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NEW FINANCIAL MONITORING LAW TO EXTEND THE LIST OF POLITICALLY EXPOSED PERSONS (PEPS)
Asters, Kyiv, Ukraine,
Mar 4, Wed, 20202
Law No. 361-IX on Anti-Money Laundering, Terrorist Financing and Weapons of Mass Destruction Proliferation Financing ('Law No. 361-IX') will come into force on 28 April 2020 to supersede presently effective and similarly titled Law No. 1702-VII of 14 October 2014.
Law No. 361-IX will bring fundamental changes to the methods of defining 'politically exposed persons' (PEPs). One of the main novelties is that the relevant definition does not contain any reference to a three-year period, after the expiry of which a person is not regarded as a public official. Accordingly, anyone who satisfies this definition—although they may have changed his or her employer, post, etc.—will be treated as a PEP for an indefinite term with effect from 28 April 2020.
Please also note that the new Law will (i) considerably extend and update the list of posts and activities qualifying an individual as a public official and (ii) introduce the definitions of family members or close associates of PEPs. The Law defines close associates of a PEP as individuals meeting at least one of the following criteria:
- an individual known to have joint beneficial ownership of a legal entity or trust or another similar legal arrangement or any other close business relationship with a PEP; and/or
- an individual who has sole beneficial ownership of a legal entity or trust or another similar legal arrangement, which is known to have been set up for the benefit of a PEP.
The legal changes in question will significantly expand the scope of persons who will be subject to scrutiny by primary reporting entities and whose information will be sent to the State Financial Monitoring Service of Ukraine.