Ultimate beneficial owners and the new Law. How to comply with all requirements and avoid liability?

On 28 April 2020, the Law of Ukraine №361-IX “On Prevention and Counteraction to Legalization (Laundering) of Proceeds from Crime, Financing of Terrorism and Financing of Proliferation of Weapons of Mass Destruction” entered into force.

The Cabinet of Ministers of Ukraine within three months from the date of entering into force of this Law is obliged to adopt necessary regulations for the provisions implementation of this Law, in particular this applies to regulations that will approve ownership form and its content.

The law obliges all legal entities to submit to the updated information in the state register on the ultimate beneficial owners (hereinafter – CBV) and the ownership structure of the company within three months from the date of entering into force of the legal act approving the form and content of ownership structure.

Therefore, in the near future, namely by July 28, 2020, the Cabinet of Ministers of Ukraine will approve the relevant act. And only after that the countdown of time (three months) for providing legal entities with information about KBV will begin.

A significant number of Ukrainian companies  are registered outside Ukraine. Such legal entities need to be prepared more carefully. It will be necessary to prepare a comprehensive package of documents, including request in advance with necessary information and supporting documents from the parent company – a non-resident, if necessary, apostille and translate documents, notarize copies of documents identifying the individual non-resident.

Based on the fact that since 01.05.2020 the number of legal entities in Ukraine exceeded 1.3 million, we recommend not to waste time and ask for documents and information from non-resident parent companies about KBD.

Therefore, in the near future, namely by 28 July 2020, the Cabinet of Ministers of Ukraine will approve the relevant act. And only after that the countdown of time (three months) for providing legal entities with information about KBD will begin.

A significant number of founders of Ukrainian companies are registered outside Ukraine. Such legal entities need to prepare more carefully. It will be necessary to prepare a comprehensive package of documents, including request in advance the necessary information and supporting documents from the parent company – a non-resident, if necessary, apostille and translate documents, notarize copies of documents identifying the individual non-resident.

 Based on the fact that as of 01.05.2020 the number of legal entities in Ukraine exceeded 1.3 million, we recommend not to waste time and ask for documents and information from non-resident parent companies about KBD.

The law provides for the application of fines from 17,000 to 51,000 UAH for failure to provide information on KBD.

The issue of adopting a normative legal act, which will approve the form and content of the ownership structure, is under the control of DEGA Partners team.

• In order to comply with requirements specified in the Law of Ukraine №361-IX and avoid liability, JC “DEGA Partners” offers a range of legal services for the processing and submission of all necessary documents, including:
• providing a questionnaire on KBD and collecting the necessary data and documents;
• ensuring prompt approval of the provision of information and documents about the parent company and its KBD, as well as the translation organization and legalization of the necessary documents (if the participant and / or KBD is a non-resident) in accordance with the Law;
• attorney’s draft power development to perform the necessary actions on behalf of the Principal;
• filling in and submitting all necessary forms of documents by agreement and on behalf of the Principal.

If you have any additional questions, we will be happy to provide needed advice.