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1 Hunter, Marcena. Measures That Miss the Mark: Capturing Proceeds of Crime in Illicit Financial Flows Models. 2018, https:// globalinitiative.net/analysis/capturing-proceeds-of-crime-inillicit-financial-flows-models/.

2 UNECA. Illicit Financial Flows Report of the High-Level Panel on Illicit Financial Flows from Africa. 2015, https://repository. uneca.org/handle/10855/22695. 3 Aziani, Alberto. Illicit Financial Flows. 1st ed., Springer International Publishing, 2018, doi:10.1007/978-3-03001890-0.

4 Hunter, Marcena. Measures That Miss the Mark: Capturing Proceeds of Crime in Illicit Financial Flows Models. 2018, https:// globalinitiative.net/analysis/capturing-proceeds-of-crime-inillicit-financial-flows-models/.

5 Ibid.

6 OECD. Illicit Financial Flows THE ECONOMY OF ILLICIT TRADE IN WEST AFRICA. 2018, doi:10.1787/9789264268418-en.

7 FATF. Money Laundering - Financial Action Task Force (FATF). https://www.fatf-gafi.org/faq/moneylaundering/. Accessed 12 Feb. 2021.

8 European Commission. COM (2020) 605 Final. COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE EUROPEAN COUNCIL, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS on the EU Security Union Strategy. 2020, https://ec.europa.eu/info/sites/info/files/ communication-eu-security-union-strategy.pdf. 9 European Commission. Anti-Corruption Report. 2021, https:// ec.europa.eu/home-affairs/what-we-do/policies/organizedcrime-and-human-trafficking/corruption/anti-corruptionreport_en. 10 IMF. Corruption: Costs and Mitigating Strategies. 2016, https:// www.imf.org/external/pubs/ft/sdn/2016/sdn1605.pdf. 11 Fleming, Sean. “Corruption Costs Developing Countries $1.26 Trillion Every Year - yet Half of EMEA Think It’s Acceptable.” World Economic Forum, 9 Dec. 2019, https:// www.weforum.org/agenda/2019/12/corruption-globalproblem-statistics-cost/. 12 OECD. Illicit Financial Flows from Developing Countries: Measuring OECD Responses. 2014, https://www.oecd.org/ corruption/Illicit_Financial_Flows_from_Developing_ Countries.pdf. 13 This may include, for example, mechanisms for plea bargaining, reconciliation or other settlement options which require the defendant to return illicitly-obtained assets in exchange for a reduced sentence; mechanisms that allow for parallel proceedings against the assets, mechanisms for use of extended confiscation or orders for confiscation of legally-acquired assets of the defendant, where the State demonstrates that it has taken every reasonable measure to locate the illicitly-acquired assets, but has been unable to do so.

14 These often include civil confiscation proceedings, which still place the initial burden on the State to prove that certain assets are the product of illicit activities, albeit at a lower burden of proof. 15 For example, Antigua and Barbuda, Austria, Canada, Colombia, France, Hong Kong, Italy, the Netherlands, New Zealand, the United Kingdom, Singapore and Switzerland. 16 For example, Colombia, Italy, the Netherlands and the United States. Notwithstanding this, while a number of jurisdictions have proven to be adept on seizing and confiscating assets, they remain quite weak in terms of actually returning seized and confiscated assets to the Requesting States (countries in which the illicit wealth was originally obtained, either through organised criminal activity or through corruption). 17 Department of Economic and Social Affairs. Goal 16. https:// sdgs.un.org/goals/goal16. Accessed 12 Feb. 2021; see also United Nations. Addis Ababa Action Agenda of the Third International Conference on Financing for Development Addis Ababa Action Agenda of the Third International Conference on Financing for Development. July 2015. 18 Ibid.

19 UN Stats. Goal 16. 2018, https://unstats.un.org/sdgs/tierIIIindicators/files/Tier3-16-04-01.pdf. 20 OECD. Illicit Financial Flows from Developing Countries: Measuring OECD Responses. 2014, https://www.oecd.org/ corruption/Illicit_Financial_Flows_from_Developing_ Countries.pdf; and European Commission. COM (2019) 370 Final, Report from the Commission to the European Parliament and the Council on the Assessment of the Risk of Money Laundering and Terrorist Financing Affecting the Internal Market and Relating to Cross-Border Activities. 24 July 2019, https://ec.europa.eu/info/sites/info/files/supranational_ risk_assessment_of_the_money_laundering_and_terrorist_ financing_risks_affecting_the_union_-_annex.pdf. 21 See, for example: CARIN - the Asset Recovery Network. https:// www.carin.network/. Accessed 12 Feb. 2021.

22 The World Bank. Population, Total - Ukraine. https://data. worldbank.org/indicator/SP.POP.TOTL?locations=UA. Accessed 24 Feb. 2021.

23 USD 1 corresponds to UAH 28.25 according to the February 2021 United Nations rate of exchange. The list of currency exchange is available at: UN Treasury. UN Operational Rates of Exchange - Rates. https://treasury.un.org/operationalrates/ OperationalRates.php. Accessed 24 Feb. 2021. 24 MONEYVAL. Anti-Money Laundering and Counter-Terrorist Financing Measures Ukraine Fifth Round Mutual Evaluation

Report COMMITTEE OF EXPERTS ON THE EVALUATION OF ANTI-MONEY LAUNDERING MEASURES AND THE FINANCING OF TERRORISM (MONEYVAL) MONEYVAL (2017)20. 2017, https://www.fatf-gafi.org/media/fatf/content/images/MERMONEYVAL-Ukraine-Dec-2017.pdf. 25 Åslund, Anders. “What Is Wrong with the Ukrainian Economy? - Atlantic Council.” Atlantic Council, 26 Apr. 2019, https://www.atlanticcouncil.org/blogs/ukrainealert/what-iswrong-with-the-ukrainian-economy/. 26 The World Bank. Ukraine Overview. 2019, https://www. worldbank.org/en/country/ukraine/overview. 27 Ibid.

