As part of the Financial Integrity Platform – Young Leaders Chapter, a session was held focusing on the fundamentals of financial monitoring. Rostyslav Marchuk explained the concept in simple terms and provided real-life examples.

One of the key topics was debunking myths about money laundering. The speaker shared real-world schemes, including cases in casinos where a client can “win” money by essentially paying for it, or in the art sector, where a painting is resold at an inflated price to create the illusion of legitimate income.

The discussion also covered the difference between de-shadowing (detinisation) and legalisation of funds:

• De-shadowing of funds refers to the process of bringing hidden but legally earned income into the formal economy. For example, if a business operated without official registration and later started paying taxes, this is de-shadowing.
• Legalisation (money laundering) is the process of making illegally obtained money (e.g., from corruption, drug trafficking, or fraud) appear legitimate. Various schemes are used to conceal the illicit origin of these funds.

Financial monitoring includes measures aimed at preventing and combating the legalisation of illicit proceeds and the financing of terrorism:

• Preventive measures: customer due diligence, development of internal regulations, risk management, and monitoring of suspicious transactions.
• Countermeasures: asset freezing and conducting financial investigations.

Financial monitoring operates on two levels:

• State level, carried out by government authorities.
• Primary level, conducted by all entities providing financial services (banks, insurance companies, credit unions, pawnshops, auditors, accountants, etc.). These entities are required to report suspicious financial transactions.

Rostyslav Marchuk also emphasised that the financial monitoring system operates on a risk-based approach. Information on financial transactions is analysed by primary monitoring entities, and in case of suspicion, it is forwarded to the State Financial Monitoring Service. If violations are confirmed, the case is transferred to law enforcement agencies and courts.

The event concluded with an interactive quiz, after which all participants received gifts from the CFI and the Academy of Financial Monitoring of Ukraine.

The CFI continues to support young people in their pursuit of knowledge in financial security and the fight against financial crime.

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