=Paper=
{{Paper
|id=Vol-3156/paper18
|storemode=property
|title=Theoretical and Applied Principles of Information Technology for Anti- Money Laundering
|pdfUrl=https://ceur-ws.org/Vol-3156/paper18.pdf
|volume=Vol-3156
|authors=Iryna Moiseienko,Ivanna Dronyuk
|dblpUrl=https://dblp.org/rec/conf/intelitsis/MoiseienkoD22
}}
==Theoretical and Applied Principles of Information Technology for Anti- Money Laundering==
https://ceur-ws.org/Vol-3156/paper18.pdf
Theoretical and Applied Principles of Information Technology
for Anti-money Laundering
Iryna Moiseienkoa, Ivanna Dronyukb
a
Prydniprovska State Academy of Civil Engineering and Architecture, Chernyshevsky 24A, Dnipro, 49000,
Ukraine
b
Lviv Polytechnic National University, Bandery 12, Lviv 79013, Ukraine
Abstract
Theoretical bases of corruption risk analysis are presented. Methodical bases of information
technology construction to prevent money laundering are formulated. Methods for
monitoring money laundering risks have been developed. The research of money laundering
risks has been implemented by using system analysis and generalization for research of
peculiarities of money laundering risks, grouping, and logical analysis to study the practice of
identifying money laundering risks. Algorithms for identifying money laundering risks of
suspicious financial transaction subjects have been developed. The presented models and
methods have applied application for anti-money laundering processes digitalization.
Keywords 1
Artificial intelligence, big data, financial services, anti-money laundering, risk assessment,
evaluation criteria
1. Introduction
Advanced artificial intelligence applications become critically important to observe for fraud risk
monitoring, fraud detection, and various anti-money laundering techniques. With the development of
financial markets, the technology of money laundering is constantly updated, and new challenges and
threats arise. Therefore, the Financial Monitoring System at the macro level and the level of the
subjects of primary financial monitoring needs to be updated and adapted to the new legal
requirements and new threats of money laundering.
The financial monitoring system at the macro level and for the subjects of primary financial
monitoring needs to be adapted to the new legal requirements and new threats of money laundering.
This adaptation involves the formation of algorithms for identifying dubious financial transactions
and verifying participants in these transactions using modern information technology tools.
Theoretical aspects of the study reflect the legal basis of financial monitoring at the macro and
micro levels. They involve the initial identification of the object, size, nature, and participants of
dubious financial transactions. Applied aspects are related to the peculiarities of the organization of
primary financial monitoring. These include the legal and economic characteristics of direct financial
motrackingnd and methods of compliance risk management.
This study aims to improve the procedure for the transition from monitoring financial transactions
to monitoring the activities and behavior of participants in these operations and the use of information
technology to identify the risks of money laundering. To determine the theoretical and applied
features of financial monitoring, general scientific and unique research methods were used:
generalization to determine the characteristics of the risks of money laundering; grouping and logical
IntelITSIS’2022: 3rd International Workshop on Intelligent Information Technologies and Systems of Information Security, March 23–25,
2022, Khmelnytskyi, Ukraine
EMAIL: iruna_m2015@ukr.net (Iryna Moiseienko); ivanna.m.droniuk@lpnu.ua (Ivanna Dronyuk)
ORCID: 0000-0002-3140-461X (Iryna Moiseienko); 0000-0003-1667-2584 (Ivanna Dronyuk)
©️ 2022 Copyright for this paper by its authors.
Use permitted under Creative Commons License Attribution 4.0 International (CC BY 4.0).
CEUR Workshop Proceedings (CEUR-WS.org)
analysis for risk identification practice; algorithms to identify risks, entities, and suspicious financial
transactions.
Among the methods of financial control of the legalizing processes of legalizing illegally obtained
income, the analysis of financial transactions at the primary and state financial monitoring level. If
there are signs of doubt in the financial transaction, it may be suspended. Financial monitoring of
suspicious transactions involves procedures for the transition from monitoring the transaction to
monitoring the activities and behavior of the client. Information technologies to combat money
laundering involve the use of specific control methods.
