The authorities are "tightening the screws" on citizens' transfers to cards

The authorities are "tightening the screws" on citizens' transfers to cards

A number of provisions of the Law of Ukraine “On Prevention and Counteraction to Legalization (Laundering) of Proceeds from Crime, Financing of Terrorism and Financing the Proliferation of Weapons of Mass Destruction” do not fall within the competence of the National Bank.

Therefore, even though the law takes effect tomorrow, 28 April 2020 year, the National Bank is still awaiting additional clarifications from regulators on the application of these provisions, said Oleksiy Shaban, director of the Payment Systems Department, at a briefing, Ukrinform reports.

"There are a number of issues that do not concern banks or financial institutions. For example, realtors checking clients' sources of funds, identification of buyers when purchasing jewelry over a certain amount, identification in insurance payouts. The National Bank cannot answer these and a number of other questions because the regulation of these subjects of primary financial monitoring is not within the competence of the National Bank. And we are expecting additional clarifications from the regulators of these areas," Shaban emphasized.

Remember, according to Shaban, the Law of Ukraine “On Prevention and Counteraction to Legalization (Laundering) of Proceeds from Crime, Financing of Terrorism and Financing the Proliferation of Weapons of Mass Destruction” will change almost nothing for banks and their clients, since both the payer's cardholder and the recipient's cardholder are already identified by the bank, and no additional identifications are needed.

At the same time, for cash payments over 5 thousand hryvnias the bank may request the payer's passport.

Also, identity verification must take place for cash transfers over 5 thousand hryvnias through a postal operator or payment systems.

In addition, the law introduces identification of electronic wallet owners and identification of payers for transactions and transfers via mobile operators. The law sets a transition period until 1 January 2021 year for this.

Remember, the Law of Ukraine “On Prevention and Counteraction to Legalization (Laundering) of Proceeds from Crime, Financing of Terrorism and Financing the Proliferation of Weapons of Mass Destruction” takes effect on 28 April 2020 year. It establishes, in particular, new requirements for proper customer due diligence by financial institutions. The law requires state regulators to bring their regulatory acts into compliance with the law's requirements within three months from the date it takes effect, that is, by 28 July 2020 year.

Currently, the NBU is already preparing: an updated Regulation on Banks' Implementation of Financial Monitoring, whose approval and implementation is expected by the end of April; similar regulatory norms for the nonbank financial market, whose approval and implementation are expected by the end of July.

At the same time, the provisions of Article 14 of the Law do not apply to: payment for housing and communal services, payment of taxes, fines, other mandatory fees and payments (regardless of amount); repayment of a loan in the amount up to 30 thousand hryvnias (provided that the financial institution can identify the payer who entered into the contract with the recipient); transfers to pay for goods and services made by the payer using a payment card (or another electronic payment instrument) if its number accompanies the transfer (regardless of amount); all cash transfers within Ukraine in amounts up to 5 thousand hryvnias; withdrawal of funds from one's own account.