CURRENT TRENDS IN THE DEVELOPMENT OF THE FINANCIAL MONITORING SYSTEM OF UKRAINE
Abstract
The constant growth of financial transactions and their digitalization lead to an increase in the risks of money laundering or terrorist financing. To reduce these risks, a financial monitoring system operates within the national economy. The article examines the dynamics of reports sent on financial transactions subject to financial monitoring. The activity of various groups of primary financial monitoring entities in reporting threshold and suspicious financial transactions is highlighted and an increase in the quality of reports sent is established, since the share of suspicious transactions increased from 4.7% in 2021 to 22% in the first quarter of 2025. The problem of an insufficient number of on-site and non-on-site inspections carried out by state regulators in the field of financial monitoring of all participants in the system, except for banking institutions, is identified. This problem leads to the lack of submission of suspicious and threshold reports by entire sectors of the primary level of the financial monitoring system, including pawnshops, credit unions, realtors, organizations that provided accounting services. On the other hand, the share of the banking system in these reports in 2024 was 99.16%. In addition, the lack of inspections leads to a lack of willingness on the part of reporting institutions to spend resources on training staff on requirements in the field of anti-money laundering and counter-terrorist financing and counter-weapons of mass destruction financing. Banks and non-bank financial institutions sent the number of staff that met the requirements of the legislation for training. At the same time, employees of other types of primary financial monitoring entities underwent such specialized training much less often. The article also analyzed international cooperation of the State Financial Monitoring Service of Ukraine with financial intelligence units of other countries. A comparable number of international reports were received. However, the number of reports sent by Ukrainian financial intelligence unit significantly exceeded standard limits, which was caused by increased risks in the field of national security, starting in 2022.
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