On 10 October 2021, Law of Ukraine No.1805-IX “On Amendments to the Law of Ukraine on the Prevention and Counteraction to the Legalisation (Laundering) of Proceeds from Crime, Financing of Terrorism and Financing of the Proliferation of Weapons of Mass Destruction” (the “Law”) came into force. The Law extends the deadline for the mandatory submission of information regarding ownership structures and ultimate beneficial owners (“UBOs”) of Ukrainian legal entities by nine months (i.e., until 11 July 2022). This is a long-awaited initiative that will provide companies with sufficient time to comply with the new UBO disclosure requirements.
Please note that earlier this year, on 11 July 2021, the Ministry of Finance of Ukraine adopted new requirements with regard to the UBO disclosure. According to these new rules all Ukrainian entities should have submitted information regarding their ownership structures and disclosed all entities and individuals who directly or indirectly own or control such Ukrainian entities by 11 October 2021. The ownership structure should be confirmed with numerous supporting documents (i.e., extracts from official registries, certificates of incorporation or other equivalent documents with regard to each foreign entity, and its shareholders). Non-submission or late submission of the above information may trigger the imposition of administrative fines of approximately USD 1,900 on the directors of the respective legal entities.
In practice, the initial deadline turned out to be too soon to comply with for many Ukrainian companies with complex ownership structures involving numerous foreign legal entities. In addition, the state registrars technically could not process and register in time all pending applications for the UBO disclosure. According to the Minister of Justice of Ukraine, less than 20% of all legal entities managed to submit their ownership structures within the original three-month deadline. Therefore, the extension is a logical response. During the nine months of the deadline extension the regulator is expected to provide additional clarifications and to prepare the necessary infrastructure for companies to be able to comply with the new disclosure requirements.
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