scholarly journals The Methodological Instrumentarium for Assessing Compliance Risks of Financial Monitoring of Banks

2020 ◽  
Vol 11 (514) ◽  
pp. 296-309
Author(s):  
I. M. Chmutova ◽  
◽  
O. S. Bezrodna ◽  
D. I. Nechyporenko ◽  
◽  
...  
Keyword(s):  
Control Systems ◽  
Money Laundering ◽  
Implementation Process ◽  
Risk Level ◽  
Characteristics Method ◽  
Analytical Research ◽  
Business Functions ◽  
Financing Of Terrorism ◽  
Integral Assessment ◽  
Financial Monitoring

The article examines the essence and directions of identification of compliance risks of banks. The criteria for assessing compliance risks of financial monitoring of banks are purported to be: the level of development of the compliance system; experience in applying influence measures to banks by the NBU for violation of the requirements of legislation in the field of prevention and counteraction to money laundering and financing of terrorism (in the form of written warnings and fines); operational risk level and staff turnover. The defined directions of assessment include result factors (taking into account cases of risk materialization) and the factors that make the compliance function implementation process uncertain. The sequence and methodological instrumentarium for assessing compliance risks of financial monitoring of banks are presented, which provides for: formation of a database for analytical research by means of digitization of data (using coefficient approach and binary characteristics method); consolidation of the results of computation of indicators for the integral assessment of the researched phenomenon (by building up a composite indicator by means of the weighted amounts method). Based on information on the activities of individual banks, which during 2014-2020 belonged to the category of systemically important, practical approbation of the developed methodological instrumentarium was carried out. Recommendations on minimization of compliance risks of banks in the field of financial monitoring are formed, including: improvement of intrabank control systems; ensuring uninterrupted work and thorough training of staff; introduction of operational algorithms of actions to identify the reasons for their involvement in the processes of money laundering; using a risk-oriented approach to test business functions; introduction of effective monitoring systems and expansion of the list of compliance risk management instruments.

scholarly journals DEVELOPMENT OF UNIFIED PROCEDURES FOR FINANCIAL INSTITUTIONS IN ORDER TO PREVENT MONEY LAUNDERING AND TERRORISM FINANCING

2019 ◽  
Vol 2 (87) ◽  
pp. 141
Author(s):  
Suzanna Kalinina
Keyword(s):  
Risk Management ◽  
Public Relations ◽  
Money Laundering ◽  
Financial Institutions ◽  
Financial Institution ◽  
Legal Regulation ◽  
Graphical Analysis ◽  
Terrorism Financing ◽  
Financing Of Terrorism ◽  
Financial Monitoring

The relevance of the topic is confirmed by the changes taking place in the financial monitoring system: the expansion of the financial monitoring range of procedures complication´s supervisory bodies aimed at countering money laundering and financing of terrorism, the creation of specialized international and European requirements, which causes changes in the legal regulation of public relations in this area, both at the level of the Estonian Republic, and at international level. Taking into account these changes, financial institutions are a subject to significant legal risks. The purpose of this topic is to improve the financial institution risk management system, in the field of anti-money laundering and countering financing of terrorism. The theoretical and methodological basis of the study are the provisions and conclusions regarding anti-money laundering and countering financing of terrorism risk management issues contained in the research works of different Estonian and Russian authors; as well as the author analysed anti money laundering and counter terrorism financing legal acts and revealed the main recommendations to financial institutions for preventing money laundering and terrorism financing.  The author analyses reasons, which affect licenses withdrawal due to breach of money laundering. The nature of the tasks and the system approach to their solution determined the use of the following research methods in the research: analysis and synthesis, grouping and classification, scientific generalization, expert assessments and graphical analysis.

