Rada passes bill to increase control of financial transactions
7 noviembre 2019

Ukraine

On November 1, the Verkhovna Rada approved on first reading a bill to prevent and combat money laundering, which seeks to bolster financial controls through the application of international standards. The Rada is now preparing the text for its second reading. Meanwhile, on January 19 2020, a law on the protection of consumers of financial services will enter into force. 

The objective of the bill is to comprehensively improve national legislation in the sphere of financial sector monitoring. On this, it proposes, among other things, to apply fines for offending banks and financial institutions, introduce mechanisms for freezing assets, intercept suspicious financial transactions, and strengthen requirements for the disclosure of final beneficiaries. At the same time, the proposal aims to digitize processes to simplify access to financial services through digital identification, which would also allow for remote verification in transactions.

The initiative, whose second debate has yet to make it onto Rada’s agenda, incorporates into national legislation the FATF recommendations and the European Union Directives on money laundering and terrorist financing. It should be noted that the sanctioning of the bill would enable Ukraine to fulfil one of its key conditions for receiving from the EU the second tranche of macro-financial assistance amounting to 500 million euros in 2019. 

Separately, a law to protect users of financial services will come into force in the country on January 19. The law regulates, among other things, the advertising of financial services for banks and non-banking institutions, partly with a view to support users to better gauge and compare different financial services and products.

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