Determinants of anti-money laundering system’s effectiveness in Ukraine: Insights from factorial and regression analysis
-
DOIhttp://dx.doi.org/10.21511/pmf.14(2).2025.13
-
Article InfoVolume 14 2025, Issue #2, pp. 146-170
- 30 Views
-
13 Downloads
This work is licensed under a
Creative Commons Attribution 4.0 International License
The effectiveness of anti-money laundering systems is vital for national economic resilience, especially in transitional economies facing wartime challenges, such as Ukraine. This study aims to identify key managerial determinants of the effectiveness of Ukraine’s anti-money laundering and counter-terrorist financing (AML/CFT) system and to develop evidence-based recommendations for improving its performance. Based on data from Ukrainian national institutions for the period 2011–2023, the study employs principal component analysis and multiple linear regression to evaluate 44 statistical indicators related to institutional workload, procedural efficiency, and inter-agency coordination. The findings reveal that a small set of indicators, including the volume of suspicious transaction reports from non-banking institutions, the number of dossiers compiled, and the backlog of unresolved judicial cases, explain over 70% of the system’s output variance. The final model exhibits high explanatory power (R² = 0.963), underscoring the importance of prioritizing high-impact operational metrics. The study concludes that targeted procedural reforms and enhanced coordination between institutions can significantly strengthen AML/CFT outcomes in fragile and reforming contexts.
Acknowledgment
This study was supported by the Ministry of Education and Science of Ukraine (project No. 0123U101945 – National security of Ukraine through prevention of financial fraud and money laundering: war and post-war challenges).
- Keywords
-
JEL Classification (Paper profile tab)H83, K42, O17
-
References55
-
Tables11
-
Figures5
-
- Figure 1. Scree plot – Graphical visualization of principal components
- Figure 2. Pareto diagrams of factors significantly affecting the effectiveness of Ukraine’s AML/CFT system
- Figure 3. Pareto diagrams showing the significance of key factors affecting the effectiveness of Ukraine’s AML/CFT system
- Figure 4. Normal distribution of residuals from the regression model explaining the effectiveness of Ukraine’s AML/CFT system
- Figure 5. Normal distribution of residuals from the final regression model of Ukraine’s AML/CFT system effectiveness
-
- Table 1. Eigenvalue matrix – Tabular representation of principal components
- Table 2. Summary of interim calculations for determining weight coefficients of indicators of Ukraine’s AML/CFT system with estimated values of weight coefficients
- Table 3. One-factor test for the significance of selected indicators affecting the effectiveness of Ukraine’s AML/CFT system
- Table 4. Characteristics of adequacy and accuracy of the model
- Table 5. Regression analysis of key factors influencing the effectiveness of Ukraine’s AML/CFT system
- Table 6. Regression analysis results for the most statistically significant factors affecting the effectiveness of Ukraine’s AML/CFT system
- Table A1. Indicators reflecting the activities of key institutions involved in Ukraine’s AML/CFT system
- Table A2. Input statistical base for research into the activities of Ukraine’s AML/CFT system
- Table A3. Factor loadings– Intermediate calculations
- Table A4. One-factor significance test of factors influencing the effectiveness of Ukraine’s AML/CFT system
- Table A5. Correlation matrix of interdependence of factors of Ukraine’s AML/CFT system
-
- Alassuli, A. (2025). Impact of artificial intelligence using the robotic process automation system on the efficiency of internal audit operations at Jordanian commercial banks. Banks and Bank Systems, 20(1), 122-135.
- Aldabousi, A.M. (2025). Managing commercial space activities: Legal and regulatory challenges in the UAE’s space sector. Problems and Perspectives in Management, 23(2), 423-432.
- Allen, F., Gu, X., & Jagtiani, J. (2021). A survey of fintech research and policy discussion. Review of Corporate Finance, 1(3-4), 259-339.
- Asare, K., & Samusevych, Y. (2023). Exploring financial fraud, tax tools, and economic security research: Comprehensive bibliometric analysis. Financial Markets, Institutions and Risks, 7(3), 136-146.
- Bozhenko, V. V., Lyeonov, S. V., Polishchuk, E. A., Boyko, A. O., & Artyukhova, N. O. (2022). Identification of determinants of corruption in government: A mar-spline approach. Naukovyi Visnyk Natsionalnoho Hirnychoho Universytetu, 6, 176-180.
- Burton, S. L., & Moore, P. D. V. M. (2024). Pig butchering in cybersecurity: A modern social engineering threat. SocioEconomic Challenges, 8(3), 46-60.
- Committee of Experts on the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism (MONEYVAL). (2020). Anti-money laundering and counter-terrorist financing measures. Ukraine. 2nd Enhanced Follow-up Report & Technical Compliance Re-Rating.
- Dalla Pellegrina, L., & Masciandaro, D. (2009). The risk-based approach in the new european anti-money laundering legislation: A law and economics view. Review of Law & Economics, 5(2), 931-952.
