THE METHODS OF MANAGING FOR RISK OF COMBATING MONEY LAUNDERING (LEGALIZATION) OF PROCEEDS FROM CRIME AND THE FINANCING OF TERRORISM

ABSTRACT

The article presents a comparative description of the current situation in the banking market of Ukraine, Azerbaijan Republic and Republic of Latvia, considers the main problems of modern risk management and its effectiveness in the field of combating the laundering (legalization) of proceeds from crime and the financing of terrorism (AML/CFT) under banking operations and transactions are at high risk of involvement in dubious operations. The article considers the risk of legalization (laundering) of proceeds from crime, and analyzes the methods of managing it that exist in banking practice using the example of one of the largest banks in Eastern Europe - CB JSC "Privatbank" in Ukraine and a subsidiary bank - JS "Privatbank" Latvia. The paper formulates the main characteristics of reputational banking risk. Here is revealed of the risk of AML/CFT. The article presents characteristic of the banking market in Ukraine, Azerbaijan Republic and Republic of Latvia. Analysis the dynamics of the main indicators of banking activity over the past 5 years, as well as the activities of CB JSC "Privatbank" in Ukraine and JS "Privatbank" Latvia were provided. Considered the legislative framework that regulates banking and the management of combating the laundering (legalization) of proceeds from crime and terror financing ISM in particular, the experience of developed countries in this direction is mentioned. Based on the study, it is proposed to identify the basic principles of risk-based approaches in the process of banking management in general, as well as specifically, taking into account the specifics of the management system for AML / CFT in the implementation of banking operations in Ukraine and the Republic of Latvia;presented the recommendations to reduce reputational risks in the field of Banking.