Beginning 31 August 2016, the National Bank of Ukraine will start informing the public on a regular basis about enforcement measures applied to banks for violations of anti-money laundering laws and regulations, as well as for infringements linked to the execution of risky transactions posing threats to the interests of depositors or other creditors of the bank.
“We are building a modern and open central bank integrated into the European community of national central banks. Following the best international standards of banking supervision and guided by its vision, the NBU has decided to regularly inform the public about enforcement measures applied to banks for violation of anti-money laundering laws and regulations,” said Director of the NBU Financial Monitoring Department Mr Ihor Bereza.
Information on enforcement measures applied to banks was earlier designated as “restricted information.” However, an NBU Board Resolution on 25 August 2016 ordered the declassification of information on the application of enforcement measures in the form of warning letters, fines, and suspensions from office of a bank's executive officers for violations of anti-money laundering laws and regulations.
Numerous violations by banks of new legislative requirements regarding the identification of politically exposed persons have recently been revealed. For instance, bank employees either fail to effectively identify their clients as politically exposed persons and verify the source of funds of such persons, or establish relations with such clients without the consent of the bank’s CEO.
Such violations can occur for different reasons, including:
- human error (due to carelessness of bank employees);
- improper fine-tuning and calibration by banks of software packages designed for financial monitoring purposes.
However, some banks either fail to duly comply with the applicable financial monitoring requirements in terms of ensuring that adequate risk management practices are in place, or perform risk management functions in a perfunctory manner.
Beginning 31 August 2016, the NBU shall publish and make available to the public information about enforcement measures applied to banks on a monthly basis.