Informing on the results of the State Financial Monitoring Service of Ukraine work for the 1st half of 2021
The SFMS, as the financial intelligence unit of Ukraine, takes measures to combat the legalization (laundering) of the proceeds from crime, terrorist financing and financing of proliferation of weapons of mass destruction.
In particular, for the 1st half of 2021, the SFMS has submitted 568 referrals (of them 364 case referrals and 204 additional case referrals) to law enforcement authorities which were sent for consideration to:
- the prosecutor’s offices - 31 referrals (of them 25 case referrals and 6 additional case referrals);
- the State Fiscal Service of Ukraine - 151 referrals (of them 91 case referrals and 60 additional case referrals);
- the National Police of Ukraine - 188 referrals (of them 166 case referrals and 22 additional case referrals);
- the Security Service of Ukraine - 125 referrals (of them 61 case referrals and 64 additional case referrals);
- the National Anti-Corruption Bureau of Ukraine - 56 referrals (of them 14 case referrals and 42 additional case referrals);
- the State Bureau of Investigations of Ukraine - 17 referrals (of them 7 case referrals and 10 additional case referrals).
In these referrals, the amount of financial transactions that may be related to the legalization of proceeds and the commission of another criminal offence, determined by the Criminal Code of Ukraine, is UAH 50,6 billion.
The SFMS pays particular attention to investigation into facts of money laundering of corrupt acts, embezzlement and appropriation of state funds and property.
Thus, for the 1st half of 2021, the SFMS has submitted 85 such referrals (18 case referrals and 67 additional case referrals) to law enforcement authorities, which are related to suspicion of corruption, in particular to:
- the National Anti-Corruption Bureau of Ukraine - 56 referrals (of them 14 case referrals and 42 additional case referrals);
- the State Bureau of Investigations of Ukraine - 9 referrals (of them 3 case referrals and 6 additional case referrals);
- the Prosecutor General’s Office – 3 referrals (of them 1 case referral and 2 additional case referrals);
- the National Police - 2 additional case referrals
- the Security Service of Ukraine - 15 additional case referrals.
In these referrals, the amount of suspicious financial transactions that may be related to the legalization (laundering) of proceeds or the commission of another criminal offense, determined by the Criminal Code of Ukraine, is UAH 4,4 billion.
Also, the SFMS on a regular basis pays special attention to the analysis of suspicious transactions that have signs of tax crimes, including using the mechanism of "counter-flows" and "twists".
Thus, for the 1st half of 2021, the SFMS has submitted to law enforcement agencies 51 referrals (of them 26 case referrals and 25 additional case referrals) which are related to the mechanism of "counter-flows", in particular to:
- the State Fiscal Service of Ukraine – 24 referrals;
- the Security Service of Ukraine – 26 referrals;
- the State Bureau of Investigations of Ukraine – 1 referral.
The total amount of "converted" funds on these referrals is UAH 7,6 billion.
In the course of these financial investigations, the SFMS suspended (blocked) funds in the amount of UAH 68,05 million.
Pursuant to the legislation of Ukraine, the SFMS (as the financial intelligence unit of Ukraine) in conjunction with law enforcement agencies takes measures aimed at preventing and countering the financing of terrorist activities and separatism.
Thus, for the 1st half of 2021, the SFMS has submitted to law enforcement agencies 57 referrals (of them 43 case referrals and 14 additional case referrals) regarding financial transactions of persons which, according to law enforcement agencies information, 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, as well as to whom international sanctions have been applied, including:
- 14 referrals (6 case referrals and 8 additional case referrals) related to financial transactions with the participation of 7 individuals and 60 legal entities included in the annexes to Decisions of the National Security and Defense Council of Ukraine, enacted by Decrees of the President of Ukraine of 21.06.2018 No. 176/2018, of 14.12.2020 No. 546-27t (as amended by Decision of the National Security and Defense Council of Ukraine of 28.01.2021, enacted by Decree of the President of Ukraine of 28.01.2021 No. 29/2021), of 02.02.2021 No. 43/2021 and of 19.02.2021 No. 64/2021, of 03.04.2021 No. 140/2021, від 21.04.2021 No. 169/2021 та від 21.05.2021 No. 203/2021;
- 17 case referrals that contained information about 69 individuals suspected of involvement in criminal offenses - mercenary, encroachment on the territorial integrity and inviolability of Ukraine and the creation of paramilitary or armed groups unforeseen by the legislation;
- 7 case referrals related to suspicions of conducting financial transactions involving 11 individuals, allegedly involved in the financing of international terrorist organizations and/or extremist groups;
- 19 referrals (of them 13 case referrals and 6 additional case referrals) which contained information on financial transactions of 60 individuals and 22 legal entities suspected of terrorism/separatism and its financing (including financing of illegal armed groups in the temporarily occupied territories in Donetsk and Luhansk regions).
