On April 28, 2020 the Law of Ukraine “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 and established the new procedure of UBO disclosure for the legal entities in Ukraine.
The law amends a number of normative legal acts, including the Law of Ukraine “On State Registration of Legal Entities, Individual Entrepreneurs and Public Associations” and the Code of Ukraine on Administrative Offenses. Among other changes, the Law establishes new rules for the disclosure of information about the final/ultimate beneficial owner (s) (hereinafter – „UBO“) and its regular updating, expands the list of documents submitted for this purpose, requires annual confirmation of information about the beneficiary and increases penalties for non-compliance. The new rules also affect the scope of financial monitoring procedures, which are mostly conducted by banks, but also by other entities defined in the Law.
According to the Law all existing Ukrainian legal entities must submit to the state registrar the following documents disclosing the ownership structure of the entity, extract confirming the registration of the founder of the legal entity (if the founder is a non-resident), notarized copy of the document certifying the person who is the UBO of the Ukrainian legal entity, and an application confirming the information about the UBO
Already existing legal entities have to submit the above information/documents to the state registrar within three months after adoption of the additional regulations necessary to implement the provisions of the Law.
The documents confirming the UBO of the legal entities should be provided to the state registrar also in the following cases:
- on annual basis during fourteen calendar days from the day of legal entity registration
- any changes of the company data reflected in the local state register
- the newly incorporated Ukrainian legal entity.
Ukrainian legal entities are obliged to permanently keep information about their UBO and ownership structure up-to-date and inform state registrar in case of any changes.
Fines and possible refusal of state registration
The law stipulates that failure to submit or late submission of information on the UBO to the state registrar entails a fine of UAH 17,000 to 51,000. The fine is imposed on the head of the legal entity or a person authorized to act on behalf of the legal entity.
The state registrar also has the right to refuse state registration of a legal entity in case of discrepancy between the information specified in the application for state registration, the information contained in the submitted documents, or the information contained in the Register or other sources provided by the law.