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14.06.2023

Financial monitoring of individuals in 2023

If you are going to open a deposit in the bank, then be prepared for the fact that you may be asked about the sources of origin of funds. Such a check is part of the financial monitoring that the bank is obliged to carry out in relation to its customers. Let's figure out what financial monitoring of individuals is, for what purposes it serves and how it can affect ordinary Ukrainians.

 

About financial monitoring in Ukraine

In simple words, financial monitoring is an examination of the legality of financial transactions in order to identify and prevent:

  • financing of terrorism and proliferation of weapons of mass destruction;
  • laundering of illegally obtained income.

Financial monitoring, or as it is also called financial intelligence, functions at the state level and contributes to international financial security. In Ukraine, the National Bank of Ukraine is among the state financial monitoring bodies of Ukraine. Banking and financial institutions, in turn, belong to the subjects of primary financial monitoring, which can be the first to detect and prevent an illegal financial transaction. The National Bank establishes and monitors compliance by banking institutions with the requirements for verification of clients and their financial transactions in order to prevent the legalization of illegally obtained funds.

 

Who is subject to financial monitoring when opening a deposit account

If you are not a client of the bank and you contact the bank for the first time to open, for example, a deposit account, the bank must identify you regardless of the amount of the deposit you place. To do this, you must fill out a standard questionnaire, and the bank checks the information you provided, which takes about 30 minutes. In particular, a check is carried out for your inclusion in the registers of persons connected with terrorist activities or persons subject to sanctions.
In certain cases, in addition to primary identification, the bank requires confirmation of the origin of the funds. What are these cases:

  • when opening a deposit or several deposits for a total amount subject to financial monitoring;
  • if you are a politically significant person, a member of his family or related to him, regardless of the amount of your contribution;
  • when there are suspicions that you have received these funds illegally.

 

What amounts are subject to financial monitoring in 2023

Before carrying money for depositing in a bank, you need to know the amount from which the financial monitoring of individuals in 2023 begins, and if necessary, immediately take documents confirming the source of the funds.
The bank is obliged to clarify the source of the funds if the amount of cash financial transactions, starting from the moment of the NBU Board Resolution No. 60 of March 23, 2022, exceeds UAH 400,000 or an equivalent amount in foreign currency. They can also make a request if they see financial transactions that are not typical for an individual, or transactions that do not correspond to the financial status, taking into account the information received during the study about the financial status, financial transactions on the account.
Complete and reliable information provided to the bank in the questionnaire regarding your financial situation and planned operations on the account will reduce the likelihood of additional questions from the bank. If the bank understands that your financial transaction corresponds to your financial capabilities, it can approve it without further verification.
Even if you have been in your bank for a long time, but now you decided to make a deposit for a much larger amount or another deposit, and as a result, the total amount of your deposits will be more than UAH 400,000 or the equivalent in currency, taking into account the specifics of the implementation of legislative requirements in the field financial monitoring during the period of martial law, the bank will necessarily ask the source of the funds.

 

Confirmation of origin of funds

Therefore, if you belong to those who are subject to financial monitoring, at the request of the bank, you must provide official documents that confirm the sources of origin of funds and help the bank to perform due diligence.
Such documents can be:

  • certificate of salary received in Ukraine or abroad, even if you are no longer working but recently had a sufficient level of income;
  • documents on the sale or lease of property, sales of products or services provided;
  • documents confirming the acquisition of the right to inheritance or to treasure or lottery winnings;
  • a certificate from the revenue and tax authority about the received income and the taxes paid on it;
  • a copy of the tax declaration with a mark of the controlling body;
  • a copy of declarations submitted by politically significant persons;
  • any other statements, certificates or receipts confirming the sources of origin of funds.

These documents do not necessarily have to be "up-to-date", but must logically explain the sources of funds. All information and documents provided by you are bank secrets, and the bank will not disclose them except as required by law, such as a court order.
If you refuse to provide this information or provide inaccurate information, the bank will be forced to refuse you to open an account or conduct a transaction.
Therefore, as in the rest of the world, Ukrainian banks are obliged to carry out financial monitoring of customers and carefully check the sources of funds for the purpose of financial security of the country - to prevent illegal financial transactions, tax evasion and money laundering.

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