Over the nine months of 2018, the National Bank of Ukraine (NBU) inspected 787 units of non-bank financial institutions (NBFIs) for compliance with procedures for organizing and transacting FX operations.
The inspections were conducted in all regions of Ukraine.
Main violations found during inspections of NBFI business units include: foreign exchange operations without respective documentation; major discrepancies between NBFI cash and reporting documents; failure to provide documents, materials, and information during inspection on request of the authorized employee of the NBU; and obstructing the inspection.
"The fundamentally new model for conducting inspections that we introduced in the fall of 2016 has proven to be effective: they began to pay more attention to the security of premises and compliance with the regulator’s requirements. At the same time, the NBU heeds the needs of this market by holding regular meetings with NBFI managers and improving regulations on FX operations. All of the above facilitates the development of the legal market for FX operations and increases their transparency," said Ihor Bereza, Director of Financial Monitoring Department.
For instance, according to the NBU, the average monthly volume of FX operations per single exchange bureau has increased from USD 40–50 in 2016 to USD 6,000 in 2018.
Also, due to the comprehensive inspection model, the number of illegal exchange bureaus in Ukraine has decreased as more and more owners find it lucrative to operate legally.
Overall in the nine months of 2018, inspections by the NBU’s authorized representatives revealed 55 exchange bureaus operating illegally in the city of Kyiv and the following oblasts: Zakarpattia, Kharkiv, Lviv, Ivano-Frankivsk, Rivne, and Dnipropetrovsk.
The NBU has passed on the information on illegal FX bureaus to law enforcement agencies.
Cooperation with the economy protection units of the National Police of Ukraine in the city of Kyiv and the Kyiv, Kharkiv, Lviv, and Zakarpattia oblasts has proven to be most effective. These units have reported to the NBU on efforts taken to shut down illegal FX bureaus.
The information on the illegal bureaus with relevant photographs has been published on the NBU’s official website in the section Illegal Foreign Exchange Bureaus.
For further details on the NBU’s general licenses issued to NBFIs, search the system Information on Licenses Issued to Non-Bank Financial Institutions and Other Legal Entities (Except Banks) on the NBU’s official website.
Please be reminded that under NBU Board Resolution No. 962 dated 1 July 2016, the NBU keeps the Register of premises licensed to transact foreign exchange operations or render other financial services using domestic and foreign currency cash.
Also, the NBU conducted 1,018 inspections of the units (foreign exchange bureaus) of NBFIs in 2017