In its new report, MONEYVAL has reviewed the efforts of Ukraine to improve its anti-money laundering and countering the financing of terrorism (AML/CFT) measures since the adoption of its mutual evaluation report (MER) in December 2017.
Due to the high number of deficiencies identified in several key areas, Ukraine has been reporting to MONEYVAL under an enhanced follow-up procedure. MONEYVAL has examined a range of legislative, regulatory and institutional measures implemented by Ukraine to address these deficiencies.
MONEYVAL notes the progress of Ukraine in two key areas:
Improving the criminal law provisions for the offence of terrorism financing;
Enhanced sanctions for financial institutions and other entities for non-compliance with AML/CFT legislation.
The positive steps by Ukrainian authorities have prompted MONEYVAL to assign Ukraine higher international compliance ratings in the abovementioned areas; they have been re-rated from “partially compliant” to “largely compliant”.
At the same time MONEYVAL has not accepted the request of Ukraine to upgrade its ratings in four other areas: financial sanctions related to terrorism; financial sanctions related to proliferation; regulation and supervision on non-financial professions; maintenance of national statistics on AML/CFT. The efforts of Ukraine in these areas were not deemed to be sufficient to warrant a ratings change.
The follow-up report also covered implementation of new international requirements for virtual assets, which cover among others the most prominent virtual currencies (e.g. Bitcoin, Ethereum, etc.) and the providers of these assets. Ukraine was among the first MONEYVAL countries to be reviewed under these new requirements. While MONEYVAL has registered certain progress in the implementation of the old and new requirements for virtual assets, deficiencies remained, and Ukraine’s rating on the implementation of this Recommendation has been downgraded from “largely compliant” to “partially compliant”.
All in all, to date, Ukraine has achieved full compliance with eleven of the 40 FATF Recommendations constituting the international AML/CFT standard. Ukraine retains minor deficiencies in the implementation of another twenty-two Recommendations where it has been found “largely compliant”, and larger-scale deficiencies for the remaining six where it has been rated “partially compliant”.
MONEYVAL decided that Ukraine will remain in the enhanced follow-up process. It is to report back to MONEYVAL on further progress to strengthen its implementation of AML/CFT measures in one year’s time.
