Ukraine falls foul, Nigeria escapes the worst

Enactment of the Law of Ukraine on Prevention and Counteraction of the Legalisation (Laundering) of the Proceeds from Crime failed to forestall imposition of countermeasures by the Financial Action Task Force on 20 December. In addition to enhanced due diligence of business relations and transactions under Recommendation 21, Ukrainian individuals, companies and financial institutions now face even closer scrutiny by FATF members seeking to establish beneficial ownership of funds; prioritised reporting of their financial transactions for money laundering purposes; more stringent checks on applications for banking licences by Ukrainian institutions; and a potential wariness amongst non-financial sector businesses in FATF member states apprised of the decision. Nigeria, which had also been threatened with sanctions, managed to avoid similar strictures beyond Recommendation 21 by passing its Money Laundering Act (Amendment) Act 2002 on 14 December. The FATF will review progress by both countries at its plenary meeting in Paris on 12-14 February 2003.