RESOLUTION OF BOARD OF THE NATIONAL BANK OF UKRAINE

of July 28, 2020 No. 107

About approval of the Regulations on implementation of financial monitoring by organizations

According to Articles 7, of 15, of 55, 56 Laws of Ukraine "About the National Bank of Ukraine", for the purpose of ensuring implementation of requirements of the Law of Ukraine of December 6, 2019 "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" the Board of the National Bank of Ukraine DECIDES: No. 361-IX

1. Approve Regulations on implementation of financial monitoring by organizations (further - the Provision) which are applied.

2. Determine that organizations:

1) is applied to clients with whom business relations are established from the effective date the 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" (further - the Law), by necessary measures according to requirements of the Law;

2) is applied to clients with whom business relations are established before entry into force of the Law (further - the available clients), by measures for proper check, identification of the facts of belonging of clients (their final beneficial owners) to politically significant persons, members of their families and/or faces tied with politically significant persons, revaluation of risk of business relations with clients according to requirements of the Provision during implementation of procedures of planned updating / refining by organization of data on such clients in the terms established by organization in the available internal documents according to the legislation of Ukraine concerning financial monitoring before entry into force of the Law.

Rather available clients who do not maintain business relations with organization (except those, the risk of business relations with which is high), the specified measures can be performed also over fixed terms during the appeal of such client to organization, but before carrying out the financial transactions initiated by the client;

3) report to specially authorized body of rather threshold financial transactions of politically significant persons, members of their families and/or faces tied with politically significant persons who had no such status according to the Law of Ukraine of October 14, 2014 No. 1702-VII "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" since date of identification of the fact of belonging of the corresponding client by organization to politically significant persons, members of his family and/or to the faces tied with politically significant person;

4) provide setup and automation of necessary processes of organization according to requirements of the Provision no later than June 30, 2021.

3. Recognize invalid:

1) the order of State commission on regulation of the markets of financial services of Ukraine of August 05, 2003 No. 25 "About approval of the Regulations on implementation of financial monitoring by financial institutions", registered in the Ministry of Justice of Ukraine on August 15, 2003 for No. 715/8036;

2) the order of State commission on regulation of the markets of financial services of Ukraine of November 13, 2003 No. 121 "About modification of the Regulations on implementation of financial monitoring by financial institutions approved by the order of State commission on regulation of the markets of financial services of Ukraine of 05.08.2003 No. 25", registered in the Ministry of Justice of Ukraine on November 27, 2003 for No. 1088/8409;

3) the order of State commission on regulation of the markets of financial services of Ukraine of April 15, 2004 No. 336 "About approval of changes in Regulations on implementation of financial monitoring by financial institutions", registered in the Ministry of Justice of Ukraine on May 07, 2004 for No. 581/9180;

4) the order of State commission on regulation of the markets of financial services of Ukraine of April 28, 2006 No. 5720 "About approval of Changes in Regulations on implementation of financial monitoring by financial institutions", registered in the Ministry of Justice of Ukraine on May 17, 2006 for No. 570/12444;

5) the order of State commission on regulation of the markets of financial services of Ukraine of May 10, 2007 No. 7288 "About approval of Changes in Regulations on implementation of financial monitoring by financial institutions", registered in the Ministry of Justice of Ukraine on May 24, 2007 for No. 539/13806;

6) the order of State commission on regulation of the markets of financial services of Ukraine of August 07, 2008 No. 951 "About modification of regulatory legal acts of State commission on regulation of the markets of financial services of Ukraine concerning training of the workers responsible for carrying out internal financial monitoring", registered in the Ministry of Justice of Ukraine on October 24, 2008 for No. 1023/15714;

7) the order of State commission on regulation of the markets of financial services of Ukraine of February 24, 2011 No. 102 "About modification of the Regulations on implementation of financial monitoring by financial institutions", registered in the Ministry of Justice of Ukraine on May 18, 2011 for No. 600/19338;

8) the order of the National commission performing state regulation in the sphere of the markets of financial services, of March 5, 2013 No. 712 "About approval of Changes in some regulatory legal acts of State commission on regulation of the markets of financial services of Ukraine", registered in the Ministry of Justice of Ukraine on May 18, 2013 for No. 770/23302;

9) the order of the National commission performing state regulation in the sphere of the markets of financial services of October 13, 2015 No. 2481 "About approval of Criteria by which risk level for subjects of primary financial monitoring, state regulation and supervision of which activities is exercised by Natskomfinuslug", is estimated, registered in the Ministry of Justice of Ukraine on October 30, 2015 for No. 1335/27780;

10) the resolution of Board of the National Bank of Ukraine of September 15, 2016 No. 388 "About approval of the Regulations on implementation of financial monitoring by non-bank financial institutions regarding provision by them of financial service in money transfer";

11) the resolution of Board of the National Bank of Ukraine of April 17, 2018 No. 43 "About approval of Changes in Regulations on implementation of financial monitoring by non-bank financial institutions regarding provision by them of financial service in money transfer".

