Recent changes in the AML-legislation

! We bring attention to AML-obliged entities on the following important changes in the AML-legislation:

1. The law regarding protection of the financial system of Ukraine against actions of a state, which conducts military aggression against Ukraine was enacted

On 19 November 2022 the Law of Ukraine “On amendments to certain laws of Ukraine regarding protection of the financial system of Ukraine against actions of a state, which conducts military aggression against Ukraine, and adjustment of the Ukrainian legislation to certain standards of the FATF and requirements of the EU Directive 2018/843 was enacted”1, introducing a number of changes to the AML-legislation, in particular:

• Citizens of russian federation/republic of belarus are banned from managing AML-obliged entities
• AML-obliged entities must set high risks regarding several categories of clients, related to the russian federation/republic of belarus (clients or ultimate beneficiaries are residents of russian federation/republic of belarus, funds, which are related to a financial operation, have source from russian federation/republic of belarus, etc.)
• The term of the status of a PEP (Politically Exposed Persons) was reduced to 3 years after dismissal from the office (previously there was no time limitation)
• The list of specially designated AML-obliged entities was clarified, namely: realtors, which participate in transactions on lease of real estate (for an amount exceeding UAH 400,000 per month), as well as commercial entities, which conduct trade or intermediary activities in the field of trade of valuable cultural property (if a financial transaction exceeds UAH 400,000) should also be AML-obliged entities

We recommend all AML-obliged entities to review their internal AML-documents (in particular, in part of their own risk-profile) with the purpose of bringing them into compliance with the above requirements. Entities, which participate in transactions with real estate and valuable cultural property, should carefully analyze provisions of the law in order to understand whether it applies to them.

2. One more country has been include to the FATF “black list” — Myanmar2

In October 2022 the Republic of the Union of Myanmar was included to the FATF “black list”, thus extending the list, which previously included only the Islamic Republic of Iran and North Korea.

In Ukraine the updated list of jurisdictions, which do not fulfill or improperly fulfill recommendations of international, intergovernmental organizations in the field of counteraction legalization of funds, was adopted on 18 November 20223.

In view of the above, all AML-obliged entities must apply to their clients and transactions, related to Myanmar, the same measures as they had previously applied to Iran and North Korea.

3. National Commission for Securities and Stock Market (NCSSM) has extended possibilities to establish business relations distantly by supervised entities

On 18 October 2022 the NCSSM approved amendments to the Regulation on the procedure for conducting financial transactions for supervised entities (professional participants of the stock market, commodity exchanges, institutions of accumulative pension provision, etc.)4. 

Among others, a possibility to establish business relations distantly with legal entities was clarified, a list of events when simplified verification of clients is allowed was extended, etc. 

We recommend AML-obliged entities, which are supervised by the NCSSM, to review whether these novations require amendments to their internal AML-documents and, if necessary, to update their documents within three months after publication of changes to the Regulation.

We remind you that professionals of PwC Legal Ukraine have a wide experience in assisting clients on AML-issues: from building internal AML-system “from scratch” to conducting independent AML-audits. We will be glad to help you in resolving issues, related to the field of counteration to legalisation of criminal funds/terrorism financing. 

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1https://zakon.rada.gov.ua/laws/show/v0107500-20#Text

2https://www.fatf-gafi.org/publications/high-risk-and-other-monitored-jurisdictions/documents/call-for-action-october-2022.html

3https://fiu.gov.ua/assets/userfiles/200/Res%20677%20sanction%20countries%20list/UKR_List_21.11.2022.pdf

4https://www.nssmc.gov.ua/document/?id=13174064