Scoring of unexplained wealth risk (hereinafter “scoring”) is an automatic assessment of information about the assets of a politically exposed person, made on the basis of an annual declaration by a person authorized to perform state or local government functions, which is published on the website of the National Agency on Corruption Prevention (hereinafter "the declaration").
Scoring is a value judgment which is published on the website solely for informational purposes, in particular to assist financial monitoring entities to comply with the requirement of Recommendation 12 of FATF regarding establishment of source of wealth of PEPs.
Scoring is made on the basis of the latest publicly available PEP’s declaration using machine learning algorithms. The existing algorithm analyzes information in declarations with respect to previous declarations of this PEP and also with respect to publicly available declarations of the relevant year of other PEPs.
The algorithm detects:
1) arithmetic and logical inconsistencies in the information on the assets, including comparison of declarations for different years;
2) information not included in the declaration, which may indicate the concealment of assets or their unjustified origin;
3) risk indicators, determined by the methodologies of verification of declarations of the National Agency on Corruption Prevention and experts of the Anti-Corruption Action Center;
4) anomalies found when comparing all of the declarations of different PEPs.
Based on the established data, the annual declaration of each PEP is evaluated.
Scoring reflects the rating on a scale: low risk (0-3 points), medium risk (4-6 points), high risk (7-10 points). It also displays certain risk indicators established in the process of analysis of the declaration. Such an indicator may imply that the PEP’s assets may be unjustified and require further study and evaluation by the analysts.
The scoring risk indicators are divided into the following groups.
Risk indicators that may imply that the declaration is filled in incorrectly or that certain information may be hidden from the declaration:
· Asset declaration does not indicate PEP’s wife and/or children, while pep.org.ua register has information on them
· There is no information on the value of the real estate, land plots or vehicles owned by PEP or family members since 2015
· There is no information on real estate/apartment owned or rented in the town, city or region indicated as PEP’s place of residence
· There is no declared beneficiary ownership of company/ies, while pep.org.ua registry has information about such a beneficial ownership
· Declared ownership of vehicle produced after 2013 with an indicated value less than 150 000 UAH
Risk indicators that may imply probable concealment of sources of income and / or corruption risks of received income or assets:
· PEP declared that the overall value of the movable and immovable property and hard cash increased 5 times compared to the declaration for the previous year
· During one calendar year, PEP received and paid back a loan which exceeds the income in 2 or more times
· Income from the sale of assets or property times exceeds in 2 or more times the declared value of those sold assets in the declaration for the previous year
· Income from the teaching and creative activities, as well as part-time work, exceeds 30% of the total income indicated in the declaration
· Royalty exceeds 20% of the total income indicated in the declaration
· Overall amount of income and monetary assets indicated in the declaration is smaller or equal to the expenditures indicated in the declaration
· Declared presents amounting to more than 100 000 UAH
· Declared lottery winning or prize with a price of more than 10 000 UAH
· Monetary assets declared this year exceed the sum of income and amount of monetary assets of the previous year
· Companies owned or controlled by the declarant or his/her family members received transfers of budget funds exceeding 100 000 UAH
· PEP declared cryptocurrency and/or income based on cryptocurrency
Risk indicators that may imply a lifestyle that is not typical for most of Ukrainian PEPs and/or a lifestyle that is mismatching with declarant's income:
· Overall value of the property and assets exceeds income in 10 or more times for the current year
· Declared ownership and/or right of use of a business class car, or car with a price exceeding 800 000 UAH or brand vehicle, which is considered to be a luxury car
· Declared ownership and/or right of use of more than 5 cars
· Overall amount of declared hard cash owned by PEP and members of the family exceeds 1.5 million UAH
· Hard cash declared in the very first electronic asset declaration available in the system exceeds in 5 or more times income declared for the corresponding year
· Declared expenditures exceed 75% of the overall income for the period
· PEP declared rent of real estate exceeding 300 sq. m.