4. (Igor Bereza) to provide to department of financial monitoring placement of this resolution on the page of official Internet representative office of the National Bank of Ukraine.

5. To impose control over the implementation of this resolution on the First Deputy Chairman of the National Bank of Ukraine Ekaterina Rozhkova.

6. The resolution becomes effective from the date of, its official publication following behind day.

Approved by the Resolution of Board of the National Bank of Ukraine of July 28, 2020 No. 107

Regulations on implementation of financial monitoring by organizations

I. General provisions

1. This Provision is developed according to the Laws of Ukraine "About the National Bank of Ukraine", "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" for the purpose of prevention of use of organizations for legalization (washing) of income gained in the criminal way, financings of terrorism and financing of distribution of weapons of mass destruction.

2. This Provision establishes general requirements of the National Bank of Ukraine (further - National Bank) on accomplishment of requirements of the legislation of Ukraine by organizations concerning financial monitoring.

3. Requirements of this Provision extend to insurers (overcautious persons), insurance (reinsurance) brokers, credit unions, pawnshops and other financial institutions (except financial institutions and other legal entities concerning whom state regulation and supervision in the sphere of prevention and counteraction are performed by other subjects of the state financial monitoring); payment institutes, participants or members of payment service providers which provide financial services based on the corresponding licenses or registration documents; operators of mail service; other organizations which render services in money transfer and implementation of currency transactions; branches or representative offices of foreign business entities which provide financial services in the territory of Ukraine, other legal entities who on the legal status are not financial institutions, but provide separate financial services (further - organizations).

4. In this Provision the following reducings (abbreviations) are used:

1) VK/FT - legalization (washing) of income gained in the criminal way, financings of terrorism and/or financing of distribution of weapons of mass destruction;

2) the life insurance contract - the agreement (the insurance policy, the certificate, the certificate) of life insurance;

3) DFM - structural division of central office of National Bank within which competence questions of supervision in the sphere of prevention and counteraction of VK/FT are;

4) EPZ - electronic means of payment;

5) EGR - The Unified State Register of Legal Entities, physical persons - entrepreneurs and public forming;

6) Law on POD/FT - The law of Ukraine "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";

7) _KAO Doc 9303 - recommendations of International Civil Aviation Organization (ICAO) of Doc 9303;

8) KBV - the final beneficial owner;

9) the CAP - the qualified digital signature;

10) code on EGRPOU - identification code according to the Unified state register of the companies and organizations of Ukraine;

11) the microcompanies - organizations which according to the criteria given in the Law of Ukraine "About financial accounting and the financial reporting in Ukraine" treat the microcompanies;

12) NPK - proper check of the client;

13) PGK/FT - 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;

14) UMNP - the strengthened measures of proper check;

15) subsystem of verification of SEI - subsystem of verification of data concerning legal entities and physical persons entrepreneurs of the integrated system of electronic identification;

16) payment organization - organization which renders services in money transfer;

17) RNUKPN - registration number of accounting card of the taxpayer;

18) SA (system of automation of organization) - system of automation of processes of financial monitoring which can consist of one or several separate automated software modules which provide functioning of proper risk management system of VK/FT of organization;

19) SSU - Security Service of Ukraine;

20) SEI - the integrated system of electronic identification;

21) UMNP - the simplified measures of proper check;

22) the BankID System of the NBU - the BankID system of the National Bank of Ukraine;

23) SPFM - the subject of primary financial monitoring;

24) SUO - specially authorized body;

25) FLP - physical person entrepreneur;

26) FATF - Group on development of financial measures of anti-money laundering;

27) PEP (PEPs in plural) is physical person which is politically significant face, the member of his family or face tied with politically significant person or person whose final beneficial owner is politically significant person, the member of his family or face tied with politically significant person;

28) the prepaid-card - prepaid card of multi-purpose use.