28 Ukraine is one of the countries with the largest natural gas reserves in the world, estimated at 1.1 trillion cubic meters.

29 Ukraine contains various mineral reserves including natural gas, oil, coal, iron ore, chalk, limestone and manganese. 30 Owuor, Sophy. What Are The Biggest Industries In Ukraine? - WorldAtlas. 15 May 2019, https://www.worldatlas.com/ articles/what-are-the-biggest-industries-in-ukraine.html. 31 Tax Justice Network. Capital Flight from Developing Countries: Top 20 Losers. https://static.guim.co.uk/sys-images/ Observer/Pix/pictures/2012/07/22/gu_wealth-offshore-02. jpg. Accessed 24 Feb. 2021. See also: Tax Justice Network. Financial Secrecy Index 2020: Report on Ukraine. 2020, https:// fsi.taxjustice.net/PDF/Ukraine.pdf. 32 Kar, Dev, and Joseph Spanjers. Illicit Financial Flows from Developing Countries: 2004-2013. 2015, https:// secureservercdn.net/45.40.149.159/34n.8bd.myftpupload. com/wp-content/uploads/2015/12/IFF-Update_2015-Final-1. pdf?time=1597255783. See also, for additional data: Global Financial Integrity. Trade-Related Illicit Financial Flows: Data by Country « Global Financial Integrity. https://gfintegrity.org/ data-by-country/. Accessed 5 Apr. 2021. 33 MONEYVAL. Anti-Money Laundering and Counter-Terrorist Financing Measures Ukraine Fifth Round Mutual Evaluation Report COMMITTEE OF EXPERTS ON THE EVALUATION OF ANTI-MONEY LAUNDERING MEASURES AND THE FINANCING OF TERRORISM (MONEYVAL) MONEYVAL (2017)20. 2017, https://www.fatf-gafi.org/media/fatf/content/images/MERMONEYVAL-Ukraine-Dec-2017.pdf. 34 The CPI scores and ranks countries/territories based on how corrupt a country’s public sector is perceived to be by experts and business executives. It is a composite index, a combination of 13 surveys and assessments of corruption, collected by a variety of reputable institutions. The CPI is the most widely used indicator of corruption worldwide. The index for the CPI is the lower the score the more corrupt the country is perceived. The index is available at: Transparency International. Corruption Perceptions Index. 2020, https:// www.transparency.org/en/cpi/2020/index/ukr#. 35 The State Financial Monitoring Service of Ukraine. Report on the National Risk Assessment in the Field of the Prevention and Counteraction of the Legalisation (Laundering) of Criminal Proceeds and the Financial Terrorism. 2019, https://fiu.gov.ua/ assets/userfiles/200/NRA/2 NRA report.pdf. 36 Ibid.

37 European Union Anti-Corruption Initiative (EUACI). Corruption in Ukraine 2020: Understanding, Perceptions, Prevalence. 2020, file:///C:/Users/James/AppData/Local/ Temp/Corruption_Survey_2020_Presentation_eng.pdf. 38 This is the highest estimation. 39 Ukrinform. Ukrainian Justice Minister: Yanukovych Regime Officials Stole about $40 Bn over Three Years. 22 May 2017, https://www.ukrinform.net/rubric-crime/2232786-ukrainianjustice-minister-yanukovych-regime-officials-stole-about40-bn-over-three-years.html. 40 See, for example: Olearchyk, Roman. “Ukraine’s President Ousts Two Judges for Being Threats to National Security | Financial Times.” Financial Times, 27 Mar. 2021, https:// www.ft.com/content/7c0da9bd-74f1-43f4-983bdbfb09d1c9b2. See also: Interfax-Ukraine. ARMA Being Searched in Connection with Seizure of Funds Transferred to Its Management. 1 Apr. 2021, https://en.interfax.com.ua/news/ general/734653.html. 41 The State Financial Monitoring Service of Ukraine. Report on the National Risk Assessment in the Field of the Prevention and Counteraction of the Legalisation (Laundering) of Criminal Proceeds and the Financial Terrorism. 2019, https://fiu.gov. ua/assets/userfiles/200/NRA/2 NRA report.pdf. See also: Statista. Ukraine: Currency in Circulation to GDP. https://www. statista.com/statistics/1096347/cic-to-gdp-ratio-in-ukraine/. Accessed 5 Apr. 2021. 42 Ibid.

