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Ukraine undertakes to develop its AML/CFT regulatory framework for virtual assets service providers

Ukraine 3 November 2020
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© Shutterstock

© Shutterstock

New anti-money laundering legislation, which came into effect earlier this year, brough significant novelties and changes to the whole anti-money laundering and countering the financing of terrorism (AML/CFT) system of Ukraine. Among other innovations, the scope of the AML/CFT legislation was extended to include virtual assets. The Ministry of Digital Transformation of Ukraine was assigned supervisory powers over virtual assets service providers (VASP), and, in this context, asked for Council of Europe support to develop the relevant regulatory framework for AML/CFT supervision over VASPs.

In response to this assistance request, a technical paper on “The Virtual Asset Service Provider AML/CFT regulatory framework in Ukraine - Reviewing the technical compliance and implementation of an effective risk-based supervision system” was prepared and presented to the Ministry of Digital Transformation of Ukraine. The report lays out a comprehensive and balanced step-by-step and phased-in approach that enables the reconciliation of strategic objectives, namely the development of the VASP sector in Ukraine and the equally important need for an effective AML/CFT regulatory framework. It contains a detailed analysis of the technical compliance with FATF Recommendations of the draft by-laws prepared by the Ministry, as well as recommendations on improving it. In addition, the report provides advice on the effective implementation of recommendations by both the VASPs and the Ministry in close cooperation with other relevant competent authorities.

This activity is part of the EU/CoE Partnership for Good Governance (PGG) Project “Strengthening measures to counter money laundering and financing of terrorism in Ukraine” which is co-funded by the EU and the Council of Europe and implemented by the Council of Europe.