Optional obligation of specially designated entities under the financial monitoring law to register with a specially authorized body

LegalHelp Not all auditors, lawyers, accountants, lawyers are subject to registration by special subjects of financial monitoring. Features of the activity, under which mandatory registration and conditions that exclude it.

Limits of the law

On April 28, 2020, the Law of Ukraine “On Prevention and Counteraction to Legalization (Laundering) of Proceeds from Crime, Financing of Terrorism and Financing of the Proliferation of Weapons of Mass Destruction” of December 6, 2019 (hereinafter - the Law) entered into force.

This Law, in accordance with Part 1 of Article 2, applies to those who provide financial transactions, in particular: citizens of Ukraine, foreigners and stateless persons, natural persons - entrepreneurs, legal entities, their branches, representative offices and other separate units.

By a financial transaction, according to item 65 part 1 of Article 1, the Law defines any actions concerning the client's assets, committed with the help of or which became known to the subject of primary financial monitoring from among auditors, accountants, tax consultants, lawyers , notaries and legal service providers.

Assets, according to paragraph 2, part 1 of Article 1, the Law defines funds, including electronic money, other property, property and non-property rights.

Specially defined subjects of financial monitoring

Law, in paragraph 7 part 2. Article 6 by specially designated subjects of financial monitoring, in addition to employees, determines:

• subjects of auditing activity (item "a");
• accountants, business entities that provide accounting services (paragraph "b");
• business entities that provide advice on taxation (paragraph "c");
• law firms, bar associations and lawyers who practice law individually (item "d");
• notaries (item "g");
• business entities that provide legal services (item "d");
• persons who provide services for the establishment, operation or management of legal entities (paragraph "e");
• business entities that provide intermediary services in the implementation of transactions for the sale of real estate, as well as business entities that provide for a fee consulting services related to the purchase and sale of real estate (paragraph "is" );
• business entities that trade in cash for precious metals and precious stones and articles thereof (paragraph "g");
• business entities providing services in the field of lotteries and / or gambling (paragraph "c").

Accounting of specially designated subjects of financial monitoring in a specially authorized body

The law defines the various obligations of a specially designated financial monitoring entity depending on whether or not it is registered with a specially authorized body.

In accordance with Part 2 of Article 8 of the Law, the subject of primary financial monitoring (specially designated subjects of primary financial monitoring) is obliged to register with a specially authorized body, ie among the defined Part 3 of Article 6 of the Law of subjects of state financial monitoring and in accordance with the powers distributed under Article 18 of the Law on the basis of entities and certain types of their activities.

The unaccounted for are obliged to be registered, and the accounted are obliged to comply with the requirements of the financial monitoring legislation.

In this case, deregistration, in accordance with Part 5 of Article 25 of the Law, is possible in the manner prescribed by the Cabinet of Ministers of Ukraine (!) At the request of the subjects of primary financial monitoring in case of termination or at the request of state financial monitoring or on the basis of information on cancellation of state registration (for legal entities and natural persons - entrepreneurs), or in case of state registration of death (for natural persons).

However, the fulfillment of the obligation to register is ensured not by all specially identified subjects of primary financial monitoring, as listed in paragraph 7, part 2 of Article 6 of the Law, but only by those who have the peculiarities of their activities in accordance with Part 1 of Article .10 of the Act.

Features of activity for which registration is mandatory

1. For lawyers, law firms, law associations, notaries and business entities that provide legal services with the following features, paragraph 1, part 1 of Article 10 of the Law defines the conditions, in particular:

• participation in any financial transaction on behalf of or on behalf of the client, as actions on the client's assets or which became known in the business relationship as defined by the financial transaction in paragraph 65 part 1 of Article 1 of the Law, among financial transactions subject to financial monitoring, paragraph 67, part 1 of Article 1 of the Law defines only threshold financial transactions (UAH 400 thousand or currency equivalent or UAH 30 thousand from lotteries and / or gambling) and suspicious financial transactions (criminal activity, financing terrorism or proliferation of weapons of mass destruction), and expenditure financial transaction, in accordance with paragraph 10 part 1 of this article of the Law - a financial transaction that leads to a decrease in assets on the account of the client - the owner of assets;
• assistance to the client to plan or carry out operation on:
  • purchase and sale of real estate or property management when financing housing construction;
  • purchase and sale of business entities and corporate rights;
  • management of funds, securities or other assets of the client;
  • opening and / or managing a bank account or securities account;
  • raising funds necessary for the creation of legal entities and funds, ensuring their activities or managing them;
  • creation, provision of activity or management of legal entities, funds, trusts or other similar legal entities;

2. For business entities that provide intermediary services in the implementation of transactions for the sale of real estate, as well as providing for a fee consulting services related to the purchase and sale of real estate, such features of paragraph 2 of Part 1 of Article .10 of the Law defines the conditions, in particular, in the provision of consulting services, preparation and / or implementation of transactions for the sale of real estate.

3. For business entities that trade in cash for precious metals and precious stones and articles thereof, such features of paragraph 3 of Part 1 of Article 10 of the Law define the conditions, in particular, if the amount of the financial transaction is equal to or exceeds 40 thousand hryvnias, or the amount , equivalent to the specified amount, including in foreign currency, bank metals, other assets, when conducting financial transactions with high value items (including precious metals, precious stones, antiques, art objects, etc.) or when organizing trade in such items, including auction.

4. For business entities that provide services in the field of lotteries and / or gambling, the following features of paragraph 4 of Part 1 of Article 10 of the Law define the conditions, in particular:

• during the implementation of financial transactions for the acceptance or return of a total or separate fee (bet) directly from the players, the payment of winnings (prizes);
• during the implementation of financial transactions for the acceptance or refund of fees (rates), payment of winnings (prizes), if such financial transactions are carried out on its behalf and on his behalf (on the basis of the contract) by third parties.

Conditions under which there is no obligation to register with a specially authorized body

Therefore, those who do not have and do not plan the specifics of their activities specified in Part 1 of Article 10 of the Law are not obliged to register as subjects of primary financial monitoring in a specially authorized body: probably under civil contracts -legal nature), business entities (from among legal and natural persons-entrepreneurs) that provide accounting services, provide tax advice, provide legal services, services for the establishment, operation or management of legal entities, brokerage services during the sale and purchase of real estate, provide for a fee consulting services related to the purchase and sale of real estate, trade in cash for precious metals and precious stones and articles thereof, provide services in the field of lotteries and / or gambling, as well as, notaries and lawyers in any of the organizational forms of implementation a bureaucratic activities (individually, a law firm or a law firm).

Some, additional features of the subject of financial monitoring

However, audit firms, law firms, law firms and other legal entities among such special entities of financial monitoring and in general, any legal entities that are not financial institutions, but provide certain financial services, for example from the list Part 1 of Article 4 of the Law of Ukraine "On Financial Services and State Regulation of Financial Services Markets" attraction of financial assets with the obligation for their subsequent return (paragraph 4), lending, including on the terms of a financial loan ( item 6), provision of guarantees (item 7), etc., such legal entities, in accordance with item 9 part 2. Article 6 of the Law, are separate subjects of financial monitoring, different from specially defined subjects of primary financial monitoring in item 7 part 2. Article 6 of the Law.

Roman Truskavetsky

Translated from Ukrainian using Google translator