During martial law, banks must not verify the origin of funds deposited in cash if the amount is less than 400 thousand UAH But this does not mean at all that financial monitoring is no longer interested in the legality of the client's funds. And some cards may be blocked.
The Rada adopted amendments to the law that weakened some requirements for financial monitoring of banks. However, as lawyers explain, this does not mean that banks no longer check the financial transactions of citizens and do not block accounts if there is a suspicion of money laundering, reports the Chronicle.info with reference to Focus.
How financial monitoring works in wartime
New times require new solutions. Moreover, this thesis is relevant during the war. Actually, that is why the Parliament on March 15 adopted amendments to the Law «On Preventing and Counteracting the Legalization (Laundering) of Proceeds from Crime, the Financing of Terrorism and the Financing of Proliferation of Weapons of Mass Destruction». In particular, during martial law, banks should not check the sources of origin of funds when they are deposited in cash to the account, if the amount is less than the threshold — UAH 400,000. However, this does not mean at all that the financial monitoring of banks is no longer interested in the legality of the client's funds.
To check or not to check: new norms of financial monitoring for the period of martial law
The amendments to the law state that during the period of martial law (for the period of martial law or until it is canceled) & # 171; the bank does not take measures to establish the sources of origin of funds when they are deposited by a client — an individual in cash to his current account in in the amount that corresponds to the threshold financial transaction, if such a client did not provide the relevant documents or information at the request of the bank».
In practice, this means that it does not matter whether the client has confirmation of the legal origin of the funds that he deposits on the account, or not, the bank should not send a request to the client regarding the source or take independent actions to study the source of the client's income.
«No, for the period of the legal regime of martial law, banks should not take measures to establish the sources of origin of funds», — says Alexander Kamsha, lawyer at Law Firm «Ilyashev & Partners».
< p>However, such a rule on the abolition of measures to verify the client and his sources of income during martial law does not mean that banks have canceled financial monitoring as such and suddenly stopped checking transactions of individuals with cash in the amount of less than UAH 400,000. After all, the amendments to the law say that if banks are prohibited from establishing a source, then it is also prohibited later to allow the client to freely use such unverified funds.
« funds to the current account, documents on the origin of funds were requested, but the client did not provide the relevant documents, the bank will not take further measures to establish the sources of the origin of such funds. The Bank will prohibit the client's debit transactions with such funds, except for their transfer to special accounts opened by the NBU to support the Armed Forces of Ukraine and/or for humanitarian aid to Ukrainians affected by the actions of the aggressor state of the Russian Federation, as well as for acquisition of bonds of an internal government loan «War bonds», explains Oleksandra Polyakova, Senior Associate at Kinstellar .
So, on the one hand, allegedly clients were allowed to freely deposit up to UAH 400 thousand in cash, and on the other hand, in the next paragraph of Law No. 361, they were forbidden to freely use the funds deposited in cash if the client did not provide confirmation of their legality.
Funds blocked: when the bank can block money in accounts
A client of one of the largest Ukrainian banks recently said on his Facebook page that the bank blocked his account due to depositing UAH 60,000 in cash and demanded to inform about the source of funds. In response to the client's request to ask what was happening, the bank manager sent him a link to NBU resolutions No. 492 and No. 705, and also said that the bank could check any crediting of funds to the account, according to these resolutions.
Consequently, although Law No. 361 says that there is no requirement regarding the source of origin for amounts up to UAH 400,000, there are other rules that now allow banks to check customers and require them to provide information about the sources of origin of the money they deposit into their accounts.< /p>
Although lawyers are sure that banks should use the primary source — that is, the law, and then the resolutions of the NBU, as by-laws.
Lawyer, partner of JSC «Assyria» Dmitry Kutsevol says that the NBU resolutions indicated in the response to the client by the bank now contradict the law, however, probably due to the situation in Ukraine, the NBU has not had time to change them yet.
«And bank employees, in exercising their powers, were guided by bank instructional materials, and not by legislative changes, which is why such a situation arose with the client. I don’t think that the situation of blocking the accounts of bank customers in such a situation will be systematic, and the NBU will bring its decisions in line with the law», Dmitry Kutsevol is sure.
However, lawyers talk about Another aspect of the issue is several threshold amounts in the law. For example, if for most operations it is UAH 400,000, then for some it is UAH 30,000.
«According to Article 11 of this law, a procedure for due diligence of transactions equal to or exceeding UAH 30,000 is provided. in the following cases: 1) making a transfer without opening an account with a financial institution; 2) conducting a financial transaction with virtual assets (cryptocurrencies). That is, in such cases, the threshold amount of financial monitoring is reduced to UAH 30,000.», — explains Igor Chudovsky, managing partner of JSC «Chudovsky and partners».
He also recalls that the norm on the threshold amount for mandatory confirmation of the source of funds (UAH 400 thousand) can be used if one of the following grounds exists:
Connecting the SBU: how banks check clients' money < p>According to new changes in the legislation, the bank may not require the client to provide information about the sources of origin of funds, but simply block the funds on the account, and also inform the SBU of the suspicion raised in the transaction (for example, in the financing of terrorism). Further, as stated in the law, the SBU conducts a check, and if the funds are legal, the bank will soon unfreeze the client's assets.
«Money on the accounts of individual clients can be frozen if the bank Suspicion that the cash deposited by the bank's client — an individual is an asset related to terrorism. However, the bank must immediately notify the SBU of its own suspicion, and after checking by the SBU, the bank is obliged to unfreeze the assets no later than the next business day from the date of receipt from the Security Service of Ukraine of information that the bank’s suspicion was not confirmed«,” Oleksandr said Kamsha.
In general, lawyers emphasize that the legal financial monitoring of banks allows them to use a risk-based approach, which means that there are no guarantees that a particular financial transaction will not fall under suspicion: especially we are talking about transactions with cash in the amount of UAH 300-400 thousand and more.
«Regarding the freezing of assets by a financial institution, in respect of which there is a suspicion of their connection with terrorism, its financing, distribution weapons of mass destruction and its financing, then in this case, financial institutions, when making an appropriate decision, are guided by the provisions of the legislation on financial monitoring on the basis of a lawsuit-oriented approach in relation to clients and internal instructions, which include quite a few factors and analysis of available information», — said Igor Chudovsky.