The National Bank of Ukraine has streamlined the procedure for analyzing information on financial transactions by banks given the recent steps by taken by the regulator to relax FX controls, notably the decision to allow investors to repatriate funds invested in Ukraine.
Until now, a ban has been put in place on FX purchases and transfers abroad due to foreign investors after the sale of corporate rights, reduction of the statutory capital of legal entities or withdrawal from business partnerships of foreign investors. Last week the NBU decided to authorize such transactions from 12 June 2017.
At the same time, to prevent the outflow of capital via the shadow schemes, such transactions will be subject to the regulator’s monitoring in terms of their compliance with a specified list of requirements.
Therefore, the NBU has expanded the list of transaction indicators that will be subject to in-depth analysis and monitoring by banks. Until now, these transactions have included transfers made by private individuals exceeding the equivalent of USD 150,000 and the payment of dividends to a foreign investor. Going forward, these transactions will include the following:
- transfers made by private individuals exceeding the equivalent of UAH 150,000 (apart from social payments (payment of medical, education and burial expenses), transfers related to payment of salaries to non-resident employees and transfers up to USD 50,000 related to payment of taxes, duties, and other mandatory payments);
- transfers due to foreign investors after the sale of corporate rights or securities.
However, the new rules have expanded the list of financial transactions that will not be subject to analysis of documents and information. These will include money transfers abroad based on individual licenses issued by the NBU and transfers arising from the sale of listed securities at Ukrainian stock exchanges.
Also, banks will be required to take sufficient measures to identify the ultimate beneficial owners of legal entities.
The amendments to this effect are introduced by NBU Board Resolution No. 43 of 25 May 2017 On Amendments to Some NBU Regulations, which shall come into effect from 12 June 2017.