- Directorate-General for Neighbourhood and Enlargement Negotiations. (2024, October 30). Ukraine 2024 Report. Enlargement Package 2024: A detailed assessment of the state of play and the progress made by the Western Balkans, Türkiye, Ukraine, Moldova and Georgia on their respective paths towards the European Union (Commission Staff Working Document SWD (2024) 699 final). Brussels.
- Dobrovolska, O., Ortmanns, W., Dotsenko, T., Lustenko, V., & Savchenko, D. (2024). Health security and cybersecurity: Analysis of interdependencies. Health Economics and Management Review, 5(2), 84-103.
- Dotsenko, T., Dvořák, M., Lyeonov, S., & Kovács, A. (2023). Socially relevant factors of organizational mortality of enterprises: Context of corporate sustainability in European countries. Economics & Sociology, 16(1), 284-299.
- Eratalay, M. H., & Kaasa, A. (2024). Does culture matter for consumer confidence? Economics & Sociology, 17(2), 11-36.
- FATF. (2023, June). 2013 Methodology for Assessing Compliance with the FATF Recommendations and the Effectiveness of AML/CFT Systems (updated June 2023). Paris, France.
- Garbowski, M., Mironova, D., Perevozova, I., Khrushch, N., & Gudz, I. (2019). Influence of IPO on macroeconomic security of countries. Journal of Security and Sustainability Issues, 8(4), 841-853.
- Hauptman, L., Žmuk, B., & Dečman, N. (2024). Tax governance in compliance: The role of motivational postures and behavioural intentions. Problems and Perspectives in Management, 22(1), 500-513.
- Holtfort, T., & Horsch, A. (2024). Quantum economics: A systematic literature review. SocioEconomic Challenges, 8(1), 62-77.
- Ishwardat, S., van Steenbergen, E., Coffeng, T., & Ellemers, N. (2024). Stimulating regulatory compliance and ethical behavior of organizations: A review. Business Ethics and Leadership, 8(3), 151-172.
- Kawedar, W., Sri Handayani, R., & Milawati. (2025). Perceptions of corruption by perpetrators: An empirical analysis of the fraud triangle and attribution theories. Problems and Perspectives in Management, 23(1), 515-527.
- Khrais, L. (2025). Bridging gaps in InsurTech and e-commerce integration: Insights from Saudi Arabia. Insurance Markets and Companies, 16(1), 64-73.
- Koroshchenko, M. (2024). Monitoring principles of formation of public administration systems in Ukraine. Social and Labour Relations: Theory and Practice, 13(1), 47-54.
- Kotina, H., Stepura, M., Kornieva, A., & Slavkova, A. (2023). Fiscal solvency and fiscal limitations under economic crisis and recovery: An empirical approach of Ukraine. Investment Management and Financial Innovations, 20(1), 277-292.
- Kurniasari, F., & Lestari, E.D. (2025). Does corporate governance matter in elucidating factors that drive profitability in the insurance industry? Insurance Markets and Companies, 16(1), 90-102.
- Kuzior, A., Tiutiunyk, I., Zielińska, A., & Kelemen, R. (2024a). Cybersecurity and cybercrime: Current trends and threats. Journal of International Studies, 17(2), 220-239.
- Kuzior, A., Užík, J., Dotsenko, T., Riabyi, R., Filatova, H., & Reshetniak, Y. (2024b). Assessment of implicit and explicit illicit region financial flows, conducted through the fraudulent actions of local authorities: Theoretical basis. Financial and Credit Activity Problems of Theory and Practice, 6(59), 432-445.
- Kuzior, A., Vasylieva, T., Kuzmenko, O., Koibichuk, V., & Brożek, P. (2022). Global digital convergence: Impact of cybersecurity, business transparency, economic transformation, and AML efficiency. Journal of Open Innovation: Technology, Market, and Complexity, 8(4).
- Kuzmenko, O., Bilan, Y., Bondarenko, E., Gavurova, B., & Yarovenko, H. (2023a). Dynamic stability of the financial monitoring system: Intellectual analysis. PLOS ONE, 18(1), Article 0276533.
- Kuzmenko, O., Yarovenko, H., & Perkhun, L. (2023b). Assessing the maturity of the current global system for combating financial and cyber fraud. Statistics in Transition. New Series, 24(1), 229-258.
- Kuznetsov, A., Kiian, A., Babenko, V., Perevozova, I., Chepurko, I., & Smirnov, O. (2020). New approach to the implementation of Post-Quantum Digital Signature Scheme. 2020 IEEE 11th International Conference on Dependable Systems, Services and Technologies (DESSERT) (pp. 166-171). Kyiv, Ukraine.
- Lyeonov, S., Draskovic, V., Kubaščikova, Z., & Fenyves, V. (2024). Artificial intelligence and machine learning in combating illegal financial operations: Bibliometric analysis. Human Technology, 20(2), 325-360.
- Lyeonov, S., Hrytsenko, L., Trojanek, R., & Popp, J. (2025). Who benefits from AI in money laundering in Europe: The organised criminals or the AML services? Human Technology, 21(1), 222-245.
