Zelensky has signed the law on money laundering: how it will fight

Зеленский подписал закон об отмывании денег: как с ним будут бороться

Zelensky, the President signed the law on counteraction to money laundering, however it will come only four months. The document introduces far-reaching changes in the Ukrainian legislation and harmonizes it with EU legislation.

The President of Ukraine Vladimir Zelensky on 27 December signed a Law “On prevention and counteraction to legalization (laundering) of proceeds from crime, financing of terrorism and financing of proliferation of weapons of mass destruction”. It is reported by government portal.

Rada adopted the document on December 6 giving the “pros” 246 votes.

Why the need for a law on combating money laundering

The document harmonizes Ukrainian legislation with European Union legislation:

  • With the EU Directive 2015/849 from 20 may 2015 “On prevention of the use of the financial system for money laundering and financing of terrorism”.
  • With the EU Regulation 2015/847 “On information accompanying transfers”.
  • With the recommendations of the Report of the Committee of the Council of Europe MONEYVAL, the evaluation of Ukraine in the sphere of counteraction of money laundering and financing of terrorism.

The government explained that this law is important for the European partners of Ukraine to receive macrofinancial assistance and European integration.

What will change the law on counteraction to money laundering

This law makes changes to:

  • The criminal code of Ukraine,
  • Criminal procedural code of Ukraine,
  • The code of administrative proceedings of Ukraine,
  • The code of Ukraine on administrative offences,
  • The law “On banks and banking activity”,
  • The law “On combating terrorism”
  • The law “On state registration of legal entities, individuals-entrepreneurs and community groups”,
  • The law “On currency and exchange operations”,
  • The law “On insurance”.

How to counter money laundering

  • Increase the threshold amount of money and reduced the number of signs of financial operations, which must necessarily submit the report to scfm (applies to banks, insurers, credit unions, pawnshops, etc.).
  • Reinforce the obligation to report financial transactions for the sum more than 400 thousand hryvnias (refers to cash transactions, remittances, operations of politically important persons).
  • Introduce international instruments for the freezing of assets.
  • Improve laws that affect the quality of crime investigation for money laundering.
  • The payment system will be required in remittances to specify information about the payer and the recipient.

Important: the law shall enter into force four months from the date of its publication.