The changes to the UBO information confirmation are still in progress in Ukraine. Let’s summarize where it all started. In April 2020, a Law of Ukraine was adopted “On prevention and counteraction to the legalization (laundering) of illegally received funds, financing of terrorism and financing of proliferation of weapons of mass destruction.” The Law came into force to establish a new procedure of UBO disclosure for legal entities in Ukraine and introduce a process for keeping these data up-to-date. Moreover, it required to update the registers and confirm information about UBO and the structure by legal entities till October 10th, 2021. However, just before the indicated deadline it was postponed by the Verkhovna Rada for another 9 months – till July 11, 2022.
Later on, the further development of the law progressed. So, let us remind that at the end of October 2021, draft law No. 6131-2 appeared on the website of the Verkhovna Rada, proposing to amend the Law of Ukraine “On State Registration of Legal Entities, Individual Entrepreneurs and Public Organizations.” Later, on June 19, 2022, the project was registered resolution at the Verkhovna Rada under No. 6131-2/P regarding adoption as a basis of draft law No. 6131-2.
Simplified confirmation of UBO information in Ukraine
It becomes relevant to recall what changes and simplifications regarding the confirmation of information about the ultimate beneficial owner (UBO) are provided by draft law No. 6131-2.
The draft law provides for the following:
- To expand the list of legal entities that are not subject to the requirement to submit information on the ultimate beneficial owners to the following legal entities: public organizations and their structural entities (separate divisions), youth and children’s public organizations and their structural formations (separate divisions), charitable organizations and their structural formations (separate subdivisions), associations of associations of co-owners of apartment buildings, housing and construction, dacha (cottage and construction), gardening, garden (gardening and gardening) and garage (garage and construction) cooperatives (companies), agricultural service cooperatives, pension funds, bodies of self-organization of the population, consumer associations, law offices, non-governmental organizations of professional self-governance (self-regulation).
Information on the ultimate beneficial owner and ownership structure is not submitted during the state registration of the creation of a legal entity in relation to legal entities whose founders are exclusively natural persons who are considered its ultimate beneficial owners, unless they have submitted information that the ultimate beneficial owners of such a legal entity are other persons;
- Leave the obligation to submit documents and information about the ultimate beneficial owners and the ownership structure of the legal entity only upon initial registration of the legal entity and in case of changes in the ownership structure and information about the ultimate beneficial owner of the legal entity;
- Exclude the obligation of annual confirmation of information about the ultimate beneficial owner.
Therefore, it is expected that in the near future deputies of the Verkhovna Rada will still support draft law No. 6131-2 in the 1st reading and it will become easier for businesses to conduct their business activities, especially in such difficult times as now during martial law.