The Head of the State Financial Monitoring Service of Ukraine Igor Cherkaskyi has presented the Public Report for 2019
Dear colleagues!
Let me present the results of the State Financial Monitoring Service of Ukraine (SFMS) activity for 2019.
The SFMS Report for 2019 is available on the SFMS official web site in the section “Activity” – “Activity reports” – “2019” (link).
First of all, the Report contains information on the main aspects of the regulatory provision of the Service, its organizational structure, human resources functioning, funding and the main results on the implementation of the SFMS function regarding the detection and blocking of the assets from crime or related to terrorist financing.
The important result in 2019 was the presentation of the first Follow-up Report of Ukraine following the results of the fifth round of mutual evaluation of Ukraine and its approval by the MONEYVAl Committee, which took place within the framework of the 58th MONEYVAl Plenary Meeting in Strasbourg, France.
The approval of this Report reconfirmed the recognition by the international community steps taken by our country towards increasing the effectiveness of the national financial monitoring system.
The second key event in 2019 was the adoption of the Law of Ukraine “On the prevention and counteraction to the legalization (laundering) of the proceeds from crime, terrorist financing and the financing of the proliferation of weapons of mass destruction” in December of this year by the Verkhovna Rada of Ukraine, which was developed jointly with the SFMS. The Law implements the provisions of the 4th Directive (EU) 2015/849 “On the prevention of the use of the financial system for the purposes of money laundering or terrorist financing” and partially the provisions of the Regulation (EU) 2018/847 “On information accompanying transfers of funds” as well as the provisions of the 5th Directive (EU) 2018/843.
Another key event of the last year was the presentation of the report on the second National Risk Assessment in the field of the prevention and counteraction of the legalization of criminal proceeds and terrorist financing in December.
Thus, following the results of the second National Risk Assessment, 11 threats of the AML/CFT system and 24 risks of money laundering and terrorist financing, including 6 – with high level, 16 – with medium level, 2 – with low level were identified.
It is also important to focus on the cooperation issue between the SFMS and the reporting entities, noting that the number of reports from all reporting entities over the past five years has increased from 4 million to over 11 million.
I would like to acknowledge the work of the Financial Intelligence Unit of Ukraine regarding the generalization of typological studies. In particular, in the reporting year, the Service published the typological study on “Laundering proceeds from embezzlement and property of state-owned enterprises and other entities funded by the state and municipal budgets” which seeks to study the issue of laundering of criminal proceeds related to theft and misuse of budget funds. This is an extremely relevant and sensitive topic, which the SFMS will continue to develop this year.
I will also focus on work on improving the effectiveness of cooperation with law enforcement agencies, to which the SFMS submits case referrals.
Thus, in 2019, 893 referrals were sent to law enforcement agencies. In the mentioned referrals the amount of financial transactions that may be related to the legalization of funds, as well as the commission of another crime, determined by the Criminal Code of Ukraine is UAH 92,2 billion.
In total, 4492 case referrals were sent to the law enforcement agencies from March 2014 till December 2019.
The next important aspect of the SFMS activity was the issue of ensuring the coordination of the financial monitoring system participants.
Such coordination based on the implementation of the Strategy for development of the financial monitoring system till 2020 is carried out both on information level due to the Unified state information system, and through the activity of the Governmental AML/CFT Council as well as via the cooperation with professional associations of reporting entities and public.
I emphasize that the SFMS IT system continued to be modernized in 2019. In particular, in the reporting year, the financial monitoring information system was connected to the system of the electronic interaction of the state electronic information resources called “Trembita”. The software on requests/responses to the state electronic information resources of the state authorities connected to “Trembita” were developed and put into experimental operation.
At the same time, a team formed under the SFMS leadership with the idea on “Mechanism of ultimate beneficial owners (UBO) verification”, named “DO100%VIRNO” became the winner and received the award “The Most Innovative Solution” according to the results of the pilot program “Project Laboratory for the implementation of the Association Agreement between Ukraine and EU”.
I will not neglect such important work element as methodical assistance and cooperation with the reporting entities.
I would like to highlight that 2000 specialists of the public and private sector have been trained on the basis of the State Institution of Postgraduate Education “Academy of Financial Monitoring”, belonged to the sphere of the Service in 2019.
Also, the SFMS has prepared and published the analytical review on the use of non-profit organizations for illegal purposes.
I will note the significant volume of the SFMS work on the international level. The SFMS cooperates with major international organizations, in particular: FATF, MONEYVAL, Egmont Group of financial intelligence units and others. Currently, the SFMS has concluded 79 Memoranda of Understanding with foreign financial intelligence units (FIUs). In 2019, the SFMS actively exchanged financial information with foreign FIUs.
At the conclusion, I would like to inform about future plans of the SFMS activities. Thus, an important direction will be the continuation of cooperation with MONEYVAL Committee in the framework of the coordination measures for the preparation and presentation of the second Follow-up report, scheduled during the 60th MONEYVAL Plenary meeting, as well as the implementation of the amended Basic Law legal provisions.
The main priority will be the conduction of the strategic analysis of the information on financial transactions, subject to financial monitoring, other financial transactions or information that may be related to the money laundering and terrorist financing suspicion and cooperation with law enforcement agencies.
We will continue to improve sharing information process with national financial monitoring system participants. In particular, this year, in addition to the updated the SFMS website, an electronic cabinet will be launched, which will provide electronic interaction between the SFMS and reporting entities and supervisory authorities, as well as the law enforcement agencies and other state authorities.
I want to mention that the SFMS as a financial monitoring system coordinating authority, in order to achieve efficient results in its activity, will remain open and provide constructive cooperation with state regulators, law enforcement agencies, reporting entities, and especially with institutes of civil society.
I would like to thank to every employee of the Service for the contribution to the results achieved, and to all that, through their hard work, help the SFMS in the implementation of the state policy on financial monitoring issues.
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