AML (Anti-Money Laundering) is a set of measures designed to monitor, prevent and combat the legalisation of funds derived from crime (known as “money laundering”). AML is widely used in the financial sector (banks, payment systems and other financial institutions) as well as in the crypto industry. Almost all major players in the financial market (banks, stock exchanges, exchangers, etc.) need to implement modern AML practices and ensure compliance with them vis-à-vis their business partners.
Let’s take a look at the key aspects of AML regulation in Ukraine, the European Union and the United States of America.
AML in Ukraine
In Ukraine, the fight against money laundering is regulated by the Law of Ukraine “On Prevention and Counteraction of Legalisation (Laundering) of Proceeds from Crime, Financing of Terrorism and Financing of Proliferation of Weapons of Mass Destruction”. The main provisions of the law include
– Obligations of primary financial monitoring entities: banks, notaries, brokers, auditors and other entities are required to identify their clients and monitor financial transactions.
– Threshold amounts: financial transactions exceeding UAH 400,000 (or the equivalent in foreign currency) are subject to mandatory verification.
– Ultimate beneficial owners of legal entities: Legal entities must have and, in certain cases, disclose information about their ultimate beneficial owners.
– State Financial Monitoring Service: This body is responsible for analysing suspicious transactions and passing on information to law enforcement agencies.
– Penalties and liability: Fines, sanctions in the form of suspension of activities and even criminal liability are applied in case of violation of rules and requirements.
Ukraine is actively working to harmonise its legislation with international standards, such as the recommendations of the Financial Action Task Force (FATF).
AML in the European Union
In the European Union, AML is governed by a number of directives and regulations. The main provisions of EU AML legislation are as follows:
– Criminal Links: Certain crimes, including cybercrime and tax fraud, are considered grounds for AML.
– Increased liability: Establishment criminal liability for legal persons who fail to comply with AML requirements.
– Compulsory cross-border cooperation: EU member states are required to coordinate their efforts to investigate and prevent crime.
– Anti-Money Laundering and Counter-Terrorist Financing Authority: A decentralised EU authority (Agency) was established in 2024 to coordinate national authorities to ensure that EU AML rules are correctly and consistently applied.
AML in the USA
In the United States, AML is governed by several laws, the most important of which are
– Bank Secrecy Act (BSA): Requires financial institutions to report and disclose suspicious transactions.
– Patriot Act: Strengthened customer identification requirements and monitoring of international transactions.
FinCEN (Financial Crimes Enforcement Network) is the main body responsible for collecting and analysing data on suspicious financial transactions.
US AML legislation is largely cross-border in nature and requires the collection and processing of information on a maximum number of persons. Strict sanctions and liability for violations of US law are established for all financial market participants. Much attention is paid to specific tools for identifying suspicious transactions, and special control is exercised over transactions involving digital assets (including cryptocurrencies).
General principles
All participants in the financial market, including the crypto industry, must take into account the requirements of the law when planning their activities. This includes: 1) the use of certain AML provisions in contracts with counterparties; 2) the use of special software to identify risky transactions and counterparties; 3) the collection of information about counterparties; 4) the implementation of modern compliance systems; 5) the training of personnel; 6) the constant monitoring of changes in legislation, etc. Failure to comply with AML measures may have negative consequences for the market participant, so we recommend consulting lawyers and using special software in this area.
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