In its new report published today, the Council of Europe’s anti-money laundering body (MONEYVAL) acknowledged that there is strong political commitment in Ukraine to prevent and combat money laundering and terrorism financing (ML/FT), and the measures undertaken have already had a positive effect. However, new legal provisions are required to render more dissuasive sentences for the crimes, more resources are needed, and high-level cases are to be investigated and prosecuted more actively. (See also the summary of the report)
Ukraine faces considerable money laundering risks due to the corruption and illegal economic activities, including fictitious entrepreneurship, tax evasion and fraud. The sheer size of the shadow economy exacerbated by the widespread use of cash makes the country especially vulnerable. Among the prevalent mechanisms to launder money in Ukraine are the so-called conversions centres through which funds are siphoned from the real to the shadow economy, and which are used to convert proceeds into cash and transfer them out of the country.