The State Financial Monitoring Service of Ukraine on execution of paragraph 53 of the Action Plan for 2017-2019 on the implementation of the Strategy for the development of the system on Prevention and Counteraction to Legalization (Laundering) of Proceeds from Crime, Terrorist Financing and Financing the Proliferation of Weapons of Mass Destruction for the period up to 2020, approved by the order Cabinet of Ministers of Ukraine as of August 30, 2017 No. 601-p. Has carried out the Sectoral risk assessment of using the real estate market for legalization (laundering) of proceeds from crime and terrorist financing.
The study focuses on identifying the risks (threats) of legalization (laundering) of proceeds from crime and terrorist financing in the real estate market, analyzing and evaluating them, and is the basis for conducting another National Risk Assessment, scheduled for 2019.
The main objective of the sectoral risk assessment was to identify the level of compliance and effectiveness of legislative, methodological and practical measures taken in the country to protect and avoid (reduce) the threats and vulnerabilities of legalization (laundering) of income in the real estate market.
The basis for risk assessment is also the analysis of macro and micro indicators of market activity in the area of real estate purchase and sale.
In the Sectoral Assessment Report, the detailed information was disclosed regarding:
fullness and effectiveness of the legal regulation of the AML sector;
crime situation in the real estate sector;
execution of the requirements of legislation in the area of financial monitoring by supervised reporting entities;
the effectiveness of regulation and supervision on reporting entities;
typical money laundering schemes using real estate market instruments, etc.
As a result, the received by the SFMS results of the qualitative and scoring sector risk assessment indicate the high level of risk of the real estate market in the context of its threats, vulnerabilities and the probable consequences of being used by criminals for money laundering purposes.
In this regard, according to the results of the sectoral assessment identified and provided clear proposals for money laundering and terrorist financing risk-reducing in the real estate market, as well as a number of recommended measures for state authorities and the private sector.
It should be noted that presented by the SFMS report is the first such document, according to which all state regulators until the completion of the first quarter of 2019 (according to the order of the Cabinet of Ministers of Ukraine as of August 30, 2017, No. 601-p.) are expected to carry out a sectoral assessment of those sectors, regulation, and supervision of which they carry out.
On October 25, 2018, at the Working Group meeting on Sectoral Risk Assessment in the AML/CFT system with the participation of representatives of the main specialized state authorities involved in the system of prevention and counteraction to the legalization (laundering) of proceeds from crime, terrorist financing and the financing of the proliferation of weapons of mass destruction the Sectoral Assessment Report was presented by SFMS.
The design of the Report was conducted by the assistance of OSCE. The Report is published on the official website of the SFMS in the section "National Risk Assessment".
Press service of the SFMS