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Where there is no law, but every man does what is right in his own eyes, there is the least of real liberty
Henry M. Robert

CABINET TO TIGHTEN SCREWS ON BANKS Bank security experts think they will have to live through it

24 February, 1998 - 00:00

The Coordinating Committee for Combating Organized Crime and Corruption and the National Bank of Ukraine have signed a joint action plan to prevent criminalization in banking and finance.

According to Vasyl Durdynets, head of the National Bureau of Investigation (which is not financed by Parliament), the document sets cooperation guidelines for the NBU and law enforcement authorities. The emphasis seems to be on revising the legislative framework of the banking business, specifically crediting procedures, bank security arrangements, currency regulation, oversight, banking supervision, and cash payments. Criminologists will examine a bill introducing changes in certain normative acts concerning the opening of bank accounts, NBU instructions on the opening of foreign exchange accounts by banks, bank loan procedures, and the opening of correspondent accounts denominated in foreign currencies at authorized banks of Ukraine.

Many experts attribute the outburst of law enforcement activity in the baking domain to the Cabinet’s attempt to tighten the screws on the banks before the elections, thus preventing the outflow of funds to finance rival campaigns. The more so that the banks, particularly the Commercial Banks Association, have of late been working to step up their influence on the political and economic situation, supporting candidates whose programs are in their professional interests.

Meanwhile banking circles are taking the Cabinet’s move rather calmly.

Hryhory Sheludko, head of security at the Bank Aval, President of the Association of Ukrainian Bank Security Services, told The Day that work is underway in all post-Soviet countries to establish and further contacts between banks and law enforcement agencies. Sheludko thinks that a number of banks indulge in illicit operations, so the task is to build a solid bank-security-tax inspection triangle to seal off all possible criminal channels. In the first place, this will help the commercial banks that have been exposed to strongly worded accusations of late. Whenever one hears about criminal transactions at a bank there is practically no way to find out the truth. No bank is authorized to conduct such investigations, the latter being the prerogative of the state. However, banks could join in a crime-prevention campaign, benefiting one and all on the right side of the law.

Volodymyr Sennyk, head of NBU’s legal department, believes that commercial banks should welcome this action plan. Copies are being forwarded to all interested organizations. Although officially adopted on February 11, no copies had reached the Commercial Banks Association by noon February 17. The Association’s spokesman declined comment.

 

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