Government Approved Methodology for Determining Ultimate Beneficial Owner by Legal Entity

The Government approved the Resolution "On Approval of the Methodology for Determining the Ultimate Beneficial Owner by a Legal Entity". The Methodology is a unique comprehensive regulatory document.

The Government's decision is one of the key elements in creating a comprehensive system for verifying information about the ultimate beneficial owner (UBO).

The purpose of the Methodology for Determining the UBO is to establish a unified approach at the country level to determine the real owners of companies.

The development of rules for determining the UBO (as well as informing about the beneficiaries) is one of the requirements of the EU-Ukraine Association Agreement and is a key for the implementation of the FATF International Financial Monitoring Standards into Ukrainian legislation.

In developing the Methodology, the Ministry of Finance fully implemented the UBO Guidelines published by the FATF in March this year.

Verifying UBO information will ensure that adequate, accurate and up-to-date information on the beneficial ownership of legal entities is available to the competent authorities in a complete and timely manner.

The document establishes mechanisms for researching information on individuals who exercise control and decisive influence over the activities of a legal entity.

To determine the UBO, the Methodology establishes: 

• methods, ways, and means of ascertaining information on the presence of signs of decisive influence on the legal entity's activities;

• the principles of determining the legal entity's UBO, monitoring and updating information on UBO.

The Methodology also provides for the specifics of determining the UBOs for:

• non-profit organisations;

• collective investment institutions - corporate, mutual investment and non-state pension funds;

• partnerships established by the laws of a foreign jurisdiction on the basis of or under an agreement to conduct business for profit or to achieve another common goal;

• general and limited liability companies.

Additional information: 

The draft act was developed jointly by the Cabinet of Ministers of Ukraine and the National Bank of Ukraine with the involvement of a wide range of NGOs and international experts who have been working on the draft Methodology for more than two months as part of a working group organized by the Ministry of Finance.