The Mechanism for Recording and Analyzing Information about the Risks Contained in the Reports of Suspicious Transactions: Foreign Experience

2021 ◽  
Vol 18 (1) ◽  
pp. 32-39
Author(s):  
V. V. Sergunina
Keyword(s):  
Money Laundering ◽  
System Analysis ◽  
Management Strategies ◽  
Foreign Experience ◽  
Suspicious Transaction ◽  
Risk Management Strategies ◽  
Financing Of Terrorism ◽  
Analysis System ◽  
Financial Monitoring ◽  
Monitoring Service

The article considers the foreign experience of functioning and application of the mechanism for accounting and analysis of information about risks contained in reports on suspicious transactions for the purpose of its further application in Russian conditions. The relevance is due to the need to improve the system for recording and analyzing information about risks contained in reports on suspicious transactions transmitted to in Rosfinmonitoring. Due to the involvement of noncredit nonfinancial organizations in the process of countering the proceeds of crime, the financing of ter- rorism and the financing of the proliferation of weapons of mass destruction, the number of incoming reports to the Federal financial monitoring service is only increasing. All messages received are evaluated to determine whether they are suspicious or not. However, as the number of messages increases, the existing mechanism becomes less effective, and it needs to be updated and refined.The analysis of foreign experience was carried out on the basis of methods of theoretical and practical analysis, system analysis, comparison and classification methods. The methodology combines a review of the literature, analysis of research results of scientific specialists to comprehensively cover the goal.The study revealed that the analysis of suspicious transaction reports is used to assess the application of the Anti-Money Laundering/Combating the Financing of Terrorism regime, the level of risk awareness and compliance with risk management strategies. Under Anti-Money Laundering / Combating the Financing of Terrorism, it is useful to consider best practices to develop a mechanism for recording and analyzing risk information contained in suspicious transaction reports submitted to the Federal financial monitoring service.

scholarly journals The Eurasian Group on Combating Money Laundering and Financing of Terrorism as a Component of International Anti-Money Laundering System

2018 ◽  
Vol 3 (2) ◽  
pp. 485
Author(s):  
Yurieva A.
Keyword(s):  
Money Laundering ◽  
Technical Assistance ◽  
International Training ◽  
History Of ◽  
Financing Of Terrorism ◽  
Financial Monitoring ◽  
And Training ◽  
Structure And Functions

This article is about the Eurasian Group on Combating Money Laundering and financing of terrorism. The history of group is studied, as well as its structure and functions. The examples of the results of group’s activities are presented, the conclusion is made about its role in the region and the role of Russia in group’s development. Keywords: Combating Money Laundering and financing of terrorism, FATF, FATF-style regional body, The Eurasian Group on Combating Money Laundering and financing of terrorism, Technical assistance and training, The International training and methodology center for financial monitoring

scholarly journals FATF Guidance on Effective Oversight in the AML/CFT System

2018 ◽  
Vol 3 (2) ◽  
pp. 190 ◽  
Author(s):  
Andronov M.Y. ◽  
Leonov P.Y.
Keyword(s):  
Money Laundering ◽  
Task Force ◽  
Limited Resources ◽  
Financial Action Task Force ◽  
Financial Action Task ◽  
Financing Of Terrorism ◽  
The One ◽  
Financial Monitoring ◽  
Fourth Round ◽  
Oriented Approach

Fourth round of mutual evaluations of the FATF (financial action task force on money laundering, the Financial Action Task Force on Money Laundering, FATF) was held already in 38 countries around the world. In 2018 Russia will be cheсked.One of the elements of anti-money laundering system is the oversight activities. FATF gives guidance on its effective building. It should be provided with the risk-oriented approach. On the one hand, in order to apply its limited resources to the most dangerous areas. On the other hand, does not interfere the development of legal entrepreneurs with redundant oversight actions.The purpose of this article is to attract attention of specialists for financial monitoring to Guide FATF on the application of risk-oriented approach to oversight for AML/CFT purposes. Keywords: Legalization, countering the financing of terrorism, supervision in the sphere of AML, risk-oriented approach

scholarly journals Improvement of regulatory and legal support of financial monitoring in Ukraine

2021 ◽  
Vol 2021 (7) ◽  
pp. 108-126
Author(s):  
Olga KUZMINSKA ◽  
◽  
Оlena ABESINOVA ◽  
Keyword(s):  
Money Laundering ◽  
National Economy ◽  
Task Force ◽  
Economic Security ◽  
Weapons Of Mass Destruction ◽  
Mass Destruction ◽  
Other Information ◽  
Information Law ◽  
Financing Of Terrorism ◽  
Financial Monitoring

