Financial monitoring

Financial monitoring is a set of measures taken by financial monitoring authorities to prevent and counteract legalization of proceeds from crime and terrorist financing.

The special authorized executive authority in financial monitoring is the State Financial Monitoring Service of Ukraine.

The National Bank of Ukraine (the NBU) is the supervisory authority of the banking sector and non-bank financial institutions that have the general license of the NBU for money transfers. It exercises its supervisory and regulatory functions within its mandate as the state authority in financial monitoring.

The Committee of Experts on the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism (MONEYVAL) acknowledged the NBU’s role in implementation of the risk-based approach to building an anti-money laundering system in banking institutions.

According to the MONEYVAL report, published on 30 January 2018, the NBU receives significant information to provide it with a broad understanding of ML/FT risks of each bank and the banking sector in light of its knowledge.

MONEYVAL evaluation of the NBU and banks

The evaluation team identified areas in Ukraine that can be misused to
channel funds to terrorists and terrorist organizations:


imgIllegal economic activities:
- fictitious entrepreneurship
- tax evasion
- fraud

imgShadow economy

imgOrganized crime expansion

imgActivity of conversion centers

imgHigh cash circulation

imgTerrorism financing risk

imgNon-profit organizations

The NBU’s official website has the section Financial monitoring, which contains the NBU’s materials on the system of anti-money laundering and combatting the financing of terrorism (AML/CFT) in banking institutions.

imgMONEYVAL report

Risk-based approach

Risk-based approach is an on-going analysis of a customer’s financial transactions regarding their correlation with the customer’s financial standing, business activity, and economic feasibility of the transactions.

Banks at their own discretion identify respective indicators and lists of customers to apply measures of financial monitoring based on the risk-based approach as an AML/CFT tool and a way to prevent risky activities.

The key accents of the NBU’s risk-based approach:

Supervision is focused on the following:

imgCash and scheme transactions

imgFictitious entrepreneurship

imgPolitically exposed persons (PEPs)

imgIdentification of ultimate
beneficial owners

imgTerrorism financing

It does not focus on the following:

imgOrdinary household transactions

imgReal economy

The NBU and the banking system work together on projects to improve the AML/CFT system. One of the examples of such cooperation is the NBU’s participation in the project of the Independent Association of the Banks of Ukraine (NABU) «Best Practices in Financial Monitoring».

imgBest practices

Typical money laundering schemes

The NBU applies corrective measures (sanctions) to banks for violation of AML/CFT laws. Information on the applied sanctions is available in Ukrainian on the NBU’s official website at the section Corrective measures.

Useful materials

(for download)

Implementation of the international
AML standards by the Ukrainian
banking community

Outstanding issues

Materials of the Conference
«Best Practices
in Financial Monitoring»

Relevant issues
of financial monitoring
in banks

Risky (scheme) transactions,
identified during
inspections of banks

Specifics of Know-Your-Customer

Risk-based approach
as an effective method of
prevention of laundering of
proceeds from crime

Recommendations and

Answers to some questions

imgCorrective measures