Letter of explanation to the bank regarding the origin of the funds

Today, the legislation clearly establishes financial monitoring mechanisms, which are designed to prevent money laundering, unregistered business activities and corruption. Financial monitoring can be state and carried out at the level of the National Bank. This applies to the centralized level and regulatory policy. And it can also be primary. Such monitoring is carried out by banking institutions. To explain it in simpler terms, every bank has a monitoring department that monitors card and account transactions. Accordingly, operations that are suspicious, from the bank's point of view, may be blocked.

From what amount does mandatory monitoring begin?

When we talk about mandatory financial monitoring, it starts with transactions in the amount of 400,000 hryvnias or more. This is exactly how it is defined by legislation. Therefore, in such transactions, the bank will demand an explanation. But, in addition to this mandatory condition, there are other circumstances that, in aggregate, may become grounds for the bank's representatives to demand explanations regarding the financial transactions being carried out. As practice shows, this often happens when:

• several dozen transactions take place on your card every day;
• your banking transactions have recently become different from those that were typical for you before;
• you started receiving transfers from the border areas;
• you receive the same small amounts every day, which may indirectly testify to the purchase of goods at such a cost and the conduct of unregistered business activities.

In each of the cases when it comes to a letter of explanation to the bank, you need to look first of all at the reason that became the basis for such an action. And already, starting from this, formulate the explanation itself. If you need legal advice and support for such interaction, you can contact the lawyers of the "Prikhodko&Partners" law firm. We specialize in such cases and will help you navigate the appropriate actions in the legal field, based on the objective circumstances of your financial history.

What documents can be a confirmation of the origin of funds?

It should be noted that the current legislation does not establish a specific explanation of what should be understood by the origin of funds. In each situation, this will have its own explanation, depending on the real factors of the appearance of this or that amount. For example, a document confirming the origin of funds can be a declaration of property status and income. It may also refer to a declaration of property, income, expenses and obligations of a financial nature. It can be an entrepreneur's declaration submitted to the DPS, or a financial statement submitted by a legal entity-acquirer.

Only some examples of documents were given above. In fact, they can be much more. So contact us - and we will help you find your way. The team of the "Prikhodko&Partners" law office regularly works in the field of such client appeals. So we know how to harmonize your interaction with authorized representatives of banking institutions when you need to write a letter of explanation. The document will be drawn up in accordance with all the requirements that are relevant to it.

To receive advice or legal assistance on matters of financial monitoring or tax law - fill out the form on our website and our lawyer will contact you in the near future.