The object of financial monitoring is actions with relevant financial assets and participants in these
financial transactions. Such activities or events, purchases, and their participants, and any information
on the legalization of illegal income are subject to monitoring. At the present stage of development,
most of these actions occur in cyberspace, which creates the need to use computer tools to combat
corruption. Therefore, the presented work is relevant.
2. Materials and methodologies
The basis of the methodology for the construction of information technology is a systematic
approach to studying economic phenomena and processes. This approach involves the use of the
following principles of analysis:
• completeness and оbjectivity of monitoring the processes of illegal income
• analysis of the processes of financial transactions and their participants in the dynamics
• verification of the subjects of dubious financial transactions and their property relations
• use of historical and international experience in organizing financial monitoring
• introduction of mathematical models, artificial intelligence, and information
• technologies for practical tools of financial monitoring.
2.1. State of the art
Currently, there is a transition of all human processes in cyberspace. Following the banks in virtual
reality, scammers rushed. Cybersecurity has become a leading trend in the modern world. Modern
information technologies have been actively introduced to ensure data integrity, customer
confidentiality, and anti-corruption. Artificial intelligence (AI), machine learning methods, and
classical methods are actively used to prevent money laundering. The investigation survey in this field
is presented [1, 12, 24-26]. The advanced AI applications are the base of fraud risk monitoring, fraud
detection, anti-money laundering methods, and cross-border payment handling and have become very
effective tools [13-15]. Based on the Basel AML Index, an annual world ranking of countries at risk
of money laundering is formed (see Table.1) [16,17]. A data mining approach for finding illicit
transactions has been developed [18]. Leveraging machine learning methods for the struggle against
money laundering are investigated [19]. Artificial Intelligence has become an essential resource for
organizations and governments dealing with regulatory changes, new Anti-Money Laundering
obligations, and ML/TF proven [20,27,28]. A systemic approach for creating information
technologies is investigated [21- 23]. The presented literature review demonstrates that it is critically
important for Ukraine to implement modern information technologies in ML/TF.
2.2. Theoretical fundamentals of money laundering analysis
Systematic analysis of money laundering processes will be considered scientific methods and
practical analysis methods using international experience in detecting these transactions in global
computer networks. The use of the category of the system as a unity of elements and relationships
between them to achieve the study’s objectives involves the use of the following system principles:
multicriteria; hierarchy; uncertainty; autonomy; dynamism (inertia). Multicriteria means that there are
many ways to legalize illicit income. Thus, the multi-criteria analysis method involves forming plans
for identifying money laundering risks, establishing the level of hazards, and response measures to
identify suspicious transactions or participants in legalization processes in the computer network.
Table 1
Part of the ranking countries for money laundering and terrorism financing risks from the Basel AML
Index [17,18]
Country Basel Rank KYC Rank
Cote D’Ivoire 18 67
China 19 24
Mongolia 20 30
Nicaragua 21 4
Argentina 22 75
Pakistan 23 5
Angola 24 63
Serbia 25 55
Tajikistan 26 47
Algeria 27 52
Kazakhstan 28 61
Ecuador 29 23
Jamaica 30 12
Thailand 31 51
Senegal 32 60
Turkey 33 54
Panama 34 6
Guyana 35 69
Morocco 36 26
Ukraine 37 19
Bolivia 38 28
Albania 39 15
Vanuatu 40 53
Kyrgyzstan 41 57
Bosnia-Herzegovina 42 13
Columbia 43 36
Philippines 44 27
Bangladesh 45 79
Marshall Islands 46 88
Honduras 47 48
Russia 48 18
Venezuela 49 7
Uzbekistan 50 43
India 51 59
United Arab Emirates 52 68
A hierarchy of analysis methods means such an algorithm for studying money laundering
processes. The initial information on the decision-making response is formed at different levels of the
economic system. The peculiarity of the current stage is that other software can be used at each level
of this system. The autonomy of the financial analysis methodology involves the use of models of
analytical research that take into account the specifics of the legalization of illicit funds at each level.
