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LAW OF UKRAINE

of December 6, 2019 No. 361-IX

About prevention and counteraction of legalization (washing) of income gained in the criminal way, to financing of terrorism and financing of distribution of weapons of mass destruction

(as amended on 14-07-2020)

This Law is directed to protection of the rights and legitimate interests of citizens, societies and the states, ensuring national security by determination of legal mechanism of prevention and counteraction of legalization (washing) of income gained in the criminal way, to financing of terrorism and financing of distribution of weapons of mass destruction (further - prevention and counteraction).

Section I General provisions

Article 1. Determinations of terms

1. In this Law the stated below terms are used in such value:

1) the agent - person who acts on behalf and for the benefit of the subject of primary financial monitoring;

2) assets - means, including electronic money, other property, the property and non-property rights;

3) the assets connected with terrorism and its financing, distribution of weapons of mass destruction and its financing, - all assets, directly (and concerning the property right to corporate laws - also indirectly (through other persons) being in property, including in common property, or are given to advantage of persons included in the list of faces tied with implementation of terrorist activities or to which the international sanctions (further - the list of persons), persons performing financial transactions from name or at the request of persons included in the list of persons and persons who directly or indirectly (through other persons) own are applied or final beneficial owners of which are persons included in the list of persons, and also the assets received from such assets;

4) bank cover - nonresident bank (bank, other financial institution, organization which performs the activities similar to activities of financial institutions) which has no physical presence at country of incorporation and licensing and is not part the regulated financial group which is subject to the effective consolidated supervision.

Availability of physical presence physical layout and functioning in the country of governing bodies of the specified nonresident organizations is considered. Availability in the country only of authorized representatives of the specified organizations or personnel which does not belong to management of such organizations is not considered availability of physical presence;

5) faultless goodwill - set of the confirmed information on the physical person which gives the chance to draw conclusion on absence established by competent authorities or court of violations of requirements of the legislation, and also about lack of criminal record which is not removed or is not extinguished in the procedure established by the law;

6) verification - the actions undertaken by the subject of primary financial monitoring for the purpose of check (confirmation) of accessory to the corresponding person of the identification data obtained by the subject of primary financial monitoring and/or for the purpose of confirmation of data which allow to establish final beneficial owners or their absence;

7) the beneficiary (beneficiary) under the agreement (the insurance policy, the certificate, the certificate) of life insurance - person or category of persons to whom insurance payment in case of loss occurrence will be paid;

8) the beneficiary (beneficiary) of trust or other similar legal education - person who has the right to benefit and/or the income from trust or other similar legal education;

9) the beneficiary (beneficiary) concerning securities, the rights to which it is right, on which are considered on the account in securities of the nominee holder, - person for the benefit of whom the financial account transaction of the nominee holder is performed;

10) account financial transaction - financial transaction which leads to reduction of assets on the customer account - the holder of assets;

11) high risk - result of risk assessment subject of primary financial monitoring which is based on analysis results of set of criteria stipulated by the legislation and internal documents of the subject of primary financial monitoring and which demonstrates high probability of use of the subject of primary financial monitoring for legalization (washing) of income gained in the criminal way, financings of terrorism and/or financing of distribution of weapons of mass destruction;

12) separate division of the subject of primary financial monitoring - the branch, other division of the subject of primary financial monitoring which is located not on the location of such subject and performs financial transactions or provides their implementation, including provides services on behalf of the subject of primary financial monitoring (except implementation of representational functions);

Virtual asset - digital expression of cost which can be traded in digital format or to translate 13) and which can be used for the payment or investment purposes;

14) group - banking group, non-bank financial group, and also two and more subjects of managing connected among themselves by the control relations as the parent and affiliated companies by direct and/or the mediated ownership of mother company of shares in subsidiary company which corresponds to equivalent of 50 or more percent of the authorized capital and/or voices of subsidiary company or irrespective of formal ownership opportunity to perform decisive influence on subsidiary company on the basis of the agreement or any other image;

15) the data allowing to establish the final beneficial owner - surname, name and (in the presence) middle name, the country of nationality and the permanent residence, birth date, nature and degree (level, degree, share) of beneficial ownership (benefit, interest, influence);

