All spheres of life are constantly changing and improving according to the requirements of time. Qualitative changes also apply to public procurement customers and all those required to provide information about the ultimate beneficial owners. Information on the changes in public procurement for customers and participants can be found in the Law of Ukraine On Preventing and Counteracting to Legalization (Laundering) of the Proceeds from Crime, Financing of Terrorism and Financing of Proliferation of Weapons of Mass Destruction.
But this canon will serve as a supplement to the existing provision and the Law On State Registration of Legal Entities, Individual Entrepreneurs and Public Formations. Here, the main purpose is to introduce changes regarding measures to disclose and verify information about the ultimate beneficial owners. Changes in public procurement for customers and participants are listed below:
- List of business entities for which the information about the ultimate beneficial owner will not be entered in the unified state register of legal entities;
- Exceptions to the requirements for state registration of standards regarding the absence of the need to provide information about such an owner, when the founder of the company will be an individual who is responsible for the ultimate beneficial owner;
- Changes in the rules for submitting documents, on the basis of which information about the ultimate beneficial owner is established, etc.
Who should provide information about the ultimate beneficial owners?
The right to provide relevant information is granted to any legal entities. Such information for the unified state register of legal entities is data on the ultimate beneficial owner of the legal entity and the ultimate beneficial owner of the founder of this enterprise. The above-mentioned is possible only when the same founder will be a legal entity. However, legal entities registered before the new law came into force must submit information about the final beneficial owner to the extent determined by them. This also applies to the representation of the ownership structure within 3 months from the date of entry into force of the normative legal act used to approve the form and content of the ownership structure.
It is important to note that the form and content of the ownership structure have not yet been approved by the Ministry of Finance of Ukraine. All this should be understood in such a way that no one will require documents on establishing information about the ultimate beneficial owner before the relevant regulatory act is approved.
Changes regarding public procurement customers
When they talk about refusing to participate in the procurement procedure, they rely on the Law On Public Procurement. The basis for this is the absence in the Unified State Register of Legal Entities of information provided for in paragraph 9 part 2 Article 9 of the Law On State Registration. However, this requirement does not apply to non-resident participants. For this reason, the customers themselves should take care of checking the grounds for rejection in the consideration of tender proposals. It is their responsibility to monitor the availability of information about the ultimate beneficial owner of the participant.
What other requirements have appeared regarding the disclosure of beneficial owners?
In accordance with the Law, the obligations of each legal entity are determined:
- Updating information about the ultimate beneficial owners and ownership structure and providing documentary evidence of changes in accordance with the deadline set by the law.
- Every year, certify the update of information about the ultimate beneficial owners or their absence, together with the ownership structure, an extract from the commercial register of foreign origin or any other register of legal entities regarding non-resident companies included in the list of participants of the legal entity. In this case, the identity card of a non-resident, the ultimate beneficial owner of a legal entity, is made thanks to a notarized copy of the document.
It should be noted that the new law significantly expands the list of information that financial monitoring entities may need to identify and verify the ultimate beneficial owners of trusts. This also includes information about the founders, trustees, defenders, beneficiaries, or other individuals who play a crucial role in the trust's activities.
Liability for failure to provide information about the ultimate beneficial owner
If information (or documents confirming it) about the ultimate beneficial owner of a legal entity or its absence is not submitted to the Unified State Register of Legal Entities in a timely manner or is not provided at all, then this is considered an administrative violation and leads to a fine of 17 - 51 thousand UAH. Such punishment is imposed on the head of a legal entity or a person who has the right to act on behalf of the company.