14 referrals of 57 submitted referrals contained information on identified relationships with the Russian Federation.
Mentioned referrals were sent to the Security Service of Ukraine and the Prosecutor General’s Office.
In order to increase the effectiveness of interagency cooperation, during the reporting period, the SFMS has been taking coordinating measures for the implementation by the relevant state authorities of the Action Plan to improve the national financial monitoring system based on the MONEYVAL 5th Round of Mutual Evaluation of Ukraine (hereinafter – the Action Plan). Thus, the SFMS has ensured a generalization of information provided by state and law enforcement authorities on the progress of the implementation of the Action Plan in 2020, and sent generalized information to the Cabinet of Ministers of Ukraine.
Further, in February 2021, the completed questionnaire on the Third Enhanced Follow-up Report following the results of the MONEYVAL 5th Round of Evaluation of Ukraine was sent to MONEYVAL. The Report is planned to be considered via “written procedure” this year.
At the same time, in June 2021, the eleventh meeting of the Government Council on Prevention and Counteraction took place in a videoconference format. The Council discussed the implementation of the Action Plan to improve the national financial monitoring system based on the MONEYVAL 5th Round of Mutual Evaluation of Ukraine, in particular, concerning the need to amend the Criminal and Criminal Procedural Codes of Ukraine.
Moreover, in the framework of interagency cooperation, the SFMS in January signed an Agreement on interagency cooperation between the SFMS and the Commission for Regulation of Gambling and Lotteries. The purpose of this Agreement is to establish cooperation and information exchange to prevent and combat the legalization (laundering) of the proceeds from crime, terrorist financing and financing of proliferation of weapons of mass destruction in the area of organization and conducting of gambling and lotteries.
In addition, in order to enhance the public outreach about the national financial monitoring system in March 2021, the SFMS Report on the activities for 2020 was posted on the official website of the SFMS, and in April 2021 the Head of the SFMS Igor Cherkaskyi presented Public report on the results of the SFMS's activities in 2020 to the public.
In order to sum up the results after the entry into force of the updated Basic Law (April 28, 2020), the Head of the SFMS Igor Cherkaskyi on April 28, 2021, gave an extended interview to the information portal “Minfin”. During the interview, Igor Cherkaskyi provided answers to current anti-legalization topics of interest to the public and the professional community.
Within the framework of legislative initiatives of the SFMS, the Government of Ukraine approved the Main Directions of the Development of the Prevention and Counteraction to Legalization (Laundering) of the Proceeds of Crime, Terrorist Financing and Financing of Proliferation of Weapons of Mass Destruction System in Ukraine for up to 2023 and Action Plan for Their Implementation (Order of the Cabinet of Ministers of Ukraine No. 435-r of 12.05.2021). This plan is designed to implement the provisions of the updated Basic Law and international standards in the area of prevention and counteraction.
Furthermore, the SFMS in the 1st half of 2021 actively contributed to the activities of the Public Council under the SFMS. Thus, during this period, two meetings of the Public Council were conducted via videoconference, where Council members were informed about the implementation of the policy in the area of prevention and counteraction by the SFMS.
At the same time, within the framework of methodological work the SFMS’s experts:
- in conjunction with state regulators, have prepared recommendations for the reporting entities - non-banking institutions to submit the information on the termination of separate units from January 1, 2021 and clarifications on e-cabinets of the financial monitoring system;
- clarification for banking institutions on electronic interaction on financial monitoring issues, including L-type files (file-list).
- based on the results of the study of the risks of using non-profit organizations, a review on the topic “Using non-profit organizations for illegal purposes” has been elaborated;
- taking into account the requirements of EU Directives 2015/843 and 2018/843 based on the results of generalization of the national legislation, best international practices, case studies and unresolved issues, Guidelines “Management of business relations with politically significant persons” have been developed and published.
Also, as part of the educational work, during the 1st half of 2021, representatives of the SFMS took part in 43 educational events, which were attended by 2326 persons.
Regarding international cooperation, from April 26 to 30, 2021, representatives of Ukraine under chairmanship of the SFMS participated in the 61st MONEYVAL Plenary and Working Group on Evaluations meetings, which, due to the restrictions caused by the COVID-19 pandemic, were held in a "hybrid" mode.
In addition, with the assistance and consent of the Committee of the Council of Europe MONEYVAL within the period from June 22 to 25, 2021 representatives of the SFMS participated in the FATF Plenary, which took place online. The Plenary addressed a number of issues related to the global measures taken by the FATF and its members in the area of prevention and counteraction.
Moreover, within the period from June 28 to July 9, 2021, representatives of the SFMS participated in the meetings of the Working Groups and the 27th Plenary Meeting of the Egmont Group of Financial Intelligence Units, which, due to restrictions caused by the COVID-19 pandemic, were held virtually.
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