Fighting Financial Crime is Central to Ukraine’s Future

In the swirl of news and misinformation, and amidst the sound and fury surrounding Ukraine over the last month, one constant remains. Ukraine needs to continue its journey to secure the integrity of its financial system to combat corruption, confiscate the proceeds of crime and ensure every cent invested in Ukraine’s future is put to work. Nothing should distract the country from this mission.

The main judges of this progress are the European Commission and the Financial Action Task Force (FATF) via its regional body at the Council of Europe, MONEYVAL (the Committee of Experts on the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism). Progress matters as they are some of the very few independent and internationally recognised assessors of Ukraine at a time when independent analysis is in short supply.

So, what is the current status, and what more must Ukraine do to meet the expectations of the EU and the global standards set by the FATF?

Constant Progress is Needed

While Ukraine’s progress has been recognised by the EU, the country cannot stand still as the EU’s expectations continuously develop. Although Ukraine may have made up ground, the EU’s Anti-Money Laundering Package is once again raising the bar for all existing and aspiring member states.

The efforts made by Ukraine in its EU accession evaluation highlight Ukraine's commitment to meeting EU standards, but challenges remain. The EU has laid out further expectations in its Ukraine Plan that need to be met, including more robust oversight of high-risk sectors, stricter controls on virtual assets, and stronger anti-money laundering (AML) enforcement to fully align with EU standards. Alongside the EU, the regular reviews of the FATF, the global anti-financial crime watchdog, have entered a new phase as it – and its regional bodies such as MONEYVAL, to which Ukraine belongs – begin the next round of global evaluations. Ukraine cannot afford to lag as its assessment is scheduled for 2027. The FATF and MONEYVAL have cut Ukraine some slack, postponing previously planned update reviews, which have now been restarted at Ukraine’s request.

A FATF mutual evaluation is a deep dive into a country’s ability to tackle money laundering, and terrorist and proliferation financing. It is not just about laws on paper – international experts assess whether rules are enforced, interviewing regulators, banks, and investigators. Countries are rated on technical compliance and real-world effectiveness, with poor scores leading to reputational damage or financial restrictions. Crucially, these evaluations provide the international community with a rare, independent assessment of a country’s financial system integrity. It is a tough process, but Ukraine is not alone – recent FATF reviews have flagged similar gaps in some EU member states, showing that even well-established systems face challenges.

Other benighted countries that have fallen victim to war and conflict (such as Syria and Yemen) have also had their review schedules paused and thus found themselves singled out by the FATF. These nations are placed on its ‘increased monitoring’ list due to the inability of the FATF to visit the country under the existing security situation. Being placed on the so-called ‘grey list’ is not a positive place from which to attract reconstruction investment.

Ukraine’s anti-money laundering framework, while evolving, still faces structural weaknesses that are also seen in other European jurisdictions. FATF and MONEYVAL’s latest evaluations highlight familiar issues: insufficient supervision of designated non-financial businesses and professions such as real estate agents, notaries or accountants, gaps in virtual asset regulation, and an underdeveloped financial investigations system. These aren’t unique to Ukraine – MONEYVAL has pointed out similar struggles in EU countries like Cyprus, where oversight of lawyers, real estate agents, and other gatekeepers remains weak. The regulatory vacuum around virtual assets is also a challenge in jurisdictions like Slovakia. Ukraine’s efforts to counter the financing of proliferation are similarly patchy, with enforcement still lacking – a problem shared by several other European countries such as Bulgaria flagged for shortcomings in financial sanctions in the latest evaluation round.

Architecture and Action

Ukraine’s financial crime architecture is strong. Since the 2017 Mutual Evaluation Report , Ukraine has made notable progress in strengthening its fight against financial crime. Legislative changes have improved the transparency of beneficial ownership, enhancing disclosure and accountability. Reforms to monitoring politically exposed persons have aligned Ukraine’s practices with international standards. Additionally, the Prosecutor General’s Office has enhanced its register of pretrial investigations, supporting more effective financial crime investigations.

Despite the challenges posed by ongoing conflict, Ukraine's institutions tasked with tackling financial crime are proving resilient. The National Anti-Corruption Bureau (NABU) continues to address corruption at all levels, while the State Financial Monitoring Service keeps a close watch on suspicious financial activities. NABU has undergone significant reforms and is widely regarded as a cornerstone of the country's anti-corruption and financial crime efforts. Ukraine’s vibrant civil society also plays a vital role, providing essential oversight and ensuring these institutions stay effective and accountable in their mission to clean up the financial system.

