February 1, 2023

The Verkhovna Rada of Ukraine included crypto assets in the law against money laundering in accordance with FATF standards

On Friday December 6, the Verkhovna Rada of Ukraine adopted in the second reading a bill to prevent and anti-money laundering according to FATF standards, which also includes crypto assets.

246 deputies voted for the decision at a parliament meeting on Friday.

The bill aims to improve andclarification of certain provisions of the legislation on prevention and combating money laundering (legalization) (laundering), as well as on harmonization and improvement of the provisions of the amended legislation ensuring the implementation of the provisions of new international standards in the field of combating money laundering and the financing of terrorism.

The document includes the 4th and partially the 5thinternational anti-money laundering directives that are already in force in all EU member states and are mandatory for states that intend to obtain EU membership (including Ukraine).

In addition, a provision onvirtual assets (including cryptocurrencies and tokens), which are classified as property and can be used for investment or payment purposes. Introduced concepts such as service providers who will deal with the exchange and storage of virtual assets. These can be legal entities and individuals. Any operations with virtual assets in the amount of from 30 000 hryvnia will be subjected to rigorous verification.

The Ministry of Digital Transformation has been instructed to regulate the circulation of virtual assets, as well as monitor compliance with AML.

After the law comes into force, financial regulators of Ukraine will have to bring their legal acts in line with it within three months.

Also at the current stage, it was decided to reduce penalties for the subjects of initial financial monitoring, if for some reason they violate or do not fulfill the AML requirements.

The adoption of this law is part ofUkraine’s international obligations as defined by the Association Agreement with the EU and the memorandum of understanding between Ukraine and the EU ratified in November last year. This will allow not only to reach a new level of quality of the financial monitoring system, but also make it possible to receive from the EU a second tranche of macro-financial assistance worth 500 million euros.

Ministry of Digital Transformation of Ukraineproposed to legalize cryptocurrencies in September. In early November, the first reading of the regulation of the bill passed, and on November 28, the Verkhovna Rada Finance Committee approved the amendment on virtual assets.