From June 23 to 28, 2024, the State Financial Monitoring Service of Ukraine (under the quota of the Council of Europe MONEYVAL Committee and with the support of the EU Anti-Corruption Initiative in Ukraine (EUACI) project), took part in the regular FATF Plenary Meeting and meetings of the relevant Working Groups in Singapore (Republic of Singapore).

During the FATF Plenary Week, a number of issues related to global measures taken by the FATF and its members in the field of combating money laundering, terrorist financing and proliferation financing (AML/CFT/CPF) were considered.
It was important for Ukraine to consider further sanctions against Russia for its violation of the FATF Standards, which generate daily growing AML/CFT/CPF threats and risks.

According to the FATF official information following the Plenary Meeting, the suspension of Russia's membership in the FATF remains in effect. Following the statements issued since  March  2022, the FATF reiterates that all jurisdictions should be vigilant to current and emerging risks from the circumvention of measures taken against the Russian Federation in order to protect the international financial system.

We remind you that following the Plenary Meeting in February of this year, the FATF adopted the relevant Statement, according to which, FATF members note with concern the potential risks to the international financial system, including growing financial connectivity of Russia with countries subject to FATF countermeasures, risks of proliferation financing, and malicious cyber activities and ransomware attacks. Due to the gravity of these risks, many FATF members are taking proactive measures to protect themselves and the global financial system.

«The FATF calls upon all jurisdictions to continue to remain vigilant due to the above-mentioned risks. As they have done since the Russian Federation commenced its war of aggression, FATF members will continue to monitor the situation and the risks posed to the global financial system. As a suspended member of the FATF, the Russian Federation still remains accountable for its obligation to implement the FATF Standards.
Two years after the Russian Federation’s unprovoked war against Ukraine, the FATF recalls its Statement of 24 February 2023».

One of the important issues considered by the FATF was the growing risks posed by the Democratic People's Republic of Korea (DPRK). The actions of the DPRK (which has a strategic military and economic partnership with the Russian Federation) have direct signs of violations of UN Security Council Resolutions and, therefore, the relevant FATF Recommendations. In this regard, the FATF has issued an updated statement in which, given the increased risks of financing the proliferation of weapons of mass destruction (WMD), it reiterated its call for countermeasures against high-risk jurisdictions (DPRK, Iran). The statement, in particular, states:

   - The FATF has continually reiterated since 2011 the need for all countries to robustly implement the targeted financial sanctions in accordance with UNSC Resolutions and apply the following countermeasures to protect their financial systems from the money laundering, terrorist financing, and proliferation financing threats emanating from DPRK:

          - terminate correspondent relationships with DPRK banks;
          - close any subsidiaries or branches of DPRK banks in their countries;
          - limit business relationships & financial transactions with DPRK persons;

   - DPRK has increased connectivity with the international financial system, which raises proliferation financing (PF) risks. This requires greater vigilance and renewed implementation and enforcement of these countermeasures against the DPRK;
   - The ability to obtain reliable and credible information to support the assessment of PF risks relating to the DPRK is hampered by the recent termination of the 1718 Committee Panel of Experts mandate. Thus, the FATF will monitor the measures to comply with DPRK targeted financial sanctions and the implementation of countermeasures against DPRK.

The full text of the statement is available via the link.

Thus, the FATF statement explicitly mentions (a) the DPRK's increased connection to the international financial system, which increases the risks of PF, and (b) the recent termination of the mandate of the UN SC Committee 1718 Pannel of Experts, which makes it difficult to obtain reliable and credible information to support the assessment of PF risks related to the DPRK. These two aspects are directly related to the RF, taking into account the numerous evidences of growing cooperation between the RF and the DPRK, as well as the RF's veto of the relevant UN Security Council Resolution on the DPRK.

In view of the aforementioned, the State Financial Monitoring Service of Ukraine calls on reporting entities to pay attention to and strictly implement the FATF Statement by complying with the relevant provisions of the Law of Ukraine «On Prevention and Counteraction to Legalization (Laundering) of Criminal Proceeds, Terrorist Financing and Financing of Proliferation of Weapons of Mass Destruction».

In the framework of the current FATF meeting, the State Financial Monitoring Service of Ukraine held a significant number of bilateral meetings with delegations of FATF member countries and other participants of the Plenary where further joint actions were discussed to strengthen the international financial system, including against risks posed by the RF. After the FATF Plenary Meeting, the Head of the State Financial Monitoring Service of Ukraine Igor Cherkaskyi emphasized:

«Ukraine continues to be an active contributor to the FATF meetings, and our contacts with delegations are intensifying. It is worth noting the high technical level of discussions on the risks posed by Russia to the Global Network against Financing Proliferation, Terrorist Financing and Money Laundering. This work will be continued.

Russia, as a suspended member of the FATF, should not evade responsibility for its actions under the FATF Mandate. Our team is working on further measures and I thank all colleagues at the national and international level who support these efforts.»

The State Financial Monitoring Service of Ukraine will continue to take measures aimed at addressing the risks and threats posed by the RF in the area of  money laundering, terrorist financing and proliferation financing, as well as to impose sanctions on the aggressor country.