43 For the purpose of this report, we solely discuss illicit economy. We recognise that an informal economy by less fortunate people could also contribute to the numbers of shadow economy, however we understand that some live in poverty and cannot work in a taxable occupation. 44 The State Financial Monitoring Service of Ukraine. Report on the National Risk Assessment in the Field of the Prevention and Counteraction of the Legalisation (Laundering) of Criminal Proceeds and the Financial Terrorism. 2019, https://fiu.gov.ua/ assets/userfiles/200/NRA/2 NRA report.pdf. 45 MONEYVAL. Anti-Money Laundering and Counter-Terrorist Financing Measures Ukraine Fifth Round Mutual Evaluation Report COMMITTEE OF EXPERTS ON THE EVALUATION OF ANTI-MONEY LAUNDERING MEASURES AND THE FINANCING OF TERRORISM (MONEYVAL) MONEYVAL (2017)20. 2017, https://www.fatf-gafi.org/media/fatf/content/images/MERMONEYVAL-Ukraine-Dec-2017.pdf. 46 Tax evasion is an illegal activity in which a person or entity deliberately avoids paying a true tax liability. Full definition available at: Investopedia. Tax Evasion Definition. 29 May 2020, https://www.investopedia.com/terms/t/taxevasion. asp. 47 The State Financial Monitoring Service of Ukraine. Report on the National Risk Assessment in the Field of the Prevention and Counteraction of the Legalisation (Laundering) of Criminal Proceeds and the Financial Terrorism. 2019, https://fiu.gov.ua/ assets/userfiles/200/NRA/2 NRA report.pdf.

48 Ibid.

49 Tax evasion is an illegal activity in which a person or entity deliberately avoids paying a true tax liability. Full definition available at: Investopedia. Tax Evasion Definition. 29 May 2020, https://www.investopedia.com/terms/t/ taxevasion.asp. 50 Tax Justice Network. Pandemic of Tax Injustice in Ukraine - Tax Justice Network. 8 July 2020, https://www.taxjustice. net/2020/07/08/pandemic-of-tax-injustice-in-ukraine/. 51 Such policies include- Temporarily suspending tax checks and fines for corporates, suspending social tax for selfemployed, and making agricultural corporates temporarily exempt from land tax. 52 Ibid.

53 MONEYVAL. Anti-Money Laundering and Counter-Terrorist Financing Measures Ukraine Fifth Round Mutual Evaluation Report COMMITTEE OF EXPERTS ON THE EVALUATION OF ANTI-MONEY LAUNDERING MEASURES AND THE FINANCING OF TERRORISM (MONEYVAL) MONEYVAL (2017)20. 2017, https://www.fatf-gafi.org/media/fatf/content/images/MERMONEYVAL-Ukraine-Dec-2017.pdf. 54 Ibid, p.33. 55 PwC. Global Economic Crime and Fraud Survey 2018: Ukrainian Findings. 2018, https://www.pwc.com/ua/en/survey/2018/ pwc-gecs-2018-eng.pdf. 56 Each type of fraud is not exclusive to an organisation; each respondent was allowed to indicate any number of fraud related crimes.

57 The Fraud Survey was conducted with more than 7,000 respondents by PWC in 2018, the survey is available at: PwC. Global Economic Crime and Fraud Survey 2018: Ukrainian Findings. 2018, https://www.pwc.com/ua/en/survey/2018/ pwc-gecs-2018-eng.pdf. 58 Ibid, p.7. 59 The State Financial Monitoring Service of Ukraine. Report on the National Risk Assessment in the Field of the Prevention and Counteraction of the Legalisation (Laundering) of Criminal Proceeds and the Financial Terrorism. 2019, https://fiu.gov.ua/ assets/userfiles/200/NRA/2 NRA report.pdf. 60 Ibid, p.12. 61 State Financial Monitoring Service of Ukraine. Risks of Terrorism and Separatism. 2017, https://www.sdfm.gov.ua/ assets/userfiles/200/Typologies%20of%20the%20SFMS/ Risks%20of%20Terrorism%20and%20Separatism%20 Typology%202017.pdf. 62 Ibid, p.14. 63 REACH. Ukraine: Economic Security Assessment, GovernmentControlled Areas of Donetsk and Luhansk Oblasts within 20km of the Contact Line - March, 2019 - Ukraine | ReliefWeb. 31 Mar. 2019, https://reliefweb.int/report/ukraine/ukraineeconomic-security-assessment-government-controlledareas-donetsk-and-luhansk. See also: Law of Ukraine 25419-VIII (17 March 2015) “On Recognition of Separate Raions, Cities, Towns and Villages in Donetsk and Luhansk Regions as Temporarily Occupied Territories.” https://zakon.rada.gov.ua/ laws/show/254-19?lang=uk#Text. Accessed 5 Apr. 2021. 64 The State Financial Monitoring Service of Ukraine. Report on the National Risk Assessment in the Field of the Prevention and Counteraction of the Legalisation (Laundering) of Criminal Proceeds and the Financial Terrorism. 2019, https://fiu.gov.ua/ assets/userfiles/200/NRA/2 NRA report.pdf. 65 Ibid, p.205. 66 State Financial Monitoring Service of Ukraine. Risks of Terrorism and Separatism. 2017, https://www.sdfm.gov.ua/ assets/userfiles/200/Typologies%20of%20the%20SFMS/ Risks%20of%20Terrorism%20and%20Separatism%20 Typology%202017.pdf. 67 Urbanskaya, Tatiana. Fiscal Service Official: Ukrainian Coal Siphoned to Russia, Drugs Smuggled Back. 2015, http://blind. sfs.gov.ua/en/mass-media/interviews/print-207814.html. 68 Vchasno News Agency. In the Donbass, Women and Girls Are Kidnapped for the Purpose of Sexual Exploitation, - the Report of the U.S. Department of State - News Agency “Vchasno.” 29 June 2017, https://vchasnoua.com/en/63-in-the-donbasswomen-and-girls-are-kidnapped-for-the-purpose-ofsexual-exploitation-the-report-of-the-u-s-department-ofstate.

