It's time to disclose the ultimate beneficial owners

On 11 July 2021, Order of the Ministry of Finance of Ukraine dated 19 March 2021, No. 163 “On approval of the Regulations on the form and substance of ownership structure” (“Order”) will enter into force.

In this context, all Ukrainian companies registered before 28 April 2020 must disclose information about their ultimate beneficial owners (“UBO”) in the Unified State Register of Legal Entities, Individual Entrepreneurs and Public Organizations (“Register”) and submit information on the company’s ownership structure in free form by 11 October 2021. Such disclosure should comply with the requirements of the Law of Ukraine “On Prevention of and Counteraction to Legalization (Laundering) of Proceeds from Crime, Terrorism Funding and Financing of Proliferation of Weapons of Mass Destruction” (“AML Law”) and the Law of Ukraine “On the State Registration of Legal Entities, Individual Entrepreneurs and Public Organizations”.

The UBO disclosure should be made:

1. Within the given timeframe, because untimely submission or non-submission of such information to the state registrar may result in a fine of up to UAH 51,000 being imposed on the head of the legal entity or a person authorized to act on behalf of such legal entity or executive body.
2. After careful consideration and comprehensive assessment of various aspects of such disclosure, since the approach to the UBO concept used in the AML Law is new and fundamentally different from that outlined in the previous legislation. Therefore, it is necessary to be mindful of the UBO information, which has been disclosed earlier under previous legislation, and to define whether it correlates with current requirements of the AML law. Moreover, it is also necessary to take into account the existing interaction with primary financial monitoring entities, antitrust authorities, tax authorities, in particular, during the preparation of transfer pricing documentation, which also discloses the UBO information.