The Law of Ukraine
On Prevention and Counteraction of the Legalization (Laundering) of the Proceeds from Crime
Date of Entry into Force:
June 11, 2003
The Law of Ukraine “On Prevention and Counteraction of the Legalization (Laundering) of the Proceeds from Crime” (hereinafter referred to as “the Law”) regulates relations in the sphere of prevention and counteraction of the legalization of the proceeds from crime, as well as sets legal grounds for combating financial terrorism.
This Law applies to the relations that deal with obtaining material benefits and are characterized by concealing and disguising illegal origin of money or other material values or rights for them. According to the Law, the necessary condition for recognizing incomes as illegal is the realization of their illegal origin by the individual obtaining them. For this purpose the Law applies to citizens of Ukraine, foreigners and stateless persons, as well as legal entities, their branches, representative offices and other detached departments that perform financial transactions on the territory of Ukraine.
The financial monitoring system has two levels - primary and state. Subjects of primary financial monitoring are:
banks, insurance and financial institutions;
payment organizations, members of payment systems, acquiring and clearing institutions;
commodity, stock and other exchanges;
professional participants on the market of securities;
institutes of joint investment;
gambling facilities, pawn-shops, and legal entities drawing any lotteries;
enterprises, organizations managing investment funds or non-governmental pension funds;
communication enterprises and associations, and other non-credit organizations performing money transfers;
other legal entities, which perform financial transactions according to the legislation.
According to the Law, subjects of state financial monitoring are:
central bodies of executive power and the National Bank of Ukraine, which, according to the law, regulate and supervise activities of legal entities that perform financial transactions;
a specially authorized body of executive power in the sphere of financial monitoring - a government body of the state administration, which functions within the Ministry of Finance of Ukraine (hereinafter referred to as the Authorized Body).
On the basis of this Law, subjects of primary financial monitoring shall:
identify individuals performing financial transaction that is subject to financial monitoring;
reveal and register financial transactions that are subject to financial monitoring according to the present Law;
provide the Authorized Body with the information about financial transaction that is subject to obligatory financial monitoring within three working days after the moment of its registration;
assist subjects of state financial monitoring in issues related to performing analysis of financial transactions that are subject to financial monitoring;
save documents related to identification of individuals who have performed financial transaction that is subject to financial monitoring according to the present Law;
fulfill other functions envisaged by the present Law.
The subject of primary financial monitoring shall identify individuals performing financial transactions which are subject to financial monitoring according to the present Law on the basis of submitted originals or appropriately verified copies of financial documents. Identification of resident natural persons and legal entities is performed with the help of such data:
for natural persons: data about their last name, name and patronymic, date of birth, series and number of passport (or other identification document), date of issuance and the body issuing it, place of residence, identification number according to the State Register of Natural Persons - payers of taxes and other mandatory payments;
for legal entities: data on their name, legal address, state registration, identification code according to the Unified Register of Enterprises and Organizations of Ukraine, requisites of the bank where its current account has been opened and the number of bank account.
The subject of primary monitoring establishes the following data for identification of legal entities and natural persons:
for natural persons: last name, name, patronymic, series and number of passport (or other identification document), date of issuance and the body issuing it, citizenship, place of residence or place of temporary stay;
for legal entities: full name, location and requisites of the bank, where its account has been opened and the number of bank account.
Financial transaction is subject to obligatory financial monitoring, if the amount of the transaction equals or exceed UAH 80,000, or equals or exceeds the amount in foreign currency which is equivalent to UAH 80,000 and has one or more of the below attributes:
transfer of money to an anonymous account abroad and reception of money from an anonymous account abroad;
purchase of checks, traveling checks or other similar payment tools for cash;
performance of financial transactions with securities in cases, when at least one of the parties is a natural person or a legal entity that comes from a country, which does not take part in the cooperation in the sphere of prevention and counteraction of the legalization (laundering) of the proceeds from crime.