№ 7/2021

Fìnansi Ukr. 2021 (7): 108–126https://doi.org/10.33763/finukr2021.07.108

FINANCIAL MONITORING

KUZMINSKA Olga ¹, ABESINOVA Оlena ²

¹SESE “The Academy of Financial Management”
OrcID ID : https://orcid.org/0000-0001-6625-7528
²SHEE “Kyiv National Economic University named after Vadym Hetman”
OrcID ID : https://orcid.org/0000-0002-7124-0007

Improvement of regulatory and legal support of financial monitoring in Ukraine

In the publication according to the results of the analysis of the main international and national regulations of financial monitoring on the basis of the historical approach the directions of improvement of normative – legal maintenance in the field of prevention and counteraction to legalization of illegal incomes in Ukraine are outlined. The peculiarities of the main historical stages of the formation of the financial intelligence unit in Ukraine – the national center for analysis of information on suspicious transactions and other information on money laundering, terrorist financing, and financing the proliferation of weapons of mass destruction are discloses. The issues of implementation of the provisions of international normative acts regulating the sphere of counteraction to legalization (laundering) of proceeds from crime, financing of terrorism and financing of proliferation of weapons of mass destruction at the international level are highlighted, in particular, the standards developed by the Financial Action Task Force on Money Laundering (FATF) and the Directives of the European Parliament and the Council of the EU, United Nations documents, international conventions ratified by Ukraine. Considerable attention is paid to the need for further harmonization of national and international legislation in the field of financial monitoring. It is proposed to take into account the conceptual principles of behavioral economics when improving the regulatory and legal support of financial monitoring (bylaws), in particular regarding the application of risk-oriented approach when analyzing and identifying suspicious financial transactions and identifying the ultimate beneficial owner of the client. The necessity of scientific research in the researched field in the traditional professional directions: “Money, finance and credit” and “Administrative law and process; finance law; information
law”, and in related scientific specialties: “Economics and management of the national economy” (in the field of “Economic security of the national economy”), and “Accounting, analysis and audit (by type of economic activity)” (in the areas of “Organization of auditing: the specifics of formation and the functioning of audit services”, and “Accounting and analytical operations, their standardization and unification”) is substantiated.

Keywords:normative-legal provision, financial monitoring, UN Conventions, EU Directives, FATF standards, Laws of Ukraine, Orders of the Cabinet of Ministers of Ukraine, the sphere of prevention and counteraction to legalization of illegal incomes

JEL: F33, F35, H 56, F15, O57

Kuzminska O. . Improvement of regulatory and legal support of financial monitoring in Ukraine / O. Kuzminska , О. Abesinova // Фінанси України. - 2021. - № 7. - C. 108-126.

Article original in Ukrainian (pp. 108 - 126)

