
Finance Ministry presents for a public discussion a bill on the prevention of and fight against the legalization of illegally received incomes, funding of terrorism and funding of the WMD dissemination
The
Ministry of Finance presents for a public discussion the corrected draft Law of
Ukraine “On amendments to some of the laws of Ukraine regarding the prevention
of and fight against the legalization (laundering) of illegally received
incomes, funding of terrorism and funding of the dissemination of
mass-destruction weapons”.
What’s it
about?
To adjust
the Ukrainian legislation to the EU regulations (Fourth Directive (EU) 2015/849
and Regulation (EU) 2015/847) and to fulfill the obligations of Ukraine towards
the International Monetary Fund, the Ministry of Finance prepared the above
draft law jointly with the State Agency for Financial Monitoring, the National
Bank of Ukraine and international experts (as part of the technical assistance
provided by the USAID project “Transformation of the financial sector in
Ukraine”). The draft law is aimed to improve and to clarify some of the
regulations related to the prevention of and fights against the legalization (laundering)
of illegal incomes as well as to align and to improve the regulations of the
laws which are subject to amendments as well as to ensure the implementation of
the new international standards for the fight against money laundering and the
funding of terrorism.
What’s the
benefit?
The draft
law is aimed to comprehensively improve the Ukrainian legislation in the area
of financial monitoring, especially in regard to the following issues:
-
significant reduction of the number of features of financial transactions which
shall be reported to the State Agency for Financial Monitoring by the entities
of the primary financial monitoring (hereafter referred to as “SPFM”) (banks,
insurance companies, loan associations, pawn offices, exchanges, payment-processing
organizations and other financial institutions). This regulation concerns,
among others, financial transactions exceeding 300,000 hryvnas
(currently: 150,000 hryvnas) and related to cash
funds, transfer of funds abroad by customers from Iran or North Korea as well
as by public persons;
- increase of the number of the SPFMs which shall report
suspicious financial transactions to the State Agency for Financial Monitoring
(to include persons providing information and advisory services related to
taxation issues);
-
improvement of the mechanism for the verification of the end beneficiary owners
of companies aimed to examine, if a person stated in the register as the end
beneficiary is the real owner of the respective company or merely a nominal
owner; to do this, it is proposed to incorporate the mandatory identification
of end beneficiaries as the element of financial monitoring for most financial
institutions and representatives of regulated professions (notaries, auditors,
accountants, lawyers, attorneys, real estate agents, tax advisors and others);
-
implementation of new regulations for the financial transactions of
high-ranking state officials and public servants as well as judges, state
prosecutors and Parliament members and their family members which require documentary
proofs for their financial and property status;
- incremental transition to the risk-oriented approach in
reporting suspicious financial transactions by SPFMs;
- implementation of appropriate impact measures imposed for
the violation of the anti-laundering regulations (ranging from written warnings
and fines not exceeding 10% of the revenue to the license cancellation);
-
simplification of the procedure for the identification of politically
significant persons based on declarations submitted to the NAZK and creation of
the state register of national public persons and their family members;
- improvement of the legislative aspects which impact the
quality of investigations regarding the legalization (laundering) of illegally
received incomes;
- improvement
of the regulations which ensure confidentiality for SPFMs which receive and
execute requests, decisions and instructions from the State Agency for
Financial Monitoring as well as, accordingly, the protection of SPFMs against
threats, discrimination and other negative factors resulting from the measures
related to the primary financial monitoring;
- mandatory
tracing of fund transfers as a tool for preventing, detecting and investigating
money laundering and funding of terrorism as well as for the implementation of
restrictive actions;
- obliging payment-processing systems to provide the data of
the payer and the receiver while processing payment transactions;
- obliging
payment-processing systems to ensure the availability of the full data of payers
and receivers;
- implementation of preventive actions aimed to counteract
manipulations with funds received through crimes and the collection of money or
assets for acts of terror.
What comes
next?
After the
public discussion the Ministry of Finance will submit the draft law to the
Cabinet of Ministers and, after that, to the Parliament.