Beneficial ownership disclosure deadline approaching

Baker&McKenzie, Kyiv, Ukraine
Thu, May 21, 2015

Pursuantto AML changes in the law¹, all Ukrainian legal entities arerequired to file with the State Registrar, not later than on 25 May 2015, aregistration form containing information about their ultimate beneficialowner(s) (UBO(s)).  If you have not yet done so, please make sure that yourcompany makes the disclosure. This deadline may be extended shortly.

Who is the UBO?

The UBO of a legal entity is the individual who has the ability to decisivelyinfluence, directly or through others, the operational management or businessactivities of that legal entity, irrespective of actual ownership by thatindividual of any interest in that legal entity. In particular, an ultimatebeneficiary is someone with the right to decisively influence the compositionof the management of the company or the decision-making in the company orsomeone who has the direct or indirect possession of 25% or more of votes inthe company.  It is an express provision of the law that an agent, anominal shareholder or an intermediary is not the ultimate beneficiary forUkrainian law purposes.

Next steps

A registration form in respect of UBO(s), prepared following theanalysis of the ownership structure of your company, should be filed with theState Registrar by next Monday, 25 May 2015 (inclusive). Please monitor changesto the deadline.

Consider speaking with your legal advisors and your StateRegistrar about the particular circumstances of your company (e.g., nonprofitorganisations, public listed companies, investment funds or UBO(s) concernedabout disclosure of their personal information), prior to your visit.

We note that the State Registrar offices are currentlyoverloaded and may not be able to promptly process all of the information beingsubmitted to them. Consider sending your UBO disclosure form by mail as analternative to a personal visit.

A failure to meet the statutory deadline might not result inimmediate fines (which are 5,100 to 8,500 Ukrainian Hryvnyas per company). Ifdisclosure cannot be made before the statutory deadline, we recommend filingyour UBO disclosure form within the following few days.

There has been no official extension of the 25 May deadline asof now. Two draft laws to this effect² have been introduced but havenot yet been passed by the Parliament. One of the two draft laws (draft law no.2896), which now is on the Parliament's agenda, also contains certain changesto the disclosure requirements which may impact on the substance of thedisclosure from your company. Please monitor changes to the law.

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[1] Please see our earlier alert on this topic at http://bakerxchange.com/rv/ff001b1c9cd5031ffa1427ba9c4ba7d7d7e61b77  

[2] Draft Law of Ukraine No. 2892 and draft Law of Ukraine No.2896 from 19 May 2015.

Additional notes

ThisLEGAL ALERT is issued to inform Baker & McKenzie clients and otherinterested parties of legal developments that may affect or otherwise be ofinterest to them. The comments above do not constitute legal or other adviceand should not be regarded as a substitute for specific advice in individualcases.