The NBU’s accession to the Memorandum on cooperation in developing a mechanism for verifying information about the beneficial owners (the “Memorandum”) is quite logical and even is expected according to the obligation of banks to identify bank account holders. The regulator has repeatedly emphasized the responsibility of the banks to conduct effective financial monitoring, so the NBU’s integration into the Memorandum’s membership is justified.
A set of measures should provide the ground to implement amendments specified in draft law No. 9417 of 19/12/2018, which has been considered by the Parliament and aimed at strengthening accountability for violations of financial monitoring requirements.
The Memorandum itself continues Ukraine’s commitments to implement the Open Government International Initiative and the Action Plan approved by Decree of the Cabinet of Ministers No. 909-p dated 30 November 2016. Even though the requirements for disclosure of information on legal entities’ controllers have been introduced and remained effective in Ukraine since 2014, several problems have not yet been resolved. In addition to the lack of responsibility for failure to provide information about the beneficial owner, state authorities are not integrated into a unified system that would allow to effectively use the information available to them and cross-check its authenticity.
The signed Memorandum is intended to eliminate the shortcomings, and the accession of the NBU should provide strengthening of the requirements in respect of “transparency” of bank transfers, the origin of bank customers’ funds, access to the specified information of fiscal authorities. At the same time, the specific content of the measures envisaged by the Memorandum has not been released, which does not allow to make a clear conclusion about their feasibility, effectiveness or potential risks for business.
But in any case, the goals and objectives of the Memorandum are in line with the worldwide trend of combating business anonymity, tax evasion and legalization, which has been launched with the introduction of the FATF and reinforced by the introduction of the CRS (Common Reporting Standard).