More Than 300 Days of Struggle
More than 300 days have passed since Russia started its full-scale military invasion of Ukraine. The aggressor has been carrying out airstrikes, shelling and numerous other war crimes. This led to the displacement of more than 10 million Ukrainians, and thousands of injuries and deaths.
The Verkhovna Rada of Ukraine has appealed to the United Nations, the European Parliament, the Parliamentary Assembly of the Council of Europe, the OSCE Parliamentary Assembly, the NATO Parliamentary Assembly, the governments, and parliaments of foreign countries regarding the recognition of Russia’s genocide of the Ukrainian people, as well as Russia’s crimes against humanity and war crimes on the Ukrainian territory.
Russia undermines global efforts to prevent the financing of terrorism, the proliferation of weapons of mass destruction and money laundering, that is why the priorities of the financial monitoring system in 2022 were changed.
On November 16, 2022, the President of Ukraine signed the Law of Ukraine "On Amendments to the Law of Ukraine "On Prevention and Counteraction to the Legalization (Laundering) of Criminal Proceeds, the Financing of Terrorism and the Financing of the Proliferation of Weapons of Mass Destruction" on protecting the financial system of Ukraine from the actions of the state which carries out armed aggression against Ukraine, and on adapting the legislation to certain FATF standards and EU Directive 2018/843 requirements" (hereinafter - Law No. 2736).
Law No. 2736 requires that:
• The citizens of Russia and/or Belarus must not be allowed to run or manage entities of primary financial monitoring:
• The list of high-risk clients of entities of primary financial monitoring must be supplemented with citizens and legal entities who are residents of the states carrying out armed aggression against Ukraine (apart from citizens of Russia and/or Belarus who were already granted the combatant status after April 14, 2014);
• Entities of primary financial monitoring must report their threshold transactions (400 thousand UAH and over) with companies related to Russia and/or Belarus to State Financial Monitoring Service.
Meanwhile, Law # 2736 implements the recommendations of European Commission’s Conclusion on Ukraine's application for membership in the European Union, in terms of ensuring compliance of anti-money laundering laws with the standards of the Financial Action Task Force (FATF).
The following clauses were among the top priorities for State Financial Monitoring Service of Ukraine in 2022:
• Detecting financial transactions related to military aggression by the Russian Federation and the Republic of Republic of Belarus against Ukraine.
• Tracing the funding channels of persons who may be related to military aggression of the Russian Federation and Belarus against Ukraine.
• Stopping the financial transactions of persons involved in funding aggressive actions of the Russian Federation and the Republic of Belarus against Ukraine.
In 2022, the State Financial Monitoring Service blocked financial transactions worth UAH 8.1 billion, with 774 materials transferred to law enforcement agencies, 420 cases transferred to law enforcement agencies regarding collaborators and traitors; 1755 accounts of collaborators and other persons blocked, and 212 foreign financial regulators taking preventive actions against businesses from the Russian Federation.
Efforts to Stop the War
On 11/21/2022, the NATO Parliamentary Assembly adopted a resolution calling on the Governments and Parliaments of NATO countries:
- To recognize the current government of Russia a terrorist regime.
- To strengthen the work of FATF against the financing of terrorism as well as the efforts of the IMF, the World Bank, the European Union and the United Nations.
Russia is currently a high-risk country for investment and business, and yet, many companies are cooperating with the aggressor.
The Financial Action Task Force (FATF) lists are an important reference point for many businesses and investors when assessing the risks of dealing with a particular country.
If Russia is blacklisted by the FATF, the risks of continuing to do business with Russia will increase, making it less attractive for global companies. It will also make trade with Russia more difficult and help defund the Russian military machine.
Russia's exclusion from the FATF and its subsequent blacklisting will also contribute to global efforts to end the war and bloodshed in Europe.
The State Financial Monitoring Service of Ukraine calls on the FATF to consolidate efforts in terms of finding the technical arguments and materials to retaliate against international terrorism, blacklisting the Russian Federation and depriving it of its membership.