5. Terms and concepts of this Provision are used in such values:

1) the address of mass registration - the address to which more than 50 legal entities, trusts or other legal educations are registered;

2) the analysis of financial transactions - complex risk - the oriented actions which are performed on permanent basis and are established by internal documents of organization concerning POD/FT which carrying out gives the chance to organization to reveal financial transactions which are subject to financial monitoring;

3) high risk of business relations (financial transaction without establishment of business relations) with the client - result of assessment by organization of risk of business relations (financial transaction without establishment of business relations) with the client based on analysis results of set of criteria, stipulated by the legislation Ukraine and internal documents of organization concerning POD/FT and which demonstrates high probability of use by the client of services of organization for VK/FT;

4) remote establishment of business relations - establishment of business relations with the client without its physical presence;

5) video verification - the procedure of implementation of verification of person by organization in the video broadcasting mode;

6) the ranking officer of organization - the employee of organization responsible for carrying out financial monitoring in organization;

7) internal documents of organization concerning POD/FT - rules, programs, techniques, other documents developed and approved by organization for the purpose of proper accomplishment of the SPFM functions;

8)-risking - the phenomenon in case of which SPFM refuses establishment (maintenance) of business relations with clients for the purpose of avoidance of risks, but not management of them;

9) the certificate of assignment of RNUKPN - the document issued by the relevant monitoring body, certifying registration of physical person in the State register of physical persons taxpayers;

10) the agreement of access to SEI - the contract of organization with the Ministry of digital transformation of Ukraine concerning access to the integrated system of electronic identification with opportunity to obtain data from subsystem of verification of data concerning legal entities and FLP concerning the head of the legal entity, other persons who can make actions on behalf of the legal entity, FLP, persons who can make actions on behalf of FLP, and also about availability of restrictions concerning representation of the legal entity and FLP, containing in EGR;

11) escalation - informing the corresponding employee of organization and/or collegiate organ on approach of the corresponding event;

12) means of information protection - program technical means which provide protection of electronic documents against unauthorized actions concerning acquaintance with their content, modifications or misstatements;

13) the considerable amount - the amount which equals or exceeds the amount determined by part one of article 20 of the Law on POD/FT;

14) the identification document - the passport of the citizen of Ukraine or other document which proves the identity and according to the legislation of Ukraine can be used in the territory of Ukraine for the conclusion of agreements;

15) the company cover - the legal entity, trust or other similar legal education concerning which, (which) the organization has reasonable suspicions that her (his) activities can be dummy;

16) the partner - person, being the second party of financial transaction (the organization can be the partner), on which between the client and the partner transfer of assets is performed;

17) juvenile person - physical person which did not reach fourteen years;

18) method of recognition of reality of face (liveness detection method) - method of photofixing of person in real time with use of the algorithms allowing to distinguish the real person from reproduction in any kind of her appearance (for example, digital reproduction, make-up, mask);

19) monitoring of the business relations / monitoring of financial transactions - the analysis of the financial transactions of the client performed in the course of business relations with it, about compliance of such financial transactions who is available in organization of customer information, its activities and risks (including in case of need about source of the means connected with financial transactions);

20) reliable sources - the sources specified in this Provision in addition to official sources and official documents as are possible to use by organizations during accomplishment of requirements of the legislation of Ukraine by them in the sphere of POD/FT;

21) instantly - the period which is determined/established from the moment of approach of the bases for implementation of the corresponding actions which are priority and are performed first of all, but no later than the next working day or the established time of the next working day;

22) without delay - in the shortest possible time during the working day in which there shall be corresponding actions from the moment of approach of the bases for their implementation;

23) the minor - physical person aged from fourteen up to eighteen years;

24) low risk of business relations (financial transaction without establishment of business relations) with the client - result of assessment by organization of risk of business relations (financial transaction without establishment of business relations) with the client based on analysis results of set of criteria, stipulated by the legislation Ukraine and internal documents of organization concerning POD/FT and which demonstrates low probability of use by the client of services of organization for VK/FT;

25) online monitoring of money transfers - the procedure of the analysis of money transfers in real time which is performed till the moment:

transfers by organization of the receiver of funds for e-wallet of receiver / payment of means to the receiver in the absence of e-wallet at it;

transfers of means by intermediary organization to other SPFM-intermediary or SPFM of the receiver;

26) the source document - the document containing obligatory details [the name of person (legal or physical) which constituted the document, the name of the document, date and the place of its creation, content and amount of transaction, unit of its measurement, the signature or other data giving the chance to identify person - the initiator of implementation of transaction; name of a consignee of means, number(s) of the account (ov)], is also the basis for reflection of financial transaction in SA;

