FEATURES OF FORMATION AND APPLICATION OF FINANCIAL MONITORING SYSTEM IN UKRAINE

Abstract

The article is devoted to the study of peculiarities of formation and development of the national system of financial monitoring in the context of Preventing and Combining the Money Legalization (Laundering) and / or Terrorism Financing (AML / CFT). The basic approaches to the definition of the essence of the concept of «financial monitoring» are systematized according to the level of its conduct, and legal aspects of AML / CFT regulation in Ukraine are disclosed. The main functions of financial monitoring, including organizational and managerial, control and supervision, operational-analytical, informative and preventative are identified. The results of the activity of the State Financial Monitoring Service of Ukraine are reviewed, which confirm that the banking sector is the most financially powerful channel of illegal flows. In turn, financial monitoring of the non-banking sector is characterized by low institutional performance. The article provides a list of financial transactions that are most commonly associated with the illicit legalization of income, including cash transactions and transactions related to obtaining or providing financial assistance. It is determined that the key problems of establishing a system of financial monitoring in Ukraine are: contradictory conditions of state-building processes (weakness of law enforcement and judicial authorities); imbalance of regulation of business activity (complexity and duration of starting a business, high level of tax burden); peculiarities of investment policy; low level of financial inclusion in Ukraine. Given the international experience of developed countries, it is advisable to expand the list of financial crimes related to AML / CFT in accordance with the FATF Recommendations; strengthen interagency coordination and create a unified information exchange system; reinforce the personal responsibility of officials. The main directions of realization of the concept of development of the financial monitoring system in Ukraine should be: intensification of international cooperation; improvement of mechanisms for identification and disclosure of suspicious transactions, elimination of «blind zones» or disorderly allocation of competences; In addition, the main task of conducting internal financial monitoring at the bank level should be use the tools «customer due diligence / enhanced due diligence», as well as «know you client / know your customer's customer», in order to ensure transparency (legality) of relationships with counterparties.