Recent changes in the AML-legislation

I.The legislation on information submission  in regard to ultimate beneficial owners (hereinafter — the "UBO") of legal entities has been amended by Law №2571-IX (hereinafter — the "Law"), which entered into force on 29 December 2022

1.Changes in the deadlines for information submission  on the UBO

The Law provides that the Ministry of Finance is obliged to develop a methodology for determining the UBO of a legal entity (hereinafter — the "Methodology"). The legal entities, in their turn, are obliged to disclose/submit information on the UBO:

• within six months from the approval date  of the Methodology; but
• not earlier than 90 days from the date of termination or cancellation of martial law in Ukraine.

2.Annual reporting on the UBO has been cancelled

The Law abolishes the requirement of annually submitting to the state registrar the information on the UBO and ownership structure. However, it requires keeping the information on the UBO and ownership structure of the legal entity up-to-date.

Information about the UBO shall be updated in the following cases:

• modification  on the UBO or ownership structure — within 30 working days from case of data the date of such modification;
• in the course of the state registration of certain changes related to  a legal entity, such as an appointment of a new director, location change, changes in charter capital, membership, etc. — in the course of  the state registration of the relevant changes;
• in case of error detection — a legal entity shall submit the information to the state registrar within 3 business days after the error detection.

3.Strengthened responsibility for failure in providing information

Before the adoption of the Law

for failure to submit or late submission of the information on the UBO, a fine is imposed on the CEO of a legal entity in the amount from UAH 17 000 to 51 000

After the adoption of the Law

for entering by the CEO of knowingly false information on the UBO — a fine is imposed in the amount from UAH 17 000 to UAH 340 000  

for failure to submit or late submission of information on the UBO — a fine is imposed in the amount from UAH 17 000 to UAH 340 000  

4.Additional changes

• There is a possibility to submit information on the UBO and/or ownership structure in an electronic form. 
• If a bank or another AML-obligated entity notifies the state registrar about data mismatch  on the UBOs of a company, a note on possible data mismatch  on UBO can be made in the publicly available register.

II.A new AML national risk assessment was approved

In December 2022, an updated AML national risk assessment was adopted by the Council on Prevention and Counteraction to Legalisation (Laundering) of the Proceeds of Crime or Terrorist Financing and  Financing  Proliferation of Weapons of Mass Destruction. The Report has not been published yet. Once it is published, AML-reporting subjects will be obliged to reassess their risk-profiles in accordance with the new national risk assessment. 

We would be glad to help ensure the compliance with the UBO reporting for legal entities, as well as to assist in peculiarities of AML-reporting for AML-obligated entities.