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Webinar on ‘Monitoring of the politically exposed persons (PEPs). How to improve the process?’

In October 2023, new Ukrainian legislation on politically exposed persons (PEPs) entered into force. The changes, designed to enhance efforts to prevent and combat money laundering, have substantial impacts on PEPs and their families.

The law removed the three-year limitation and imposed a risk-based approach. For 12 months after the PEP has ceased to perform prominent public functions, obliged entities should apply enhanced due diligence. After this period, they should use the risk-based approach to determine whether enhanced due diligence is still required. If an institution rejects a client, the obliged entity must provide the client with a reasonable explanation within five days or it can be fined up to UAH 1.7 million (about $40,000). .

However, enhanced financial monitoring should not create undue pressure on PEPs or prevent participation in political life.

On 6 February 2024, the National Bank of Ukraine published clarifications on financial monitoring issues. These clarifications and potential improvements on the process of monitoring politically significant persons were discussed during a public session organized by RUSI’s Centre for Finance & Security (CFS) and the Better Regulation Delivery Office as part of the Supervising and Monitoring Ukraine’s Reconstruction Funds (SMURF) project.

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