FINANCIAL MONITORING

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Financial monitoring has long been a commonplace in which every business exists. In addition, it is something that the entity encounters or will encounter. Financial monitoring is regulated by the Law of Ukraine "On Prevention and Counteraction to Legalization (Laundering) of Proceeds from Crime, Financing of Terrorism and Financing of the Proliferation of Weapons of Mass Destruction" (hereinafter - the Law).

In essence, financial monitoring is the activity of authorized entities to detect illegally obtained income. Such activities are performed by the state in the person of specific entities that have direct access to financial transactions. The range of these entities is clearly defined by law.

The financial monitoring system consists of primary and state levels.

The primary level is formed by:

banks, insurers, financial institutions;
payment organizations;
exchanges;
stock market participants;
postal operators;
other specially identified subjects of monitoring.

The state level consists of:

NBU;
Ministry of Finance;
Ministry of Justice;
Ministry of Digital Transformation of Ukraine;
National Commission on Securities and Stock Market.

As you can see, the main entity that carries out financial monitoring is the bank (as well as other financial institutions). In addition to the main subjects, there are also specially defined - accountants, lawyers, notaries, lawyers and more. All subjects of primary monitoring must be registered with a special state body and perform the duties specified in Article 8 of the Law.

In particular, they must notify the State Financial Monitoring Service of Ukraine of a number of financial transactions:

threshold;
suspicious.

Thresholds are transactions in excess of UAH 400,000. and contains a legally defined risk feature. At the same time, in practice it is enough to exceed the amount of UAH 400,000.

The following operations can be identified as suspicious:

if the subject of primary financial monitoring suspects that the funds are the result of criminal activity or are related to or related to the financing of terrorism or the financing of the proliferation of weapons of mass destruction;
the transaction is suspicious according to the recommendation of the subject of state financial monitoring or typological research.

Banks must report both types of transactions. But the additionally defined subjects are only suspicious. A risk-based approach is used to identify the operation as suspicious. This approach takes into account relevant risk criteria, in particular those related to its customers.

Once financially monitored, an entity is required to provide an entity, including a bank, with an explanation, confirmation of the origin of the funds, and an explanation of the relationship between the provider and the recipient. Quite often this is a difficulty for the business.