NBU adopts significant changes to the bank financial monitoring rules: what CSOs need to know

September 25, 2023

On September 07, 2023, amendments to the Regulation on the implementation of financial monitoring by banks (Resolution No. 65 of May 19, 2020) came into force.

The main innovation is that the National Bank strengthened financial monitoring measures with respect to all legal entities that are clients of banks. This includes CSOs

From now on, banks must find out the scope of financial transactions that the client plans to conduct during the month. At the same time, the client must clearly indicate the maximum amount of the client’s transactions. In the previous version, it was sufficient to determine their approximate scope.

At the same time, the bank must check if the client has the financial capacity to carry out the planned transactions. Therefore, when CSOs specify the scope of transactions in their client questionnaires, it is necessary to do it as accurately and reasonably as possible.

After all, if this amount is exceeded, the bank will be obliged to analyze the financial capacity of such a CSO within 10 business days and, if necessary, to find out why it exceeded the limit.

In addition, the NBU expanded the list of indicators of suspiciousness of financial transactions, providing for the new ones:

  • Exceeding more than twice the maximum monthly amount of financial transactions declared by the client before establishing the business relationship / updated during servicing;
  • Unusual activity on the client’s accounts.

If such indicators are present, the bank gets a reason to stop the client’s financial transactions.

It is important that the NBU has obliged banks to update customer profiles by the end of 2023, taking into account the changes.

Therefore, in order to avoid possible termination of their translations, CSOs should remember that:

  1. The maximum amount of financial transactions per month specified in the client questionnaire should be based on real indicators.
  2. If the bank applies, it is necessary to update the client’s questionnaire, taking into account the updated requirements (because banks are obliged to do this by the end of 2023).
  3. If the CSO plans to change the maximum amount of financial transactions per month, it is necessary to update the client questionnaire in advance to avoid transaction termination.

If you still have questions, CEDEM lawyers will be happy to advise you. We also recommend that you read the materials on CSO banking services that CEDEM had prepared earlier.

This material was prepared by CEDEM as part of the Project Ukraine Civil Society Sectoral Support Activity implemented by the Initiative Center to Support Social Action “Ednannia” in partnership with the Ukrainian Center for Independent Political Research (UCIPR) and Centre for Democracy and Rule of Law (CEDEM)