16) the state financial monitoring - set of measures which are taken by subjects of the state financial monitoring and go for fulfillment of requirements of this Law and other legislation in the sphere of prevention and counteraction:

the state financial monitoring of specially authorized body - set of actions for collection, the processing and information analysis about financial transactions represented to specially authorized body by subjects of primary and state financial monitoring and other state bodies, relevant organs of foreign states, other information which can be connected with suspicion of legalization (washing) of income gained in the criminal way, financing of terrorism and/or financing of distribution of weapons of mass destruction and/or with other illegal financial transactions and also actions for verification of such information according to the legislation of Ukraine and other actions directed to fulfillment of requirements of the legislation in the sphere of prevention and counteraction;

the state financial monitoring of other subjects of the state financial monitoring - set of the actions undertaken by other subjects determined by part three of article 6 of this Law, and directed to fulfillment of requirements of the legislation in the sphere of prevention and counteraction;

17) source of the means connected with financial transactions - data on origin of the means used for implementation of financial transactions (means which were used for acquisition of property right to the assets which are subject of financial transactions) by means of the subject of primary financial monitoring which give understanding about sources of their origin, the ownership/order grounds them (the rights to them) person;

18) source of condition (wealth) - data on origin of all available assets of person which give understanding about the size/size of total assets (condition) of the person and history of their origin;

19) business relations - the relations between the client and the subject of primary financial monitoring connected with business, professional or business activity of the subject of primary financial monitoring, which arose based on the agreement, including public about provision (use) of financial or other services, implementation by the subject of primary financial monitoring of other activities (further - services) also provide existence duration after their establishment;

20) figures who perform public functions in the international organizations - officials of the international organizations who hold or held the head's position (the director, the chairman of the board or another) or the deputy manager in such organizations either carry out or carried out any other leading (outstanding public) functions at the highest level, including in the international interstate organizations, members of the international parliamentary assemblies, judges and the leading officials of international courts;

21) the additional information - data on financial transactions which are object of financial monitoring, and the related financial transactions, the information about their participants, other information which is available for the subject of primary financial monitoring or information which shall be stored at such subject according to requirements of the legislation, in particular information with limited access, copies of documents or the data from them, necessary for accomplishment of the tasks assigned to specially authorized body;

22) the additional generalized materials - the data collected by specially authorized body on the basis of the analysis of in addition acquired information in addition to earlier given generalized materials specified by state body;

23) income gained in the criminal way - any assets received directly or indirectly as a result of crime execution, in particular, currency values, personal and real estate, the property and non-property rights irrespective of their cost;

24) total annual turnover - the general receipts of the accounting period received as a result of operating, investing and financial activities of the subject of primary financial monitoring according to the cash flow statement;

25) freezing of assets - prohibition on implementation of the translation, converting, placement, movement of the assets connected with terrorism and its financing, distribution of weapons of mass destruction and its financing on the basis of resolutions of the UN Security Council, solutions of foreign states, court;

26) identification data - data set which allows to identify unambiguously the personality, namely:

for physical person - the data specified in Item of 1 part eight and in Item of 1 part nine of article 11 of this Law;

for physical person entrepreneur - the data specified in Item 2 parts eight of article 11 of this Law;

for the legal entity - the data specified in Item 3 parts eight and in Item 2 parts nine of article 11 of this Law;

for trust or other similar legal education - the data specified in Item 3 parts nine of article 11 of this Law;

data which list is determined by subjects of the state financial monitoring, - in the cases determined by part fifteen of article 11 of this Law;

27) identification - the measures taken by the subject of primary financial monitoring for identification by receipt of its identification data;

28) foreign public figures - physical persons which perform or performed outstanding public functions in foreign states, namely:

head of state, governments, ministers (deputies);

members of parliament or other bodies performing functions of legislature of the state;

chairmen and members of boards of Central Banks or Audit Chambers;

members of the Supreme Court, constitutional court or other judicial authorities which solutions are not subject to appeal, except appeal in connection with exceptional circumstances;

ambassadors extraordinary and plenipotentiary, chargês d'affaires and heads of the central bodies of military management;

heads of administrative, managerial or supervisory authorities of the state companies;

members of governing bodies of political parties;

29) essential participation - immediate or indirect possession by one person independently or together with other persons of shares in the amount of 10 and more percent of the authorized capital or voting powers in the legal entity or possibility of considerable influence, independent of formal ownership, on management or activities of the legal entity;

30) the final beneficial owner - physical person which performs decisive influence (control) on activities of the client and/or the physical person on behalf of whom financial operation is performed.

