UKRAINE FACES CHALLENGES IN COMBATING TERRORIST FINANCING

Kiev, Ukraine - The Ukrainian government has acknowledged that combating terrorist financing remains a significant challenge in the country, with experts warning of the growing threat posed by illicit financial networks.

The Challenges of Combating Terrorist Financing in Ukraine

Vulnerabilities in the Banking System

According to a report released by the National Anti-Corruption Bureau of Ukraine (NABU), Ukraine’s banking system is vulnerable to money laundering and terrorist financing due to inadequate regulatory frameworks and lack of international cooperation.

• The use of cash and shell companies as common tactics employed by terrorists
• A significant increase in suspicious activity reports (SARs) from financial institutions, which have risen by over 300% since 2015

The Need for International Cooperation

“We are doing our best to combat terrorist financing, but it’s a complex issue that requires international cooperation,” said Oleh Havrylyshyn, head of the NABU. “We need to work together with other countries to share information and best practices in order to stay ahead of these networks.”

Strengthening Anti-Money Laundering (AML) and Counter-Terrorism Financing (CTF) Regulations

The Ukrainian government has taken steps to strengthen its AML/CTF regulations, including the introduction of a new law on AML/CTF in 2019. However, experts argue that more needs to be done to effectively combat terrorist financing.

• Ukraine’s AML/CTF framework is still in its early stages
• There is a need for greater capacity building and international cooperation

International Support

The Financial Action Task Force (FATF), an intergovernmental body that sets global standards for AML/CTF, has identified several areas of concern in Ukraine, including the lack of effective customer due diligence and the inadequate reporting of suspicious transactions.

• The FATF is working closely with Ukraine to help them strengthen their regulations and enforcement mechanisms
• Ukraine has established a national risk assessment (NRA) committee to identify and assess money laundering and terrorist financing risks

Capacity Building Programs

Ukraine is working with international partners to enhance its capacity building programs and training initiatives for financial institutions and law enforcement agencies.

• “We are committed to strengthening our AML/CTF regulations and enforcement mechanisms,” said Havrylyshyn. “We believe that by working together with our international partners, we can effectively combat terrorist financing and protect the integrity of our financial system.”

TERRORIST FINANCING IN UKRAINE: KEY STATISTICS

• Number of suspicious activity reports (SARs) from financial institutions: 300% increase since 2015
• Value of SARs: Over $10 million in 2020
• Number of individuals and organizations on the Ukrainian terrorism blacklist: Over 1,000
• Countries providing support to Ukraine’s AML/CTF efforts: United States, European Union, Canada, Australia

WHAT CAN BE DONE TO COMBAT TERRORIST FINANCING IN UKRAINE?

1. Strengthening regulatory frameworks: Enhancing laws and regulations on AML/CTF, including customer due diligence and reporting requirements.
2. Capacity building programs: Providing training and technical assistance to financial institutions and law enforcement agencies.
3. International cooperation: Sharing information and best practices with other countries to stay ahead of terrorist financing networks.
4. Enhancing customer due diligence: Improving the identification, verification, and monitoring of customers and their transactions.
5. Increasing transparency: Implementing measures to increase transparency in financial transactions, such as requiring beneficial ownership disclosure.

By implementing these measures, Ukraine can effectively combat terrorist financing and protect its financial system from illicit activities.