69 State Financial Monitoring Service of Ukraine. Risks of Terrorism and Separatism. 2017, https://www.sdfm.gov.ua/ assets/userfiles/200/Typologies%20of%20the%20SFMS/ Risks%20of%20Terrorism%20and%20Separatism%20 Typology%202017.pdf. 70 MONEYVAL. Anti-Money Laundering and Counter-Terrorist Financing Measures Ukraine Fifth Round Mutual Evaluation Report COMMITTEE OF EXPERTS ON THE EVALUATION OF ANTI-MONEY LAUNDERING MEASURES AND THE FINANCING OF TERRORISM (MONEYVAL) MONEYVAL (2017)20. 2017, https://www.fatf-gafi.org/media/fatf/content/images/MERMONEYVAL-Ukraine-Dec-2017.pdf. 71 The State Financial Monitoring Service of Ukraine. Report on the National Risk Assessment in the Field of the Prevention and Counteraction of the Legalisation (Laundering) of Criminal Proceeds and the Financial Terrorism. 2019, https://fiu.gov.ua/ assets/userfiles/200/NRA/2 NRA report.pdf. 72 Ibid, p.61. 73 Home Office. Country Information and Guidance - Ukraine: Fear of Organised Criminal Gangs. May 2016, https://www. refworld.org/docid/5853df354.html. 74 The State Financial Monitoring Service of Ukraine. Report on the National Risk Assessment in the Field of the Prevention and Counteraction of the Legalisation (Laundering) of Criminal Proceeds and the Financial Terrorism. 2019, https://fiu.gov.ua/ assets/userfiles/200/NRA/2 NRA report.pdf. 75 Home Office. Country Information and Guidance - Ukraine: Fear of Organised Criminal Gangs. May 2016, https://www. refworld.org/docid/5853df354.html.

76 Modern Slavery is an over encompassing term which includes- human trafficking, forced labour, dept bondage/ bonded labour, descent-based slavery, slavery of children and forced/early marriages. Read more at: Anti-Slavery International. What Is Modern Slavery?. https://www. antislavery.org/slavery-today/modern-slavery/. Accessed 24 Feb. 2021.

77 Home Office. Country Information and Guidance Ukraine: Victims of Trafficking. 2016, https://assets.publishing.service. gov.uk/government/uploads/system/uploads/attachment_ data/file/566602/CIG_-_Ukraine_-_Victims_of_trafficking.pdf. 78 Global Slavery Index. Country Data. 2018, https://www. globalslaveryindex.org/2018/data/country-data/ukraine/. 79 IOM Ukraine. Countering Human Trafficking. https://iom.org. ua/en/countering-human-trafficking. Accessed 24 Feb. 2021. 80 Global Slavery Index. Executive Summary. https://www. globalslaveryindex.org/2019/findings/executive-summary/. Accessed 24 Feb. 2021.

81 IOM Ukraine. Countering Human Trafficking. https://iom.org. ua/en/countering-human-trafficking. Accessed 24 Feb. 2021. 82 Melnyk, Anna. Trafficking in Human Beings in Ukraine. 2014, https://www.files.ethz.ch/isn/185732/Melnyk-THB-Ukraine. pdf. 83 Ibid, p.3-4. 84 Ibid.

85 U.S. Department of State. Trafficking in Persons Report. 2020, https://www.state.gov/wp-content/uploads/2020/06/2020TIP-Report-Complete-062420-FINAL.pdf. 86 In 2017, the budget stood on UAH 98,800. 87 U.S. Department of State. Trafficking in Persons Report. 2020, https://www.state.gov/wp-content/uploads/2020/06/2020TIP-Report-Complete-062420-FINAL.pdf. 88 Labour included – construction 57%, manufacture 17%, agriculture 16.5, services 8.5% and other 1%. 89 IOM Ukraine. IOM UKRAINE COUNTER-TRAFFICKING PROGRAMME AT A GLANCE. 2019, http://iom.org.ua/sites/ default/files/iom_counter-trafficking_programme_2019_eng. pdf. 90 Ibid, p.5. 91 Ibid.

92 The State Financial Monitoring Service of Ukraine. Report on the National Risk Assessment in the Field of the Prevention and Counteraction of the Legalisation (Laundering) of Criminal Proceeds and the Financial Terrorism. 2019, https://fiu.gov.ua/ assets/userfiles/200/NRA/2 NRA report.pdf. 93 Those routes are used for other purposes of organised crime as well.

94 Europol. EU Drug Markets Report 2019. 2019, doi:10.2810/766585. 95 UNODC. World Drug Report. 2010, https://www.unodc.org/ documents/wdr/WDR_2010/1.2_The_global_heroin_ market.pdf. 96 Sviatenko, Tetiana. “Ukraine’s Drugs Policy and Peculiarities of the Local Drug Market - New Drugs Gaining Popularity via Online Stores in Ukraine.” 112 Ukraine, 5 July 2018, https://112.international/interview/new-drugs-gainingpopularity-via-online-stores-in-ukraine-29953.html. 97 Ibid.

98 Ibid.

99 Ibid.

100 France 24. Ukraine Police Seize $60mn of Heroin, Say “never seen so much”. 31 Mar. 2019, https://www.france24.com/ en/20190331-ukraine-police-seize-60mn-heroin-say-neverseen-so-much.

