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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

(as amended on 15-05-2018)

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 counteraction of legalization (washing) of income gained in the criminal way to financing of terrorism and financing of distribution of weapons of mass destruction, and also forming of the nation-wide analytical database for provision to law enforcement agencies of Ukraine and foreign states of opportunity to reveal, check and investigate the crimes connected with washing of means and other illegal financial transactions.

Section I. General provisions

Article 1. Determination of terms

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

1) assets - means, property, the property and non-property rights;

2) faultless goodwill - set of the confirmed information on the physical person that allows to draw conclusion on compliance of its activities to requirements of the legislation, and also on lack of criminal record which is not removed or is not extinguished in the procedure established by the law;

3) verification of the client - establishment (confirmation) by the subject of primary financial monitoring of compliance of the identity of the client (the client's representative) at its presence to the obtained identification data;

4) 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 them implementation, including provides services on behalf of the subject of primary financial monitoring (except implementation of representational functions);

5) customer research - process of receipt of primary financial monitoring by the subject in case of identification and/or in the course of customer service of information on financial condition of the client and content of its activities; evaluating financial condition of the client; determination of accessory of the client or person acting from his name to national or foreign public figures, figures performing political functions in the international organizations or the related persons; clarifications of the place of its accommodation or residence or the place of temporary stay in Ukraine (all data concerning the residential address (stay): country name, region (area), area, city (village, settlement), street (lane), number of the building (case), number of the apartment);

6) the beneficiary - person, in advantage or for the benefit of which financial operation is performed;

7) account financial transaction - financial transaction which leads to reduction of assets on the customer account - the owner of assets;

8) high risk - result of risk assessment subject of primary financial monitoring which is based on analysis results of set of certain criteria, testimonial of high probability of use of the subject of primary financial monitoring for legalization (washing) of income gained in the criminal way and/or terrorism financing;

9) internal financial monitoring - set of actions for identification of financial transactions which are subject to internal financial monitoring, using the approach based on risk assessment of legalization (washing) of income gained in the criminal way or terrorism financings; identifications, verifications of clients (representatives of clients), accounting of such transactions and information about their participants; the obligatory reporting in the central executive body realizing 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 about financial transactions concerning which there is suspicion, and also submission of additional and other information in the cases provided by this Law;

10) the data allowing to establish the final beneficial owner (controller) - the information about the physical person including surname, name and middle name (in the presence) of physical person (physical persons), the country of its permanent residence and birth date;

11) the state financial monitoring - set of actions which it is performed by subjects of the state financial monitoring and go for fulfillment of requirements of the legislation 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:

the state financial monitoring which is carried out by the central executive body realizing 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 - set of actions for collection, processing and the analysis by the specified body of information on financial transactions, primary and state financial monitoring given by subjects 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, either financing of terrorism or financing of distribution of weapons of mass destruction and/or other illegal financial transactions and also measures for verification of such information according to the legislation of Ukraine;

the state financial monitoring of other subjects of the state financial monitoring - set of the actions performed by other subjects determined by part three of article 5 of this Law are also directed to fulfillment of requirements of the legislation 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;

12) business relations - the relations between the client and the subject of primary financial monitoring which arose based on the agreement (including public) about provision of financial or other services;

13) the figures performing political functions in the international organizations - officials of the international organizations borrowing or occupying within the last three years executive positions in such organizations (directors, chairmen of boards or their deputies) or perform any other leading functions at the high level, including in the international interstate organizations, members of the international parliamentary assemblies, judges and the leading officials of international courts;

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

15) the additional generalized materials - the data collected on the basis of the analysis of in addition acquired information in addition to earlier given generalized materials;

16) income gained in the criminal way - any benefit received as a result of making of socially dangerous act preceding legalization (washing) of the income which can consist of personal or real estate, the property and non-property rights, irrespective of their cost;

17) identification data are:

for physical person - the data specified in Items of 1 parts nine and the tenth in parts eleven and the twelfth article 9 of this Law;

for the physical person - the entrepreneur - the data specified in Item 2 parts nine in part twelve of article 9 of this Law;

for the legal entity - the data specified in Item 3 parts nine and Item 2 parts ten of article 9 of this Law;

data which list is determined by subjects of the state financial monitoring, - in the cases determined by part of the sixteenth article 9 of this Law;

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

19) foreign public figures - physical persons which carry out or carried out within the last three years certain public functions in foreign states, namely:

head of state, head of the government, ministers and their deputies;

deputies of parliament;

chairmen and members of boards of Central Banks;

members of the Supreme Court, Constitutional court or other judicial authorities which solutions are not subject to appeal, except appeal in exceptional cases;

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 having strategic importance;

heads of governing bodies of the political parties provided in parliament;

19-1) 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;

20) the final beneficial owner (controller) - the physical person, irrespective of formal ownership has opportunity to perform decisive influence on management or economic activity of the legal entity is direct or through other persons, is performed, in particular, by realization of right of possession or use of all assets or their considerable share, the right of the solving influence on forming of structure, results of vote, and also transactions which give opportunity to determine conditions of economic activity, to give mandatory instructions or to perform functions of governing body or which has opportunity to exert impact by direct or mediated (through other physical person or legal entity) ownerships of one person independently or jointly with the related physical persons and/or legal entities of shares in the legal entity in the amount of 25 or more percent of the authorized capital or voting powers in the legal entity.