The methodology of systematic analysis of the legalization of illegal income involves the sequence
of certain stages of the analytical process. These include the following:
the first - determination of the purpose, tasks, and conditions of the system analysis of processes of
legalization of the means received illegally;
the second – is determining the list of parameters and indicators for establishing risks of
legalization of illegal funds (synthetic, absolute and relative, quantitative and qualitative);
the third – is drawing up a general legalization model of illegally obtained income, determining its
components, sequence, and relationships between elements of typological schemes of money
laundering.
The method of systematic analysis of money laundering contains three analytical research
complexes:
1. analysis of potential risks and threats of money laundering
2. analysis of the results of monitoring the objects and subjects of dubious financial
transactions
3. analysis of internal and external environment measures aimed at counteracting the
legalization (laundering) of proceeds from crime.
Depending on the set of research opportunities, all methods of analysis of money laundering can
be divided into the following groups:
• Traditional methods of statistical analysis and use of relative, average values, grouping
• Methods of analytical research and presentation of results in graphical, tabular, or schematic
form
• Logical heuristic methods (surveys, expert assessments, etc.)
• Typological studies of money laundering models.
Here we introduce investigation money laundering methods [2, 9]. Research methods are divided
into primary and secondary.
Direct methods are used to study sources, gather information, observe, and survey. Secondary
methods are used for data processing and analysis.
According to the implementation process, the plans are divided into Logical-Analytical Visual,
Graphic, and Computational.
Logical and analytical methods test hypotheses and conclusions, mainly using deduction and
induction methods. Visual or graphical methods are used to visualize the results. Computational
methods are used to analyze and predict outcomes based on statistical and regression analysis
calculations, using typological methods to study typical phenomena.
According to the nature of use, the procedures are divided into stages and universal. Sets are used
only at specific research locations (observation, experiment) and are universal at all stages of research
(abstraction, generalization, induction, deduction).
According to the nature of the study of the object of financial monitoring, the analysis methods are
divided into general and unique.
Methods of empirical research include observation, comparison, measurement, and experiment.
And methods used at the practical and theoretical levels include analysis, abstraction, induction,
deduction, and modeling. Unique ways consider the specifics of specific processes (tactical research
and empirical investigation).
The analysis of money laundering processes uses various research methods and techniques,
depending on studying the models and tools for money laundering. Traditional systems analysis
methods and empirical (typological) methods are used.
Typological research as a scientific method analysis of money laundering is an essential
component of national anti-money laundering systems. They reflect international experience in using
tools, schemes, and means of money laundering.
2.3. Мethodical fundamentals of information technology anti-money
laundering
To formalize the research processes of money laundering and the effective use of various methods
of their control and analysis, it is necessary to use modern information technology.
The scheme of the research process for the operations of legalization of illegal income is presented
in Fig.1.
The scheme of information technology can be presented in such a way:
1. The day of the manifestation of risks in money laundering and the model of the occurrence of
losses.
2. Ways to drive illegal income.
3. Methods of risk analysis of money laundering at the macro and micro levels are used.
4. The Analysis of risks of receiving illegal incomes on objects of financial monitoring is carried
out.
5. The nature and analysis of risks of receiving illegal income on subjects of financial operations
are studied
6. The dynamics of indicators of legalization of illegal income by objects and subjects of
dubious financial transactions are considered
7. Comprehensive analysis of suspicious financial transactions involves a combination of
capabilities of the previous stages of their financial monitoring.
Figure 1: Stages of the information technology implementation in the process of financial
investigations into the illegal funds’ legalization
Information technology for the study of money laundering processes involves the detection of
typological schemes at the macro level and analyzing money laundering processes at the micro-level
by type of economic activity, type of financial assets, and participants in financial transactions. The
method for detecting money laundering means establishing, recording, and determining this type of
crime.
Modern information technologies are essential tools for preventing money laundering and
struggling against terrorism financing.