101 The State Financial Monitoring Service of Ukraine. Report on the National Risk Assessment in the Field of the Prevention and Counteraction of the Legalisation (Laundering) of Criminal Proceeds and the Financial Terrorism. 2019, https://fiu.gov.ua/ assets/userfiles/200/NRA/2 NRA report.pdf. 102 Ibid, p.63. 103 Ukrainian Think Tank Development Initiative. Fighting Systemic Smuggling: Customs Reform in Ukraine. 2018, https:// wiiw.ac.at/fighting-systemic-smuggling-customs-reform-inukraine-paper--dlp-4641.pdf. 104 The State Financial Monitoring Service of Ukraine. Report on the National Risk Assessment in the Field of the Prevention and Counteraction of the Legalisation (Laundering) of Criminal Proceeds and the Financial Terrorism. 2019, https://fiu.gov.ua/ assets/userfiles/200/NRA/2 NRA report.pdf. 105 Ukrainian Think Tank Development Initiative. Fighting Systemic Smuggling: Customs Reform in Ukraine. 2018, https:// wiiw.ac.at/fighting-systemic-smuggling-customs-reform-inukraine-paper--dlp-4641.pdf. 106 Kellenberg, Derek, and Arik Levinson. “The Trade Data Gap: Mistakes and Malfeasance.” VOX, CEPR Policy Portal, 21 Oct. 2016, https://voxeu.org/article/trade-data-gap-mistake-andmalfeasance.

107 Zhurzhenko, Tatiana. Ukraine’s Border with Russia before and after the Orange Revolution. 2007, https://www.karierre. bundesheer.at/pdf_pool/publikationen/ukraine_zerissen_ zw_ost_u_west_m_malek_ukraines_border_t_zhurzhenko. pdf. 108 OECD. Illicit Trade: Converging Criminal Networks. OECD, 18 Apr. 2016, doi:10.1787/9789264251847-en. 109 Ibid. p.124-126. 110 TraCCC. Tobacco Trade and Convergence with Illicit Commodities. 23 Apr. 2019, https://traccc.gmu.edu/sites/ default/files/TraCCC/Research-Findings-Illicit-Hubs-TobaccoTrade-and-Convergence-with-Illicit-Commodities.pdf. 111 Ibid, p.6.

112 Ibid.

113 Ekonomichna Pravda. The State Budget Did Not Receive from the Excise Tax on Cigarettes 5 Billion Derzhbyudzhet Nedootrymav Vid Aktsyzu Na Syharety 5 Milʹyardiv. 21 Feb. 2019, https://www.epravda.com.ua/ news/2019/02/21/645483/.

114 The State Financial Monitoring Service of Ukraine. Report on the National Risk Assessment in the Field of the Prevention and Counteraction of the Legalisation (Laundering) of Criminal Proceeds and the Financial Terrorism. 2019, https://fiu.gov.ua/ assets/userfiles/200/NRA/2 NRA report.pdf. 115 Ibid, p. 37. 116 Ibid, p.38-39. 117 Ibid, p.39. 118 Ibid, p. 41. 119 Ibid.

120 Owuor, Sophy. What Are The Biggest Industries In Ukraine? - WorldAtlas. 15 May 2019, https://www.worldatlas.com/ articles/what-are-the-biggest-industries-in-ukraine.html. 121 The State Financial Monitoring Service of Ukraine. Report on the National Risk Assessment in the Field of the Prevention and Counteraction of the Legalisation (Laundering) of Criminal Proceeds and the Financial Terrorism. 2019, https://fiu.gov.ua/ assets/userfiles/200/NRA/2 NRA report.pdf. 122 Ibid, p.31. 123 National Geographic. The Dramatic Impact of Illegal Amber Mining in Ukraine’s Wild West. 31 Jan. 2017, https://www. nationalgeographic.com/history/article/illegal-ambermining-ukraine. 124 The State Financial Monitoring Service of Ukraine. Report on the National Risk Assessment in the Field of the Prevention and Counteraction of the Legalisation (Laundering) of Criminal Proceeds and the Financial Terrorism. 2019, https://fiu.gov.ua/ assets/userfiles/200/NRA/2 NRA report.pdf. 125 Ibid, p.39. 126 Annual amount varies on the sum of illicitly exported amber. 127 The State Financial Monitoring Service of Ukraine. Report on the National Risk Assessment in the Field of the Prevention and Counteraction of the Legalisation (Laundering) of Criminal Proceeds and the Financial Terrorism. 2019, https://fiu.gov.ua/ assets/userfiles/200/NRA/2 NRA report.pdf. 128 Warsaw Institute. Ukraine Exports Illegal Timber to the European Union. 30 July 2018, https://warsawinstitute.org/ ukraine-exports-illegal-timber-european-union/. 129 This situation is facilitated by the way that timber is sold – forestry companies often sell timber through auction(which are often nontangible) instead of selling the timber directly, and a result the timber sent to private informal sawmills- where the licit wood could be combined with the illicit and later be transferred to a company which might be unaware of the nature of timber it had purchased. For example, in 2020 it was discovered that furniture from Ikea had contained illegal Ukrainian timber. Read more at: GagneAcoulon, Sandrine. “NGO Report: Ikea Is Using Wood Illegally Logged in Ukraine.” OCCRP, 2 July 2020, https://www.occrp. org/en/daily/12669-ngo-report-ikea-is-using-wood-illegallylogged-in-ukraine. 130 The State Financial Monitoring Service of Ukraine. Report on the National Risk Assessment in the Field of the Prevention and Counteraction of the Legalisation (Laundering) of Criminal Proceeds and the Financial Terrorism. 2019, https://fiu.gov.ua/ assets/userfiles/200/NRA/2 NRA report.pdf. 131 Kostyuk, Nadiya. Ukraine: A Cyber Safe Haven? 2018, https:// ccdcoe.org/uploads/2018/10/Ch13_CyberWarinPerspective_ Kostyuk.pdf. See also: International Telecommunication Union. Global Cybersecurity Index (GCI) 2017 ITU-D. 2017, https://www.itu.int/dms_pub/itu-d/opb/str/D-STR-GCI.012017-PDF-E.pdf, p.54. 132 Kostyuk, Nadiya. Ukraine: A Cyber Safe Haven? 2018, https:// ccdcoe.org/uploads/2018/10/Ch13_CyberWarinPerspective_ Kostyuk.pdf. 133 Ibid.

