Enforcement of financial monitoring by state and municipal enterprises as a counter suspected transaction mechanism

A large amount of funding from the state and local budgets falls on state and municipal enterprises. Given the existing stable practice in the country of misappropriation and embezzlement of funds from state and municipal enterprises, officials of state and municipal enterprises should apply new approaches, methods, mechanisms and practices to analyze counterparties during public procurement in order to avoid losses to the state budget (loss of taxpayers’ funds). Enforcement of financial monitoring by state and municipal enterprises will allow saving state budget funds annually and reduce the burden on the law enforcement and judicial systems of Ukraine. The proposed new approaches for state and municipal enterprises, as subjects of primary financial monitoring, will eliminate the shadow economy market during public procurement, and, due to this, revenues to the state budget will increase. The use of open sources of information and information databases of the tax service by officials of state and municipal enterprises will reduce offenses and abuses during tender procedures. The article proposes new approaches to the application of counterparty/supplier analysis tools in order to avoid reputational risks and unjustified budget expenditures for state and municipal enterprises. The analysis of the Law of Ukraine “On Prevention and Counteraction to the Legalization (Laundering) of Proceeds from Crime, Financing of Terrorism and Financing of the Proliferation of Weapons of Mass Destruction” suggests including state and municipal enterprises among the subjects of the primary level of financial monitoring, which will have a positive impact on saving budget funds. The creation of regulatory acts based on existing acts of the National Bank of Ukraine and banks of Ukraine, in the context of the enforcement of financial monitoring by state and municipal enterprises, will save time for discussions and processing by government representatives when writing a regulation on the implementation of financial monitoring by state and municipal enterprises.