In the publication according to the results of the analysis of the main international and national regulations of financial monitoring on the basis of the historical approach the directions of improvement of normative – legal maintenance in the field of prevention and counteraction to legalization of illegal incomes in Ukraine are outlined. The peculiarities of the main historical stages of the formation of the financial intelligence unit in Ukraine – the national center for analysis of information on suspicious transactions and other information on money laundering, terrorist financing, and financing the proliferation of weapons of mass destruction are discloses. The issues of implementation of the provisions of international normative acts regulating the sphere of counteraction to legalization (laundering) of proceeds from crime, financing of terrorism and financing of proliferation of weapons of mass destruction at the international level are highlighted, in particular, the standards developed by the Financial Action Task Force on Money Laundering (FATF) and the Directives of the European Parliament and the Council of the EU, United Nations documents, international conventions ratified by Ukraine. Considerable attention is paid to the need for further harmonization of national and international legislation in the field of financial monitoring. It is proposed to take into account the conceptual principles of behavioral economics when improving the regulatory and legal support of financial monitoring (bylaws), in particular regarding the application of risk-oriented approach when analyzing and identifying suspicious financial transactions and identifying the ultimate beneficial owner of the client. The necessity of scientific research in the researched field in the traditional professional directions: “Money, finance and credit” and “Administrative law and process; finance law; information law”, and in related scientific specialties: “Economics and management of the national economy” (in the field of “Economic security of the national economy”), and “Accounting, analysis and audit (by type of economic activity)” (in the areas of “Organization of auditing: the specifics of formation and the functioning of audit services”, and “Accounting and analytical operations, their standardization and unification”) is substantiated.

scholarly journals THE ROLE AND IMPORTANCE OF A COMPLIANCE OFFICER IN THE ACTIVITIES OF A FINANCIAL INSTITUTION IN ORDER TO PREVENT THE LEGALIZATION (LAUNDERING) OF CRIMINALLY ACQUIRED FUNDS AND THE FINANCING OF TERRORISM

2021 ◽  
Vol 1 (91) ◽  
pp. 16-22
Author(s):  
Suzanna Kalinina
Keyword(s):  
Risk Factors ◽  
Monitoring System ◽  
Money Laundering ◽  
Financial Institutions ◽  
Financial Institution ◽  
Terrorism Financing ◽  
Risks Factors ◽  
Financing Of Terrorism ◽  
Financial Monitoring ◽  
Compliance Officer

The relevance of the topic is confirmed by the changes taking place in the financial monitoring system: the complication of procedures aimed at countering money laundering and financing of terrorism, the creation of specialized international and European requirements and the changes of requirements for compliance specialists. Financial institutions more often face the incompetence the incompetence of these employees and their negligence. The author analysed anti money laundering and counter financing of terrorism legal acts, as well as revealed the main recommendations to financial institutions for preventing money laundering and terrorism financing. Based on scientific research, the main risk factors for using financial institutions for money laundering were identified. Based on these risks factors, the author identified the role and importance of a compliance officer in order to prevent the legalization (laundering) of criminally acquired funds and the financing of terrorism.

scholarly journals Features of the Newest Methods of Money Laundering Using Financial Institutions

2021 ◽  
Vol 3 (518) ◽  
pp. 132-140
Author(s):  
V. V. Rysin ◽  
◽  
A. R. Karpets ◽  
Keyword(s):  
Money Laundering ◽  
Financial Institutions ◽  
Public Awareness ◽  
Legal Aspects ◽  
The State ◽  
Online Gambling ◽  
Financial Infrastructure ◽  
Financing Of Terrorism ◽  
Financial Monitoring ◽  
High Level

