Ultimate beneficiary owners' disclosure: slow rush!


Alexander Borodkin

Partner, Attorney-at-Law

Real Estate and Construction,
Trade and Commercial,
Transport and Infrastructure

Since July 2021 there is a lot of fuss around the UBO disclosure.

The Law of Ukraine "On Preventing and Counteracting to Legalization (Laundering) of the Proceeds from Crime, Financing of Terrorism and Financing of Proliferation of Weapons of Mass Destruction" №361-IX dated 06 December 2019 requires to submit a schematic ownership structure of a legal entity and its supporting documents, and the term for that was very short – until 10 October 2021 inclusive. In could seem reasonable at a glance…

Although not easy.

In attempting to disclose their UBOs in the manner prescribed Ukrainian management has faced many issues.

The most common is when a legal entity belongs to a diverse group with many foreign companies. The law requires to submit extracts from the company registers or similar for each of the direct and indirect shareholders. These extracts shall be apostilled and notarized in countries of such foreign companies' registration, translated into Ukrainian with certifying the translator's signature by local notary...  This takes long.

The regulations further provide that although the UBO filing can be submitted by an attorney, only the appointed chief manager of the company may certify the schematic ownership structure. As it has turned out, not all directors of legal entities are always physically present in Ukraine.

We understand that all these issues may be solved. However, according to the information provided by the Minister of Justice of Ukraine D. Malyuska on his Facebook page, as of 06 October 2021, out of more than 1 million legal entities, only 171,333 has disclosed their UBOs.

A lot of fright was imposed by the established fines on the employed local managers for non-submission or late submission of the UBO information in the amount of UAH 17,000 to UAH 51,000 hryvnias, which constitutes approximately USD 600 to USD 2,000.

However… On the last business day before the expiration of the stated term for the UBO disclosure, the government has extended the UBO disclosure period for 9 months! The next deadline is 11 July 2022 now.

This is indeed good news to begin the week!

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