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Ukraine, International Money Laundering, and the Investigation of Organized Crime (From Prediction and Control of Organized Crime: The Experience of Post-Soviet Ukraine, P 53-59, 2004, James O. Finckenauer, Jennifer L. Schrock, eds., -- See NCJ-204368)

NCJ Number
Alexander N. Gorodysky
Date Published
7 pages
This chapter explores the problem of international money laundering in Ukraine.
Organized crime networks used Ukraine’s period of economic reform and unrest to develop methods of draining Ukrainian currency and hiding capital resources abroad. This activity continues largely unchecked because current criminal code in Ukraine is inadequate to curb these illegal activities. In 2000, the estimated value of capital flight from Ukraine totaled $2 billion. The extent of the problem places a considerable strain on Ukraine’s economic security, as the average national budget is only about $6 billion. Clear regulations are needed to stabilize Ukraine’s international and domestic economic activities. Contradictory standards, bribery, larceny, document forgery, and abuse of office contribute to the problem and make law enforcement efforts difficult. Next, the author discusses the four main methods by which economic crime is carried out in Ukraine: (1) via widespread tax evasion; (2) via the development of international business relations between Ukraine businesses and foreign businesses that provide a mechanism for concealing currency abroad; (3) via the creation of fictitious companies; and (4) via international trade agreements. In terms of law enforcement efforts, there are many indicators that may be present to assist law enforcement in the detection and interdiction of economic crime in Ukraine, such as recently formed legal entities entering into large foreign economic contracts or several contracts involving the same object. In order to combat these economic crimes in Ukraine, law enforcement efforts cannot be limited to the country’s borders. Rather, Ukrainian law enforcement agencies must form cooperative associations with foreign law enforcement to police activities that go beyond Ukraine’s borders. Notes, references