Ministry of Justice clarifies rules for submitting data on beneficiaries

As a reminder, on September 1, 2024, Order of the Ministry of Justice dated 12.07.2023 No. 2542/5 on the Procedure for Notifying the Ministry of Justice as the holder of the USR of Discrepancies between the information on the ultimate beneficial owners and/or ownership structure of a legal entity received by the subject of initial financial monitoring as a result of due diligence and the information on the ultimate beneficial owners and/or ownership structure of the legal entity will come into force.

In addition, starting from September 1, 2024, the Ministry of Justice, in accordance with the Procedure approved by the Order of the Ministry of Justice dated September 13, 2023 No. 3258/5, has the right to impose fines for inaccurate data on beneficiaries in the USR.

We would like to inform you that shortly before the new rules for notification of ultimate beneficial owners came into force, the Ministry of Justice, by its Order No. 2531/5 dated 27.08.2024, approved amendments to Procedure No. 2542/5.

The amendments, in particular, supplement Procedure No. 2542/5 with new terms, namely

• incompleteness - absence in the USR of information on one or more parameters in relation to the UBO and/or ownership structure of a legal entity that are displayed in accordance with open access, compared to those established by the PFMS (the UBO is the same person/s as the person/s established by the PFMS, but not all information about him/her is entered in the USR; the ownership structure of a legal entity corresponds to that obtained by the PFMS, but it does not contain all the necessary information);
• inaccuracy - a difference in the information about the PEO and/or the ownership structure of a legal entity, which is displayed according to the public domain, with those established by the PFMS (the same person/persons are established as PEO, but there is a difference in the information about such person/persons; inaccuracy in the information reflected in the ownership structure of a legal entity);
• error - inconsistency of information about the legal entity's PEO and/or ownership structure, which is displayed according to the public domain, with those established by the PFMS (the legal entity's PEO is a different individual(s) than the one(s) whose information is/are contained in the Unified State Register; the legal entity has a BOD if the Unified State Register contains information about its absence; the legal entity does not have a BOD if the Unified State Register contains information about the BOD; the ownership structure of the legal entity, as disclosed in the Unified State Register, does not correspond to the received PFMS).

In addition, the new version sets out a list of types of discrepancies between the types of information on the legal entity's CBO and/or ownership structure received by the PFMS as a result of due diligence of the legal entity and the relevant information in the Unified State Register.

From the date the Order comes into force, they will be as follows:

• incomplete information about the CBO;
• inaccuracies in the information on the CMB;
• an error in the information about the IPP;
• Incomplete information in the ownership structure of a legal entity;
• inaccuracy in the information on the ownership structure of the legal entity;
• an error in the information on the ownership structure of a legal entity.

At the same time, discrepancies are not classified as discrepancies if the USR does not contain information on the KBV and/or the ownership structure of the legal entity.

It has been clarified that the PFMS shall attach to the notification scanned copies of relevant materials and documents (if any) archived in one file for each notification record. In this case, a document containing more than one page is scanned into one file. Scanned copies must be suitable for perceiving their content.

In case the Ministry of Justice receives a Notice that does not contain all the information provided for in the relevant form, if such information is required by law, such Notice shall be returned without consideration for elimination of the identified deficiencies to the relevant e-mail address from which it was sent.

Order No. 2531/5 shall enter into force on September 1, 2024, but not earlier than the day of its official publication.