Legal entities will be fined for false data on beneficiaries
The Ministry of Justice reminds that the Law of Ukraine "On Prevention and Counteraction to Legalization (Laundering) of Proceeds of Crime, Terrorist Financing and Financing of Proliferation of Weapons of Mass Destruction" (Law No. 361) obliges legal entities to have information about the ultimate beneficial owner (UBO) or its absence and ownership structure, aswell as to submit information about the UBO or its absence and ownership structure for entry into the Unified State Register of Legal Entities, Individual Entrepreneurs and Companies.
Law No. 361 also provides for the obligation of legal entities to keep information on the BOD and the ownership structure of the legal entity up to date.
Article51 of Law No. 361 establishes that if a public authority, law enforcement agency, primary financial monitoring ent ity (hereinafter referred to as the PFMS), or other person (if the information relates to such a person) discovers discrepancies between the information on the CbC and ownership structure of a legal entity (in particular, detection of incompleteness, inaccuracies or errors in the information on the CbC and/or ownership structure of such a person contained in the Unified State Register), such body, entity or person shall, within 10 business days from the date of their detection, send a notice of the discrepancies to the holder of the Unified State Register.
In its turn, Article 8 of Law No. 361 requires the PFMS to notify the holder of the Unified State Register in accordance with the procedure established by the Ministry of Justice of discrepancies between the information on the customer's CBO and ownership structure received by it as a result of due diligence and the information on the customer's CBO and ownership structure placed in the Unified State Register (in particular on the discovery of incompleteness, inaccuracies or errors in the information on the CBO or the ownership structure of such a client contained in the Unified State Register) - within 10 business days from the date of discrepancies.
TheUnified State Register is kept by theMinistry of Justice of Ukraine, which takes organizational measures related to the functioning of the Unified State Register.
Theprocedure for notifying the Ministry of Justice of Ukraine as the holder of the Unified State Register is set out in the Procedure for Notifying the Holder of the Unified State Register of Discrepancies between the PFMS received as a result of due diligence and the information on the CMB and/or ownership structure of a legal entity placed in the Unified State Register (Order of the Ministry of Justice of 12.07.2023 No. 2542/5) (hereinafter - the Notification Procedure).
Order of the Ministry of Justice No. 727/5 dated 18.03.2024 "On Amendments to the Order of the Ministry of Justice of Ukraine No. 2542/5 dated July 12, 2023" postponed the implementation of the Notification Procedure until September 1, 2024.
We would like to emphasize that after the entry into force of the Order of the Ministry of Justice No. 2542/5 dated 12.07.2023, the official website of the Ministry of Justice of Ukraine will create a section "Notification of the holder of the Unified State Register on discrepancies between the information received by the PFMS as a result of due diligence and the information on the CbC and/or ownership structure of a legal entity", which will contain the encryption certificate and e-mail address provided for in paragraph 7 of the Notification Procedure.
We would like to emphasize that the Ministry of Justice of Ukraine is responsible for bringing persons to liability for violations under part four of Article 35 of Law No. 755 in accordance with the Procedure for Bringing to Liability and the Procedure for Determining the Amount of Fines for Violations in the Field of State Registration of Legal Entities (Order of the Ministry of Justice No. 3258/5 dated 13.09.2023).
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