The Ministry of Justice reminds that the Law of Ukraine “On Prevention and Counteraction to Legalization (Laundering) of Proceeds of Crime, Financing of Terrorism, and Financing of the Proliferation of Weapons of Mass Destruction” dated December 6, 2019, No. 361-IX (hereinafter referred to as Law No. 361) obliges legal entities to:
- Maintain information about the Ultimate Beneficial Owner (hereinafter referred to as UBO) or its absence, as well as the ownership structure;
- Submit information about the UBO or its absence, and the ownership structure for inclusion in the Unified State Register of Legal Entities, Individual Entrepreneurs, and Public Formations (hereinafter referred to as the USR) in the manner specified by the Law of Ukraine “On State Registration of Legal Entities, Individual Entrepreneurs, and Public Formations” dated May 15, 2003, No. 755-IV (hereinafter referred to as Law No. 755).
The Ministry of Justice will impose fines on legal entities that fail to submit information about the UBO or submit it late. The fines will range from UAH 17,000 to UAH 340,000 (Paragraph 4, Article 35 of Law No. 755). Additionally, the director or the person authorized to act on behalf of the legal entity will also be fined. The administrative fine will range from UAH 17,000 to UAH 51,000 (Part 6, Article 166-11 of the Code of Ukraine on Administrative Offenses).
Law No. 361 also obliges legal entities to keep information about the UBO and the ownership structure up to date.
If a government authority, law enforcement agency, primary financial monitoring entity (hereinafter referred to as PFME), or other person (if the information concerns such a person) discovers discrepancies between the information about the UBO and the ownership structure of the legal entity (including incompleteness, inaccuracies, or errors in the information about the UBO and/or ownership structure in the USR), they must notify the USR holder within 10 working days from the day the discrepancies are discovered (Article 5-1 of Law No. 361).
In turn, the PFME is required to notify the USR holder about any discrepancies found between the information obtained during proper verification and the information in the USR concerning the UBO and the ownership structure of the client (including incompleteness, inaccuracies, or errors in the information about the UBO or the ownership structure in the USR) within 10 working days from the day the discrepancies are discovered (Article 8 of Law No. 361).
The USR is maintained by the Ministry of Justice, which takes organizational measures to ensure its functioning.
The procedure for notifying the Ministry of Justice as the USR holder is defined by the “Procedure for Notifying the Holder of the Unified State Register About Discrepancies Identified by the PFME Between the Information Obtained During Proper Verification and the Information in the Unified State Register About the UBO and/or the Ownership Structure of the Legal Entity” (Order of the Ministry of Justice dated July 12, 2023, No. 2542/5; hereinafter referred to as the Notification Procedure).
By the Order of the Ministry of Justice “On Amendments to the Order of the Ministry of Justice of Ukraine dated July 12, 2023, No. 2542/5” dated March 18, 2024, No. 727/5, the implementation of the Notification Procedure has been postponed until September 1, 2024.
After the Order of the Ministry of Justice dated July 12, 2023, No. 2542/5 comes into force, a section titled “Notification by the Holder of the Unified State Register About Discrepancies Identified by the PFME Between the Information Obtained During Proper Verification and the Information in the Unified State Register About the UBO and/or the Ownership Structure of the Legal Entity” will be created on the official website of the Ministry of Justice, where the encryption certificate and email address provided in Paragraph 7 of the Notification Procedure will be posted.
The Ministry of Justice has approved the procedure for holding individuals accountable and determining the amount of fines for violations in the field of state registration of legal entities by Order dated September 13, 2023, No. 3258/5.
This procedure will be used by the Ministry of Justice when holding individuals accountable for violations specified in Paragraph 4 of Article 35 of Law No. 755.
