FATF Expands List of Demands
Maksym Karyzhsky, assistant to Ukraine’s Minister of Economy and European Integration Valery Khoroshkovsky, told The Day that on January 31, at 5.30, Kyiv time, in Washington, the US-Ukrainian Committee for Economic Cooperation had signed the final version of a declaration. “The United Sates expressed commitment to actively promote Ukraine’s admission to the WTO,” Mr. Karyzhsky said, “which can be considered the Ukrainian delegation’s achievement.”
The declaration states a list of demands, voiced by US Department of Justice special advisor Theodore Greenberg, which Ukraine should meet to have FATF sanctions lifted. Among them, absolute political impartiality of the State Department for Financial Monitoring (which the National Security and Defense Council once pressed for, proposing that it should become an extra-governmental body), amendments to the Criminal Code (a law has already been passed but not yet signed by the President), the Law on Banks and Banking (passed in the first reading), and reduction of an upper limit for banking operations exempt from monitoring. The National Bank is already drafting a proposal on a threefold reduction of this limit (now being UAH 100,000 and UAH 300,000 for cash and cashless operations, respectively). “If Ukraine meets these conditions in the shortest possible time, the FATF will suspend its sanctions. Although this does not yet guarantee the removal of Ukraine from the FATF black list, the lifting of the sanctions will be a major achievement,” Mr. Greenberg said. Mr. Karyzhsky denied some media reports that the United States was imposing demands on Ukraine. In his words, “this is rather the position of all the FATF principal members, not only the United States.” Commenting on these FATF demands, Mr. Khoroshkovsky said that all of them could be satisfied by February 12. The Minister’s assistant noted Ukraine could make sure that the State Department for Financial Monitoring “shows signs of independence,” i.e., it will not be directly subordinated to any governmental officials, and there will be clearly-defined guidelines for the dismissal of its head. “Ukraine must make a political statement to this effect, and take some actions accordingly,” Mr. Karyzhsky said. He also added that “even though some countries place little trust in Ukraine now, we need to begin somewhere. It is the job of our delegation.” When asked by The Day who might head the State Committee for Financial Monitoring (this office has been vacant since Oleksiy Berezhny was fired), the Minister’s assistant said he had no relevant information.
Meanwhile, Ukrainian politicians talk that one of the leaders of State Tax Administration may be appointed “chief of the financial intelligence agency.” It is not accidental that Ukrainian bankers were not very happy with the appointment of two senior tax police officers as first deputy and deputy chairmen of the above-mentioned department. Representatives of Ukrainian banks quote unofficial sources that the FATF was dissatisfied with the dismissal of Mr. Berezhny, an ex-diplomat who is not connected with the law-enforcement agencies.
“If we began to implement the resolutions passed by Verkhovna Rada, the FATF would ease its sanctions, and we could resume our dialogue. The FATF needs to see our actions,” National Bank President, Serhiy Tyhypko stated. The Association of Ukrainian Banks (AUB) believes that the situation with the FATF is not hopeless. After negotiating with the ambassadors of Germany and Canada, AUB told The Day that as soon as Ukraine meets the demands, the FATF will treat Ukraine more favorably. German diplomats stressed the importance of placing Ukraine’s monitoring department outside direct governmental supervision. Canada’s ambassador Andrew Robinson pointed out that Ukraine’s prime concern should be restoring trust of the international community, which will determine further countermeasures that may be taken against money laundering.
In the question of FATF sanctions, a new key phrase that can be identified in the vocabulary of Western diplomats: “political impartiality”. The FATF is familiar with the practice of using governmental bodies for political and business expediency, so it insists that Ukraine should be politically impartial in the process of combating money laundering. It is a very convenient catchphrase, because everybody can talk at length about “politics”.
