Financial monitoring and customer identification

Financial monitoring and customer identification 150 150 Esquires

On February 7, 2019 the Law of Ukraine on Currency and Currency Transactions came into force and resulted significantly on requirements of the Ukrainian legislation on the identification of natural and legal persons.

Now Banks more frequently require from their customers to confirm the legitimacy of the fund’s sources.

According to the current rules, the KYC (KNOW YOUR CUSTOMER) identification procedure is used not only for opening an account, but occasionally during transactions (replenishment of bank account, currency exchange, transfer of funds, etc.).

It’s applied to every transaction for an amount equal to/or exceeding 150,000 UAH, or 15,000 UAH in case of funds transfer by an individual without opening an account.

Starting from 4th April, 2019 non-resident legal entities within the KYC procedure have to prove that they are not shell companies (regardless of the sum of the bank operation). It is also applicable to companies that are contractors with bank’s customers.

What is the threat?

Failure to submit the requested documents or submission of documents which will not be verified by the subject of the initial financial monitoring will lead to:

  • suspension of expenditure operations;
  • denial of transaction;
  • refusals to commit a transaction;
  • refusal to establish business relations and their termination;
  • suspension of the financial transaction followed by notification of the entities of the state financial monitoring.

Our experts will help you to avoid negative consequences. We assist clients on a daily basis in dealing with financial monitoring entities and ensure the successful completion of the KYC identification procedure at domestic and foreign banks.

We will help:

  • to communicate properly with the bank (other subject of the initial financial monitoring);
  • check the legitimacy of the requirements;
  • prepare a package of documents that is guaranteed to be acceptable for you and the reviewers;
  • to plan correctly further financial activity taking in consideration the novelties of the legislation.

Contact us and we share our knowledge and experience regarding the particularities of identification while conducting financial operations and structuring your investment activities.

Note for information.

Operations, that are subjected to obligatory financial monitoring (amounting to or exceeding 150,000 UAH):

  • money transfer and currency exchange;
  • obtaining credit;
  • transfer of funds abroad under international business contract;
  • financial transactions of individuals, that are considered to be at high risk (for example, transactions of individuals, who are public figures).

A shell company or non-resident legal entity that does not perform its actual business activity in the country of incorporation (there are no sufficient assets and / or employees to carry out the relevant business activity) and / or its ownership structure does not allow to establish the real ultimate beneficial owners (controllers).

Key Contact:

Vita Shkaraputa
senior lawyer
vita.shkaraputa@old.esquires.law
+38 068 791 01 47

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