134 Ibid.

135 Ibid, p.115. 136 Ibid, p.121. 137 The State Financial Monitoring Service of Ukraine. Report on the National Risk Assessment in the Field of the Prevention and Counteraction of the Legalisation (Laundering) of Criminal Proceeds and the Financial Terrorism. 2019, https://fiu.gov.ua/ assets/userfiles/200/NRA/2 NRA report.pdf. 138 Martyniuk, Anton. MEASURING ILLICIT ARMS FLOWS. Apr. 2017, http://www.smallarmssurvey.org/fileadmin/docs/T-BriefingPapers/SAS-BP3-Ukraine.pdf. 139 See: 112 UA. Iron Argument: Where and How Much to Get an Illegal Barrel and How the Black Market for Weapons Works Zheleznyy Argument: Gde i Pochem Dostat’ Nelegal’nyy Stvol i Kak Rabotayet Chernyy Rynok Oruzhiya. https://theworldnews. net/ua-news/zheleznyi-argument-gde-i-pochem-dostatnelegal-nyi-stvol-i-kak-rabotaet-chernyi-rynok-oruzhiia. Accessed 24 Feb. 2021.

140 Shramovich, Vyacheslav. “Black Arms Market in Ukraine: Where, How Much and How Much? Chernyy Rynok Oruzhiya v Ukraine: Gde, Skol’ko i Pochem?” BBC Ukraine, 27 Jan. 2017, https://www.bbc.com/ukrainian/featuresrussian-38768847.

141 Apuleev, Ivan. “The KGB of Belarus Has Revealed the Scheme of Arms Deliveries to Russia from Ukraine KGB Belorussii Raskryl Skhemu Postavok Oruzhiya v Rossiyu Iz Ukrainy.” Gazeta.Ru, 17 Sept. 2019, https://www.gazeta.ru/ army/2019/09/17/12655717.shtml. 142 Ibid.

143 Including machine guns, rifles and 9000 cartridges of ammunition. See more: RBC Ukraine. Customs of Belarus Reveals the Scheme of Arms Smuggling from Ukraine to Russia Tamozhnya Belarusi Raskryla Skhemu Kontrabandy Oruzhiya s Ukrainy v Rossiyu. 17 Sept. 2019, https://www. rbc.ua/rus/news/tamozhnya-belarusi-raskryla-shemukontrabandy-1568707103.html.

144 Read more at: The State Financial Monitoring Service of Ukraine. About SCFM Pro Derzhfinmonitorynh. 28 July 2020, https://fiu.gov.ua/pages/pro-sluzhbu/zagalni-vidomosti/proderzhfinmonitoring.html. 145 The State Financial Monitoring Service Of Ukraine. 2019 Annual Report. 2020, https://fiu.gov.ua/assets/userfiles/200/ Activity%20reports/Report%20of%20the%20State%20 Financial%20Monitoring%20Service%20of%20Ukraine%20 for%202019.pdf. 146 Ibid, p.7. 147 The State Financial Monitoring Service of Ukraine. Report on the National Risk Assessment in the Field of the Prevention and Counteraction of the Legalisation (Laundering) of Criminal Proceeds and the Financial Terrorism. 2019, https://fiu.gov.ua/ assets/userfiles/200/NRA/2 NRA report.pdf. 148 Verkhovna Rada Ukrayiny. Criminal Code of Ukraine Kryminalʹnyy Kodeks Ukrayiny. https://zakon.rada.gov.ua/ laws/show/2341-14?lang=uk. Accessed 24 Feb. 2021. 149 Such relevant articles include: Art.28-Organised Activity, Art.149-Human Trafficking, Art.190-Fraud, Art.201Smuggling, Art.203-Engagement in prohibited business activities, Art.209-Money laundering, among others. 150 See: Asset Recovery and Management Agency. Mission. https://arma.gov.ua/en/mission. Accessed 24 Feb. 2021. 151 Relevant articles of seizure in the CPC are in Chapter 16. Provisional Seizure of Property and Chapter 17. Attachment of Property. 152 Criminal Procedure Code of Ukraine. https://rm.coe. int/16802f6016. Accessed 24 Feb. 2021.

