A Penalty for Concealing the Ultimate Beneficiary

by Olha Povaliaieva
Friday, July 8, 2022
A Penalty for Concealing the Ultimate Beneficiary

A draft law has been adopted that will control the accuracy of data on the owners of the rights to develop the subsoil of Ukraine and identify corrupt money laundering schemes

On July 8, the Ukrainian parliament adopted a bill aimed at identifying Russian individuals as ultimate beneficiaries, as well as obtaining information about the actual owners of the right to develop Ukrainian subsoil and extract natural resources. In case of providing false information about the final recipient of funds, a fine of up to $2.000 (up to ₴51.000) will be imposed.

"With this document, we introduce the responsibility of legal entities for entering into the Unified State Register of knowingly false information about the ultimate beneficial owner of such legal entities or about its absence. These data are important for understanding the distribution of social wealth (reliable information about the beneficial owners of enterprises that have permits for the use of subsoil, water, and land will allow us to assess who actually concentrated the key influence in their hands in the relevant sectors of the economy). It is important for identifying participants in money laundering schemes, identifying hidden business groups, assisting law enforcement agencies of foreign partner states in conducting international financial investigations, and also identifying the owners of assets originating from the aggressor country," Olha Vasilevska-Smaglyuk, an author of the bill.

What are the penalties for false information provided in the bill:

  • Knowingly false information – ₴17.000 – 51.000;
  • False information – 1₴7.000 – 51.000;
  • Untimely providing information about the final beneficiary or refusal to provide ₴17.000 – 51.000.

The bill's adoption is part of the fulfillment of Ukraine's obligations to the European Union on the way to full membership in the EU.

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