OREANDA-NEWS. Beginning 31 August 2016, the National Bank of Ukraine starts informing the public on a regular basis about enforcement measures applied to banks for violation of anti-money laundering laws and regulations, as well as for infringements linked to the execution of risky transactions posing  threats to the interests of depositors or other creditors of the bank.

Information on enforcement measures applied to banks was earlier  as designated as “restricted information”.  However, NBU Board Resolution of 25 August 2016 ordered the declassification of information on the application of enforcement measures in the form of warning letters, fines and suspension from office of bank's executive officers for violation of anti-money laundering laws and regulations.

Numerous violations by banks of the new legislative requirements  regarding the identification of politically exposed persons have recently been revealed.   For instance, bank employees either fail to effectively identify their clients as politically exposed persons and verify the source of funds of such persons, or establish relations with such clients without the consent of the bank’s CEO.

Such violations can occur for different reasons, including:

·           human factor (due to carelessness of bank employees);

·           improper fine-tuning and calibration of software packages designed for financial monitoring purposes by banks.

However, some banks either fail to duly comply with the applicable financial monitoring requirements in terms of ensuring that adequate risk management practices are in place or perform risk management functions  in a perfunctory manner.