153 Ibid.

154 Verkhovna Rada Ukrayiny. Criminal Code of Ukraine Kryminalʹnyy Kodeks Ukrayiny. https://zakon.rada.gov.ua/ laws/show/2341-14?lang=uk. Accessed 24 Feb. 2021. 155 Alternatively, legal assets with equivalent value to the illicit ones, could also be confiscated in case the illicit assets had been already disposed at the time of the trial decision. 156 UNIAN. Ukraine’s President Enacts Law to Reinstate Criminal Liability for Illicit Enrichment - News Politics. 25 Nov. 2019, https://www.unian.info/politics/10768289-ukraine-spresident-enacts-law-to-reinstate-criminal-liability-for-illicitenrichment.html.

157 The State Financial Monitoring Service Of Ukraine. 2019 Annual Report. 2020, https://fiu.gov.ua/assets/userfiles/200/ Activity%20reports/Report%20of%20the%20State%20 Financial%20Monitoring%20Service%20of%20Ukraine%20 for%202019.pdf. 158 The State Financial Monitoring Service of Ukraine. Report on the National Risk Assessment in the Field of the Prevention and Counteraction of the Legalisation (Laundering) of Criminal Proceeds and the Financial Terrorism. 2019, https://fiu.gov.ua/ assets/userfiles/200/NRA/2 NRA report.pdf. 159 Ibid, p.222. 160 Ibid. 161 Transparency International Ukraine. ARMA Reported on Its Activities in 2019. 5 Mar. 2020, https://ti-ukraine.org/en/news/ arma-reported-on-its-activities-in-2019/. 162 Ibid.

163 Global Financial Integrity. Illicit Financial Flows to and from Developing Countries: 2005-2014 Global Financial Integrity. 2017, https://gfintegrity.org/wp-content/uploads/2017/05/ GFI-IFF-Report-2017_final.pdf. 164 OECD. Illicit Financial Flows from Developing Countries: Measuring OECD Responses. 2014, https://www.oecd.org/ corruption/Illicit_Financial_Flows_from_Developing_ Countries.pdf. 165 Global Financial Integrity. Illicit Financial Flows to and from Developing Countries: 2005-2014 Global Financial Integrity. 2017, https://gfintegrity.org/wp-content/uploads/2017/05/ GFI-IFF-Report-2017_final.pdf. 166 OECD. Illicit Financial Flows from Developing Countries: Measuring OECD Responses. 2014, https://www.oecd.org/ corruption/Illicit_Financial_Flows_from_Developing_ Countries.pdf. 167 Ortega, Bienvenido, et al. “Social Costs of Illicit Financial Flows in Low- and Middle-Income Countries: The Case of Infant Vaccination Coverage.” Health Policy and Planning, vol. 33, no. 2, Oxford University Press, Mar. 2018, pp. 224–36, doi:10.1093/heapol/czx170. 168 Kar, Dev, and Joseph Spanjers. Illicit Financial Flows from Developing Countries: 2004-2013. Global Financial Integrity, 2015, https://secureservercdn.net/45.40.149.159/34n.8bd. myftpupload.com/wp-content/uploads/2015/12/IFFUpdate_2015-Final-1.pdf?time=1597255783. 169 Making one of the highest rates of public spending on education in the world.

170 Kahkonen, Satu. “Why Ukraine’s Education System Is Not Sustainable.” The World Bank, 12 Sept. 2018, https://www. worldbank.org/en/news/opinion/2018/09/12/why-ukraineseducation-system-is-not-sustainable. 171 The estimated monthly salary of a young teacher in Ukraine stands on UAH 5900 while a teacher with up to 20 years of experience would get UAH 8900, full estimation available at: Pyatachok. Teacher Salary in Ukraine in 2020 Zarplata Uchitelya v Ukraine v 2020 Godu. 2 June 2020, https:// пятачок.dp.ua/zarplata/951-zarplata-uchitelej-v-ukraine/. 172 Kahkonen, Satu. “Why Ukraine’s Education System Is Not Sustainable.” The World Bank, 12 Sept. 2018, https://www. worldbank.org/en/news/opinion/2018/09/12/why-ukraineseducation-system-is-not-sustainable. 173 Ibid.

174 Ukraine Reform Conference. Reforms in Ukraine: Progress and Priorities. 2018, https://www.kmu.gov.ua/storage/app/media/ reform office/Ukraine_Reform_Conference_II_web.pdf. 175 Ibid, p16. 176 Cabinet of Ministers of Ukraine. Finance Minister Oksana Markarova Presented the Draft State Budget of Ukraine for

2020 in Parliament. 20 Sept. 2019, https://www.kmu.gov.ua/ en/news/ministr-finansiv-oksana-markarova-predstavilav-parlamenti-proekt-derzhavnogo-byudzhetu-ukrayini-na2020-rik.

177 Ibid.

178 Cabinet of Ministers of Ukraine. Parliament Has Passed Budget 2020. 14 Nov. 2019, https://www.kmu.gov.ua/en/ news/parlament-prijnyav-byudzhet-2020. 179 Read more about NUS: Ministry of Education and Science of Ukraine. The New Ukrainian School: Conceptual Principles of Secondary School Reform. 16 Jan. 2017, https://mon.gov.ua/ storage/app/media/zagalna serednya/Book-ENG.pdf. 180 Ukraine Reform Conference. Reforms in Ukraine: Progress and Priorities. 2018, https://www.kmu.gov.ua/storage/app/media/ reform office/Ukraine_Reform_Conference_II_web.pdf. 181 Information provided to UNICRI by Ministry of Education, December 2020.

