Formation of a new paradigm of anti-money laundering: The experience of Ukraine

Abstract

The increase in the level of money laundering is associated with digitalization and technification of all spheres of society, the globalization of financial markets, the consequences of quarantine measures caused by the COVID-19 pandemic, and the new ways of committing money laundering crimes. The paper aims to identify the peculiarities of anti-money laundering activities in Ukraine and outline approaches to increase the effectiveness of combating money laundering in the country. The current state of the problem of money laundering is analyzed based on the study literary sources, regulatory framework and their discussion in the Ukrainian society. An attempt was made to systematize the factors influencing the increase in the level of money laundering. The consequences of increasing the level of money laundering for Ukraine have been determined: a shortfall in state budget revenues, a decrease in the level of the social sphere financing, reduced living standards of the population. It has been emphasized that there is a need for a comprehensive approach to the problem of money laundering, which will include ongoing training for financial audit specialists, the establishment of special units to investigate money laundering crimes, enshrining the classification of money laundering crimes in regulatory documents and the establishment of criminal liability for their commission.

A critical analysis of Somalia’s current antimoney laundering and counter financing of terrorism regime: a comparative study with Malaysia

“…Moreover, while Fletcher (2020) emphasizes Bitcoin, Zerzan (2009) emphasizes value cards, online banking and payments, digital currencies and mobile money. Finally, the study of (Vitvitskiy et al , 2021) concurred with Lester and Roth (2007) on the notion that the lack of sufficient training for AML/CFT professionals leads to an increase in criminal activities. And Further contribution is made by Raza et al (2020) stating that unemployment and internet access among youth exacerbate issues related to money laundering and terrorist financing.…”

“…Indeed, Stack's (2015) study even agrees with Hendriyetty and Grewal (2017) that money laundering effects government revenues, but through facilitating tax evasion and corruption. Furthermore, Bartlett (2002) believes that money laundering has generally negative effects on economic competitiveness, particularly the productive sectors, whiereas Vitvitskiy et al (2021) observed that money laundering makes developing countries become more vulnerable to economic breakdown than developed countries.…”

“…To begin with money laundering, few scholars articulated and identified several issues. For instance, it is believed that this crime occurs due to either vulnerable legal system (Schneider, 2018), or lack of effective legal regulations (Vitvitskiy et al , 2021). Accordingly, Lucian (2010) argued that globalization facilitates criminals to carry out their illegal goods and services, while other scholars emphasized the possible channels.…”

“…Buchanan’s (2004) study reemphasized obstacles on global financial system, particularly the impacts of money laundering on political, social and economic spheres. Indeed, money laundering undermines democratic governance, reduces living standards and can lead to societal unrest and political instability (Vitvitskiy et al , 2021). It encourages corrupt politicians engage in laundering and thrive financially through state capture (Stack, 2015).…”

Modeling of the financial system?s stability on the example of Ukraine

“…Bukhtiarova et al (2020) note that to ensure a high level of financial security and, accordingly, stability of the financial system, the level of deshadowing of the economy and, therefore, effective financial monitoring becomes important, which is primarily aimed at implementing measures to combat money laundering. This issue is extremely relevant for Ukraine, which is confirmed by the study of Vitvitskiy et al (2021), who found that the consequences of increasing money laundering are the formation of a significant budget deficit, reduced social funding and lower living standards, which negatively affects the state of the financial system's stability.…”