Financial monitoring: 400 thousand

The Law of Ukraine "On prevention and countermeasures against legalization (laundering) of criminal proceeds, financing of terrorism and financing of the proliferation of weapons of mass destruction" establishes and regulates such a phenomenon as financial monitoring. It should be understood as a system of measures that can be conditionally divided into state monitoring and primary monitoring in this area. Both areas are aimed at countering the illegal circulation of funds.

What is the algorithm of actions of the bank and what are its powers?

When we talk about state monitoring, this duty is assigned to the National Bank at the national level. And when it comes to primary monitoring, it is carried out by the banking institutions themselves in order to prevent corruption or illegal business activities.

A direct reason for a financial check is a situation when a transfer in the amount of 400,000 hryvnias or more is received on a person's card. In such cases, the bank can block transactions with funds until it learns about their origin.

At the same time, it is important to know that even smaller amounts of transfers can be a reason to check their origin. For example, from August 1, 2023, there were changes in the regulatory framework, according to which even transfers of less than 5 thousand hryvnias can be checked.

If we talk about other suspicious financial transactions, the following of them fall under special vigilance:

• remittances coming from border areas;
• regular and similar amounts (for example, several 100-hryvnia transfers in 1 day);
• a large amount of transactions every day (more than 30 transactions per day may indicate unregistered business activity);
• many counterparties who send funds.

Thus, 400 thousand hryvnias is only the amount of the transaction that is subject to mandatory monitoring. And in fact, it can be the object of other amounts of transfers, if they meet the above criteria.

What to do if you received a request from the bank to explain the origin of the funds?

If you received such a request from the bank, you will need to provide it with a written explanation regarding the origin of the funds. For example, it can be a properly approved settlement agreement regarding the return of funds that you lent. Or - buying real estate using a mortgage-debt mechanism. The second of these examples concerns situations where there is a certain debt, and the creditor wants to recover it through the property of the debtor, if the latter does not mind. Then the notary draws up a corresponding contract.

Only some examples were mentioned above. Each case is individual, and the current legislation does not contain an interpretation of the definition of what exactly should be understood by the origin of funds. When you seek advice and legal support for your request from the Prikhodko&Partners law firm, we guide you in how to act in your particular situation.

Our lawyers provide answers to all relevant questions on how to correctly solve a problem in the legal field. So, instead of doing it yourself, you can turn to experts who work with such requests all the time and get the right quality of service you need.