3. Main Results: Information technology for determination and analysis of
money laundering
3.1. Stages of Information technology creating
In the minds of the digital economy, it is necessary to develop information technology and analysis
of illegal income. to reconcile the reduced ordering of the set of exact rules for the introduction of
expenses, which are described, such in the sequence, it is necessary to conclude so that after the
reduced number of short cuts, the achievement of the detection of the legalization of illegal income
[4,6,8]. Information technology for the legalization of unlawful payments on macro-transfer lines,
revealing and fixing typological schemes for transferring funds in various activities, assets, and
financial operations. The algorithm for showing the recognition of income possessed by a malicious
path means establishing, fixing, and confirming that it is necessary to set the specified type of
evaluation [7].
Information technology can be modeled as a function of such parameters: the identification,
verification, clarification of information about the objects and subjects of financial transactions:
(1)
Here we use notation as I is the result of the function, current stage of information technology;
ip is the process of identification, verification of subjects of financial transactions, the
establishment of the fact of belonging of the client to the national or foreign public figure, close or
related person,
io is the process of monitoring business relations and financial transactions on the activities of
public figures;
d is the process of identification of sources of origin of funds and the establishment of actual
financial capabilities of the client to conduct (initiate) financial transactions for the relevant amounts;
k is the process of monitoring: specific categories of clients and establishment of ultimate
beneficial owners; verification of participants in financial transactions for their affiliation with
persons or organizations related to terrorist activities or in respect of which domestic or international
sanctions have been applied; identification of the nature of clients' activities, their forms of
ownership, management structures and identification of clients with non-transparent ownership
structures.
The formula (1) will be used in the software realization of the verification process of money
laundering.
3.2. Identification of entities and object of the financial laundering
operation
The research [2, 3] of the intergovernmental body that develops policies to combat money
laundering and promotes its implementation at the national and international levels shows the most
commonly used legalization methods in Table 2.
To improve the financial monitoring of money laundering operations under international
standards, the concept of due diligence has been introduced in Ukraine. Applied aspects of monitoring
dubious financial transactions contain current data:
• about the ultimate beneficial owners;
• ownership structure of participants in financial transactions;
• changes in the ownership structure and composition of participants in financial transactions.
Participants in suspicious financial transactions in these materials were officials, state bodies, local
governments, and persons equal to them.
The following were used as instruments of money laundering: financial assistance (loans); cash;
deposits; securities, and others [3].
Such an analysis involves the transformation of researched and verified information received by
the subjects of primary financial monitoring into financial monitoring information through the
interpretation and integration of all collected data.
IT analysis of financial transactions can be divided into the following procedures:
1. Verification of the received data on business entities or financial transactions, officials
2. Development of a working hypothesis regarding their involvement in money laundering
3. Collection, evaluation, and verification of additional information on the surveyed business
entities, officials, and financial transactions
4. Identification of preconditions for doubtful financial transactions
5. Development of preliminary conclusions on the affiliation of financial transactions to
typological schemes
6. Construction of arguments for financial monitoring of dubious financial transactions.
Ukraine has introduced a new regulation on financial monitoring of banks, which provides for the
study of suspicion Financial transactions. The signs of suspicious financial transactions include those
listed in table 3.
Table 2
The primary operations of money laundering
Model stage Operation type
Smurfing Shredding of deposits
Structuring of cash transactions without exceeding the statutory
limit
Use of correspondent relations Exchange operations
of banks Correspondent and transit accounts
Transfer of funds abroad
Smuggling Use of fictitious persons
Hidden placement Use of shell companies
Use of credit cards
Use of cryptocurrencies
Legalization Investing legally
Using cryptocurrencies
Table 3
List of criteria for financial transactions suspicion
Classification feature List of indicators
Preliminary stage (collection Clear division of powers in decision-making in the field of risk
and generalization of management; identification/review of existing risks regularly
information) due to dynamic changes occurring in the external and internal
environment; use of portfolio and individual approach in risk
assessment and management; determining the position on
different types of risks;
Stage of identification Determination of criteria for classifying specific processes
(identification) of risks phenomena as risky; setting indicators (limits) of risk
Risk analysis Taking measures to reduce risks to an acceptable (acceptable)
level; regularly updating procedures, methods of risk
assessment, and management;
Risk assessment and Assessment of admissibility and justification of the size of
management certain types of risks; qualitative and quantitative evaluation of
threats; identification of relationships between individual types
of risks to assess the impact of measures to limit a kind of risk to
increase (decrease) the level of other threats; application of
unique methods of assessment for each type of risk;
Risk monitoring and Risk monitoring; regular implementation of control measures to
management determine the adequacy of the risk management system,
verification of the reliability of the results of the risk system.
