The Role of Financial Monitoring in the Mechanism for Identifying Unfounded Assets Subject to Civil Confiscation

Abstract

The article examines the role of financial monitoring in the mechanism for identifying unfounded assets. The relevance of the study is due to the need to increase the effectiveness of countering the legalization of proceeds from crime, illicit enrichment, concealment of assets, and the use of the financial system to move funds of dubious origin in the context of the spread of cross-border transactions and the use of virtual assets. The purpose of the study is to provide a theoretical, legal and analytical justification for the role of financial monitoring in identifying suspicious financial transactions that may indicate the unfounded origin of assets, as well as to identify areas for improving interaction between financial monitoring entities, the State Financial Monitoring Service of Ukraine and other authorized bodies. The methodological basis of the study includes systemic, structural-functional, comparative-legal, statistical methods, methods of analysis and synthesis, as well as a risk-oriented approach. Based on the analysis of regulatory provisions and the practice of the financial monitoring system, it is proposed to consider the mechanism for identifying unfounded assets as a sequence of interconnected stages: obtaining information about financial transactions; initial risk-oriented selection; analytical study of financial flows, sources of funds and property relations; identification of signs of risk and possible concealment of assets; formation of generalized materials; their transfer to competent authorities and further use of the information obtained in the procedures for searching, arresting, recognizing assets as unfounded and their recovery into state revenue. The scientific novelty of the study lies in the systematization of the elements of the mechanism for identifying unfounded assets and substantiating its functional connection with civil confiscation procedures. The author's contribution lies in the isolation of the main information, analytical and interdepartmental components of the specified mechanism, determining their sequence and establishing key problems of its functioning. The practical significance of the results obtained lies in the possibility of using the proposed approach to improve the analytical activities of the financial intelligence unit, procedures for interdepartmental information exchange and risk-oriented detection of assets with potentially unjustified origin. The feasibility of further development of digital tools for analyzing financial flows, automated processing of large data sets and integration of state information resources is substantiated. The formation of a digital model of interaction between financial monitoring, asset tracing, and procedures for their recovery into state revenue is identified as a promising direction for further research.