Chasing Dirty Money: A Public Database of Ukrainian PEPs

Two weeks ago I posted Ferreting Out Kleptocrats’ Buddies: The Ukrainian Solution which described a list of Ukrainian public officials, their relatives, and close associates that a Ukrainian NGO had compiled. Banks and other financial institutions are required by national antimoney laundering laws to ask these individuals, “politically exposed persons” in antimoney laundering lingo, how they came by their money before doing business with them.  The idea is to keep money obtained through corrupt and other criminal means from polluting the financial system.  The hope is that such controls will either discourage PEPs from stealing from the public or, if not, open up one more way to catch those who have.

As Ferreting Out explained, currently the institutions subject to the antimoney laundering laws rely on PEP lists sold by large international companies, lists that often omit many names that should be on them.  Despite antimoney laundering laws in place around the globe, Ukrainian PEPs are spiriting money out of the country and into foreign financial institutions, real estate, and other investments at an alarming rate.  To help staunch the flow, the Ukrainian Anticorruption Action Center developed and published its own list of Ukrainian PEPs.  The list draws on many local sources and was compiled to complement the ones peddled by commercial vendors.

Center staff presented their work last weekend at the IMF-World Bank Annual Meetings.  A summary of their presentation with a link to the database follows.

“What unites corrupt individuals who hold senior public offices, their family members and close business associates, prosecutors, judges and senior executives of state owned enterprises of developing countries? They are making dirty money at their home country, but prefer to spend it abroad – in the developed jurisdictions.  They all need services of financial institutions for that.  And, they are all PEPs – Politically Exposed Persons under international anti-money laundering standards.

“Financial institutions across the globe are obliged to know whether they are doing business with PEPs and if yes, to verify the source of origin of PEPs funds. Finding out which client is considered to be PEP for financial institutions around the world is a challenging task. The Ukrainian NGO Anticorruption Action Center has developed a tool to meet this challenge for Ukrainian PEPs: pep.org.ua.  This free, accessible database is synchronized with the government’s registry of the asset declarations of public officials.

“Pep.org.ua at a glance:

  • 7800 of PEPs records
  • 11 500 of PEPs close associates and PEP’s family members
  • List of western banks, connected with PEPs
  • List of legal enterprises, connected to or owned by PEPs
  • bilingual
  • recommended by Ukrainian financial intelligence unit and National Bank of Ukraine
  • 30+ local and international banks already incorporated PEPs dataset.”
In an e-mail, Anticorruption Action Center’s Executive Director Daria Kaleniuk explained that the database was launched in February 2016.  Two people are working on it full-time with assistance from some part-time analysts.  Given the importance of stopping PEPs in other countries from hiding the proceeds of corruption in the financial system, this an effort worthy of emulation by NGOs elsewhere.

2 thoughts on “Chasing Dirty Money: A Public Database of Ukrainian PEPs

  1. Pingback: Chasing Dirty Money: A Public Database of Ukrainian PEPs | Matthews' Blog

  2. Hi Rick, this is a really cool initiative and I hope it continues to develop. I wonder what your thoughts are on people, say banks, relying on this resource for their compliance needs when there are still gaps in its coverage. For instance, the entry for Serhii Rybalka (whom I’m not picking on, and only selected because of the story from Tuesday linked below) does not list any of his extensive business holdings; do you know of plans to increase coverage? If not, should people rely on a resource like this for compliance decisions?

    All the best,
    Thomas Ewing

    Rybalka PEP Entry (https://pep.org.ua/en/person/5082)
    News Item: Rybalka Companies Searched (Ukr)
    (http://www.epravda.com.ua/news/2017/10/17/630138/?utm_source=traqli&utm_medium=email&utm_campaign=357)

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