Download

Downloads :334

1. Arkusha, L. I. (2010). Legalization (laundering) of proceeds from organized crime: characterization, detection, investigation. Odesa: Legal literature [in Ukrainian].
2. Bysaga, K. (2016). National system of prevention and counteraction to legalization (laundering) of proceeds from crime, financing of terrorism and financing of WMD proliferation of Ukraine: stages of formation and development. State and regions. Series: Public Administration, 1, 37–49 [in Ukrainian].
3. Dudorov, O. O., & Tertychenko, T. M. (2015). Counteraction to laundering of “dirty”property: European standards and the Criminal code of Ukraine. Kyiv: Vaite [in Ukrainian].
4. Iefymenko, T. I., Gasanov, S. S., Korystin, O. Ie. et al. (2013). Development of the national financial monitoring system. Kyiv: SESE “The Academy of Financial Management” [in Ukrainian].
5. Komisarov, O. H., Skrypka, O. Yu., & Sobakar, A. O. (2015). Primary financial monitoring in the field of prevention and counteraction to legalization (laundering) of proceeds from crime and terrorist financing. Dnipropetrovsk: Dnipropetrovsk State University of Internal Affairs [in Ukrainian].
6. Bazyliuk, A. V. (2002). The role of legislation in shaping the implementation of money laundering schemes and the motivation to withdraw capital abroad. Economic Annals-XXI, 5, 11–13 [in Ukrainian].
7. Bilous, V. T., Popovych, V. M., & Popovych, M. V. (2001). Organizational and legal support of the fight against money laundering of illegal origin. Irpin: SFS Academy [in Ukrainian].
8. Burdonova, O. Yu. (2011). Anti-legalization legislation: international initiatives and national experience. The South Ukrainian Law Journal, 3, 137–140 [in Ukrainian].
9. Butkevych, S. A. (2010). Financial monitoring in Ukraine (organizational and legal aspects). Simferopol: KRP Krymnavchpedderzhvydav Publishing House [in Ukrainian].
10. Haevskyi, I. M. (2014). The new law on the fight against money laundering: an analysis of the nature and purpose of legal regulation. Public Law Magazine, 4, 93–98 [in Ukrainian].
11. Dmytrenko, E. (2014). Improvement of existing legislation as a way of combatingmoney laundering risks. RFI Scientific Papers, 3, 50–56 [in Ukrainian].
12. Krulko, I. I. (2011). Evolution of legal bases of adaptation of the legislation of Ukraine to the EU legislation. Our Law, 4 (2), 172–175 [in Ukrainian].
13. Melnychuk, M. V. (2011). Normative-legal regulation of the sphere of counteraction to legalization of incomes. Bulletin of commercial litigation, 6, 91–96 [in Ukrainian].
14. Poltoratskyi, O. B. (2013). Criminal-legal characteristics of legalization (laundering) of proceeds from crime. Luhansk: Promdruk [in Ukrainian].
15. Vovchak, O., & Yendorenko, L. (2021). Institutional and legal aspects of establishment and development of the financial monitoring system in Ukraine. Bulletin of the University of Banking, 1 (40), 19–24 [in Ukrainian].
16. Kuzmenko, O., Boiko, A., Yarovenko, H., & Dotsenko, T. (2020). Scenarios of reformation of the national financial monitoring system. Ekonomika ta derzhava, 1, 9–15 [in Ukrainian]. doi.org/10.32702/2306-6806.2020.1.9
17. Melnuk, O. P., & Bozhuk, I. I. (2020). Tendency in the development of financial monitoring in Ukraine and world practice. Legal Novels, 10, 200–206 [in Ukrainian].doi.org/10.32847/ln.2020.10.28
18. FATF. (2012). International Standards for Combating Money Laundering and Terrorist Financing and the Proliferation of Weapons of Mass Destruction (FATF Recommendations). Retrieved from fiu.gov.ua/assets/userfiles/200/%D0%9C%D1%96%D0%B6% D0%BD%D0%B0%D1%80%D0%BE%D0%B4%D0%BD%D1%96%20%D1%81%D1%82%D0%B0%D0%BD%D0%B4%D0%B0%D1%80%D1%82%D0%B8/FATF%20Recommendations_UKR_17_12_2018.pdf [in Ukrainian].
19. Council of Europe. (2005, May 16). Convention on Laundering, Search, Seizure and Confiscation of the Proceeds from Crime and on the Financing of Terrorism. Retrieved from zakon.rada.gov.ua/laws/show/994_948#Text [in Ukrainian].
20. Verkhovna Rada of Ukraine. (2010). On ratification of the Council of Europe Convention on Laundering, Search, Seizure and Confiscation of the Proceeds from Crime and on the Financing of Terrorism (Act No. 2698-VI, November 17). Retrieved from https:// zakon.rada.gov.ua/ [in Ukrainian].
21. Information reference on the international legal standard to the status of the financial intelligence unit. (n. d.). Retrieved from fiu.gov.ua/assets/userfiles/0350/zagalna/DovidkaFIU.pdf [in Ukrainian].
