Ukraine mistakenly put itself into FATF “black list”

On Friday, 19th of March, hundreds of Ukrainian news sources reported that Ukraine Financial Action Task Force (FATF) has put the country into list of states that have serious deficiencies in their strategies for countering money laundering and terrorism financing.

This fact shows how far is Ukraine from the outer world. The initial information on list of problematic countries was released by FATF took place a month before, on 18th of February. Ukraine WAS NOT in the black list. The country was mentioned as one that made significant progress in fulfilling FATF recommendations.

It is important that this list is NOT the synonym of FATF “black list”. The latter term usually refers to countries which it perceives to be non-cooperative in the global fight against money laundering and terrorist financing. It is divided into three groups.

First of them is jurisdictions subject to a FATF call on its members and other jurisdictions to apply countermeasures to protect the international financial system from the ongoing and substantial money laundering and terrorist financing (ML/TF) risks emanating from the jurisdiction. Now only Iran is in this group.

Second group includes Angola*, Democratic People's Republic of Korea (DPRK), Ecuador and Ethiopia. These are jurisdictions with strategic AML/CFT deficiencies that have not committed to an action plan developed with the FATF to address key deficiencies as of February 2010. The FATF calls on its members to consider the risks arising from the deficiencies associated with each jurisdiction. Despite the FATF’s efforts, these jurisdictions have not constructively engaged with the FATF or an FSRB as of February 2010 and have not committed to the international AML/CFT standards.

Pakistan, Turkmenistan and São Tomé and Príncipe are in the third group. The group constist of jurisdictions previously publicly identified by the FATF as having strategic AML/CFT deficiencies, which remain to be addressed as of February 2010.

Ukraine is not present in any of these problematic groups. It is mentioned in the list of countries the FATF and the FSRBs will continue to work with and to report on the progress made by them in addressing the identified deficiencies. The FATF calls on these jurisdictions to complete the implementation of action plans expeditiously and within the proposed timeframes. The FATF will closely monitor the implementation of these action plans.

FATF notes that “Ukraine has demonstrated progress in improving its AML/CFT regime; however, the FATF has determined that certain strategic AML/CFT deficiencies remain. Ukraine has made a high-level political commitment to work with the FATF and MONEYVAL to address these deficiencies, including by: (1) adequately criminalising money laundering and terrorist financing (Recommendation 1 and Special Recommendation II), (2) enhancing financial transparency (Recommendation 4); and (3) establishing and implementing an adequate legal framework for identifying and freezing terrorist assets (Special Recommendation III).”