Modern determinants of assessing the risk of legalization of criminal proceeds in banks

Abstract

Introduction. In recent years, there has been a tendency to simultaneously increase requirements in terms of reserve capital, combating money laundering and terrorist financing, which has led to a significant increase in the corresponding costs for banks around the world. Banks that provide services such as depositing, lending, transferring funds or assets from one institution to another without taking into account geographical restrictions are most often used for money laundering. Problem Statement. It has been proven that the entrenchment of shadow schemes by economic entities conducting various operations, the introduction of the latest technologies into the financial sphere, as well as the rapid development of the cryptocurrency market have led to a growing trends in legalization of criminal proceeds involving financial institutions. Purpose. Generalization of the key provisions and practices of international standards, analysis of the use of a risk-oriented approach by countries in ensuring countermeasures against money laundering and terrorist financing, systematization of the provisions of risk management of money laundering, financing of terrorism and proliferation of weapons of mass destruction in foreign practice and their introduction into domestic banking practice. Methods. General scientific and special methods are used: analysis, synthesis, grouping, description, comparison, theoretical generalization and cluster analysis. Results. The factors that form the risks of legalization of criminal proceeds are studied by such components as threats, vulnerability and consequences. The main components of the risk management system of the legalization of criminal proceeds are singled out, namely: stages of identification and analysis of the risk of legalization of criminal proceeds , principles, functions, risk assessment methods, security systems and strategies for managing the risks of legalization. The article proposes a methodology for assessing the risk of legalization of criminal proceeds in banks using the clustering method. Conclusions. The national money laundering risk assessment system should be based on a unified approach that provides for the identification of clients of financial institutions, the processing of information by regulatory and supervisory authorities, supervision by regulatory authorities and financial intelligence units and the assessment of AML/CFT risks, the comparison of data of financial institutions with data of law enforcement agencies to determine the vulnerabilities of the system of combating the legalization of criminal proceeds and financing of terrorism. Threats caused by the latest state of operation of Ukrainian banks, the development of measures to further reduce their involvement in money laundering and terrorist financing schemes require further research.