These methods include: monitoring the size of the financial transaction, analysis of the transaction
based on comparison with regulatory indicators, risk assessment, control (cancellation) of the
financial transaction, and adaptation of data on the financial marketing and the client.
Іn order to bring Ukrainian money laundering legislation in line with international standards, the
concept of due diligence of participants in dubious financial transactions has been introduced. Such
verification involves:
• Identification and verification of participants in financial transactions
• Establishment of the ultimate beneficial owner of the client
• Defining the goals and nature of financial transactions or business relationships
• establishing the dynamics of financial transactions and business relationships of the client
• Establishing compliance of customer monitoring data with customer databases of primary
financial monitoring entities [10]
• Analysis of data on the client's activities, sources of funds for financial transactions, and
the risks of such transactions
• Maintaining the relevance of databases on the bank's customers and participants in
financial transactions, information on the ultimate beneficial owners, and ownership
structure [11].
The procedure for identifying and verifying customers who may be involved in money laundering
is presented in Table 4.
Table 4
Methods of customer identification and verification
off-line online
The physical presence of For simplified customer verification models
customers and the use data from credit bureaus and BankID NBU
presentation of copies of the Ukraine (NBU), qualified electronic signature, chip of biometric
original registration document
documents are required
With full-fledged models provided for the use of BankID NBU,
the resource of state online services "DIYA” a qualified
electronic signature (QES), a video broadcast session
Let's build a mathematical model for the verification process V. Verification of a business entity
with a non-transparent ownership structure consists of specific procedures that we note as rr,rv,c, a,
and m.
(2)
Here rr is the procedure for studying data on individuals;
rv is the procedure of data study of data on a legal entity and ownership structure, comparison of
data on legal entities and individuals with data from the Internet and other sources of verification; c is
verification of legal entities and individuals (owners and managers) against the following data: the
presence/absence of criminal cases of fraud; the business reputation of individuals and legal entities,
the presence of other legal entities in their ownership, relations with public figures, etc .; availability
of trust agreements/declarations for persons registered in offshore jurisdictions;
a is the procedure of analysis of information on the content of statutory activities and the financial
condition of the business entity;
m is the procedure of monitoring the risks of the business entity. The formula (2) will be used in
the software realization of the verification process [11].
To establish the ultimate beneficial owner and ownership structure, the subjects of primary
financial monitoring take the following mandatory measures: determine the ownership structure;
analyze and identify persons who own 25% or more of the share capital of a legal entity (directly or
through related parties); identify individuals who do not own a 25% stake in the share capital, but
have a decisive influence on the activities of the legal entity [7].
Many legal and financial intermediaries provide nominee services to conceal beneficial owners
and generate illicit income.
3.3. Monitoring of money laundering risks at the macro level
The risk assessment and management process contains the following steps and elements
described in Table 5.
At the highest state level, the assessment of money laundering risks must necessarily contain
information: the type and size of money laundering; deficiencies in the system of combating money
laundering, elements of the system management, and other features supporting the environment with
the possibility of money laundering; measures necessary to eliminate the vulnerable components in
the system of combating money laundering and terrorist financing [4]. The national risk assessment in
Ukraine combines quantitative data based on statistical characteristics and qualitative data based on
expert judgments in various areas of prevention and combating money laundering and terrorist
financing [5]. According to the second national risk assessment results, 11 threats to the anti-money
laundering system were identified, and 24 risks of money laundering and terrorist financing were
identified, including six high-risk risks, 16 medium-risk risks, and two low-risk ones [2].
