New Fines Regimen for Money Laundering Violations Unveiled by Ukraine’s National Bank

Ukraine’s National Bank (NBU) has unveiled a new fines regimen aimed at strengthening its anti-money laundering (AML) defenses. The extensive assessment initiated by the NBU resulted in the introduction of specific fines for the most frequent AML infringements and an increase in maximum fines for selected AML infringements.

Key Changes to Fines for AML Infringements

1. Breaches of AML risk management requirements: Financial institutions that fall short of the AML risk management requirements could face fines of up to 50 million UAH ($1.85 million).
2. Non-compliance with internal documents on AML: Failure to comply with internal documents on AML will result in penalties of up to 1 million UAH ($35,000).

Enhanced Penalties for Selected AML Infringements

1. Customer due diligence provisions: Violations of customer due diligence provisions could result in fines of up to 50 million UAH ($1.85 million).
2. AML legislation regarding payment transactions and fund transfers: Institutions that violate AML legislation regarding payment transactions and fund transfers may face fines of up to 10 million UAH ($351,000).
3. Handling of politically exposed persons: Inadequate handling of politically exposed persons (PEPs) could elicit fines of up to 10 million UAH ($351,000) for setting inappropriate risk levels and taking disproportionate measures according to risk categories.

The new fining practices are aimed at:

• Reducing non-compliance with legislative demands by financial institutions
• Amplifying accountability in instances of non-compliance or inappropriate compliance
• Enhancing the deterrent effect of the measures to foster a transformation in the way banks structure their operations and manage risks.