensuring the effective operation of the register of beneficiaries. Regarding the second point, we remember that in 2020 Ukraine moved to active steps to create a register of beneficiaries and, according to the April Law on Counteraction, it is mandatory for companies to submit the ownership structure, both when registering new entities and operating ones – within three months from the date of approval of a special form. The form has not yet been normatively approved, but judging by public statements, this should happen in the near future. Enterprises should not miss this moment, as there is a fine for non-filing.

The Law also provides for a norm (Article 19), according to which, by January 31 of each year, the subjects of state financial monitoring, law enforcement and judicial authorities are obliged to provide the State Financial Monitoring Service with relevant reports for the previous year, on the basis of which the National Anti-Money Laundering Risk Assessment will be carried out. The procedure for both the assessment and the formation of complex administrative reporting was approved by the Government on August 5, 2020.

What information will these financial monitoring entities submit based on the results of 2020?

  1. Law enforcement authorities are obliged to include in the report the information on:

– the number of cases investigated and the number of persons against whom criminal proceedings have been initiated in this area;

– the results of the investigation of criminal offenses;

– the number of requests for mutual legal assistance and the results of their consideration;

– the number of other international inquiries;

– the value of frozen, seized or confiscated assets.

Judicial reporting should include the information on:

– the number of criminal cases (proceedings) regarding crimes in the field of prevention and counteraction submitted to the court;

– the number of criminal cases considered by courts;

– the number of persons convicted of criminal offenses;

– the sum of fines imposed by the court and the amount of property confiscations applied by the court for crimes in the field of prevention and counteraction.

  1. Reporting of the subjects of state financial monitoring (of the National Bank, the Ministry of Finance, the Ministry of Justice, the Ministry of Finance, the National Securities and Stock Market Commission) should include the information on:

– the number of subjects of primary financial monitoring that are registered or have licenses and/or other documents giving the right to carry out activities, with the implementation of which a person acquires the status of a subject of primary financial monitoring, in the manner prescribed by law;

– the number of inspections carried out by the subjects of primary financial monitoring;

– the number of violations identified and the applied measures of influence.

The summarized complex administrative reporting will be available on the official website of the State Financial Monitoring Service until February 20 of each year.



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