Table 5
Stages and aspects of financial risk monitoring
Stages Elements
Preliminary stage (collection Clear division of powers in decision-making in the field of risk
and generalization of management; identification/review of existing risks regularly
information) due to dynamic changes occurring in the external and internal
environment; use of portfolio and individual approach in risk
assessment and management; determining the position on
different types of risks;
Stage of identification Determination of criteria for classifying specific processes
(identification) of risks phenomena as risky; setting indicators (limits) of risk
Risk analysis Taking measures to reduce risks to an acceptable (acceptable)
level; regularly updating procedures, methods of risk
assessment, and management;
Risk assessment and Assessment of admissibility and justification of the size of
management certain types of risks; qualitative and quantitative evaluation of
certain types of threats; identification of relationships between
individual types of risks to assess the impact of measures to limit
a kind of risk to increase (decrease) the level of other threats;
application of unique methods of assessment and management
for each type of risk;
Risk monitoring and Risk monitoring; regular implementation of control measures to
management determine the adequacy of the risk management system,
verification of the reliability of the results of the risk system.
Among the risks with a high level of importance are: manifestations of terrorism and separatism,
the risk of falsification of invoices (invoices) in foreign economic activity (risk of illegal financial
outflows from the country), high cash flow, low income, low income, VC / FT through remote
services or use of virtual currencies, improper detection and authorization of suspicious financial
transactions of public figures. The most significant risk is inherent in the development of corruption,
mainly due to unsuccessful reform of economic relations in the country, political decision-making,
non-compliance with ethical rules of conduct by public officials due to low governance culture, and
inadequate financial status. Consider the typology of sets of dubious financial transactions in terms of
analysis and creation of preventive measures to legalize illicit funds. Typical schemes of criminal
money laundering processes are conversion of cash into non-cash in significant amounts, with
frequent (daily periodicity) and considerable speed of transactions; transfer of funds abroad. Several
financial transactions associated with these processes are investigated to determine the typological
schemes of money laundering obtained illegally. This considers financial transactions, distinct legal
entities, and individuals.
The use of the principle of multicriteria in the study and economic analysis of money laundering
revealed that the same typological scheme might include financial transactions using different
instruments, such as cash, securities, insurance and reinsurance, settlements with nonresidents, bogus
transactions, illegal reimbursement VAT, etc. At the same time, various combinations of financial
transactions and financial instruments, methods of money laundering, the currency of dubious
transactions, and international financial organizations are used to legalize illegal income.
Typological schemes reflect trends in combining traditional financial transactions of money
laundering with financial transactions involving new technologies and legal, financial transactions.
Thus, by using promissory notes and transferring funds to payment cards, financial transactions can
be combined with subsequent use in other countries [18, 19].
The main characteristics of typological schemes include:
• А form of conducting - financial transactions
• The method of carrying out - moving, masking, transfer of financial assets
• The result is the possession of financial assets obtained illegally.
Systematized typical algorithms of money laundering can be implemented according to the next
classification criteria: source of illegal funds, type of financial asset, business entities and institutions
involved in financial transactions, and sales channels. The combination of originals and holdings of
financial transactions in typical algorithms of money laundering are presented in table 6.
Thus, the typological scheme of legalization for income money obtained by criminal means
consists of the identification of the next elements: the source of illicit income; the type of asset
(financial instrument) with which the funds are transferred; the presence of a channel for the
movement or transformation of illegal funds; use of financial transactions between certain business
entities.
Financial monitoring during the transfer of funds was changed to increase the efficiency of control
over money transfers. To the aim, the primary financial monitoring subjects' obligation to verify
customer data and financial transactions was introduced, and the threshold value of UAH 30,000 is
obligating. Therefore, all larger transfers have to be checked at the primary level.
