Implementation of international experience in the banking risk assessment system of illegal incomes legalization

Kovalenko Victoria
D.Sc. (Economics), Professor, Professor, Department of Banking, Odessa National University of Economics, Odessa, E-mail:kovalenko-6868@ukr.net

Yehorova Anastasiia
Student of the Faculty of Finance and Banking, Odesa National Economic University, Odessa, E-mail:anastasiia.eee@gmail.com

Cite this article:

Kovalenko V., Yehorova A. (2021) Implementation of international experience in the banking risk assessment system of illegal incomes legalization. Ed.: V.V. Kovalenko (ed.-in-ch.) and others [Implementaciya mizhnarodnogo dosvidu v sistemi ocinyuvannya bankivskogo riziku legalizaciyi dohodiv otrimanih zlochinnim shlyahom; za red.: V.V. Kovalenko (gol. red.)], Scientific Bulletin of the Odessa National Economic University (ISSN 2313-4569), Odessa National Economics University, Odessa, No. 11-12 (288-289), pp. 33-41.

Abstract

The aim of the paper is to summarize key provisions and practices of international standards, analyze the application of risk-based approach in ML/CFT, systematization of risk management provisions ML/CFT/WMD in foreign practice and their introduction into domestic banking practice. In the process of research both general scientific and specific methods were used: logical structure analysis - to build the logic and structure of the study; evolutionary - to study approaches to assessing the risks of money laundering and terrorist financing. Results of the article. To minimize the threats of ML/CFT/WMD from the financial system is summarized the international experience of applying a risk-based approach in the banking sector. It is proved that such risks as the risks of legalization (laundering) of the proceeds of crime are related to other typical banking risks, but are more mediate, and therefore affect their implementation. The scientific novelty is the detailing of the risk assessment tool and the systematic and organized process with the participation of stakeholders public and private sector in the field of combating money laundering. The practical significance of this study is to improve existing approaches of systematize the risks of legalization of money laundering Among the key accents for improvement for domestic banks in this matter are the following areas: risk assessment should be adapted to the activities of a particular banking institution; ensuring individual risk assessment for all clients (low, medium, high); adaptation of CDD measures and monitoring system based on the collected information and identified risks (both the bank and the client); the monitoring system should be adapted to the bank's business and risks, which contributes to more accurate reporting to the financial intelligence department.

Keywords

bank, risk, risk-based approach, money laundering.

JEL classification: G210

UD classification: 336.71.078.3

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