Informing on the results of the State Financial Monitoring Service of Ukraine work for 9 months of 2020

19.10.2020 10:00

The SFMS as a financial intelligence unit of Ukraine, takes measures aimed at counteraction to legalization (laundering) of the proceeds from crime, terrorist financing and financing of proliferation of weapon of mass destruction. In particular, for the 9 months of 2020, the SFMS has submitted 739 referrals to law enforcement authorities (of them 399 case referrals and 340 additional case referrals) in particular which have been submitted to:

- the Prosecutor’s offices of Ukraine – 56 referrals (of them 14 case referrals and 42 additional case referrals);

- the State Fiscal Service of Ukraine – 200 referrals (of them 140 case referrals and 60 additional case referrals);

- the National Police of Ukraine - 145 referrals (of them 115 case referrals and 30 additional case referrals);

- the Security Service of Ukraine - 185 referrals (of them 82 case referrals and 103 additional case referrals);

- the National Anti-Corruption Bureau of Ukraine - 132 referrals (of them 43 case referrals and 89 additional case referrals);

- the State Bureau of Investigations - 20 referrals (of them 4 case referrals and 16 additional case referrals);

- the Foreign Intelligence Service of Ukraine – 1 case referral.

In these referrals, the amount of financial transactions that may be related to legalization of funds and the commission of another criminal offence, defined by the Criminal Code of Ukraine, is UAH 60,3 billion.

The SFMS pays particular attention to investigation of money laundering from corruption, embezzlement and appropriation of state funds and property.

Thus, for the 9 months of 2020, the SFMS has submitted 157 referrals (48 case referrals and 109 additional case referrals) to law enforcement authorities, which are related to the suspicion of corruption, in particular to:

- the National Anti-Corruption Bureau of Ukraine - 132 referrals (of them 43 case referrals and 89 additional case referrals);

- the Prosecutor's offices of Ukraine – 7 referrals (of them 1 case referral and 6 additional case referrals);

- the State Fiscal Service of Ukraine – 1 additional case referral;

- the National Police of Ukraine – 1 case referral;

- the State Bureau of Investigations - 3 referrals (of them 2 case referrals and 1 additional case referral);

- the Security Service of Ukraine - 13 referrals (of them 1 case referral and 12 additional case referrals).

In these referrals, the amount of financial transactions that may be related to legalization (laundering) of funds and the commission of another criminal offense defined by the Criminal Code of Ukraine is UAH 6,4 billion.

According to the legislation of Ukraine, the SFMS (as a financial intelligence unit) together with law enforcement authorities, takes measures aimed at preventing and countering to financing of terrorist activities and separatism.

Thus, for the 9 months of 2020, the SFMS has submitted to law enforcement authorities 45 referrals (of them 25 case referrals and 20 additional case referrals) on financial transactions of persons which, according to the information received from the Security Service of Ukraine, may be involved in the financing of terrorism/separatism, conducted with the participation of persons, who publicly call for violent change or overthrow of the constitutional order or change of boundaries of the territory or state border of Ukraine, and also to whom sanctions were applied, of which:

- 10 referrals (1 case referral and 9 additional case referrals) related to the implementation of financial transactions on accounts of individuals, whose identification data coincide with the identification data of the persons included in the List of Persons, related to terrorist activity or persons to whom international sanctions were applied;

- 1 case referral related to the implementation of financial transactions by persons included in the annex 1 to the decision of the National Security and Defense Council of Ukraine dated June 21, 2018 (enacted by the Decree of the President of Ukraine dated June 21, 2018, No. 176/2018);

- 22 referrals (19 case referrals and 3 additional case referrals) related to suspicions in conducting financial transactions by persons involved in the activities of the international terrorist group "Islamic State of Iraq and Levant" (hereinafter - ISIL) or other extremist groups;

- 12 referrals (of them 4 case referrals and 8 additional case referrals) related to the suspicion of terrorism/separatism and its financing (including financing illicit armed groups in the temporarily occupied territories in the Donetsk and Luhansk oblasts).

Of the 45 submitted referrals, 8 referrals contained information on the identified relationships with the Russian Federation.

The mentioned referrals were sent to the Security Service of Ukraine.

In order to increase the effectiveness of interagency cooperation, during the reporting period, the SFMS was coordinating measures for the implementation by the relevant state authorities of the Action Plan to improve the national financial monitoring system following the results of the MONEYVAL’s 5th round of mutual evaluation of Ukraine. Thus, the SFMS has ensured compilation of the information provided by state and law enforcement authorities on the progress of the implementation of the Action Plan and sent the compiled information to the Cabinet of Ministers of Ukraine.

