Financial monitoring of individuals

The legislation regulating the financial sector is changing quite dynamically, but its key trend is obvious. Everything is moving towards rationing the industry as much as possible and making it so that funds obtained through illegal means cannot be used in the future without hindrance in most major transactions. Here we can talk about different means – from those obtained through criminal activity and ending with income from unregistered entrepreneurship and salary in an envelope. We invite you to learn more about what legal norms on financial monitoring are in force as of 2023. It is he who is an instrument on the part of the state, which is designed to prevent the mentioned phenomena.

So what is financial monitoring?

Such monitoring refers to the activities of specialized banking departments that check the origin of their clients’ funds. Before you buy a car or real estate, you need the money to go through the bank. In the case of a large deposit, this becomes obvious. This is where banking institutions are required to verify the origin of customer funds. Such monitoring is aimed at preventing financial terrorism, as well as laundering of proceeds previously obtained illegally.

Financial monitoring is quite common. It works both at the level of individual states and at the international level. The key Ukrainian state body designed to carry out this monitoring is the National Bank. Banking and financial institutions, in turn, carry out the function of primary financial monitoring. Their task is to prevent illegal financial transactions. And the National Bank controls how carefully the banks themselves carry out their work in this direction.

When can financial monitoring be carried out?

Above, it was not in vain that we were talking about large transactions, because it would be technically difficult and impractical to track insignificant amounts of deposits and other small financial transactions. In accordance with the Resolution of the NBU Board of March 23, 2022 № 60, today there is a legal norm according to which it is necessary to check the origin of cash, the amount of which exceeds UAH 400,000 or an equivalent equivalent in the currency of other countries.

At the same time, the reason mentioned is not the only one. A request can also be made when bank representatives saw that a person is making financial transactions that are atypical for him. For example, they may not correspond to the financial condition, which is easy to see from the usual account transactions.

Some of the wording of the legislation is rather vague. For example, a politically exposed person may fall under financial monitoring when opening a deposit account. This also applies to family members. And this rule also applies when the bank has a suspicion about income, the way of obtaining which may be illegal.

What to do if the bank requires confirmation of the origin of funds?

The legislation establishes a list of documents with which you can confirm the origin of your funds – starting with a salary certificate and ending with other certificates, statements and receipts.

If you need confirmation of funds, the specialists of the Prikhodko&Partners Law Office are ready to advise on this topic and answer all your pressing questions. Each situation is individual, so we will help you find the right solution within the legal framework.

We are often approached by people who, for example, have a problem with proving the origin of their legitimate savings. This is just one of the possible examples. We know what to do and focus on guaranteed results helping our clients.