182 See: Salary Explorer. Teacher Average Salary in Ukraine 2021 - The Complete Guide. http://www.salaryexplorer.com/ salary-survey.php?loc=226&loctype=1&job=123&jobtype=3. Accessed 5 Apr. 2021. 183 Romaniuk, Piotr, and Tetyana Semigina. “Ukrainian Health Care System and Its Chances for Successful Transition from Soviet Legacies.” Globalization and Health, vol. 14, no. 1, BioMed Central Ltd., 23 Nov. 2018, p. 116, doi:10.1186/ s12992-018-0439-5. 184 Ministry of Health of Ukraine. Healthcare Reform. https:// en.moz.gov.ua/healthcare-reform. Accessed 24 Feb. 2021. 185 Cabinet of Ministers of Ukraine. Healthcare Reform. https:// www.kmu.gov.ua/en/reformi/rozvitok-lyudskogo-kapitalu/ reforma-sistemi-ohoroni-zdorovya. Accessed 24 Feb. 2021. 186 UK Foreign & Commonwealth Office. Medium-Term Government Priority Action Plan to 2020. July 2017, https:// assets.publishing.service.gov.uk/government/uploads/ system/uploads/attachment_data/file/625352/ukrainegovernment-priority-action-plan-to-2020.pdf. 187 See: Salary Explorer. Teacher Average Salary in Ukraine 2021 - The Complete Guide. http://www.salaryexplorer.com/salarysurvey.php?loc=226&loctype=1&job=123&jobtype=3. 188 Ibid.

189 See, for example: Council of Europe. The Use of NonConviction Based Seizure and Confiscation. 2020, https:// rm.coe.int/the-use-of-non-conviction-based-seizure-andconfiscation-2020/1680a0b9d3.

190 Or, at the very least, channelling recovered assets into public awareness campaigns about the dangers posed by human trafficking. 191 Or even goods which are similar in nature. 192 Such as security cameras and security sensors.

DISCLAIMER

The opinions, findings, and conclusions and recommendations expressed herein do not necessarily reflect the views of the United Nations Interregional Crime and Justice Research Institute (UNICRI), the European Union or any other national, regional or international entity involved. The responsibility for opinions and conclusions expressed rests solely with the author, and publication does not constitute an endorsement by UNICRI or the EU of such opinions or conclusions. The designation employed and presentation of the material in this publication do not imply the expression of any opinion whatsoever on the part of the Secretariat of the United Nations concerning the legal status of any country, territory, city or area of its authorities, or concerning the delimitation of its frontiers or boundaries. Contents of this publication may be quoted or reproduced, provided that the source of information is acknowledged. © UNICRI, April 2021.

ACKNOWLEDGEMENTS

This report has been produced as a result of generous funding from the European Union, through the Directorate-General for Neighbourhood and Enlargement Negotiations (DG NEAR). In 2020, the EC and United Nations Interregional Crime and Justice Research Institute (UNICRI), jointly launched the initiative: “Support to EU Eastern Partnership Countries to Enhance Asset Recovery”, a challenging project that seeks to work with national authorities in the six Eastern Partnership Countries, including Ukraine. The main objective of the project, is to enhance the capacity of the beneficiary countries to effectively trace, seize and confiscate assets linked to organised criminal activity, and to provide expert guidance in addressing the moral imperative of depriving criminals of the proceeds of their crimes. UNICRI is grateful to the Delegation of the EU to Ukraine and other key EU and CoE experts who have provided input and feedback on this report.

Special appreciation goes to UNICRI’s Communication Office, as well as to the Imprimerie Centrale in Luxembourg for the graphic design. Principal research and drafting of this report was carried out by Arkadius Stark, with additional editing done by Iuliia Drobysh and Yasmine Chennoukh, under the guidance of James Shaw, Senior Legal Officer (Asset Recovery).

ABOUT UNICRI

The United Nations Interregional Crime and Justice Research Institute (UNICRI) was established in 1968 pursuant to Economic and Social Council Resolution 1086 B (XXXIX) of 1965, which urged an expansion of the United Nations activities in crime prevention and criminal justice. The Institute is an autonomous institution and is governed by its Board of Trustees.

Working within the broad scope of its mandate to design and implement improved policies and actions in the field of crime prevention and control, the mission of UNICRI is to advance justice, crime prevention, security and the rule of law in support of peace, human rights and sustainable development.

UNICRI’s work focuses on Goal 16 of the 2030 Agenda for Sustainable Development Agenda, that is centered on promoting peaceful, just and inclusive societies, free from crime and violence. Justice, crime prevention and the rule of law are the basis for fighting poverty and reducing inequalities while enhancing economic growth and stability and protecting the environment. UNICRI supports governments and the international community at large in tackling criminal threats to social peace, development and political stability.

UNICRI’ s goals are:

• to advance understanding of crime-related problems;

• to foster just and efficient criminal justice systems;

• to support the respect of international instruments and other standards;

• to facilitate international law enforcement cooperation and judicial assistance.

The Institute’s current priorities include:

• Artificial intelligence and robotics in the context of crime prevention and criminal justice;

• Chemical, biological, radiological, and nuclear risks mitigation;

• Cyber-crimes;

• Domestic violence;

• Environmental crimes;

• Illicit financial flows and asset recovery; • Illicit trafficking in precious metals and gemstones; • Juvenile justice; • Protection of vulnerable population and victims; • Strengthening international criminal law; • Tourism and major events security; and • Violent extremism (including rehabilitation and reintegration of violent extremist offenders).

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