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NEW  Anti-Money Laundering Rules for Legal and Tax Consultants 23 July 2010 Dmytro Gadomsky
New  Anti-Money Laundering Law adopted     It will come into force  in 29 days
“ Behind every great fortune there is a crime” Honore de Balzac
SFM MinFin MinJust NBU Subjects to Initial Finance Monitoring Special Subjects to Initial Finance Monitoring <ul><li>Banks...
Special subjects to initial financial monitoring <ul><li>Who: </li></ul><ul><li>Notaries,  </li></ul><ul><li>Attorneys at ...
Structure of  initial  financial monitoring  Initial financial monitoring Obligatory FM Internal FM
Criteria for  obligatory  financial monitoring <ul><li>Transactions which fall under  obligatory  FM: </li></ul><ul><li>Si...
Criteria for  internal  financial monitoring <ul><li>Single  financial operation performed  during a day   for  any amount...
Transactions that are subject to financial monitoring  for consultants <ul><li>What to report: </li></ul><ul><li>Sale and ...
Transactions that are subject to financial monitoring for consultants (EXAMPLES) <ul><li>What to report: </li></ul><ul><li...
Person, responsible for financial monitoring
Obligations of consultants <ul><li>New Anti-Money Laundering Law added more  then 20 (!) new obligations  for consultants,...
Limitations for consultants <ul><li>Among others, the new Law also provides for the consultants the following limitations ...
Identification of the client <ul><li>One of the main obligations of consultants is the client’s identification </li></ul><...
Liability of specially defined subjects of the financial monitoring <ul><li>Penalties: </li></ul><ul><li>Non-fulfillment o...
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Anti-Money Laundering in Ukraine

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New rules for lawyers and tax consultants introduced

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Anti-Money Laundering in Ukraine

  1. 1. NEW Anti-Money Laundering Rules for Legal and Tax Consultants 23 July 2010 Dmytro Gadomsky
  2. 2. New Anti-Money Laundering Law adopted It will come into force in 29 days
  3. 3. “ Behind every great fortune there is a crime” Honore de Balzac
  4. 4. SFM MinFin MinJust NBU Subjects to Initial Finance Monitoring Special Subjects to Initial Finance Monitoring <ul><li>Banks </li></ul><ul><li>Financial institutions </li></ul><ul><li>Stock exchanges </li></ul><ul><li>Etc. </li></ul><ul><li>Audit companies </li></ul><ul><li>Public notaries </li></ul><ul><li>Attorneys </li></ul><ul><li>Legal consultants </li></ul>FATF EU WB IMF Structure of financial monitoring
  5. 5. Special subjects to initial financial monitoring <ul><li>Who: </li></ul><ul><li>Notaries, </li></ul><ul><li>Attorneys at law ( адвокаты ), </li></ul><ul><li>Auditors, audit companies, </li></ul><ul><li>Legal entities who provide legal services (except in-house legal) </li></ul><ul><li>And some others </li></ul>
  6. 6. Structure of initial financial monitoring Initial financial monitoring Obligatory FM Internal FM
  7. 7. Criteria for obligatory financial monitoring <ul><li>Transactions which fall under obligatory FM: </li></ul><ul><li>Single financial operation performed during a day is equal or exceeds UAH 150 thousand AND meets one of the below descriptions: </li></ul><ul><ul><li>anonymous accounts in offshore jurisdictions;  </li></ul></ul><ul><ul><li>country that do not take part in international cooperation on prevention and counteraction of legalization (laundering) of illegally obtained profits (FATF lists);   </li></ul></ul><ul><ul><li>cash operations;   </li></ul></ul><ul><ul><li>legal entity operates for less than 3 months;   </li></ul></ul><ul><ul><li>etc. </li></ul></ul>
  8. 8. Criteria for internal financial monitoring <ul><li>Single financial operation performed during a day for any amount if it meets one of the below descriptions: </li></ul><ul><ul><li>lack of economic sense;  </li></ul></ul><ul><ul><li>contradiction to business activity;    </li></ul></ul><ul><ul><li>Avoidance of financial monitoring; </li></ul></ul><ul><ul><li>etc.   </li></ul></ul>
  9. 9. Transactions that are subject to financial monitoring for consultants <ul><li>What to report: </li></ul><ul><li>Sale and purchase of real estate – if transaction is equal or excess UAH 400 thousand; </li></ul><ul><li>Asset management; </li></ul><ul><li>Bank account operation; </li></ul><ul><li>Fund raising for the purpose of establishing legal entities, arranging their activities and administration; </li></ul><ul><li>Establishing of legal entities, arranging their activities and administration, as well as sale and purchase of legal entities. </li></ul><ul><li>No obligation to report if the respective information is subject to attorney’s secret or professional secret. </li></ul>
  10. 10. Transactions that are subject to financial monitoring for consultants (EXAMPLES) <ul><li>What to report: </li></ul><ul><li>One-day operation exceeding UAH 150’000 + anonymous account + establishing of legal entity = inform SFC </li></ul><ul><li>or </li></ul><ul><li>One-day operation exceeding UAH 150’000 + cash + SPA of real estate + inform SFC </li></ul>
  11. 11. Person, responsible for financial monitoring
  12. 12. Obligations of consultants <ul><li>New Anti-Money Laundering Law added more then 20 (!) new obligations for consultants, in particular: </li></ul><ul><li>Register with the SFM; </li></ul><ul><li>Appoint responsible person; </li></ul><ul><li>Clients’ identification; </li></ul><ul><li>Register financial operations; </li></ul><ul><li>To inform the SFM on the identified financial operations; </li></ul><ul><li>To provide the SFC with additional information; </li></ul><ul><li>To provide the SFM with any clients’ documents and information (including restricted); </li></ul><ul><li>etc. </li></ul>
  13. 13. Limitations for consultants <ul><li>Among others, the new Law also provides for the consultants the following limitations of responsibility and restrictions for their actions: </li></ul><ul><li>No liability for informing SFM even if their actions infringe rights and interests of legal entities and/or individuals. </li></ul><ul><li>Consultants who submitted information on the financial operation to SFM are prohibited from informing their clients , to whom this information was concern, or any third parties; </li></ul><ul><li>Consultants, who received an information request from SFM or provided the latter with an answer to such request, are prohibited from informing their clients , to whom this request was concern, or any third parties. </li></ul>
  14. 14. Identification of the client <ul><li>One of the main obligations of consultants is the client’s identification </li></ul><ul><li>Consultants are obliged to perform identification of their clients (i.e. to gather information, the scope of which defined by the new Law) before or during establishing business relations or making a deal, but not before executing a financial operation. </li></ul><ul><li>Consultants are obliged to refuse from establishing business relations with a client or executing a financial operation in case the identification of the client is impossible . </li></ul><ul><li>Consultants have a right to refuse from executing a financial operation if characteristics of such operation corresponds to those, which are subject to the financial monitoring. </li></ul>
  15. 15. Liability of specially defined subjects of the financial monitoring <ul><li>Penalties: </li></ul><ul><li>Non-fulfillment of client’s identification – in the amount of 500 minimum level of income exempted from taxation (UAH 8,500) ; </li></ul><ul><li>Non-identification, untimely identification and improper registration of the financial operations – 800 minimum (UAH 13,600) ; </li></ul><ul><li>Non-interruption of the financial operation – 1,000 minimums (UAH 17,000); etc. </li></ul><ul><li>Besides, persons could be prohibited from providing some types of business activity . </li></ul><ul><li>The legal entities that executed financial operations aimed at laundering or terrorism financing could be liquidated under the court decision. </li></ul>

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