Draft bill #9269-д of September 4, 2023 

Cosponsors: a group of 5 MPs from the factions Servant of the People and Holos with Danylo Hetmantsev as the first signatory 

Status: the dedicated parliamentary committee issued its review of the bill. The bill is ready to be considered in the first reading 

Who is affected: persons performing public functions in international organizations (for example, the UN Secretary-General or NATO), national public figures (government members, their deputies, MPs, the President, the leadership of the Office of the President, ambassadors, heads of law enforcement agencies, state regulators, the Armed Forces, and major state companies), and foreign public figures 

Summary of the bill: 

  • the status of a “politically significant person” will no longer be limited to three years after a person left their position. “Politically significant” status will apply to a public official and their family permanently 
  • banks, financial, auditing, and a number of other institutions will be obliged to re-assess the risks of cooperation with a “politically significant” person within 12 months after this person leaves their position 
  • banks, financial, auditing, and other institutions will be held liable for unjustified restrictions imposed on their interactions or business relations with politically significant persons. The fine for the offense will be up to 17 million UAH. 

What is right: 

  • liability for unjustified risk assessment for interactions with politically significant persons will supposedly reduce risks of unjustified blocking of bank transactions 
  • regulatory authorities, banks, financial, auditing, and other institutions will be able to properly allocate resources to prevent potential crimes since financial monitoring will not be limited to only three years after a public person leaves their position. 

What is wrong: 

  • the lifelong status of a “politically significant person” will create unwarranted inconveniences for a person, e.g., unjustified blocking of financial transactions by banks. Fewer people will aspire to step into politically important positions. 

Why this is important:  

Politically significant persons are a priori suspected of having influence and maintaining it even after they leave their positions. These individuals will have to justify their sources of income due to increased risks of high-level corruption. This approach is based on the international standards of the Financial Action Task Force (FATF). 

For example, the current head and deputy heads of the Office of the President are considered “politically significant persons.” It is reasonable to monitor them if they make relatively expensive purchases (e.g., purchases over 400 thousand UAH worth) or open new bank accounts regardless of whether they are still occupying their positions or not. Such control is necessary due to the influence of these persons on Ukrainian politics and the significant risks of money laundering and corruption. 

Background information: 

On November 4, 2022, the President of Ukraine signed the law #2736-IX on the implementation of some of the FATF standards. It was this particular law that made the status of “politically significant person” limited to three years instead of being a lifelong status. After this change was introduced, the EU and the IMF began to pay closer attention to this issue and changing it is one of the conditions for negotiations on EU membership and continued cooperation with the IMF to begin.