27) the list of the states which do not implement the recommendation of FATF - the list of the states (jurisdictions) which do not carry out or inadequate image implement recommendations of the international, intergovernmental organizations involved in the sphere of fight against VK/FT which is created according to the procedure, determined by the Cabinet of Ministers of Ukraine on the basis of the conclusions of the international, intergovernmental organizations involved in the sphere of fight against VK/FT and it will be promulgated on the SUO official website;

28) the list of terrorists - the list of faces tied with implementation of terrorist activities or to which the international sanctions which is created according to the procedure, determined by the Cabinet of Ministers of Ukraine are applied and will be promulgated on the SUO official website;

29) counterfeit - creation (fully or partially) the document, similar on this/authentic document, for the purpose of its illegal use as this/authentic document;

30) further monitoring of money transfers - the procedure of the analysis of money transfers, is performed after:

means were offset by organization of the receiver on e-wallet of the receiver / paid to the receiver, in the absence of e-wallet at it;

funds were transferred by intermediary organization to other SPFM-intermediary or SPFM of the receiver;

31) the assignment/instrument of assignment - use of information by organization concerning identification, verifications of clients, establishments of their KBV and taking measures to verification of their personality, and also information concerning the purpose and nature of future business relations received from the third party who is SPFM according to requirements of the Law on POD/FT or applies similar measures on content, is subject to the corresponding supervision according to the legislation of country of incorporation of such subject and acts on its own behalf;

32) procedure - the accurate sequence of actions of certain process with indication of methods, forms, terms (terms) of acceptance by employees of organization of these actions determined in internal documents of organization concerning POD/FT;

33) acceptable level is risk VK/FT - risk which is managed, under control to organization, cannot entail increase in legal risk and risk of reputation, and also deterioration in financial results of activities of organization or to do harm to his creditors and clients;

34) suspension of implementation of financial transaction - temporary suspension of the procedure of carrying out financial transaction in case of detection of information by organization which requires the further analysis regarding need of acceptance of certain actions by organization for the purpose of fulfillment of requirements of the legislation of Ukraine in the sphere of POD/FT and/or internal documents of organization concerning POD/FT, in particular, in case of coincidence of data of the participant of financial transaction to data of person from the list of terrorists;

35) one-time financial transaction on the considerable amount - financial transaction which is performed without establishment of business relations on the amount which equals or exceeds the amount determined by part one of article 20 of the Law on POD/FT (irrespective of, such financial operation one-timely is performed or as several financial transactions which can be connected among themselves);

36) the register of refusals - the register of notifications of organization on committed refusals in establishment (maintenance) of business relations with clients;

37) the register of freezings/defrosting - the register of notifications of organization on committed freezings / defrosting of the assets connected with terrorism and its financing, distribution of weapons of mass destruction and its financing;

38) the register of notifications on suspicious financial activities - the register of notifications of organization on suspicious financial activities;

39) the register of disagreements about KBV - the register of notifications of organization on discrepancies between data on KBV which contain in EGR, and information on KBV obtained by organization as a result of implementation of NPK;

40) the register of financial transactions - the register of financial transactions of organization which are subject to financial monitoring;

41) risk appetite (tendency to risk) of organization in the sphere of POD/FT - the size of risk of VK/FT predetermined and within acceptable risk level of VK/FT on which the organization made the decision on feasibility/need of its content for the purpose of achievement of its strategic objectives;

42) risk of reputation - the available or potential risk for receipts and the capital which arises owing to adverse perception of image of organization by clients, partners, potential investors or supervision bodies which influences capability of organization to establish the new relations with partners, to provide new services or to maintain the existing relations and can lead organization (or his heads) to financial losses or reduction of client base, attraction to administrative, civil or criminal liability;

43) legal risk - the available or potential risk for receipts or the capital of organization which arises owing to violation or non-compliance with requirements of the laws of Ukraine by organization, regulatory legal acts and can lead organization to financial losses, abuses, involvement of organization and/or its heads to administrative, civil or criminal liability;

44) the impostor - the person issuing himself for other person illegally appropriating someone else's identification data;

45) the sanctions list of National Security and Defense Council of Ukraine - the list of persons to whom special economic and other rationing measures (sanctions) according to article 5 of the Law of Ukraine "About sanctions" are applied;

46) average risk of business relations (financial transaction without establishment of business relations) with the client - result of assessment by organization of risk of business relations (financial transaction without establishment of business relations) with the client based on analysis results of set of criteria, stipulated by the legislation Ukraine and internal documents of organization concerning PGK/FT and which demonstrates the increased probability of use by the client of services of organization for VK/FT;