Within the framework of the coordination work, on June 30, 2020, the ninth meeting of the AML/CFT Council took place in the SFMS. The representatives of the main relevant state and law enforcement authorities, involved in the AML/CFT system took part in the meeting of the AML/CFT Council. The meeting discussed, in particular, the draft of the second follow-up report of Ukraine following the results of the MONEYVAL’s 5^th round of mutual evaluation.

At the same time, the draft of the second follow-up report was considered within the framework of the 2nd MONEYVAL Intersessional Consultation (May 22 - July 10, 2020), where it was approved and subsequently published.

It’s an important indicator for Ukraine to increase the rating of compliance and to achieve positive assessment of compliance with FATF Standards regarding Recommendation 5 and Recommendation 35.

International experts’ outcomes noted that Ukraine has largely implemented counter-terrorist financing provisions, as well as increased sanctions for breaches the AML/CFT legislation, having identified them as appropriate, dissuasive and deterrent.

In addition, in April 2020, the Head of the SFMS Igor Cherkaskyi has presented to the public the Public Report on the results of the SFMS’s activity for 2019.

Also, the SFMS has prepared and published the review on the use of non-profit organizations for illegal purposes.

Also, in order to increase informing the public, the updated official SFMS’s website began to operate at the address: https://fiu.gov.ua. The new SFMS’s website has a modern design and more user-friendly interface in Ukrainian and English, and provides accessibility for visually impaired users.

According to the results of the monitoring of the information content of the official websites of the executive authorities by the State Committee for television and radio broadcasting of Ukraine, the updated official website of the SFMS was recognized as the best among the central executive authorities.

During 9 months of this year, the SFMS actively facilitated the activities of the Public Council under the SFMS. Thus, during this period, two meetings of the Public Council were held in the videoconference mode.

Within the framework of legislative initiatives, in order to bring it into the line with the updated Law of Ukraine “On Preventing and Counteracting to Legalization (Laundering) of the Proceeds from Crime, Terrorist Financing and Financing the Proliferation of Weapons of Mass Destruction”, the Government of Ukraine has adopted 7 Resolutions.

In addition, the SFMS together with the state financial monitoring entities has prepared the recommendations for the reporting entities - banking and non-banking institutions on submission from 28.04.2020 to the entry into force of new bylaws, information to the SFMS on financial transactions.

At the same time, the SFMS, with the assistance of the OSCE Project Co-ordinator in Ukraine, taking into account the recommendations following the results of the MONEYVAL’s 5th round of mutual evaluation of Ukraine, in accordance with the international standards and best international practices, has prepared a Guidance on risk-based approach for the specially identified reporting entities.

This Guidance is prepared in order to provide recommendations and assistance to the specially identified reporting entities for better understanding and effective implementation of their obligations in accordance with the AML/CFT legislation.

Also, the SFMS has compiled and published on the website the international practice of determining criteria/indicators of risky transactions that may be related to legalization (laundering) of the proceeds from crime, financing of terrorism and financing of proliferation of weapons of mass destruction.

Within the framework of the methodological work, during 9 months of 2020, the SFMS representatives took part in 54 educational activities, which were attended by 4412 persons.

In order to provide educational services in the financial monitoring area during quarantine caused by acute respiratory disease COVID-19, a digital platform for distance learning was introduced in the Academy of Financial Monitoring.

The SFMS international cooperation direction has been implemented by participation, in particular:

- in the meetings of the Information Exchange Working Group of the Egmont Group of Financial Intelligence Units;

- in the working meeting with an EU-ACT representative to discuss the developments of the Manual on financial investigations, ensure the FIU capacity building and preparation of the FIU's staff training plan;

- in the meeting of evaluators following the results of the on-site visit to the Slovak Republic for discussing the draft MER within the results of the 5^th Round of mutual evaluation of Slovak Republic, which was prepared by the MONEYVAL evaluators;

- in the virtual MONEYVAL Working Meetings, which took place within the framework of the 2nd MONEYVAL Intersessional Consultation (May 22 - July 10, 2020);

- in online training on «Bases and modern effective methods of counteracting to legalization of the proceeds from crime», organized by the Law Enforcement Academy under the Prosecutor General’s Office of the Republic of Kazakhstan (September 8-10,2020);

- in the 60^th MONEYVAL Plenary meeting (September 16 - 18, 2020), on which, in particular, the follow-up reports of countries, typologies research topics and other AML/CFT initiatives were discussed.

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