Establishment of the Centre for Combating Tax Offences and Financial and Tax Monitoring: ESBU Discusses Cooperation with the SFMS and the State Tax Service

The Economic Security Bureau of Ukraine held a working meeting with the leadership of the State Financial Monitoring Service of Ukraine and the State Tax Service of Ukraine.

During the event, the participants discussed the results of cooperation between the agencies, new trends in financial crimes and counteraction mechanisms, as well as strengthening cooperation to prevent tax offences and prevent budget losses.

At the beginning of the event, Acting Director of the ESBU Serhiy Perkhun noted that the institutions have established a regular exchange of analytical information, which allows them to quickly stop suspicious transactions. Also, the quality of analytics has significantly improved due to access to tax service data, and in criminal proceedings of the ESBU, the State Financial Monitoring Service of Ukraine has stopped almost UAH 30 million in bank accounts of companies with signs of “fictitiousness” this year alone.

“But there are many problems that must consolidation of our efforts. For example, the use of individual entrepreneurs in tax evasion and cash withdrawal schemes. To effectively and, most importantly, timely counteract such schemes, we propose to create a so-called Centre for Combating Tax Offences,” said Sergiy Perkhun.

According to Oleksandr Tkachuk, Head of the ESBU detectives, there are more than 50,000 individual entrepreneurs involved in illegal schemes. Most of them are young people, i.e. students, who provide their electronic keys for opening bank accounts for a fee. Their use in conjunction with the use of personal data of the owners can reduce tax payments by real sector enterprises by about UAH 70 billion annually.

“We already have joint positive developments in this area, so we would like to scale them up. The creation of the Centre for Combating Tax Offences will allow us to do this and introduce financial and tax monitoring of enterprises to increase the efficiency of our work,” Tkachuk said in his speech.

In his turn, Deputy Director of the ESBU Andriy Pashchuk noted that it is also time to develop amendments to legislation that will strengthen the institutional capacity of the bodies involved in combating economic crimes, develop a coordinated system for identifying risks and implementing European standards for responding to them, and establish joint analytical work.

All participants of the meeting supported the proposals of the ESBU representatives. In particular, Philip Pronin, Head of the State Financial Monitoring Service of Ukraine, emphasized that the agency is fully prepared for such cooperation, as it is possible to overcome current challenges in the fight against economic crime only by coordinating efforts.

“We are constantly looking for algorithms to improve our own efficiency and establish communication with other government agencies. Since the signing of the Memorandum, the effectiveness of our cooperation has improved significantly. We have sent materials with information on tax violations worth more than UAH 50 billion to law enforcement agencies alone. We also have positive dynamics in the exchange of information with the ESBU. In each such case, feedback and results are important to us. So, I support the idea of creating a coordination centre,” Pronin summarized.

For his part, Deputy Head of the State Tax Service of Ukraine Serhiy Lysiuk noted that the State Tax Service and the State Customs Service are the controlling bodies in the field of taxation, so all bodies should be involved in this work to be effective. He emphasized that the idea of establishing the Centre would help to resolve operational issues that arise during the work more quickly.

At the end of the meeting, the participants discussed the next steps required to launch the Centre, including documenting the process, creating a working group, and developing a roadmap at the expert level.

The event was attended by Acting Director of the ESBU Serhiy Perkhun, Head of the State Financial Monitoring Service of Ukraine Philip Pronin, First Deputy Head of the State Financial Monitoring Service of Ukraine Bohdan Korolchuk, Deputy Head of the State Tax Service of Ukraine Serhiy Lyseyuk, Deputy Director of the ESBU Andriy Pashchuk, Acting Director of the Department for Prevention of Financial Transactions Related to Legalization of Proceeds from Crime of the State Tax Service Anton Zamyatin and Head of the ESBU detectives Oleksandr Tkachuk.