The NBU Board has approved the decision to revoke the banking license and liquidate JSCB CONCORD JSC (the Bank) effective 1 August 2023. The financial institution accounted for 0.17% of solvent banks’ assets. Therefore, removing the Bank from the market will not influence the stability of the Ukrainian banking sector.
The decision was taken in accordance with Article 77 of the Law of Ukraine On Banks and Banking due to a repeated breach by the Bank of the laws on counteracting money laundering, terrorism financing, and financing proliferation of weapons of mass destruction (AML/CFT), namely:
- Article 8 part two paragraph 3 of the Law of Ukraine On Prevention and Counteraction to Legalisation (Laundering) of Criminal Proceeds, Terrorism Financing and Financing of Proliferation of Weapons of Mass Destruction (Law No. 361-ІХ), as the Bank failed to maintain the functioning of a proper risk management framework
- Article 8 part two paragraph 15 of Law No. 361-ІХ and Section II paragraph 26 indent four of the Regulation on the Procedure for Organizing and Exercising Supervision in the Area of Financial Monitoring, Currency Supervision, Supervision on the Issues Related to Implementation and Monitoring of Personal Special Economic and Other Restrictive Measures (Sanctions) approved by NBU Board Resolution No.90 dated 30 June 2020, as the Bank failed to provide the inspection group with reliable information required for AML/CFT supervision
- Article 8 part one indents one and two of Law No. 361-ІХ, as the Bank failed to properly meet its obligations to develop and implement internal AML/CFT documents, taking into account legislative requirements and results of domestic risk assessment and assessment of risks inherent to the Bank’s activities, and as the Bank’s internal AML/CFT documents did not contain proper procedures for ensuring effective risk management
- Section IV paragraph 40 of the Regulation on Financial Monitoring by Banks approved by NBU Board Resolution No. 65 dated 19 May 2020, as the Bank did not consider peculiarities and possibilities of using its products and services when analyzing their risks of legalization (laundering) of proceeds from crime, terrorism financing, and/or financing proliferation of weapons of mass destruction.
In addition, during the past two years, based on results of AML/CFT supervision, the NBU imposed the following corrective measures on the Bank for its violations: a fine totaling UAH 60,400,000.00 and a warning letter.
Information on previous corrective measures imposed on the Bank was published on the NBU’s official website in accordance with Article 68 of the Law of Ukraine On the National Bank of Ukraine.
The Deposit Guarantee Fund will reimburse to each depositor of the Bank the full amount of their deposit, including interest accrued as of the end of the day preceding the date of the start of the resolution procedure, except in the cases specified in Article 26 part four of the Law of Ukraine On Households Deposit Guarantee System. The total guaranteed amount that could be payed to depositors was UAH 1,116.25 million as of 1 July 2023.
As a reminder, after Law of Ukraine No. 2180-IX On Amendments to Certain Laws of Ukraine Concerning Ensuring the Stability of the Households Deposit Guarantee System dated 1 April 2022 came into force, retail deposits became 100% guaranteed at all banks.
The decision to revoke the banking license and liquidate the Bank was approved by NBU Board Decision No. 265 On Revocation of Banking License and Liquidation of JOINT-STOCK COMMERCIAL BANK CONCORD JOINT-STOCK COMPANY dated 1 August 2023.
In addition, the NBU imposed on the Bank a corrective measure in the form of a fine of UAH 400,000.00 for violating the following requirements:
Article 14 part one paragraph 2 subparagraph "a" of the Law of Ukraine No. 361-IХ*, as the Bank failed to complement a money transfer with required information about the transfer recipient
Article 14 part one paragraph 1 subparagraph "b" of the Law of Ukraine No. 361-IХ*, as the Bank failed to complement a money transfer with information about the payer (transfer initiator).
*The wording effective as of the moment of the violation.