The law on financial monitoring – what changes and simplifications are expected?

Starting from 28 April, 2020, new requirements for making payments according to the Law

“On Prevention and Counteraction to Legalization (Laundering) of Proceeds from Crime, Terrorism Financing and Financing of Proliferation of Weapons of Mass” will enter into force.

In general, the Law considerably simplifies requirements for financial monitoring for the majority of clients of the banking system of Ukraine.

We hope that the following answers on probable questions will help you to figure that all out.

Do I need to explain the sources of my funding?

The Law does not change anything in this matter.

Our bank has already identified you as our client, we know about your activity and regular payments. In case your activity in account transactions seems unusual to us, we will ask you to confirm that the transaction has been made by you.

So, what was the reason for the introduction of this Law?

 The Law is not new, and its norms have been effective for several years. The new version of the Law introduces requirements of a risk-oriented approach in relations with customers and harmonizes the Ukrainian legislation with demands of the European legislation in the sphere of counteraction to legalization of proceeds and terrorism financing. Risk-oriented approach means that banks will build their work and diversify the depth of analysis of transactions or clients depending on a risk level.

How will an approach to major transactions change?

First of all, new requirements of the Law increase the threshold of transactions from UAH 150,000 to UAH 400,000 and decrease a list of features of transactions which are to be reported.  The banks’ approach to analysis of major transactions will not essentially change.

In case I will transfer more than UAH 400,000 and be unable to confirm sources of funding, what are the threats for me?

The Laws entering into force does not change anything in approaches of the bank.

While opening a bank account, a client provides the bank with his personal data and his incomes, etc.  

The bank monitors client transactions on a daily basis and knows which of them are usual, regular for him. So, if any atypical transaction, which does not correspond to the financial solvency of a client, is revealed, the bank will ask the client for the respective explanations.

Should the volume of transactions be atypical for this client, the bank will make an additional analysis.

Are there any restrictions regarding use of ATMs?

Yes, all devices with a cash receiving function – self-service terminals and ATMs (further on – Software and Hardware Self-service Complex, SHSC) should be equipped with special readers for identification till the year end.  

If such readers are absent, a cash amount may not exceed UAH 5,000.

Apart from:

payment of utilities, payment of taxes, fines, other obligatory payments (disregarding the amount of payment);

repayment of a loan sized to UAH 30,000.

Is additional identification for money transfers between cards, in Internet or in shops required?

No, it is not required. As a cardholder and a client of the bank, you may make all your usual transactions.

How can I get a SWIFT transfer on my card?

SWIFT – is a money transfer in a foreign currency, which is made between accounts of already identified clients.

If the bank considers such transfer unusual and has any questions arisen, it may ask the client for additional information about the content of the transaction.

Are there any limits for foreign currency transfers?

So as we mean a currency account of the existing and already identified client of the bank, no limits for crediting funds to a client’s account are foreseen by the legislation.

As before, there are no limits or restrictions for crediting funds transferred from abroad to a client’s account, stipulated by the currency law or the law on financial monitoring.

Is identification for Western Union transfers required?

Yes. So far as it is a cashless transfer, the bank has to identify and verify a payee making such transaction. That means that a client should have a passport with him and explain the content of the payment, for example, to point in the banking details that the transfer is meant for the assistance to his relatives.

Can I make charity donations up to UAH 10,000?

Yes. You may make such donations as usual.