December 20, 2002  FINTRAC Advisory

FINTRAC calls for increased vigilance when dealing with financial entities from Ukraine

Ottawa, December 20, 2002 - The Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) today issued an advisory to all Canadian financial institutions, money service businesses and other entities, who are subject to the requirements of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act, alerting them to the risk of doing business with individuals and companies based in Ukraine. This follows the decision of the Financial Action Task Force (FATF), at its October 2002 meeting, to place countermeasures against Ukraine if it failed to enact appropriate anti-money laundering legislation by December 15, 2002. Canada is a member of the FATF and strongly supports its efforts to combat money laundering and terrorist financing.

Financial transactions emanating from, or destined to, Ukraine should be viewed by reporting entities as potentially suspicious. Reporting entities are urged to exercise an enhanced level of scrutiny when dealing with transactions involving this jurisdiction.

In September 2001, the FATF identified Ukraine as a Non-cooperative Country and Territory (NCCT) because it lacked comprehensive anti-money laundering legislation, including the failure to establish an efficient mandatory suspicious transaction reporting regime and proper customer identification requirements. On December 7, 2002, Ukraine enacted the Law of Ukraine on Prevention and Counteraction of the Legalization (Laundering) of the Proceeds from Crime. This legislation, however, does not meet international standards and does not address the main deficiencies identified by the FATF in September 2001.

The Office of the Superintendent of Financial Institutions (OSFI) has also issued an advisory to all federally regulated financial institutions. For a copy of the letter visit: www.osfi-bsif.gc.ca.

To link to the FATF Web site, please refer to: www.oecd.org (PDF Format).

FINTRAC is an independent federal government agency with a mandate to collect, analyze, assess and, where appropriate, disclose information in order to assist in the detection, prevention and deterrence of money laundering and the financing of terrorist activities.