Final beneficial owner is:

for legal entities - any physical person which performs decisive influence on activities of the legal entity (including through control/ownership chain);

for the trusts founded according to the legislation of the country of their education - the founder, the incorporated trustee, the defender (in the presence), the beneficiary (beneficiary) or group of beneficiaries (beneficiaries), and also any other physical person who performs decisive influence on activities of trust (including through control/ownership chain);

for other similar legal educations - person who has the status equivalent or similar to persons specified for trusts.

Sign of implementation of direct decisive impact on activities is direct ownership of shares of physical person in the amount of at least 25 percent of the authorized (compound) capital or voting powers of the legal entity.

Signs of implementation of indirect decisive impact on activities is, at least, ownership of shares of physical person in the amount of at least 25 percent of the authorized (compound) capital or voting powers of the legal entity through connected physical persons or legal entities, trusts or other similar legal educations, implementation of the solving influence by realization of the right of control, ownership, use or the order of all assets or their share, the rights to the income from activities of the legal entity, trust or other similar legal education, the right of the solving influence on forming of structure, results of vote of governing bodies, and also transactions which give the chance to determine the main conditions of economic activity of the legal entity or activities of trust or other similar legal education, to make decisions, obligatory to execution, which have decisive influence on activities of the legal entity, trust or other similar legal education, irrespective of formal ownership.

At the same time the final beneficial owner can be person who has the formal right to 25 or more percent of the authorized capital or voting powers in the legal entity, but is commercial agent, the nominal owner or the nominee holder, or only the intermediary concerning such right;

31) the client - any person, which:

addresses for provision of services the subject of primary financial monitoring;

uses services of the subject of primary financial monitoring;

is agreement party (for subjects of primary financial monitoring on which the National commission on securities and the stock market according to article 18 of this Law performs functions of state regulation and supervision);

is player in gambling or the participant of lottery (for the subjects of primary financial monitoring determined in the subitem "z" of Item 7 parts two of article 6 of this Law);

32) correspondence relations are the relations which:

arise during opening of correspondent account by corresponding bank in other bank based on the agreement on establishment of correspondence relations for implementation of interbank transfers;

are established by Central Securities Depository with depositaries of foreign states and the international depositary and clearing institutions according to the procedure, established by the legislation on depositary system of Ukraine;

are established by depository institution with foreign financial institution which is member of International association for system concerning servicing of securities (ISSA), based on the service provision agreement on servicing of the account in securities of the nominee holder;

arise between banks and/or financial institutions during which the organization correspondent provides the services connected with maintaining correspondent accounts or other similar services;

33) the international sanctions - sanctions which are recognized Ukraine, according to the procedure, determined by the Cabinet of Ministers of Ukraine, according to international treaties of Ukraine or solutions of interstate associations, the international, intergovernmental organizations, part in which is taken by Ukraine, and also foreign states, concerning freezing of the assets connected with terrorism and its financing, distribution of weapons of mass destruction and its financing or restriction of access to them or prohibition on carrying out financial transactions;

34) proper check - the actions including:

identification and verification of the client (his representative);

establishment of the final beneficial owner of the client or his lack, including receipt of structure of property for the purpose of her understanding, and data, the final beneficial owner and taking measures to verification of his face allowing to establish (in the presence);

establishment (understanding) of the purpose and nature of future business relations or carrying out financial transaction;

carrying out on permanent basis of monitoring of the business relations and financial transactions of the client performed in the course of such relations, about compliance of such financial transactions who is available for the subject of primary financial monitoring of customer information, its activities and risk (including, in case of need, source of the means connected with financial transactions);

ensuring relevance of the received and existing documents, data and customer information;

35) properly drawn up notification - the legislations which are drawn up and submitted according to requirements in specially authorized body of the message on financial transaction which is subject to financial monitoring, or the message containing the additional information about the financial transactions and their participants who became object of financial monitoring from specially authorized body;

36) national risks assessment - system of the actions undertaken by subjects of the state financial monitoring, authorized bodies of the government with involvement of other subjects (if necessary) for the purpose of determination (identification) of risks (threats) of legalization (washing) of income gained in the criminal way and terrorism financings, their analysis, assessment and development of the actions directed to prevention of origin and/or reduction of negative consequences;

37) national public figures - physical persons which perform or performed outstanding public functions in Ukraine, namely:

President of Ukraine, Prime Minister of Ukraine, cabinet ministers of Ukraine and their deputies;

the head of the permanent facilitative branch created by the President of Ukraine, his deputies;

head and deputy managers of Public administration by cases;

the heads of devices (secretariats) of state bodies who are not government employees whose positions belong to the category "A";

