Implementation of EU Anti-Money Laundering Standards in Ukraine: Problems and Prospects of Law Enforcement

Abstract

The purpose of the article is a comprehensive analysis of the stages of formation, current state, and strategic prospects for the development of the national system for preventing and counteracting the legalization (laundering) of proceeds obtained through crime in the context of Ukraine's European integration. The methodological basis of the study comprises the dialectical method of cognition of legal phenomena, formal-legal analysis of normative acts, and the comparative legal method. The authors argue the necessity of transitioning from formal implementation of European directives to creating an interoperable financial monitoring ecosystem, and also highlight systemic disparities between the regulatory status of Politically Exposed Persons (PEPs) and the practical capabilities of the risk-based approach employed by banking institutions. The article investigates the transformation of legal regulation from primary control procedures to the introduction of a risk-based approach resulting from the implementation of the standards of the 4th and 5th EU Directives. The key novelties of the Law of Ukraine No. 361-IX are analyzed, particularly the verification mechanism for Ultimate Beneficial Owners (UBOs) and new rules regarding liability for submitting false information, effective from September 2024. It is established that the legislative consolidation of the "lifelong" PEP status, while meeting international requirements, in practice creates risks of formalism and unjustified refusal of service ("de-risking"). It is also determined that despite the adoption of the specialized Law No. 2074-IX, the virtual assets sector remains partially deregulated due to the lack of tax amendments, which makes the full implementation of FATF recommendations impossible. Based on the results of the study, it is concluded that the national system requires further improvement in three vectors: 1) completing the digitalization of beneficial ownership registers; 2) fiscalization of the virtual assets market; 3) developing detailed methodological recommendations to avoid excessive pressure on clients with PEP status.