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Finance Business Service

Offshore Transactions No Longer Subject to Additional Bank Checks


The NBU has forbidden financial institutions to apply the requirements of the Regulation on the procedure of analysis by the banks and verification of documents (information) on financial transactions and their participants (Resolution No.369) to the transactions, one of the parties of which are persons registered in the offshore zones.
On January 24, the financial institutions received the corresponding Clarification No.25-0008/4731, signed by the director of the financial monitoring of the National Bank of Ukraine, Igor Beryoza. The document was sent out in the form of an electronic message.
The letter states that from January 1, 2018 banks should not define such operations as risky ones, which means they are not required to conduct additional checks and request the documents from the clients.
This change is justified by the fact that the order of the Cabinet of Ministers, effective from September 16, 2015, with which the list of offshore countries and territories was enshrined, lapsed at the beginning of this year. At the same time, the updated list, determined by a separate order, was not included in the relevant resolution of the National Bank.
In other words, the list of offshore zones still exists, but the NBU rules, which oblige banks to closely monitor such operations, send the financiers to no longer valid list. At the same time, the message does not explain why the NBU made offshore transactions out of control. Moreover, there is nothing in the letter about the intention of the regulator to amend its rules, including a reference to the updated list of offshore companies.
We remind that, according to the rules of the National Bank, financial institutions should have referred the transactions to risky ones, one of the parties to which are registered natural persons and legal entities in offshore areas. Such operations should have been subjected to additional checks with clarification of their essence, purpose, conformity to the type of the activity of the participants and economic feasibility. In addition, banks were required to establish the ultimate beneficiaries of the companies and sources of origin of funds.

Ролан Бондарец
Lawyer in tax disputes
Finance Business Service