But those scrutinising Ukraine’s response to financial crime are not merely looking for institutions, laws and an active civil society. They are looking for the effective use and implementation of Ukraine’s architecture – this is where Ukraine must demonstrate clear progress. Asset confiscation and criminal prosecutions are key measures by which the FATF will make its judgements.

Why does this Matter?

A resilient financial system is not just about compliance for Ukraine – it is a strategic necessity, especially in wartime. With billions in international aid flowing in, and financial crime risks heightened, ensuring transparency is critical. Weak supervision of gatekeepers, gaps in financial investigations, and an unregulated virtual asset industry leave openings for the laundering of the proceeds of corruption, criminal network exploitation and even hostile actors seeking to finance sabotage and anti-democratic activity. War has introduced new financial crime threats. From money mule schemes to the misuse of cryptocurrency, the integrity of Ukraine’s financial system is being constantly challenged. At the time when trust is everything, Ukraine must shore up its financial defences not just to reassure international partners but to ensure every resource is used where needed most.

This matters even more as Ukraine moves closer to EU integration. Brussels is tightening the screws on financial crime with its new AML package, setting stricter rules and creating the Anti-Money Laundering Authority to oversee enforcement across the block. For Ukraine, aligning with these standards is not just a bureaucratic hurdle - it is a chance to prove it can meet the expectations of future EU membership. Stronger AML controls will help unlock further financial support, attract investment, and deepen cooperation with European institutions. But more importantly, will ensure that as Ukraine rebuilds, its financial system is not just open but trusted.

So, what should Ukraine do Now?

Ukraine has a real opportunity to strengthen its financial system and build trust with international partners. One key step is getting a proper handle on virtual assets. With the country among the world’s leaders in crypto adoption, clear rules will help the sector grow responsibly while keeping the bad actors out. Parliament should finally push through long-overdue legislation to set up a regulator and align with FATF standards. Just as important is building stronger public-private partnerships to fight financial crime. Banks, fintech firms, and law enforcement need real changes for sharing intelligence - but that only works if there is trust. Initiatives like RUSI’s Taskforce on Public Private Partnership are great first steps helping businesses and regulators find common ground. Now, Kyiv has the chance to take this forward and put real structures in place.

Ukraine has also made solid progress in financial oversight, but enforcement still needs work. Law enforcement agencies need better training, clearer mandates, and the right tools to track complex financial crimes. Building on Ukraine’s recognised expertise to develop smarter technology - AI-driven transaction monitoring and blockchain analytics - can make a real difference in spotting fraud and suspicious activities faster. At the same time, Ukraine has an opening to improve how it enforces targeted financial sanctions. Tighter coordination between the financial intelligence unit and security agencies will help plug gaps and strengthen resilience. None of this is about ticking boxes - it is about making the system stronger, more transparent, and better prepared for the future. Getting this right will reinforce Ukraine’s reputation as a trusted financial partner, further tighten the screws on corruption, attract investment and smooth the path to EU integration.

Conclusion

Assessing Ukraine’s progress on anti-money laundering should focus on evidence-based evaluations from international watchdogs, not political soundbites shaped by disinformation. Hostile actors have long sought to exploit perceptions of corruption in Ukraine to weaken international support, using exaggerated and false claims to undermine confidence in the country’s institutions. In Europe, such narratives risk fuelling scepticism among the public and undermining the political will to continue providing assistance. The best way to counter this is through clear and measurable progress: stronger investigations, better enforcement and tangible reforms that align with global standards. At the same time, Ukraine’s efforts must be judged fairly, using the same benchmarks and evaluation process applied to other countries.

For Ukraine, a well-regulated financial system is not just about EU integration or technical compliance - it is a matter of national security and international trust. To make this happen, Ukraine needs support from its allies that focuses on helping Ukraine modernise its financial institutions, incorporating new technologies and AI-driven solutions, provide capacity building and support independent, evidence-based research that will counter disinformation, whether it comes from the East or the West.

© RUSI, 2025.

The views expressed in this Commentary are the authors’, and do not represent those of RUSI or any other institution.

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