At the same time person having the formal right to 25 or more percent of the authorized capital or voting powers in the legal entity cannot be the final beneficial owner (controller), but is agent, the nominee holder (the nominal owner) or is only intermediary concerning such right;

21) 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 14 of this Law performs functions of state regulation and supervision, and also in cases, the stipulated in Article 64 Laws of Ukraine "About banks and banking activity");

is player in lottery or gambling, including casino, electronic (virtual) casino (for the subjects of primary financial monitoring determined in the subitem "v" of Item 7 parts two of article 5 of this Law);

21-1) correspondence relations are:

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

the relations 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;

the relations established by depository institution with foreign financial institution based on the service provision agreement on servicing of the account in securities of the nominee holder.

22) the international sanctions - sanctions which are recognized 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 (according to the procedure, determined by the Cabinet of Ministers of Ukraine) concerning freezing of assets of certain persons or restriction of any access to them;

23) properly drawn up notification - drawn up and given to the central executive body realizing 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 according to requirements of the legislation the message on the financial transaction which is subject to financial monitoring or the message containing the additional information about financial transactions and their participants which became object of financial monitoring from the central executive body realizing 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;

24) national risks assessment - system of the actions performed by subjects of the state financial monitoring, authorized bodies of the government with involvement of other subjects (in case of need) for the purpose of determination (detection) 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;

25) national public figures - physical persons which carry out or carried out within the last three years certain public functions in Ukraine, namely:

President of Ukraine, Prime Minister of Ukraine, cabinet ministers of Ukraine;

first deputies and deputy ministers, heads of other central executive bodies, their first deputies and deputies;

People's Deputies of Ukraine;

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

chairmen and judges of the Constitutional Court of Ukraine, Supreme Court of Ukraine and the supreme specialized courts;

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;

Chairman of the Antimonopoly Committee of Ukraine and his deputies;

Chairman and members of Audit Chamber;

members of National council concerning television and broadcasting of Ukraine;

ambassadors extraordinary and plenipotentiary;

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

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

heads of regional territorial authorities of the central executive bodies, 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 exceeds 50 percent;

heads of governing bodies of political parties and members of their central authorized bodies;

26) 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 of scientific, educational, cultural, improving, ecological, religious, charitable, social, political and other activities for the purpose of requirements satisfaction and interests of citizens in the limits determined by the legislation of Ukraine without the profit earning purpose;

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

28) 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 such assets for the purpose of legalization (washing) of income gained in the criminal way or financing of terrorism or financing of distribution of weapons of mass destruction, and also any information on such actions or events, assets and their participants;

29) obligatory financial monitoring - set of the actions performed by subjects of primary financial monitoring, for identification of the financial transactions which are subject to obligatory financial monitoring, identification, verification of clients (representatives of clients), accounting of such transactions and the information about their participants, the obligatory report on them to the central executive body realizing 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 and also submission of additional and other information in the cases provided by this Law;

30) the official document - the document constituted, issued, assured 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, confirmatory or certifying certain events, the phenomena or the facts and containing stipulated by the legislation details and data;

31) primary financial monitoring - set of the actions performed by subjects of primary financial monitoring and directed to the fulfillment of requirements of this Law, regulatory legal acts of subjects of the state financial monitoring including, in particular, carrying out obligatory and internal financial monitoring;

32) suspicion - the assumption based on analysis results of the available information can also demonstrate that financial transaction or its participants, their activities or sources of origin of assets are connected with legalization (washing) of income gained in the criminal way, or financing of terrorism or connected with making of other socially dangerous act which is determined by the Criminal code of Ukraine as crime or for which the international sanctions are provided;

33) profound check of the client - implementation by the subject of primary financial monitoring of actions for obtaining (including from public authorities, the state registrars, from official or public sources) customer informations (the client's representative) for confirmation or confutation of the data provided to them which reliability is doubtful;

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

35) structure of property - documentary confirmed system of relations of legal entities and physical persons that allows to establish all the available final beneficial owners (controllers), including the control relation between them concerning this legal entity, or absence of final beneficial owners (controllers);

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

37) specially authorized body - the central executive body realizing 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;

38) 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 at the initiative of the client;

39) socially dangerous act which precedes legalization (washing) of income gained in the criminal way - acts for which the Criminal code of Ukraine prescribes primary punishment in the form of imprisonment or penalty over three thousand free minima of the income of citizens, or the act made outside Ukraine if it is recognized socially dangerous illegal act which preceded legalization (washing) of the income, according to the penal statute of the state where it was made, and is crime under the Criminal code of Ukraine as a result of which making illegally the gained income;

40) the mystery of financial monitoring - information obtained when implementing 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, either financing of terrorism or financing of distribution of weapons of mass destruction and/or other illegal financial transactions;

41) the trust - the legal nonresident person performing the activities on the basis of direct trust where the attorney acts for the account and for the benefit of the principal and also shall for remuneration make certain legal acts;

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