Secretary and Deputy Secretaries of the National Security and Defense Council of Ukraine;

People's Deputies of Ukraine;

Chairman and board members of the National Bank of Ukraine, members of council of the National Bank of Ukraine;

chairman and judge of the Constitutional Court of Ukraine, Supreme Court, the supreme specialized freighters;

high councilors of justice, members of the Highest qualification commission of judges of Ukraine, members of the Qualification and disciplinary commission of prosecutors;

Attorney-General and his deputies;

Chairman of the Security Service of Ukraine and his deputies;

Director of National anti-corruption bureau of Ukraine and his deputies;

Director of the State bureau of investigations and his deputies;

Director of Bureau of financial investigations and his deputies;

The chairman and members of National council of Ukraine concerning television and broadcasting, the Chairman and members of the Antimonopoly Committee of Ukraine, the Chairman of the National agency concerning prevention of corruption and his deputies, the Chairman and members of Audit Chamber, the Chairman and members of Central Election Commission, chairmen and members of other state collegiate organs;

ambassadors extraordinary and plenipotentiary;

the chief of the General Staff is the Commander-in-chief of the Armed Forces of Ukraine, commanders of Land forces of the Armed Forces of Ukraine, Air Forces of the Armed Forces of Ukraine, Naval forces of the Armed Forces of Ukraine;

government employees whose positions belong to the category "A";

heads of bodies of prosecutor's office, heads of regional territorial authorities of the Security Service of Ukraine, chairmen and judges of Appeal Courts;

heads of administrative, managerial or supervisory authorities of the state and state companies, economic societies, the state share in which authorized capital directly or indirectly exceeds 50 percent;

members of governing bodies of political parties;

38) the non-profitable organizations - legal entities, except state bodies, state bodies and organizations of the state-owned and municipal property which are not financial institutions, created for implementation and protection of the rights and freedoms, satisfactions public, in particular economic, social, cultural, ecological, and other interests, without the profit earning purpose;

39) unacceptably high risk - the highest risk which cannot be accepted by the subject of primary financial monitoring according to internal documents concerning financial monitoring;

40) the nominal owner - person who on its own behalf manages corporate laws of other person - the final beneficial owner for the benefit of the last;

41) object of financial monitoring - the actions with assets connected with the corresponding participants of financial transactions which carry out them on condition of availability of risks of use of such assets for the purpose of legalization (washing) of income gained in the criminal way, financings of terrorism and/or financing of distribution of weapons of mass destruction and also any information on such actions or events, assets and their participants;

42) the faces tied with politically significant persons - physical persons which answer at least one of the following criteria:

it is known that such persons have general with politically significant person beneficial ownership the legal entity, trust or other similar legal education or having any other close business connections with politically significant persons;

are final beneficial owners of the legal entity, trust or other similar legal education who are known that they were de facto formed for benefit of politically significant persons;

43) official source - the automated information and help systems, registers, bases and databanks, the owner (administrator) of which are state bodies or local government bodies, and also relevant organs of foreign states and the international, intergovernmental organizations;

44) the official document - the document constituted, issued, certified with observance of the regulations determined by the legislation by the authorized person which by the legislation is granted the right in connection with its professional or office activity to constitute, issue, certify certain document types which confirm or is certified by certain events, the phenomena or the facts and contain stipulated by the legislation details and data;

45) primary financial monitoring - set of actions which are used by subjects of primary financial monitoring and are directed to fulfillment of requirements of the legislation in the sphere of prevention and counteraction;

46) suspicion - the assumption based on analysis results of the available information can also demonstrate that financial transaction or its participants, their activities or origin of assets are connected with legalization (washing) of income gained in the criminal way, financing of terrorism and/or financing of distribution of weapons of mass destruction or with making of other criminal offense or act for which the international sanctions are provided;

47) politically significant persons are physical persons who are national, foreign public figures and figures who perform public functions in the international organizations;

48) the intermediary in money transfer - the subject of primary financial monitoring which directly does not serve either the payer (the initiator of money transfer), or the receiver and carries out money transfer at the request of other subject of primary financial monitoring which serves the payer (the initiator of money transfer) or the receiver, or at the request of other intermediary in money transfer;

49) the strengthened measures of proper check - the measures taken by the subject of primary financial monitoring on basis risk - the oriented approach concerning clients with whom business relations (financial transactions without which establishment of business relations) represent high risk are proportional to the revealed risks and directed to their minimization, including by increase in frequency and amount of actions for monitoring of business relations and collection of the additional information of rather business relations;

