Financial monitoring: Ukraine harmonizes its legislation with international standards
- Risk-oriented approach to carrying out financial monitoring is implemented: Fromnow on, each subject of initial financial monitoring (SIFM) is obliged to identify risks inherent to its business and implement the respective risk management system. Inparticular, the SIFM will be obliged to carry out an appropriate check of the clients and create their risk profile. The SIFM is additionally obliged to re-evaluate its risks and the clients’ risks based on their operations and analyze their risk profile.
- KYC: Verification of identification data of the respective person can be conducted by the SIFM without their presence (i.e., remotely).
- Work with politically exposed persons (РЕР): Henceforth, the РЕР is a public official independent of the length of their position (currently — starting from three years) and even if the PEP ceases to perform these functions, the SIFM is obliged to continue taking into account the respective ongoing risks for at least 12 months. At the same time, however, the list of PEP family members is reduced.
- Threshold financial operations: The threshold of operations subject to financial monitoring increased to UAH 400,000; at the same time, however, the number of criteria for the operations to fall within the scope of financial monitoring substantially decreased.
- Suspicious financial operations: These are subject to monitoring irrespective of the amount.
- Funds transfer: The SIFM providing funds transfer services, is obliged to supplement the funds transfers exceeding UAH 30,000 (with the exception of certain operations) with information regarding the sender and recipient of the transfer.
- Whistle-blowing: The SIFM is obliged to establish, for the employees, a procedure of notification of the director and/or the responsible employee regarding a breach of legislative requirements.
- Measures of influence: The amount of fines significantly increased — for the banks and non-banking financial institutions — up to UAH 135.15 million.
This LEGAL ALERT is issued to inform Baker McKenzie clients and other interested parties of legal developments that may affect or otherwise be of interest to them. The comments above do not constitute legal or other advice and should not be regarded as a substitute for specific advice in individual cases.