Ukraine brings AML reforms into effect

Monday, 04 May 2020
Ukraine's new anti-money laundering (AML) laws took effect on 28 April 2020.

The new regime is similar to that already in force in the European Union under the EU Fourth Anti-Money Laundering Directive (4AMLD). Ukrainian companies are now required to update information on their beneficial owners annually, and within 30 business days of any changes. Previously existing companies have three months to make their first filing, although that deadline is not fixed yet as the three month countdown will not begin until the relevant regulations are published.

Companies will need to provide the registrar with documents proving application and ownership structure, and a notarised copy of the passport of the individual who is beneficial owner of the company.

For trusts, the definition of ultimate beneficial owner (UBO) now includes the founder, trustee, protector, beneficiary or group of beneficiaries, as well as any other individual who has a decisive influence on the trust's activities. The law also introduces the notion of 'trust-like legal establishments', whose beneficial owners are persons with equivalent status to UBOsof a trust.

Politically exposed persons (PEPs) will be subject to enhanced financial monitoring measures for 12 months after they have left public office. They will continue to be designated PEPs for life, instead of losing that designation three years after they leave office, as per the previous regime.

The threshold of transactions subject to monitoring was increased from UAH150,000 to UAH400,000, and UAH5000 for cash transfers. Suspicious transactions are subject to financial monitoring, irrespective of the amounts involved. Virtual assets operations must be monitored if their value exceeds UAH30,000.

Penalties for non-compliance have been increased substantially. The fine for regulated institutions is up to 10 per cent of their total annual turnover, to a maximum of UAH135 million. Company directors can be fined up to UAH51,000 for non-compliance with the UBO reporting rules.

Sources

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