UBO UPD. What? When? How?

What happened?

• The new Law of Ukraine №361-IX regarding financial monitoring has entered into force as of 28.04.2020, harmonizing Ukrainian financial monitoring framework with European standards.
• Among other issues, the Law №361-IX has obliged companies-residents of Ukraine to update information about their ultimate beneficiary owners.

What has changed?

• The concept of the ultimate beneficiary owner of legal entity was specified.
  - The ultimate beneficiary owner of legal entity is an any natural person, who has a decisive influence on the activity of a legal person.
  - The decisive influence may be either direct (ownership of not less than 25% of the charter capital) or indirect (the right to control, own, use or dispose assets or the right of decisive influence on decision-making).
• Additional reporting obligations were assigned to the management of companies, namely, companies shall update information about their ultimate beneficiary owners:
  - within 3 months from specific form of ownership structure adoption by the Ministry of Justice
  - within 30 days from the moment of change in ultimate beneficiary owners’ composition
  - annually within 14 days from the date of company registration (e.g., company was registered as of May 4, 2020 — the information shall be updated until May 18, 2021)

How to update information about UBO?

• The company’s CEO shall submit to the state registrar the following documents:
  - statement of information verification about the ultimate beneficial owner.
  - ownership structure (the form of this document is to be adopted by the Ministry of Justice)
  - extract or other document from the commercial, banking, court register, etc., which confirms the registration of the non-resident company in the country of the location — if the company has a non-resident company as a founder.
  - certified by notary copy of the non-resident UBO’s passport, as well as resident UBO’s passport, if he/she does not have a biometric passport.

What are the consequences of breaching obligations, established by the Law №361-IX?

• The company’s CEO is liable to the fine from UAH 17000 to 51000 (approx. EUR 575 to 1750) for failure to submit or late submission of information about the beneficial owner or the absence of such.
• The company’s CEO is criminally liable for submission of documents for state registration regarding UBO, which contain a deliberately false information.
• The irrelevant information about UBOs can be identified and reported to State Service of Financial Monitoring by banks, notaries, auditors, tax consultants, outsourcing accountants and other subjects of primary financial monitoring. Ignoring updating information regarding UBO can also cause problems with banking operations.

If you would like to be informed about the date of specific form of ownership structure adoption by the Ministry of Justice — please follow the link: https://forms.gle/tbWda81MMTt47zCr6