MEASURES OF INFLUENCE FOR VIOLATION OF FINANCIAL MONITORING BY BANKS IN UKRAINE

Abstract

The research examines the organizational principles of building a system of influence measures for violations of financial monitoring by banks in Ukraine, analysis of fines imposed on banks in the field of financial monitoring, and judicial practice of challenging the applied influence measures for the period from 2018 to 2023. This subject of research was chosen due to the impossibility of effective functioning of the national system of financial monitoring without an effective regulation mechanism. An integral part of market regulation is the implementation of influence measures adequate to the committed violation. The application of influence measures and control over the implementation of corrective actions contribute to the strengthening of the national financial monitoring system. The relevance of the study is determined by the heterogeneity of the functioning of financial monitoring systems in different jurisdictions, the involvement of a wide range of reporting entities in this process, the constant development in the field of financial monitoring due to the digital transformation of the provision of financial services. A wide list of influence measures, which the financial regulator has the right to apply to banks according to Ukrainian legislation, was revealed, including a ban on carrying out certain types of operations, removing management from their positions, classifying the bank as problematic or liquidating the bank. However, in practice, the use of influence measures in the form of written warnings and fines prevailed. The National Bank of Ukraine, as a rule, applied fines in the case of problems of banks with the implementation of measures for customer due diligence and poor banking analysis of financial transactions of clients. The ultimate goal of most schemes, which, according to the National Bank of Ukraine, violated the legislation in the field of financial monitoring, was the conversion of non-cash funds into cash. Banks appealed the decision of the financial regulator only in case of significant fines. At the same time, the courts made different decisions in similar situations, which indicates the absence of a unified position of the judicial system regarding the legality of the application of fines to banks for violations in the field of financial monitoring.