On 11 July 2021, the regulations on the form and content of ownership structure, as adopted by the Ministry of Finance on 19 March 2021 (the “Regulations“), came into effect. The Regulations were envisaged by the Law “On State Registration of Legal Entities, Individual Entrepreneurs and Civic Formations” and the Law “On Prevention and Counteraction of Legalisation (Money Laundering) of Illegally Obtained Proceeds, Financing of Terrorism and Financing of Proliferation of Weapons of Mass Destruction”. The adoption of the Regulations triggers the obligation for legal entities registered in Ukraine to disclose their ownership structure. Disclosure of both the ultimate beneficial owner (“UBO“) information and information on the entire chain of ownership is now required.
Notable provisions of the Regulations include:
Legal entities must file UBO and ownership structure information with a state registrar within three months of 11 July 2021, that is, by 11 October 2021. What may become problematic in the practical application of the Regulations is that the Regulations expand the statutory definition of ownership structure.
According to the effective legislation, legal entities must maintain the information on UBOs and their ownership structure. Companies must also update such information and notify the state registrar of any changes within 30 working days of the date of the change. To that effect, companies are required to file supporting documents. By way of reminder, a failure to file, or to timely file, information in relation to UBOs, or documents confirming information in relation to them, entails administrative liability for a company director (or another authorised representative) in an amount ranging from UAH 17,000 (circa EUR 513) to UAH 51,000 (circa EUR 1,540).
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