As of 28 April 2020, new requirements to payments enter into effect as prescribed in the Law of Ukraine On the Prevention and Counteraction to Legalizing (Laundering) the Proceeds from Crime, Terrorism Financing, and Financing the Proliferation of Weapons of Mass Destruction.
At the same time, this will have no effect on most daily remittances. Remote payments for utilities, tax payments, settlements for goods and services or other usual household transfers, including card-to-card transfers should not be affected.
In order to clarify provisions of the law, the National Bank of Ukraine (NBU) has prepared answers to frequently asked questions on the issue.
If a person is willing to transfer UAH 10,000 to a relative or a friend, how can he/she do that and pass identification? Should he/she go to a bank office? What documents are required?
If the mentioned amount is on the customer account, it is preferable to make a noncash transfer to the account of a relative or an acquaintance. Such payments are transacted as previously without limitations as to the amount, since banks have already identified and verified account holders. Such payments can be easily and conveniently delivered using remote banking.
If a person has only cash, the payment can be made:
- at a bank office by presenting a passport
- using a cash-accepting device, like self-service kiosks (SSKs), with the technology to verify the payer. If the SSK belongs to the bank that issued a card to the payer, the bank can verify the payer by the card.
In any case, financial institutions have enough time to equip SSKs with different technical options. For that purpose, the NBU has established a long transition period until the end of 2020.
Should the transfer to a relative be less than UAH 5,000? How often can transfers of UAH 5,000 be made?
Cashless card-to-card or account-to-account payments remain unlimited, with no need to split payments. Bank account holders with payment cards have already underwent adequate identification.
Banks have information on every account and card holder. Banks are aware of usual transactions from the payment history and hold information that the customer provided for opening the account.
Besides, usual transactions of households of small amounts are not subject to financial monitoring. These are low-risk transactions, and the bank will not scrutinize those. Instead, the new law shifts focus to analysis of risky and major transactions amounting over UAH 400,000.
Furthermore, the NBU has never required from bank customers to provide information on the source of funds for common transactions of small amounts.
Will the payment card be blocked for receiving UAH 5,000 from a relative or acquaintance twice a day?
No, it won’t. Transfers to customer card accounts, i.e. ordinary transactions of Ukrainians, are not subject to financial monitoring. Such low-risk transactions are of no interest to banks. The purpose of the law is quite different. According to the law, banks should focus on the high-risk areas, such as risky and large transactions amounting to more than UAH 400,000.
However, financial institutions need to comply with some technical requirements of the law, like assignment of a unique number to each transaction. Banks will have enough time for that purpose, since the NBU has established a long transition period, until the end of 2020. During this period banks will be able to comply with all technical requirements.
If a customer is willing to transfer more than UAH 5,000 in cash at a bank office upon presenting a passport, does he/she need to confirm the source of funds? For example, when funds are transferred for services or as assistance to relatives etc.
No, the customer need not do that.
The NBU has never required from bank customers to provide information on the sources of funds for common transactions of small amounts.
Households need not have a confirmation of income or any other supporting documents.
This applies to fund transfers to other persons and payments for goods and services, as well as to fund transfer to own accounts.
Confirmation of source of funds is only required for large transactions of over UAH 400,000.
Is identification required for a SSK transfer of, let’s say, UAH 10,000 to a card?
Such transfer can be made at a bank office with a passport or through a SSK capable to verify the payer (by reading data from the card).
If a SSK has such technical functionality, the customer can deliver the transaction at the desired amount.
Otherwise, a limit will be set for the SSK, and the customer won’t be able to transfer more than UAH 5,000.
Is identification required for a card-to-card transfer of UAH 10,000?
No, it is not required. All card holders have already been identified by banks.
Customers can transfer funds as previously with no limitations.
Banks already have the information on customers and are aware of their usual transactions from the payment history.
Is it possible to replenish a credit card in SSK?
It is possible.
SSKs accept cash below UAH 5,000 for replenishing an account or a card without the need to identify the payer. Replenishments beyond UAH 5,000 can be made at a bank office with a passport or through SSK capable to verify the payer (by reading data from the card).
What will happen to foreign transfers to FX accounts? Are there any limits or restrictions?
Since the bank customer holding an FX account has already been identified, there are no legal limits on transfers.
As before, no limits or restrictions are set on crediting amounts transferred from abroad to an account according to the currency law or the law on financial monitoring.
What is the way to receive a SWIFT transfer to a card?
This relates to an account-to-account transfer in foreign currency.
Thus, the parties are bank customers that have been identified. The bank already has information on these customers, has studied and comprehends their usual transactions.
If the bank has suspicions regarding the transfer and has some questions, the purpose of the transaction will need to be explained to the bank.
Is identification required for purchasing goods online for over UAH 40,000, if the payment is delivered to a card? What if goods are delivered by a post service?
If a payment for goods or services is delivered online, such transfer requires only the payer’s card number. This is one of the exceptions regarding identification set out in the law.
Is identification required for a cash transfer, let’s say UAH 10,000, in an international transfer system ?
Yes, identification and verification of the payer is required for this transaction. Thus, the customer needs to have a passport and explain the nature of the payment, i.e. indicate in payment details that this is assistance for the relatives.
If a transfer exceeds UAH 400,000 and the source of funds is not proven, can the account be blocked and its funds frozen?
Banks will not block customer accounts without a reason, if all required information is at hand.
When opening an account a customer provides a bank with personal information, information on income etc. The bank monitors daily and is aware of the customer’s transaction history, and knows what transactions are typical for the customer.
So, if only the transaction is atypical and does not align with the financial resources of the customer, the bank will require further explanations.
If the customer explains that, for instance, this is inheritance, then the bank will execute the transaction and the customer is free to use these funds.
Can donations to charities exceeding UAH 10,000 be made? How will things be?
Everything will be as before. The law sets no limits for cashless payments.
How to use the e-purse now? Is customer identification required? What documents need to be presented? Is identification required for users of mobile operators?
Yes, holders of e-purses need to be identified and verified.
But this does not apply to purses for payment of mobile services. The law sets no requirements to mobile operators.
The law applies to customers, who open e-purses for the purpose of different transactions, such as purchasing goods and paying for services.
Financial institutions are required to identify and verify such customers by the end of the year. Usually, for this purpose customers need to present their passport and tax ID.
Transactions on such purses will be limited, and the customer who comply with these limits, will be eligible for a simlified identification procedure.
Consumers in financial services send to the NBU various questions that are beyond its remit. These include questions on identification and verification:
- by real estate agents of customers willing to buy real estate
- of customers during a taxation consult
- of customers making bets in a betting office or playing the lottery
- when purchasing jewels for over UAH 50,000
- of a beneficiary of insurance payments etc.
Please note that these issues fall within the competence of other financial regulators. We are certain that detailed clarifications will be provided shortly.