U.S. flag

An official website of the United States government, Department of Justice.

NCJRS Virtual Library

The Virtual Library houses over 235,000 criminal justice resources, including all known OJP works.
Click here to search the NCJRS Virtual Library

Ukraine, International Money Laundering, and the Investigation of Organized Crime

NCJ Number
Trends in Organized Crime Volume: 6 Issue: 3/4 Dated: Spring/Summer 2001 Pages: 37-42
Alexander N. Gorodysky
Date Published
6 pages
This paper identifies the four main methods by which economic crime is committed in Ukraine and proposes ways to increase the effectiveness of efforts to counter such economic crime.
The methods used to commit economic crime in Ukraine can be instructive in devising detection and investigative tactics to counter them. One method of committing economic crime is through the widespread practice of tax evasion. Businesses in Ukraine and abroad can evade taxes by keeping profits made in foreign currency in their businesses abroad, by collecting profits in foreign currency and paying workers in Ukrainian currency, and by using profits in foreign currency to pay "foreign expenses" so the money remains outside Ukraine. A second method involves the creation of fictitious companies by criminals to conceal currency assets and profits to fund criminal activity. Another common method used to conceal currency assets is through international trade agreements. The terms of contracts may be changed by mutual consent or by signing supplemental agreements to them. Probably the economic crime most difficult to detect is when Ukrainian businessmen conceal foreign currency with the aid of legal foreign entities. These schemes are largely used to convert funds and avoid taxation. There are many indicators to assist law enforcement in detecting and interdicting the aforementioned economic criminal activities. Some primary indicators are as follows: a contractor's failure to meet a deadline for completion of settlements on foreign economic transactions; a recently formed legal entity that enters into large foreign economic contracts; a large non-commodity contract; a Ukrainian exporter's application for a barter contract specifically to change the terms of the agreement; currency declarations not filed with the State Taxation Administration by business entities; and several contracts that involve the same object or applications for changes in bargaining agreements. Cooperation between Ukrainian law enforcement agencies and their counterparts in other countries, notably countries of the Commonwealth of Independent States, is particularly urgent. Ukraine must do its part to be proactive in the country's implementation of international conventions, mutual assistance, and agreements made in the fight against international economic crime. 3 references