Changes to legislation, court practice news and much more
On 5 September 2023, the Board of the National Bank of Ukraine adopted Resolution No. 110 «On Approval of Amendments to the Regulation on Financial Monitoring by Banks».
With this Resolution, the National Bank of Ukraine introduced new requirements for financial monitoring by banks.
The changes will make financial monitoring measures more effective and help reduce the risks of money laundering, terrorist financing and other illegal activities. The new requirements:
- oblige banks to respond to cases where the maximum amount of financial transactions declared by the client is exceeded. This requirement does not apply to individual clients carrying out ordinary financial transactions in amounts and volumes that have a reasonable explanation;
- extend the list of suspicion indicators relating to a client’s financial transactions, namely exceeding more than twice a month the maximum amount of financial transactions declared by the client before establishing the business relationship / updated during its servicing, and atypical activity on the client’s accounts.
In addition, the procedure for banks’ due diligence of clients who are electronic residents (e-residents) has been clarified in terms of identification and verification. The procedures for e-residents to establish business relationships remotely are also regulated.
An electronic resident (e-resident) is a foreigner aged 18 or over who is not a tax resident of Ukraine, has received the relevant qualified electronic trust services and whose details are entered in the «E-resident» information system.
The Resolution enters into force on 7 September 2023.
On 6 September 2023, the Draft Law on Amendments to Certain Laws of Ukraine on Exempting Military Personnel from Fees for Certain Administrative Services during Martial Law was adopted.
The draft law was developed to strengthen the guarantees of protection of the legitimate rights and interests of military personnel and persons who directly took part in the measures necessary to ensure the defence of Ukraine and protect the safety of the population and the interests of the state in connection with the military aggression of the Russian Federation against Ukraine, to honour the courage and heroism of the defenders of Ukraine’s independence and territorial integrity, and to further strengthen the patriotic spirit of society. The draft law amends two legislative acts governing the issuance and exchange of the passport of a citizen of Ukraine, the passport for travelling abroad and the driving licence, namely:
1) it is proposed to add a new item 5 to Section V «Transitional Provisions» of the Law of Ukraine «On the Unified State Demographic Register and Documents Confirming Ukrainian Citizenship, Identity or Special Status», reading as follows:
- «To establish that during martial law in Ukraine, introduced by Decree of the President of Ukraine No. 64/2022 of 24 February 2022 «On the Introduction of Martial Law in Ukraine», approved by Law of Ukraine No. 2102-IX «On Approval of the Decree of the President of Ukraine «On the Introduction of Martial Law in Ukraine» of 24 February 2022, and for one year after its termination or lifting, the issuance (including in place of a lost or stolen one) and exchange of the passport of a citizen of Ukraine and the passport for travelling abroad for military personnel and persons who directly took part in the measures necessary to ensure the defence of Ukraine and protect the safety of the population and the interests of the state in connection with the military aggression of the Russian Federation against Ukraine shall be carried out without charging the administrative fee, state duty or the cost of the form.»;
2) it is proposed to supplement Section XIII «Transitional Provisions» of the Law of Ukraine «On Road Traffic» with an item reading as follows:
- «To establish that during martial law in Ukraine, introduced by Decree of the President of Ukraine No. 64/2022 of 24 February 2022 «On the Introduction of Martial Law in Ukraine», approved by Law of Ukraine No. 2102-IX «On Approval of the Decree of the President of Ukraine «On the Introduction of Martial Law in Ukraine» of 24 February 2022, and for one year after its termination or lifting, the issuance and exchange of a new driving licence (including in place of a lost or stolen one), and the issuance and exchange of a driving licence (without examinations) for military personnel and persons who directly took part in the measures necessary to ensure the defence of Ukraine and protect the safety of the population and the interests of the state in connection with the military aggression of the Russian Federation against Ukraine shall be carried out without charging the administrative fee, state duty or the cost of the form».
On 7 September 2023, Draft Law No. 9656-2 on Amendments to Subsection 4 of Section XX «Transitional Provisions» of the Tax Code of Ukraine on the Taxation of Banks’ Net Interest Income was adopted.
The draft law aims to establish a fair tax burden by introducing temporary specifics of corporate income tax for banks.
It provides for additional corporate income tax on banks for the 2023 reporting year, namely:
- on the amount by which the net interest income according to the bank’s financial statements for 2023 exceeds the arithmetic mean of the net interest income according to its financial statements for 2019-2021. Net interest income is the difference between the bank’s interest income (less income from domestic government bonds) and its interest expenses (less expenses related to the redemption of and payment of income on domestic government bonds) according to the financial statements;
- at a rate of 50% for this additional corporate income tax.
