Informing on the results of the State Financial Monitoring Service of Ukraine work for 2018

17.01.2019 12:15

The State Financial Monitoring Service of Ukraine (SFMS) as the Financial Intelligence Unit of Ukraine takes enhanced measures of a practical nature to counteract the legalization (laundering) of the proceeds from crime, financing of terrorism and financing of the proliferation of weapons of mass destruction. In particular, for 2018 the SFMS prepared 934 cases (466 case referrals and 468additional case referrals), which were submitted to:

? Prosecution authorities 159 cases (40 case referrals and 119 additional case referrals);

? State Fiscal Service of Ukraine 190 cases (157 case referrals and 33additional case referrals);

? Internal Affairs Authorities of Ukraine 106 cases (85 case referrals and 21 additional case referrals);

? Security Service of Ukraine 178 cases (97 case referrals and 81 additional case referrals);

? National Anti-Corruption Bureau of Ukraine 300 cases (86 case referrals and 214 additional case referrals);

? intelligence authorities 1 case referral.

It should be noted that in comparison with the previous period in 2018, the number of submitted case referrals by the SFMS to the law enforcement authorities increased by 31.2%.

In the mentioned materials, the amount of financial transactions that may be related to legalization (laundering) of the proceeds from crime and commitment of other criminal offenses, defined by the Criminal Code of Ukraine, amounting to UAH 347.4 billion.

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

Thus, for 2018 the SFMS has submitted 420 such cases to the law enforcement authorities (128 case referrals and 292 additional case referrals), in particular to:

? National Anti-Corruption Bureau of Ukraine - 300 cases;

? Prosecution authorities of Ukraine - 110 cases;

? Security Service of Ukraine - 10 cases.

In addition, the SFMS continues active work on the investigation of money laundering facts from corruption, theft and appropriation of state funds and property, including by Viktor Yanukovych, his relatives, other officials and their related persons.

The specified work is carried out within the framework of the continuation of in-depth measures taken in 2014-2017 on the blocking, arrest and confiscation of the state funds equivalent to USD 1,5 billion.

Thus, for 2018 the SFMS has submitted 108 cases to the law enforcement authorities (39 case referrals and 69 additional case referrals) regarding financial transactions carried out with the participation of former high-level officials, in particular to:

? National Anti-Corruption Bureau of Ukraine - 1 case;

? Prosecution authorities of Ukraine - 105 cases;

? Security Service of Ukraine - 2 cases.

According to the legislation of Ukraine, the SFMS, together with law enforcement authorities, takes measures aimed at preventing and countering on the financing of terrorist activities, separatism.

In 2018, the SFMS submitted 100 casesto the law-enforcement authorities (44 case referrals and 56additional case referrals) related to financial transactions of persons who may be involved in terrorism, separatism and/or persons who publicly call for the violent change or overthrow of the constitutional order or the change of borders of the territory or state border of Ukraine, including following:

? 43 cases (7 case referrals and 36 additional case referrals), related to the financial transactions conducted by natural persons whose identification data coincides with the identification data of persons included in the List;

? 8 cases (6 case referrals and 2 additional case referrals), related to the financial transactions conducted by the persons, included to the Attachments of the National Security and Defense Council of Ukraine Resolution of 28.04.2017 (implemented by the Decrees of the President of Ukraine of 15.05.2017 №133/2017) and of 21.06.2018 (implemented by the Decrees of the President of Ukraine of 21.06.2018 № 176/2018);

? 15 cases (14 case referrals and 1 additional case referral), related to suspicions in conducting financial transactions by persons involved in the activities of the international terrorist group "Islamic State of Iraq and Levant" or other extremist groups;

? 33 cases (16 case referrals and 17 additional case referrals), related to suspicions in financing of illegal armed formations of occupied regions of Donetsk and Luhansk oblasts;

? 1 case (1 case referral) related to suspicions in violation of sanction regime regarding North Korea.