47) scoring risk model - model of risk assessment of business relations (financial transaction without establishment of business relations) with the client which calculates the certain integrated indicator (score) on the basis of specific weight inherent in business relations (to financial transaction without establishment of business relations) with the client of criteria of risk that further it is used for assignment of appropriate level of risk of business relations (financial transaction without establishment of business relations) with the client;

48) the screening procedure - the procedure of implementation of data analysis by organization, including the analysis of databases of organization by means of the automated software modules (in the presence), for the purpose of identification of the corresponding facts;

49) social engineering - set of methods of use of psychological features of person for the purpose of its motivation to certain actions which it under habitual conditions would not make, introduction of person in delusion;

50) case of the client - all documents / information concerning the client, business relations with it (carrying out one-time financial transaction on the considerable amount), inclusive with results of measures of proper check, the legislations of Ukraine and internal documents of organization collected and documented by organization during fulfillment of requirements concerning PGK/FT;

51) the subject of managing - legal resident person or FLP;

52) organization of the receiver - the organization providing services in money transfer to the receiver;

53) organization of the payer - the organization providing services in money transfer to the payer (the initiator of the translation);

54) intermediary organization - organization which is intermediary in money transfer in value of the term determined in Item 48 parts one of article 1 of the Law on POD/FT;

55) falsification - change of this/authentic document (its elements, parts) for the purpose of introduction of court in delusion, in particular, for use of the identification document by person who does not have the right to it;

56) financial phone number - contact phone number of the client used by organization including for the purpose of carrying out its authenticity;

57) financial inklyuziya - process of implementation of open, timely and full access to wide range of financial products and services, distribution of their use in society by means of the existing and innovative approaches;

58) the ID card - the identification document into which the contactless electronic medium is implanted;

59) the otp-password (the one-time password) - certain sequence of text symbols and/or figures which is generated by software of organization on a centralized basis and is valid only for this purpose and limited in time which the organization sends to the person on its financial phone number in the form of the text message.

Other terms and concepts used in this Provision are applied in the values determined by the Law on POD/FT, the Laws of Ukraine "About financial services and state regulation of the markets of financial services", "About payment systems and money transfer in Ukraine", regulatory legal acts of National Bank, Cabinet of Ministers of Ukraine and the central executive body providing forming and realization of state policy in the sphere of POD/FT (further - the Ministry of Finance of Ukraine).

II. Proper organization of the POD/FT internal system of organization

6. The organization shall provide the proper organization of the POD/FT internal system and carrying out primary financial monitoring. The purpose of the proper organization of the POD/FT internal system and carrying out primary financial monitoring are:

1) fulfillment of requirements of the legislation of Ukraine in the sphere of POD/FT;

2) opportunity to properly reveal threshold and suspicious financial transactions (activities) and to report about them to SUO;

3) prevention of use of services and products of organization for carrying out financial transactions by clients for the purpose of VK/FT.

7. The organization for the purpose of the proper organization of the POD/FT internal system and carrying out primary financial monitoring takes, in particular, the following measures:

1) appoints the ranking officer of organization according to requirements of the legislation of Ukraine in the sphere of POD/FT at the level of management of organization;

2) is provided by functioning of risk management system of VK/FT;

Develops 3) and approves internal documents of organization concerning POD/FT in the amount necessary for effective functioning of the POD/FT internal system and understanding as employees of organization of the obligations and powers in the sphere of POD/FT;

4) is provided on permanent basis by consideration of problematic and topical issues of functioning of the POD/FT internal system;

5) provides sufficient resources for functioning of the POD/FT internal system;

6) the risk profile of organization risks of VK/FT provides sufficient knowledge and awareness of management of organization concerning their obligations in the sphere of POD/FT, and also about inherent;

7) is provided by informing management of organization on importance of observance of requirements of the legislation of Ukraine concerning POD/FT for the purpose of ensuring proper risk management system, need of acceptance of effective measures for effective prevention of use of services of organization for the purpose of VK/FT and understanding of consequences which the organization in case of failure to meet requirements of the legislation of Ukraine concerning POD/FT faces;

8) provides due knowledge and accomplishment by employees of organization of the obligations determined by it in the sphere of POD/FT, understanding with such workers of the responsibility for failure in duty and/or failure to act;

Develops 9) and constantly enhances system of internal audit (control) concerning POD/FT and/or involves independent auditors, including provides timely identification with internal audit (control) and/or substantive audit of problematic issues and signs of inadequate risk management system of VK/FT;

Disclaimer! This text was translated by AI translator and is not a valid juridical document. No warranty. No claim. More info