22. Verkhovna Rada of Ukraine. (2019). On prevention and counteraction to legalization (laundering) of proceeds from crime, financing of terrorism and financing of proliferation of weapons of mass destruction (Act No. 361-IX, December 6). Retrieved from zakon. rada.gov.ua/laws/show/361-20#Text [in Ukrainian].23. OSCE. (2019). Report on the National Risk Assessment in the Field of Prevention and Counteraction to Legalization (Laundering) of Proceeds from Crime and Financing of Terrorism. Retrieved from fiu.gov.ua/assets/userfiles/310/%D0%9D%D0%9E%D0%A 0/%D0%94%D0%BE%D0%BA%D1%83%D0%BC%D0%B5%D0%BD%D1%82%D0%B8/Zvit. pdf.pdf [in Ukrainian].
24. MONEYVAL. (2017, December). Ukraine Mutual Evaluation Report on the Results of the 5th Evaluation Round by the Committee of Experts of the Council of Europe on the Evaluation of Measures to Combat Money Laundering and Terrorist Financing. Retrieved from finmonitoring.in.ua/wp-content/uploads/2018/03/zvit_ukr.pdf [in Ukrainian].
25. State Financial Monitoring Service of Ukraine. (n. d.). International standards. Retrieved from fiu.gov.ua/pages/dijalnist/mizhnarodne-spivrobitnictvo/mizhnarodni-standarti [in Ukrainian].
26. State Financial Monitoring Service of Ukraine. (n. d.). Legislation. Retrieved from fiu.gov.ua/pages/zakonodavstvo [in Ukrainian].
27. FATF. (n. d.). FATF Members and Observers. Retrieved from www.fatf-gafi. org/about/membersandobservers/.
28. National Institute for Strategic Studies. (n. d.). Using FATF tools to combat corruption in Ukraine (Analytical note). Retrieved from old2.niss.gov.ua/articles/1672/ [in Ukrainian].
29. MONEYVAL. (2021, June 4). MONEYVAL: States must improve their effectiveness against money laundering and terrorist financing. Retrieved from www.coe.int/en/ web/moneyval/-/moneyval-states-must-improve-their-effectiveness-against-money-laundering-and-terrorist-financing.
30. Ukraine, & EU. (2014, June 27). Association Agreement between Ukraine, of the one part, and the European Union, the European Atomic Energy Community and their Member States, of the other part. Retrieved from zakon.rada.gov.ua/laws/show/984_011 [in Ukrainian].
31. European Parliament, & EU Council. (2015, May 20). Directive (EU) on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing, amending Regulation (EU) No 648/2012 of the European Parliament and of the Council, and repealing Directive 2005/60/EC of the European Parliament and of the Council and Commission Directive 2006/70/EC. Retrieved from www.kmu.gov.ua/storage/app/ sites/1/55-GOEEI/es-2015849.pdf [in Ukrainian].
32. European Parliament, & EU Council. (2015, May 20). Regulation (EU) 2015/847 of the of 20 May 2015 on information accompanying transfers of funds and repealing Regulation (EC) No 1781/2006. Retrieved from www.pard.ua/download.php?downloadid=1074 [in Ukrainian].
33. MONEYVAL. (2020, June). Measures to combat money laundering and terrorist financing. Ukraine: Second Progress Report and Reassessment of Technical Responsibility Ratings. Retrieved from fiu.gov.ua/assets/userfiles/200/%D0%9C%D1%96%D0%B6% D0%BD%D0%B0%D1%80%D0%BE%D0%B4%D0%BD%D1%96%20%D1%81%D1%82%D0%B 0%D0%BD%D0%B4%D0%B0%D1%80%D1%82%D0%B8/UKR_MONEYVAL(2020)9_ SR_2nd%20Enhanced%20FuR_UA.pdf [in Ukrainian].
34. European Parliament, & EU Council. (2018, May 30). Directive (EU) 2018/843 amending Directive (EU) 2015/849 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing, and amending Directives 2009/138/EC and 2013/36/EU. Retrieved from zakon.rada.gov.ua/ [in Ukrainian].
35. Ministry of Finance of Ukraine. (n. d.). Memorandum on economic and financial policy. Retrieved from mof.gov.ua/uk/memorandum_of_economic_and_financial_policies_by_the_authorities_of_ukraine-435 [in Ukrainian].
36. President of Ukraine. (2021). On the decision of the National Security and Defense Council of Ukraine of August 11, 2021 “On the Strategy of economic security of Ukraine for the period up to 2025” (Decree No. 347/2021, August 11). Retrieved from zakon.rada.gov.ua/laws/show/347/2021#Text [in Ukrainian].
37. Cabinet of Ministers of Ukraine. (2021). On approval of the Main directions of development of the system of prevention and counteraction to legalization (laundering) of proceeds from crime, financing of terrorism and financing of proliferation of weapons of mass destruction in Ukraine for the period up to 2023 and the plan of measures for their implementation (Decree No. 435-r, May 12). Retrieved from zakon.rada.gov.ua/laws/show/435-2021-%D1%80 [in Ukrainian].
38. OSCE. (2020). Guidance on a risk-based approach for specially designated primary financial monitoring entities. Retrieved from fiu.gov.ua/assets/userfiles/books/2020/KerivnytxtvoSPFM.pdf [in Ukrainian].
39. Thaler, R. (2017). Push. How to help people make the right choice. Kyiv: Our format [in Ukrainian].