Materials are sent to the Security Service of Ukraine and the Prosecutor General’s Office of Ukraine.

In 2018, the SFMS in 51 cases (materials) blocked funds regarding financial transactions of persons who, according to information from law enforcement authorities, may be involved in the terrorism financing, separatism, for a total amount equivalent to UAH 100,9 million.

During 2018, in order to increase the efficiency of interagency cooperation, the main focus was on the implementation of the Action Plan for the improvement of the national financial monitoring system, based on the results of the MONEYVAL 5th round of mutual evaluation of Ukraine by the Committee of Experts of the Council of Europe (MONEYVAL). The specified Action Plan was developed by the SFMS in cooperation with other interested bodies and in May, 2018, it was supported by the Cabinet of Ministers of Ukraine.

In addition, during the reporting period, the SFMS organized the fourth, fifth, and sixth sessions of the Council on the prevention and counteraction to the legalization (laundering) of the proceeds from crime, terrorist financing and financing of proliferation of weapons of mass destruction.

Also in the reporting period, the SFMS conducted 51 coordination meetings with interested authorities related to the issues of prevention and counteraction to the legalization (laundering) of the proceeds from crime and terrorist financing, and it was concluded an Agreement on cooperation with the State Bureau of Investigations as well as Protocol on information exchange was signed with the National Securities and Stock Market Commission.

Regarding the methodological provision of the financial monitoring system, the SFMS enhanced measures for interaction with reporting entities, in particular:

? representatives of the SFMS took part in 94 educational events held for more than 3200 people – national financial monitoring system participants;

? 3 meetings of the Working Group on problematic issues of the reporting entities - banking and non-banking institutions was held.

As part of the coordination of cooperation with the public, the SFMS has organized 5 meetings of the Public Council of the SFMS, as well as signed a framework Memorandum on cooperation with the Notary Chamber of Ukraine.

In the framework of execution the Decree of the Cabinet of Ministers of Ukraine of 30.08.2017 № 601-р «On realization of the strategy on the development of the system on prevention and counteraction to legalization (laundering) of the proceeds from crime, terrorist financing and financing of the proliferation of weapons of mass destruction for the period up to 2020» general information was provided to the Cabinet of Ministers of Ukraine on the realization of Action plan for 2017-2019 with the realization of the mentioned Strategy.

In December, 2018, within the framework of legislative initiatives, the Government registered the Government draft law «On prevention and counteraction to legalization (laundering) of the proceeds from crime, terrorist financing and financing proliferation of weapons of mass destruction» (registration # 9417), participation in the preparation of which was taken by the SFMS.

The draft law was developed to implement the provisions of the Fourth EU Directive 2015/849 «On the prevention of the use of the financial system for the purpose of money laundering and terrorist financing" and the provisions of EU Regulation 2015/847 "On information accompanying transfers of funds».

In the context of preparing for conducting the second round of the National Risk Assessment this year, the SFMS prepared and presented an updated National Risk Assessment Methodology on money laundering and terrorism financing in Ukraine, as well as sectoral risk assessment of using the real estate market for legalization (laundering) of proceeds from crime and terrorist financing was conducted.

Using own practice and practice of other participants of the national financial monitoring system, as well as international experience, in December 2018, the SFMS published a typological study on: «The risks of using entities with an opaque ownership structure in money laundering schemes».

In the context of international cooperation, during 2018, the representatives of the SFMS effectively participated in the 56th and 57th MONEYVAL Plenary Sessions of the Committee of Experts and in the Plenary Meetings of the Working Groups of the Egmont Group of Financial intelligence units.

In particular, at the 25th Plenary Meeting of the Egmont Group of Financial Intelligence Units, held in September 2018, in Sydney, Australia the State Financial Monitoring Service of Ukraine investigation won the «Best Egmont Case Award (BECA)» contest.

Press-service of the SFMS
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www.sdfm.gov.ua