Search

This article aims at studying the national legislation, recommendations of international organizations (intergovernmental bodies), as well as the opinions of scholars and practitioners on the implementation of financial monitoring in the practice of law. The authors define the achievement of this goal by fulfilling the tasks set and answering the question of the correlation between the obligation to conduct financial monitoring and the attorney-client privilege. This article is of undoubted relevance due to Ukraine's active implementation of European integration processes and transformation of legislation in the field of prevention and counteraction to money laundering and terrorist financing. Along with this development is the independent status of the attorney-at-law and the practice of law, the maintenance and provision of which are constantly relevant in the State. The authors draw attention to the current legal regulation of financial monitoring in the practice of law, as well as to the FATF recommendations, emphasizing the importance of such a legal phenomenon as financial monitoring. The authors define the area of functional responsibility of law firms, law firms and attorneys-at-law who practice law individually as specially designated subjects of primary financial monitoring. In addition, this article emphasizes the peculiarities of financial monitoring in the practice of law and expresses concerns about certain peculiarities. At the same time, the authors outline the lack of unity in the attitude toward the purpose of financial monitoring, as well as the presence of scepticism and both constructive and unjustified criticism by practising attorneys at law of financial monitoring in the practice of law, namely its legal regulation. The authors determine that the most important result of this study is the emphasis on the need for a balanced ratio of the objectives of financial monitoring and the preservation of the independence of the legal profession. Summarizing, the researchers argue that financial monitoring is a challenge of the time, the achievement of which should not be declarative, but real. The reality of the goals of financial monitoring should be achieved by all subjects of the latter, including attorneys-at-law. At the same time, the combination of the status of an advocate and a subject of primary financial monitoring should be balanced, taking into account independence as a principle of the practice of law. [ABSTRACT FROM AUTHOR]

The history of anti-money laundering legislation began with the criminalization of the proceeds derived from criminal offenses connected to drug trafficking. Illicit drug trafficking is linked also to other criminal activities that have a destabilizing effect on the economy and the development of society. Numerous international organizations have joined the fight against money laundering and terrorist financing by adopting international agreements seeking to regulate this matter. The most significant contribution to this matter has been made by international organizations such as United Nations, European Union, FATF, and MONEYVAL. Foundations of the legal regulations have been set by the adoption of the Conventions, while through the implementation of the Directives into national legislation, a uniform application of the measures for prevention of money laundering and financing of terrorism has been achieved. Since money laundering is often carried out in the international environment, the measures being brought for its prevention necessarily include international coordination and cooperation. Although the European Union has set a firm regulatory framework, as well as strategic priorities, there is a constant need for monitoring and adjustment of the regulations to new threats caused by money laundering activities. [ABSTRACT FROM AUTHOR]

• The LASSO and random forests are employed to jointly identify the five key factors affecting AML, which have policy implications for regulatory authorities to optimize the allocation of AML resources under the risk-based approach. • The random forests five-factor (RF-FF) model proposed in this paper has high prediction accuracy and good out-of-sample predictive ability for the MER-AML index. • The time-series national AML index constructed based on the RF-FF model contributes to overcoming the limitations of existing methods for measuring AML systems. This paper proposes a methodology for constructing the national anti-money laundering (AML) index based on Mutual Evaluation reports and machine learning models. We employ LASSO and random forests to jointly identify the key factors affecting AML, which have policy implications for regulatory authorities to optimize the allocation of AML resources. The random forests five-factor (RF-FF) model proposed in this paper has high prediction accuracy (86.31%) and good out-of-sample predictive ability for the MER-AML index, which is significantly better than competing models such as OLS and relaxed LASSO. The time-series national AML index constructed based on the RF-FF model contributes to overcoming the limitations of existing methods, providing fresh perspectives on the measurement of AML systems, and facilitating empirical studies related to evaluating the controversial AML regime. [ABSTRACT FROM AUTHOR]

Professionals such as lawyers, accountants, company secretaries and real estate agents who are under the category of Designated Nonfinancial Business and Professions (DNFBPs) are expected to comply with the requirements of FATF 40+9 Recommendation. FATF recommends that DNFBPs need to comply with five major recommendations (i.e. Recommendations 12, 16,17,20,24 and 25) to combat the prevalence of money laundering and terrorism financing. This includes the need to 1) conduct due diligent on their clients 2) maintain proper records and documentation of related transactions for at least six years; and 3) submit a suspicious transaction report to the Competent Authority, who is in charge of Anti-Money Laundering regime of a country. This study analyses the latest Mutual Evaluation reports of countries within the Asia Pacific Group (APG) to assess the level of compliance of the countries in pursuant to the compliance of DNFBPs and also analyze the characteristics of the compliance rating of the DNFBPs. In general, the findings show low level of compliance for these standards, implicating either lack of awareness or poor enforcement by the regulators. [ABSTRACT FROM AUTHOR]