On June 19, 2007 in the course of its Plenary the Verkhovna Rada of Ukraine adopted by a decision of 259 people’s deputies the Law of Ukraine " On Amendment of Certain Legislative Acts of Ukraine on Prevention of Legalization of the Proceeds From Crime and Terrorist Financing " (registration Nr. 2847), drafted by the State Committee for Financial Monitoring of Ukraine.
Due to this fact Ukraine has become one of the states globally, which reached new level of implementation of modern international standards in this area into national legislation.
The adopted Law balanced the best European and global practice and corresponds to new Berlin 2003 FATF 40+9 Recommendations, the Directive of the Prevention of the Use of Financial System with the Purpose of Money Laundering and Terrorist Financing (3rd EU Directive), 2005 CoE Convention on Laundering, Search, Seizure and Confiscation of Proceeds of Crime, and on the terrorist financing (Warsaw Convention), as well as other international legal acts.
The key elements of the new Law are including to the list of reporting entities of such non-financial sector representatives as notaries, lawyers, real estate dealers, dealers in precious metals and stones, auditors, business entities providing legal or accounting services.
Separate provisions refer to politically exposed persons. Reporting on such persons shall be special obligation of every entity engaged into the AML/CFT system.
Important part of the Law refers to the amendments into the Civil Code of Ukraine and banking legislation. These provisions enable suspension of suspicious financial transaction without relevant court decision. Thus, reporting entities are empowered to suspend financial transactions for the term of two working days, and SCFM of Ukraine as national FIU – for five days.
Issues of international cooperation regarding distribution of confiscated assets and freezing of "suspicious" financial transactions under the request of foreign FIU are also regulated.
During the last years the National Bank of Ukraine, as well as more than 14 Ministries and other central state authorities of Ukraine were involved in the process of elaboration of the Law. More than 30 proposals of parliamentarians and representatives of private sector, namely Association of Ukrainian Banks, League of Insurance Companies, Professional Association of Registrars and Depositaries etc., were taken into account.
It worth mentioning that the process of drafting of the Law had been carried out under the permanent attention and support of the Ukrainian Government.
Moreover, having implemented international AML/CFT standards, the law also imbibed practical aspects and experience acquired by the State Committee for Financial Monitoring of Ukraine and other authorities, involved in regulation and supervision in this area. Amendments related to improvement of current AML/CFT system in Ukraine make provisions of acting legislation more transparent and comprehensible for understanding and practical application.
Adoption of the named Law for Ukraine is, without overstatement, a new starting point for further development and improvement of the national AML/CFT system based on modern global standards.
The adopted Law will enter into force 3 months after its signing by the President of Ukraine.
SCFM of Ukraine