Member of the Union of Industrialists and Businessmen of Turkey and Ukraine “TUSIB” – law Firm SDM Partners has prepared some clarifications on new issues:
The Law of Ukraine “On Prevention and Counteraction to Legalization (Laundering) of the Proceeds of Crime, Financing of Terrorism and Proliferation of Weapons of Mass Destruction” No. 361-IX (hereinafter – “Law”) came into force on 28.04.2020, which provides, inter alia, the novelties specified below:
All legal entities registered before 28.04.2020 will be required to submit to the state registrar information about the ultimate beneficial owner and ownership structure within three months from the date of entry into force of the regulatory legal act in which the form and content of the ownership structure have been approved (charter, decision of participants).
During state registration of a legal entity, as well as state registration of changes in a legal entity data, transition by a legal entity to a model charter, or vice versa, registration of a separate division of legal entities, etc., the ultimate beneficial owner of the founder will be required to submit to the registrar a notarized copy of the passport except biometrics. In case of refusal to provide a notarized copy of the passport, state registrars will refuse to register an entity.
Legal entities are required to keep the information on the ultimate beneficial owner and ownership structure up to date, update it and notify the state registrar of changes within 30 business days from the day they occurred, and also submit documents confirming these changes to the state registrar. If there are no changes in the ownership structure and information about the ultimate beneficial owner of the legal entity, legal entities are obliged to inform the state registrar of the absence of such changes during the state registration of any changes to the information on the legal entity contained in the Unified State Register.
All legal entities will be required to confirm annually, starting from the next year from the date of the state registration, within 14 calendar days, information about the ultimate beneficial owner. To do this, one should submit the following documents to the state registrar:
(A) a statement confirming the details of the ultimate beneficial owner,
(B) the ownership structure in form and content defined in accordance with the law,
(C) extraction, extract or other document from the commercial, banking, judicial register confirming the registration of a non-resident legal entity in the country of its location (if the founder of the legal entity is a non-resident legal entity),
(D) a notarized copy of the passport of the ultimate beneficial owner, except for holders of a biometric passport.
Violation of the above requirements, namely failure to submit or untimely submission to the state registrar of information about the ultimate beneficial owner of a legal entity, provides for a fine on the head of the legal entity or a person authorized to act on behalf of the legal entity (executive body) in the amount of 17 000 to 51 000 ₴ (part 6 of Article 16611 of the Code of Administrative Offenses).
In addition, the ultimate beneficial owner, according to clause 30 of part 1 of Article 1 of the Law, is considered to be any individual exercising decisive influence / control on the activities of the client (i.e., the entity applying or subject to financial monitoring) and / or the individual on whose behalf the financial operation is executed, namely:
(A) for legal entities – any individual who obtains a decisive influence on the activities of a legal entity (including through the chain of control / ownership), which consist in the possession by an individual of at least 25% of the charter (drawn up) capital or legal entity’s voting rights (except for persons having a formal right to 25% or more of the charter capital / voting rights in a legal entity, but who are commercial agents, nominee holders or only intermediaries regarding such a right),
(B) for trusts established under the legislation of their country of origin – a founder, trustee, protector (if any), beneficiary or a group of beneficiaries, as well as any other individual, obtains a decisive influence on the activities of the trust (including through the chain of control / ownership)
(B) for other similar legal entities – a person having a status equivalent to or similar to the persons indicated for trusts.
Currently, the Ministry of Finance and the Ministry of Justice are expected to change the corresponding registration forms.