- Mańka-Szulik, M., Kolomiiets, S., Krawczyk, D., & Olihnenko, K. (2023). Fractal analysis of the medical insurance market: Theoretical and practical aspects. Health Economics and Management Review, 4(4), 95-106.
- Mong, D. D., & Thanh, H. P. (2025). Relationship between internal legal compliance culture, leadership style, organizational trust, and employee engagement in Vietnam’s banking sector. Banks and Bank Systems, 20(1), 147-160.
- Mustafa, J. A. (2024). Integrating financial literacy, regulatory technology, and decentralised finance: A new paradigm in Fintech evolution. Investment Management and Financial Innovations, 21(2), 213-226.
- National Bank of Ukraine. (n.d.). Richni zvity za 2011–2023 [Annual reports for 2011–2023]. (In Ukrainian).
- National Securities and Stock Market Commission (NSSMC). (n.d.). Annual reports for 2011–2021.
- Plastun, A. & Kozmenko, S. (2025). Stolen Ukrainian universities: An invisible russian weapon. Problems and Perspectives in Management, 23(2-si), 151-175.
- Pol, R. F. (2018). Anti-money laundering effectiveness: Assessing outcomes or ticking boxes? Journal of Money Laundering Control, 21(2), 215-230.
- Pol, R. F. (2020). Anti-money laundering: The world’s least effective policy experiment? Together, we can fix it. Policy Design and Practice, 3(1), 73-94.
- Polishchuk, Y., Tepliuk, M., Horbov, V., Ivashchenko, A., Tereshchenko, O., & Lavreniuk, V. (2024). Ukrainians in Poland and Ukraine: Can the war crisis change patterns of financial behaviour. Financial and credit activity problems of theory and practice, 4(57), 457-472.
- Polyakov, М., Khanin, I, Bilozubenko, V., Korneyev, М., & Nebaba, N. (2020). Information technologies for developing a company’s knowledge management system. Knowledge and Performance Management, 4(1), 15-25.
- Prosecutor General’s Office of Ukraine. (n.d.a). Pro rezultaty rozsliduvannia kryminalnykh provadzhen pro kryminalni pravoporushennia shchodo lehalizatsii (vidmyvannia) maina, oderzhanoho zlochynnym shliakhom, finansuvannia teroryzmu, rozpovsiudzhennia zbroi masovoho znyshchennia [On the results of investigations into criminal offenses related to money laundering, terrorist financing, and the proliferation of weapons of mass destruction]. (In Ukrainian).
- Prosecutor General’s Office of Ukraine. (n.d.b). Statystychni ta analitychni zvity za 2011–2023 [Statistical and analytical reports for 2011–2023]. (In Ukrainian).
- Pulungan, A. H., Setiawan, S., & Windiarti, F. (2024). The risk of corruption and money laundering: An analysis of personal predespositions and socio-economic challenges. SocioEconomic Challenges, 8(4), 121-136.
- Shonhadji, N., & Irwandi, S.A. (2023). Fraud prevention in the Indonesian banking sector using anti-fraud strategy. Banks and Bank Systems, 19(1), 12-23.
- Soudijn, M. R. J. (2016). Rethinking money laundering and drug trafficking: Some implications for investigators, policy makers and researchers. Journal of Money Laundering Control, 19(3), 298-310.
- State Financial Monitoring Service of Ukraine. (n.d.). Activity reports.
- Steenbergen, E. F., Jansen, W. S., & Ellemers, N. (2023). How executive boards set the stage for unethical behavior in the financial sector. Business Ethics and Leadership, 7(4), 108-127.
- The Judiciary of Ukraine. (n.d.). Sydova statystyka za 2011–2023 [Judicial statistics for 2011–2023]. (In Ukrainian).
- Tsingou, E. (2010). Global financial governance and the developing anti-money laundering regime: What lessons for International Political Economy? International Politics, 47(6), 617-637.
- Vasilyeva, T., Ziółko, A., Kuzmenko, O., Kapinos, A., & Humenna, Y. (2021). Impact of digitalization and the COVID-19 pandemic on the AML scenario: Data mining analysis for good governance. Economics and Sociology, 14(4), 326-354.
- Vyas-Doorgapersad, S. (2024). Assessment of the shortcomings on fight against corruption. Business Ethics and Leadership, 8(3), 219-230.
- World Bank & International Monetary Fund. (2005). Financial Sector Assessment: A Handbook. Washington, DC: World Bank.
- Yarovenko, H., Pozovna, I., & Bylbas, R. (2024a). The risk of escalating cyberattacks and financial fraud during wartime: The maturity of the county’s judicial system in combating cyber and financial crimes. Financial Markets, Institutions and Risks, 8(4), 126-147.
- Yarovenko, H., Vasilyeva, T., Ustinovichius, L., & Remsei, S. (2024b). Illicit practices: Experience of developed countries. Journal of International Studies, 17(2), 146-177.
- Zámek, D., & Zakharkina, L. (2024). Research trends in the impact of digitization and transparency on national security: Bibliometric analysis. Financial Markets, Institutions and Risks, 8(1), 173-188.