On 14 October 2014 Ukrainian parliament adopted the Law of Ukraine "On Amending Certain Laws of Ukraine Regarding Identification of the Ultimate Beneficial Owners of Legal Entities and Public Officials" (the "Law") that became effective on 25 November 2014.
The Law amends, inter alia, regulation of (1) state registration of legal entities, (2) public access to information in the Unified State Register of Property Rights to the Immovable Property and (3) anti-money laundering.
(1) Disclosure of information regarding ultimate beneficial owner
Under the Law, Ukrainian companies are required to disclose information regarding their ultimate beneficial owners ("UBOs") defined as individuals capable, regardless of the formal status, of exercising direct or indirect decisive influence over the company's management or business. Agents, nominee holders (nominee shareholders) or intermediaries in exercising equity or management rights may not be viewed as UBOs. The following information regarding UBOs must be included into the Unified State Registry of Legal Entities and Individual Entrepreneurs: the first, patronymic (if applicable) and last names, citizenship, passport details, residence and tax registration number (if applicable).
It is required that information regarding UBOs and the ownership structure of the company's participants/shareholders showing substantial equity in the company (direct or indirect ownership of 10 or more per cent of the charter capital/shares/voting rights or direct or indirect control of the company) must be submitted to the state registrar at the time of the company's registration.
Company's management must identify UBOs, regularly update, store and provide relevant information to the state registrars. The company's director failing to provide the required information may be subject to an administrative fine in the amount of UAH 5,100-8,500. Notably, companies existing on the Law's effective date are required to submit to the state registrars information regarding their UBOs and UBOs of their participants/shareholders within 6 months period.
(2) Public access to information in the Unified State Register of Property Rights to the Immovable Property (the "Registry")
Under the Law information from the Registry becomes publicly available and can be obtained by: individuals and companies only in respect of a specific real estate object; public officers, judges, law enforcement officers, attorneys and notaries in respect of both a specific real estate object and an owner of the real estate object.
A real estate owner is entitled at any time to obtain a list of entities/individuals/public officials who have made inquiries regarding owner's title to the immovable property or encumbrance over such immovable property.
(3) Anti-money laundering legislation
The Law introduces changes to the anti-money laundering legislation providing, inter alia, a new definition of the "public officials" and their affiliates. The new definition has significantly widened the list of individuals qualifying as public officials, with the purpose of combating legalization of proceeds received through corruption.
The primary financial monitoring entities (such as banks, insurance companies, stock exchanges, asset management companies, notaries, auditors, attorneys, etc.) must identify UBOs of their clients in the course of regular checks on the clients and their respective transactions while the state financial monitoring authorities are required to verify a "good name" of UBOs of the primary financial monitoring entities.
For further information please contact Asters' partner Yevgen Kravtsov
and associates Olena Mykhalchuk and Anna Tkachova.