Informing on the results of the SFMS work for 2020
The SFMS as a financial intelligence unit of Ukraine, takes measures aimed at counteracting to legalization (laundering) of the proceeds from crime, terrorist financing and financing of proliferation of weapon of mass destruction.
In particular, for 2020, the SFMS has submitted 1036 referrals to the law enforcement authorities (of them 607 case referrals and 429 additional case referrals), which have been submitted for consideration to:
? the Prosecutor’s offices of Ukraine – 62 referrals (of them 14 case referrals and 48 additional case referrals);
? the State Fiscal Service of Ukraine – 292 referrals (of them 214 case referrals and 78 additional case referrals);
? the National Police of Ukraine – 233 referrals (of them 198 case referrals and 35 additional case referrals);
? the Security Service of Ukraine – 252 referrals (of them 119 case referrals and 133 additional case referrals);
? the National Anti-Corruption Bureau of Ukraine – 168 referrals (of them 54 case referrals and 114 additional case referrals);
? the State Bureau of Investigations – 28 referrals (of them 7 case referrals and 21 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 76,2 billion.
The SFMS pays particular attention to investigation of money laundering from corruption, embezzlement and appropriation of state funds and property.
Thus, for 2020, the SFMS has submitted 204 referrals (of them 61 case referrals and 143 additional case referrals) to the law enforcement authorities, which are related to the suspicion of corruption, in particular to:
- the National Anti-Corruption Bureau of Ukraine – 168 referrals (of them 54 case referrals and 114 additional case referrals);
- the Prosecutor's offices of Ukraine – 11 referrals (of them 1 case referral and 10 additional case referrals);
- the State Fiscal Service of Ukraine – 1 additional case referral;
- the National Police of Ukraine – 2 case referrals (of them 1 case referral and 1 additional case referral);
- the State Bureau of Investigations – 5 referrals (of them 3 case referrals and 2 additional case referrals);
- the Security Service of Ukraine – 17 referrals (of them 2 case referrals and 15 additional case referrals).
In these referrals, the amount of financial transactions that may be related to legalization of funds and the commission of another criminal offense defined by the Criminal Code of Ukraine is UAH 8,1 billion.
According to the legislation of Ukraine, the SFMS (as a financial intelligence unit) together with the law enforcement authorities, takes measures aimed at preventing and countering to financing of terrorist activities and separatism.
Thus, for 2020, the SFMS has submitted to the law enforcement authorities 75 referrals (of them 52 case referrals and 23 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 and 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 (of them 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;
? 2 referrals (of them 1 case referral and 1 additional case referral), related to the implementation of financial transactions by individuals 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);
? 36 referrals (of them 32 case referrals and 4 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;
? 27 referrals (of them 18 case referrals and 9 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 75 submitted referrals, 10 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 took coordination 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 the 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. It was discussed, in particular the draft of the second follow-up report of Ukraine following the results of the MONEYVAL’s 5th round of mutual evaluation; the results of the typological study conducted by the SFMS in 2019.
At the same time, the draft of the second follow-up report, following the results of the MONEYVAL’s 5th round of mutual evaluation was considered within the framework of the 2nd MONEYVAL Intersessional Consultation (May 22 - July 10, 2020), where it was approved and subsequently published.
Raising the ratings of compliance and achieving positive assessment of compliance with FATF Standards regarding Recommendation 5 and Recommendation 35 are important indicators for Ukraine.
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.
Also, on November 20, 2020, the 10th meeting of the abovementioned Council took place in the video conference format. It was discussed the results and deficiencies of the second follow-up report of Ukraine; considered the results of meetings and perspective issues for discussion at the Working Groups meetings and heard the representatives of state financial monitoring entities regarding their steps taken to bring regulations in the AML/CFT area in line with the updated Basic Law.
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 published the review on the use of non-profit organizations for illegal purposes.
Additionally, 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 languages, and provides accessibility for visually impaired users.
According to the results of the monitoring the state authorities official websites information made 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 state authorities.
During 2020, the SFMS has actively facilitated in the activities of the Public Council under the SFMS. Thus, during this period, three meetings of the Public Council have been held in the video-conference format.
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 10 Resolutions.
At the initiative of the SFMS and the Ministry of Finance of Ukraine, the President of Ukraine has signed the Decree No. 523 dated November 28, 2020 «On the Day of Financial Monitoring Worker», which determines the significant contribution of employees of the national financial monitoring system in establishing positive status of Ukraine at the international level.
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 the information on financial transactions to the SFMS from April 28, 2020 to the entry into force of new by-laws.
At the same time, 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 the SFMS, with the assistance of the OSCE Project Coordinator in Ukraine has prepared a Guidance on risk-based approach for DNFBPs.
This Guidance is prepared in order to provide recommendations and assistance to the DNFBPs for better understanding and effective implementation of their obligations in accordance with the AML/CFT legislation.
Also, taking into account the requirements of EU Directives 2015/849 and 2018/843 the SFMS with the assistance of the OSCE Project Coordinator in Ukraine has prepared Guidelines on Disclosure of Information on Ultimate Beneficiary Owners.
These Guidelines relate to disclosure of information on the Ultimate Beneficial Owners of legal entities, individuals-entrepreneurs, public formations, trusts and other (similar to trusts) legal arrangements and prepared to outline issues, the solution of which will be a prerequisite for building the effective identification mechanism regarding validation and verification of data on Ultimate Beneficial Owners in Ukraine.
Moreover, the SFMS has compiled and published on its website the international practice of determining criteria/indicators of risk 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.
In addition, following the results of 2020, the SFMS has prepared typological research on Money laundering from tax crimes.
The typological research is aimed at analysing existing schemes of money laundering from tax crimes and analysis of the ways to implement them, as well as assisting participants of the AML/CFT system in their detection.
Within the framework of the methodological work, during 2020 the SFMS representatives have taken part in 84 educational activities, which were attended by 5700 persons.
It should be noted that during December 10 - 11, 2020, an integrated panel discussion on «Financial Monitoring 2020», organized by the SFMS under the auspices of the OSCE Project Coordinator took place in Lviv.
During the discussion, a special attention was focused on the issues that will help to understand the current risks of money laundering and terrorist financing in various sectors of the economy. A special emphasis during the discussion was made on the sharing experience regarding the best practices of anti-legalization containment, as well as the peculiarities of the implementation of international provisions into the national legislation based on the leading countries examples.
In order to provide educational services in the financial monitoring area during quarantine caused by COVID-19, a digital platform for distance learning was introduced in the Academy of Financial Monitoring. It should be noted, that in the end of 2020, the Academy celebrated 16 years since its creation.
The SFMS international cooperation direction has been implemented by participation:
? in the meetings of the Information Exchange Working Group of the Egmont Group of Financial Intelligence Units (FIUs) and in the working meeting with an EU-ACT representative;
? in the meeting of MONEYVAL evaluators following the results of the on-site visit to the Slovak Republic;
? in the MONEYVAL working meetings, which was held within the framework of the 2nd MONEYVAL Intersessional Consultation (May 22 - July 10, 2020);
? in the 60th MONEYVAL Plenary meeting, on which, were discussed in particular, the follow-up reports of countries, typologies research topics and other AML/CFT initiatives and in the other international events.
____________________________