Ukraine has over 30,500 politically exposed persons - NBU
MOSCOW. Aug 8 (Interfax) - National Bank of Ukraine (NBU) Governor Andrei Pyshny said at a meeting with 30 major banks that there have been multiple instances of unsubstantiated denial of services to political figures and their relatives, or politically exposed persons (PEP) - there were over 30,500 of them across the country as of April 1 with accounts in 58 banks, Ukrainian media outlets said, citing information circulated by the regulator on social media.
"It is unacceptable to pursue a formal approach to designating them as a high risk without any grounds for that, to groundlessly deny services to them or to ignore a client's presence on the PEP list," the NBU said.
As they establish business relations with and service PEPs, banks ought to pursue a risk-based approach and will be held to account for its improper use, director of the NBU's financial monitoring department Anna Lipskaya said.
Financial institutions are required to update risk-based procedures for establishing business relations with and subsequently servicing people from the PEP list and to give due attention to staff training in order to avert breaches, Lipskaya said.
Amendments that were recently introduced into the provision on the execution of financial monitoring by banks should make this formal approach impossible, she said.
The increase by the NBU of the maximum fine for financial monitoring violations, including for groundlessly designating PEPs as a high risk and for taking disproportionate measures toward them will serve as additional motivation, the bank said.
Pyshny, for his part, said that financial monitoring and providing services to people from the PEP list is a key element of the bank's memorandum with the International Monetary Fund (IMF).
As reported, one of the structural benchmarks of the IMF's Extended Fund Facility for Ukraine is the introduction of amendments to Ukraine's financial monitoring and counter-money laundering law before the end of September to re-establish enhanced due diligence measures on politically exposed persons consistent with the risk-based approach in line with the Financial Action Task Force standards. Last year, these penalties were reduced from life imprisonment to three years.
The government submitted a corresponding bill to the Verkhovna Rada in early May. The same month, the parliament's relevant committee recommended including this bill in the agenda and approving it in principle, but no headway has been made on this draft legislation since then.