Activities to counter laundering the money, obtained by criminal means, require constant monitoring of the market, monitoring the activities of financial and non-financial institutions in order to prevent capital loss and financing of terrorism, as methods of money laundering are gaining new features every year. The article is aimed at systematizing the latest money laundering schemes appearing in the financial market and developing measures to prevent the implementation of such schemes through financial institutions. An analysis of data by the State Financial Monitoring Service of Ukraine (SFMS) on the number of detected suspicious financial operations showed that the large majority of reports concerning such operations comes from banks. In view of this, the role of banks in countering the legalization of criminal income in Ukraine remains decisive today. The expansion of the range of financial instruments led to the emergence of new money laundering schemes. Such schemes can be based on P2P technologies, implemented through crowdfunding platforms, in particular through crowdinvestment. The authors also focused on the possibilities of using cryptocurrencies and online gambling tools for the purposes of legalizing criminal revenues. The peculiarities of applying the risk-oriented approach in the process of due diligent verification of clients of financial institutions and the operations they carry out, as well as the list of threats to financial institutions in case of their joining the money laundering activities, are determined. Such threats are manifested in reputational and legal aspects, and in the future inevitably lead to financial losses. The use of the latest technologies for the legalization of criminal income requires banks and non-bank institutions to improve the software used to detect and register suspicious transactions, improve cybersecurity, as well as maintain a high level of qualification of employees. The State own regulators should ensure proper control over the activities of highly risky financial infrastructure entities, as well as raise public awareness of the risks and consequences of criminal capital legalization.

scholarly journals Implementation of state financial monitoring based on risk-oriented indicators in the activities of financial institutions

2020 ◽  
Vol 18 (3) ◽  
pp. 55-64
Author(s):  
Zhanna Andriichenko
Keyword(s):  
Monitoring System ◽  
Money Laundering ◽  
Financial Institutions ◽  
Financial Services ◽  
Financial Institution ◽  
Risk Profile ◽  
Weapons Of Mass Destruction ◽  
Mass Destruction ◽  
Financing Of Terrorism ◽  
Financial Monitoring

The article examines the systems of risks of various types of financial institutions and focuses on the absence of the risk of legalization among them. This risk is considered separately within the framework of a special system of relations in the field of combating money laundering, financing of terrorism and financing the proliferation of weapons of mass destruction. The evolution of criteria for assessing the risk of a financial institution to be involved in legalization is analyzed, risk-oriented indicators of the activities of financial institutions used to assess their risk profile are generalized. It is established that one of the regulators in the financial services market, the National Securities and Stock Market Commission, uses outdated, formal, and ineffective criteria for assessing the risks of a financial institution to be involved in money laundering. However, the other regulator, the NBU, has already carried out the process of adapting state financial monitoring to the requirements of FATF and AMLD4 and developed risk-oriented indicators of financial institutions’ activities, used to assess their risk profile. Strengthening the control by the subjects of state financial monitoring over the risk profile of a financial institution and its overall financial monitoring system will help to increase the efficiency of state financial monitoring. It is proposed to unify risk-oriented features and introduce identical financial monitoring mechanisms for all participants in the financial services markets, considering the specifics of their activities, as well as including the risk of legalization in the risk system of a financial institution in order to improve the efficiency of the financial monitoring system.

scholarly journals Methods and Mechanisms of a Subsystem Formation of Financial Monitoring of Suspicious Operations in Commercial Bank

2018 ◽  
Vol 3 (2) ◽  
pp. 279
Author(s):  
Kolychev V.D. ◽  
Solovov D.V.
Keyword(s):  
Commercial Bank ◽  
Money Laundering ◽  
It Projects ◽  
Blockchain Technology ◽  
Business Applications ◽  
Business Application ◽  
Front Office ◽  
Financing Of Terrorism ◽  
Financial Monitoring ◽  
Commercial Organizations

In this paper the peculiarities of the contour formation of the suspicious operations proceeding in commercials bank using AML/CFT (Anti-Money Laundering/Counter-Financing of Terrorism) issues accepted in present time in practical sphere of commercial organizations are presented. The structure of the AML/CFT section in commercial bank is presented which is structuring on the basis of the business-applications infrastructure using special automated bank software. The attention is paid to perspective blockchain technology which is taking wider application during implementation and exploitation of IT-projects related to electronical banks’ services. Keywords: Blockchain, financial monitoring, business-application, front-office, commercial bank, register of remote data, transaction

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