Michele Sciurba - Implementation of State Anti-Corruption and Anti-Money Laundering Policy in the EU Member States

Michele Sciurba

Models for Improving Public Administration in the Ukraine

Monograph

© 2018 Edition Faust, Frankfurt am Main

All rights reserved, including the right of reproduction in whole or in part in any form. Designed by Bayerl & Ost, Frankfurt am Main

Printed in Germany

Colour Connection GmbH, Frankfurt am Main; circulation 800 copies signed to print on 15 January 2018

Michele Sciurba

Implementation of State Anti-Corruption and Anti-Money Laundering Policy in the EU Member States: Models for Improving Public Administration in the Ukraine: Monograph / Public Administrative Law / Michele Sciurba / Edition Faust Academic, 2018. – 168 pp.: Annex: pp. 135-168 .

Keywords: State Policy, Public Administration, Anti-Money Laundering, Improvement of International Cooperation, Financial Monitoring, Transition Economy.

Executive Editor/Leitende Lektorin: Sarah Schuster

Bibliografische Information der Deutschen Nationalbibliothek Die Deutsche Nationalbibliothek verzeichnet diese Publikation in der Deutschen Nationalbibliografie; detaillierte bibliografische Daten sind im Internet abrufbar über < http://dnb.d-nb.de>

German National Library Cataloguing in Publication Data

A catalogue record for this book is available from the German National Library

UDC 35.08 (082+083)

Specialty 25.00.02 – Mechanisms of State Administration

ISBN 978-3-945400-68-5

eISBN 978-3-945400-63-0

Preface

I.Introduction

II.The Theoretical Basis of State Anti-Money Laundering (AML) Policy

II.1Categories and Concepts of State AML Policy

II.2Historical Peculiarities of the Formation and Implementation of State AML Policy

II.3Characteristics of Money Laundering and State AML Policy

II.4Conclusion

III.Implementation of State Anti-Corruption and AML Policy in the EU Member States

III.1The Development of State AML Policy within the EU Framework

III.2The Organizational and Legal Bases of State AML Policy

III.3Ways to Optimize State AML Policy in the Ukraine

III.4Conclusion

IV.Improving State Anti-Corruption and AML Policy in Ukraine

IV.1Current Political and Organizational Issues of the AML Policy in Ukraine

IV.2Adapting EU Models of State AML Policy to Ukraine

IV.3Reducing the Discriminatory Impact of State AML Policy in Ukraine

IV.4Conclusion

Annex

List of Abbreviations

Index

References

Tables and Figures

Curriculum Vitae

Despite its difficult economic, political and social situation, Ukraine is a young, independent country and a European power whose future development depends upon reforming anti-money laundering (AML) structures and practices and acting in concert with other countries in Europe. In an international comparison of corruption in 180 countries, Ukraine ranks 130th, making it one of the most corrupt countries in the world. Yet, Ukraine has an AML/Counter-Terrorist Financing (CTF) legal administrative framework that largely meets the current formal requirements of the Financial Action Task Force on Money Laundering (FATF). The Ukrainian AML/CTF framework has been refined significantly in recent years. Today, there is a clear understanding of money laundering and terrorist financing risks in Ukraine both at the administrative level and at the level of the supervisory authorities.

Nevertheless, this development cannot hide the fact that money laundering via shell companies is still part of everyday life in Ukraine. Since 2014, tax evasion has been considered a predicate offence under Ukrainian AML law as it is in the European Union (EU). This legislation includes the banking supervision of financial transactions of national public officials and other Politically Exposed Persons (PEPs). The Ukrainian criminal justice system continues to be heavily influenced by corruption and has failed to effectively combat it. Ukrainian cross-border prosecution of money laundering offences, in particular the confiscation of proceeds of crime in other countries, is ineffective due to a lack of experience and the absence of legislation spelling out direct areas of responsibility and formal procedures. A central problem is the lack of confiscation orders which impedes the efficient prosecution of corruption and money laundering.

Money laundering schemes are constantly evolving, which requires public authorities to constantly update their knowledge and implement state-of-the-art measures to combat corruption. An indispensable component of the Ukraine government’s anti-corruption efforts is the prevention and combating of money laundering. Eliminating corruption helps ensure the national security of the state, the effective implementation of its national interests, and the creation of conditions for the development of a humane and civil society. Since international criminal organizations are constantly at work to improve their money laundering schemes, governments must continually educate state authorities and improve and modernize regulations.

Improving anti-corruption policy requires constant re-evaluation of strategic concepts and objectives, principles and priorities, and the implementation of long-term national programs. An objective of national reform in Ukraine is to create a system of territorial organization and power, which operates in the interest of citizens and which possesses sufficient mechanisms of democratic monitoring and control. Such a process of institutional transformation requires the creation and implementation of anti-corruption institutional mechanisms that embody the principles of social justice, integrity, transparency, and public accountability in state management. This monograph provides a general and systemic overview of the theoretical and legal bases as well as the organisational and legal mechanisms that are necessary to develop a coherent state policy to fight money laundering, using the experience of EU countries. Although there are a growing number of academic works that focus on the organizational component of anti-corruption policy, there are fewer that examine the mechanisms in the formation of state policy necessary to fight money laundering and fewer still that take into account the “best practices” of EU countries. This gap in the research was a determining factor for choosing the topic of this monograph.

This academic work demonstrates how the Ukraine can improve its implementation of the FATF Recommendations to fight money laundering and corruption and how it can better organize the mechanisms of state regulation and the monitoring of financial activities. The implementation of international “best practices” for state management of financial monitoring will increase the effectiveness of public administration and establish standards and mechanisms of state monitoring that will provide the high-quality, objective information required for effective public management of AML policy. Anti-corruption measures contribute to the national security of the state, the effective implementation of its national interests, and the creation of conditions for human development and civil society.