50) No. 768-IX Is excluded according to the Law of Ukraine of 14.07.2020

51) the service provider, the virtual assets connected with turnover, - any physical person or legal entity performing one or several following types of activity and/or transactions for other physical person and/or legal entity or from name:

exchange of virtual assets;

translation of virtual assets;

storage and/or administration of virtual assets or tools which give the chance to control virtual assets;

participation and provision of the financial services connected with the proposal of the issuer and/or sale of virtual assets;

52) the client's representative - person who on legal causes has the right to make certain actions on behalf of the client;

53) risk - the oriented approach - determination (identification), assessment (revaluation) and understanding of risks of legalization (washing) of income gained in the criminal way, financings of terrorism and/or financing of distribution of weapons of mass destruction, and also acceptance of the adequate measures on risk management by method and in amount providing minimization of such risks depending on their level;

54) risks - danger (threat, weak spots) to subjects of primary financial monitoring to be income gained in the criminal way, financings of terrorism and/or financing of distribution of weapons of mass destruction during provision of services by them according to nature of their activities used for the purpose of legalization (washing);

55) specially authorized body - the central executive body realizing state policy in the sphere of prevention and counteraction;

56) attempt of carrying out financial transaction - implementation by the client or person acting from his name or in its interests, the actions directed to carrying out financial transaction if such financial operation was not performed;

57) the simplified measures of proper check - the measures performed by the subject of primary financial monitoring on basis risk - the oriented approach concerning clients with whom business relations (financial transactions without which establishment of business relations) represent low risk are proportional to the revealed risks and can provide, in particular, reduction of frequency and amount of actions for monitoring of business relations and collection of the additional information of rather business relations;

58) structure of property - documentary confirmed system of relations of physical persons and legal entities, trusts, other similar legal educations which gives the chance to establish all final beneficial owners, including the control relation between them, or absence of final beneficial owners;

59) the mystery of financial monitoring - information obtained during the state financial monitoring by specially authorized body namely: information on financial transactions and their participants, the additional information, other information which can be connected with suspicion of legalization (washing) of income gained in the criminal way, financing of terrorism and/or financing of distribution of weapons of mass destruction and/or other illegal financial transactions;

60) trust - the legal relations created by the founder according to the legislation of the country of education in case of life or on death case when assets get under control of the incorporated trustee for the benefit of the beneficial owner (beneficiary) or for particular purpose which are characterized by the following signs:

assets constitute separate fund and are not part of own property of the incorporated trustee;

the rights to assets of trust are drawn up addressed to the incorporated trustee or addressed to other person who acts on behalf of the incorporated trustee;

the incorporated trustee has powers and obligations within which he is responsible and can manage, use or dispose of assets in accordance with the terms of the confidential agreement and special obligations assigned to him by the legislation of the relevant state;

61) the generalized materials - data on financial transactions which were object of financial monitoring and on which analysis results of specially authorized body there were suspicions. The generalized materials are source of circumstances which can demonstrate making of criminal offense and give the grounds to the investigator, the prosecutor to begin pre-judicial investigation. The generalized materials can also be the basis for carrying out by law enforcement and prospecting agencies Ukraine operational search and counterintelligence activities. The form and structure of the generalized materials are established by the central executive body providing forming and realization of state policy in the sphere of prevention and counteraction of legalization (washing) of income gained in the criminal way, to financing of terrorism and financing of distribution of weapons of mass destruction in coordination with law enforcement agencies;

62) risk management - the measures taken by subjects of primary financial monitoring concerning creation and ensuring functioning of risk management system which provides, in particular, determination (identification), assessment/revaluation (measurement), monitoring, risk control, for the purpose of their minimization;

63) participants of financial transaction - the client, the partner, and also persons who act from their name or in their interests, or persons, from name or for the benefit of which the client, the partner act;

64) branch of foreign bank - the isolated structural division of foreign bank which does not have the status of the legal entity and performing the activities in the territory of Ukraine according to the requirements established by the laws of Ukraine for banks;

65) financial transaction - any actions concerning the client's assets made by means of the subject of primary financial monitoring or of which knew the subjects of primary financial monitoring specified in subitems "a" - "d" Item 7 parts two of article 6 of this Law, within business relations with the client, to subjects of the state financial monitoring, Fund of guaranteeing household deposits, state bodies which perform activities in the sphere of prevention and counteraction to law enforcement and prospecting agencies of Ukraine within accomplishment of this Law;

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