4. Discussion
To ensure the control of cash flows and overcome the subjectivity of risk assessments, the
following measures are proposed to improve the system of counteraction to legalization:
• Implement appropriate anti-money laundering software at all levels;
• Expand the control of financial transactions, make the transition from the "history of
operations" (retrospective control of operations) to control over the initial placement of
funds in the financial system;
• Apply control of operations with control over the subjects of these operations;
• Create a unique Ukraine database of business reputation of the subject of financial
transactions, apply three levels of assessment of business reputation: impeccable (no risk);
under control (probable and weak risk); doubtful (maximum risk);
• Monitor and assess compliance with financial discipline by the subjects of primary
financial monitoring with the help of rating assessments;
• Use as a tool for assessing doubtful transactions new criteria of doubt to determine the
economic feasibility of financial transactions;
• To strengthen the mechanism for preventing money laundering and combating corruption,
it is proposed to use the following levers of influence: monitoring the client's financial
transactions and rating goodwill; the use of preventive measures - limiting the volume of
financial transactions in time and volume, expanding the criteria for risk assessment.
It is proposed to improve the methodological support of financial investigations of money
laundering to identify and verify participants in financial transactions through a comprehensive
combination of regulatory methods of the National Bank of Ukraine, the State Fiscal Service of
Ukraine, and the State Financial Monitoring Service of Ukraine and introduce special software.
In addition, it is recommended based on the results of analysis and generalization of identified
(typical and new) methods, financial instruments, and schemes of legalization (laundering) of
proceeds from crime, terrorist financing, the priority areas of financial investigations and
implementation of these program methods are identified for performances.
Table 6
Examples of combining sources of illegal income and assets to legalize them
Source of illicit income Key examples Asset schemes used in the
process of money laundering
Corrupt actions of officials at Transfer of funds to the Highly liquid assets (gold,
all levels accounts of individuals and diamonds, jewelry)
legal entities to purchase
assets, invest, repay loans or
obtain other illegal benefits
The public sector of the Schemes are related to Securities: issue by companies,
economy payment by state enterprises options, their subsequent
for services that were not resale, including abroad
provided, manipulation of bypassing exchanges.
tender procurement, settlement by a promissory
privatization of property note, transfer between the
firms of the promissory
message by forgery of
reporting documents, and
settlement by a promissory
message of illegally obtained
money by the issuer
Fraud Theft of funds from banking Land, purchase of land by a
institutions (lending to resident of Ukraine, but on the
fictitious companies, loan of a non-resident
withdrawal of funds through
foreign banks), obtaining
microloans on forged
documents
Cybercrime Forgery of payment cards, seizure of property, falsifying
online financial pyramids, documents (death, title, will,
access to remote banking gift) with the subsequent sale
connections, online casinos of the property to third parties
5. Conclusion
Data analysis on suspicious transactions, fictitious legal entities, beneficial owners, and officials is
the basis of information security of business relations of business entities. The monitoring of business
relations often involves procedures for the transition from monitoring the operation to tracking the
client's activities and behavior, applying specific control methods [4]. These methods include:
tracking the size of the financial transaction, analysis of the transaction based on comparison with
regulatory indicators, risk assessment of financial security, and adaptation of data on the financial
marketing and the client.
Information technology identifying, monitoring, and analyzing money laundering risks is essential
for financial monitoring.
Financial monitoring of suspicious financial transactions is carried out at the macro and micro
levels.
Adaptation of financial monitoring procedures involves improving the methodological framework
supporting the identification and verification processes of objects and subjects of suspicious financial
transactions, establishing the ownership structure and ultimate beneficial owners.
Algorithms for monitoring money laundering risks have been developed to use owners’ and
ownership structures data.
Object models for describing objects and subjects of suspicious financial transactions are an
auxiliary methodological tool that will allow the digitization of these processes.
The subsequent investigations can study the influence of actual war conditions on the economy of
Ukraine and partially the money laundering and struggle against terrorist financing.
6. Acknowledgment
The authors would like to thank the Armed Forces of Ukraine for providing security to perform
this work. This work has become possible only because of the resilience and courage of the Ukrainian
Army.
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