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Ukraine Tightens Rules on Disclosure of Ultimate Beneficial Owners

Kyiv – January 2020

On  April 28, 2020,  the Law of Ukraine "On Preventing and Counteracting the Legalization (Laundering) of the Proceeds of Crime, Financing Terrorism and Financing of the Proliferation of Weapons of Mass Destruction" (the “Law”) dated December 6, 2019, will enter into force.

It introduces inter alia amendments to the Law of Ukraine "On State Registration of Legal Entities, Individuals - Entrepreneurs and Public Organizations" by obliging legal entities to maintain up-to-date information on the ultimate beneficial owners and ownership structure of the legal entity and to update such information on a regular basis.

Pursuant to the Law, the state registrar will establish the data on the ultimate beneficial owners of the legal entity on the basis of the following documents:

  • A corporate structure chart – the form and content of such document has yet to be approved by the State Financial Monitoring Service of Ukraine.
  • A duly certified extract or other document confirming registration of the non-resident legal entity.
  • A notarized copy of a passport of a non-resident / resident individual.

The above documents should be submitted together with other documents stipulated for both state registration of a legal entity and amending information on a legal entity in the Unified State Register, as well as establishment of branches of the legal entity or amending information on such branches.

In addition, legal entities are obliged to notify the state registrar of any changes in their ultimate beneficial owners (i) within 30 business days from the date of such changes and (ii) annually – within 14 calendar days starting from the next year following the date of state registration of the legal entity.

Please note that all existing legal entities are obliged to submit information about their ultimate beneficial owners together with supporting documents within three months from the approval of the form and content of the corporate structure chart by the State Financial Monitoring Service of Ukraine.

Failure to submit or late submission to the state registrar of information about ultimate beneficial owners or confirmation that there is no ultimate beneficial owner may result in an administrative penalty for the director or the executive body of the legal entity. The penalty is equal to between one to three thousand times the tax-exempt minimum income (UAH 17,000-51,000, being equivalent to €650-1 900).

Based on the provisions of the Law, it might be prudent during regular annual updates or amendments to the information about the legal entity  to submit to the state registrar not only the corporate structure chart but also supporting documents (extracts, notarized passport copies), even if there is no change in the ultimate beneficial owners.

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