Recently, FATF regime governments have been urging caution with respect to Ukrainian assets.  At this sensitive time, there is a real risk of expropriation and plundering of assets that should remain within the Ukraine.  From Reuters:

Money laundering reporting officers must balance extra vigilance about suspicious Ukrainian cash entering or leaving the UK following the ousting of President Victor Yanukovich but they cannot afford to jump to conclusions, officials said. Serious civil unrest has followed in recent days with scores of people killed.

Campaign group Transparency International (TI) issued a risk alert on Ukraine saying it believed corrupt assets might be laundered through or into the UK following the devastating upheaval in the country. It called on the government, money laundering reporting officers (MLROs), law and accountancy firms plus luxury estate agents to be on the lookout for dirty funds emerging from the country. TI said lessons needed to be learnt from the Arab Spring where, it said, there had been a slow international response to freezing assets.

The article goes on to discuss the potential for capital flight and how Money Laundering Reporting Officers (MLROs) should vigilantly report and suspicious activity to the authorities and that the government must respond to suspicious activity reports (SARs) without any delay.

What is not mentioned in the article is that financial institutions should know their existing customers and now is a good time to review any Ukrainian client accounts already in your institution.  This should be done with a specific focus on their political exposure and the source of funds of any significant accounts, especially in comparison to the means of the account holder.

A quick look in reveals many Ukrainian businesses using corporate structures in western jurisdictions such as the United States and Luxembourg.  These should be of particular interests as these offshore trading companies are often the vehicle of choice for capital flight from troubled regions.

KYC3.COM Ukraine company graph view

A quick look at Ukrainian company links in Western jurisdictions using

As sanctions are being considered against some Ukrainian and Russian officials, it would not be foolish to get a handle on your current accounts so that compliance can be assured quickly and efficiently in the event that sanctions materialize.

For the full Reuters article, please read here.

%d bloggers like this: