Ukraine—Illicit Finance Capacity Development Project

Tackling illicit financial flows and the organised criminal groups that exploit them is crucial to fighting corruption, fostering citizen trust in democratic government, and building confidence in the business and financial communities that their investments are made in an environment governed by the rule of law. In war-torn Ukraine, addressing illicit finance and corruption is particularly important as the Government of Ukraine seeks to counter Russian military aggression and Russian crime syndicates while moving toward European Union accession and ensuring the effective use of international aid.

DAI has extensive experience working on illicit finance, serious and organised crime, and anticorruption in challenging environments around the world, including complex anticorruption and financial sector reforms in Ukraine. Under the Ukraine Illicit Finance Capacity Development Project (UCIF), DAI and its partners will support the Government of Ukraine, Ukrainian and international financial institutions, law enforcement agencies, and others to address key areas of reform in Ukraine’s financial ecosystem.

UCIF is a Foreign, Commonwealth & Development Office initiative funded through the U.K. Government’s Integrated Security Fund, managed by the U.K. Home Office’s Global Tackling Illicit Financial Flows and Anti-Corruption (TIFAC) Portfolio. It directly aligns with the UK–Ukraine 100 Year Partnership Commitments and contributes to protecting the United Kingdom from threats related to illicit finance, serious and organised crime, and Russia.

UCIF-supported reforms will be critical in maintaining the confidence of domestic and international investors and enabling support for post-war reconstruction. Anchored by a series of contextual and technical analyses, the project will work to deliver four related outcomes:

• Create a public-private partnership between government and financial institutions focused on issues such as anti-money laundering, which requires collaboration and dialogue between all key stakeholders of the financial ecosystem, both within government and across financial institutions and private businesses.
• Develop legislative and regulatory frameworks for licensing and supervising Virtual Assets Service Providers. Effective regulation of virtual assets such as crypto is critical for EU compliance and accession, and will play a key role in mitigating Russian influence and raising revenue through effective taxation of crypto assets.
• Advance reform of Ukraine’s regulations and supervision of financial and non-financial businesses. Enhanced supervision is critical for EU alignment and to build confidence in the legal sector so that international firms will be ready to engage in reconstruction contracts.
• Strengthen the ability of Ukrainian law enforcement to tackle illicit financial flows. For example, UCIF will help develop a triage methodology to address current bottlenecks, with a focus on collaborative intelligence sharing between law enforcement and other Ukrainian government authorities, supported by IT reforms.