EBA supports the draft law on Ukraine’s accession to SEPA but calls for further refinement

09/ 07/ 2025

On 3 July, the Verkhovna Rada Committee on Finance, Tax and Customs Policy adopted a decision to recommend that Parliament pass Draft Law No. 13233 on Ukraine’s accession to the Single Euro Payments Area (SEPA) at first reading. The European Business Association welcomes this initiative aimed at harmonising national legislation with European standards in the areas of anti-money laundering, countering the financing of terrorism, and enhancing financial system transparency. Therefore, the ЕВА supports the adoption of the draft law at first reading. At the same time, the business community emphasises the need to refine certain provisions of the draft law to ensure their practical implementation and alignment with EU standards. The ЕВА’s experts have already submitted their proposals for improving the draft law to the relevant authorities. Given public concern about access to banking information, the ЕВА underlines the importance of striking a balance between effective financial monitoring and the protection of the rights, interests, and financial privacy of citizens and businesses. Key proposals from the ЕВА’s experts include: 1. Defining “senior management” of reporting entities The draft law stipulates that financial monitoring rules, primary financial monitoring programmes, and other internal documents related to financial monitoring must be approved by the highest governing body of the reporting entity. Under Ukrainian law, this is the general meeting of shareholders. However, member companies point out that in the context of EU law, the term “senior management” refers to individuals who are actually responsible for the day-to-day operations of a company (e.g. CEO, board members, directors) and does not include the general meeting. Requiring approval at the general meeting level may hinder a reporting entity’s ability to update financial monitoring documents promptly in response to risk changes. The ЕВА therefore recommends either maintaining the current wording of Law No. 361-IX or aligning the definition of “senior management” as closely as possible with Directive (EU) 2015/849. 2. Simplifying the verification of non-resident legal entities Currently, when verifying a non-resident legal entity, the reporting entity must be provided with a legalised extract from a commercial, banking, or judicial register or a notarised certificate of registration. In today’s digital age, with access to open online registries, this requirement appears excessive. The EBA proposes amending Law No. 361-IX to allow verification of non-resident legal entities based on independent analysis of data from official foreign state registers. 3. Reviewing financial monitoring threshold amounts The draft law proposes significantly increasing the penalties for violations by reporting entities to align with euro-denominated values. However, it does not revise the transaction thresholds that trigger financial monitoring, which remain at UAH 400,000 (approx. €8,500) – well below the €15,000 threshold set by the EU Directive. The business community believes that increasing penalties without adjusting thresholds is inconsistent with the requirements of Directive 2015/849. Moreover, effectively lowering the euro-equivalent threshold leads to the misallocation of resources towards low-risk transactions, contrary to the risk-based approach principle. The EBA therefore suggests that threshold amounts be reviewed in parallel with the increase in penalties to align with those outlined in Directive 2015/849. 4. Alternative approaches to identifying ultimate beneficial owners (UBOs) who are non-residents Businesses report that many foreign UBOs are concerned about the requirement to provide notarised copies of passports, primarily due to personal data protection concerns. As a result, companies face additional obstacles in submitting UBO information. The EBA proposes allowing the use of official extracts from commercial, court, or business registers of foreign states that contain UBO information as an alternative to notarised passport copies. The European Business Association urges lawmakers to take these recommendations into account and stands ready to involve its experts in further discussions and refinement of the draft law.

The European Business Association welcomes this initiative aimed at harmonising national legislation with European standards in the areas of anti-money laundering, countering the financing of terrorism, and enhancing financial system transparency. Therefore, the ЕВА supports the adoption of the draft law at first reading.

At the same time, the business community emphasises the need to refine certain provisions of the draft law to ensure their practical implementation and alignment with EU standards.

The ЕВА’s experts have already submitted their proposals for improving the draft law to the relevant authorities. Given public concern about access to banking information, the ЕВА underlines the importance of striking a balance between effective financial monitoring and the protection of the rights, interests, and financial privacy of citizens and businesses.

Key proposals from the ЕВА’s experts include:

1. Defining “senior management” of reporting entities

The draft law stipulates that financial monitoring rules, primary financial monitoring programmes, and other internal documents related to financial monitoring must be approved by the highest governing body of the reporting entity. Under Ukrainian law, this is the general meeting of shareholders.

However, member companies point out that in the context of EU law, the term “senior management” refers to individuals who are actually responsible for the day-to-day operations of a company (e.g. CEO, board members, directors) and does not include the general meeting. Requiring approval at the general meeting level may hinder a reporting entity’s ability to update financial monitoring documents promptly in response to risk changes.

The ЕВА therefore recommends either maintaining the current wording of Law No. 361-IX or aligning the definition of “senior management” as closely as possible with Directive (EU) 2015/849.

2. Simplifying the verification of non-resident legal entities

Currently, when verifying a non-resident legal entity, the reporting entity must be provided with a legalised extract from a commercial, banking, or judicial register or a notarised certificate of registration. In today’s digital age, with access to open online registries, this requirement appears excessive.

The EBA proposes amending Law No. 361-IX to allow verification of non-resident legal entities based on independent analysis of data from official foreign state registers.

3. Reviewing financial monitoring threshold amounts

The draft law proposes significantly increasing the penalties for violations by reporting entities to align with euro-denominated values. However, it does not revise the transaction thresholds that trigger financial monitoring, which remain at UAH 400,000 (approx. €8,500) – well below the €15,000 threshold set by the EU Directive.

The business community believes that increasing penalties without adjusting thresholds is inconsistent with the requirements of Directive 2015/849. Moreover, effectively lowering the euro-equivalent threshold leads to the misallocation of resources towards low-risk transactions, contrary to the risk-based approach principle.

The EBA therefore suggests that threshold amounts be reviewed in parallel with the increase in penalties to align with those outlined in Directive 2015/849.

4. Alternative approaches to identifying ultimate beneficial owners (UBOs) who are non-residents

Businesses report that many foreign UBOs are concerned about the requirement to provide notarised copies of passports, primarily due to personal data protection concerns. As a result, companies face additional obstacles in submitting UBO information.

The EBA proposes allowing the use of official extracts from commercial, court, or business registers of foreign states that contain UBO information as an alternative to notarised passport copies.

The European Business Association urges lawmakers to take these recommendations into account and stands ready to involve its experts in further discussions and refinement of the draft law.