Risk assessment of using banks for money laundering

Abstract

It is established that in Ukraine there is a tendency to increase the number of cases of legalization of proceeds from crime. The most risky operations in terms of legalization of criminal assets are cash transactions and transactions related to receiving or providing financial assistance. Based on the distribution of Ukrainian banks by the level of reliability it was revealed that by the year 2017, 10% of banks had a high level of reliability and, to a lesser extent, were at risk of money laundering; 64% of banks had an average level of reliability; 26% of banks were exposed to significant risk of money laundering. It is established that the risk of legalization of criminal incomes is closely related to the operational risk of banks. According to the results of clusterization of all functioning banks of Ukraine, three groups of banks were identified by the operational risk and reliability rating criteria - with a low, medium and high risk of legalization of proceeds from crime. The results shows that the vast majority of Ukrainian banks have a high level of money laundering risk.