Disclosure of information on ultimate beneficial owners: from theory to practice

Abstract

Ukraine has taken a significant step in the direction of transparency and fighting corruption, becoming one of the first countries in the world to disclose information about the beneficial owners of companies and make it publicly available. On 14 October 2014, the relevant Law of Ukraine "On Prevention and Fighting the Legalisation (Laundering) of Criminal Proceeds, Financing of Terrorism and Financing of the Proliferation of Weapons of Mass Destruction” was adopted, according to which all legal entities are required to submit to the Unified State Register of Legal Entities, individuals-entrepreneurs and public formations (hereinafter referred to as EDR) information about their ultimate beneficial owners.
 This historic initiative was an unequivocal breakthrough for Ukraine in ensuring transparency and openness in the field of disclosure of ownership of legal entities. This Law brought Ukraine's anti­money laundering and terrorist financing system up to international standards (the implementation of EU Directive 2015/849). The availability of information on beneficial owners has not only increased trust in government regulation, but has also made the country an example for other countries seeking to fight corruption and ensure a fair and transparent business environment.
 The law improved the system of financial monitoring, in particular regarding the application of a risk-oriented approach by subjects of primary financial monitoring. International organizations and the world community understand the importance of disclosure of information about the beneficial owners of companies, therefore it is reflected in a number of international legal acts. Ukraine is actively implementing international standards into national legislation, which confirms the high level of Ukraine's obligations to the international community in the fight against corruption and financial crimes.