Banks are required to justify the application of customer transaction verification methods for politically exposed persons

Resolution of the Board of the National Bank of Ukraine "On Amendments to the Regulation on Banks' Implementation of Financial Monitoring" No. 74, which entered into force on June 15, 2023, introduced changes to Appendix 9 of the Regulation approved by Resolution No. 65 of May 19, 2020.

According to the new paragraph 16-1 of Appendix 9, banks are required to apply a risk-based approach when establishing business relationships or servicing clients who are politically exposed persons (PEPs). The purpose of this is to determine a justified risk level for such clients, avoid unjustified refusal to conduct financial operations, and ensure the establishment or continuation of business relationships.

The bank is responsible for incorrect application of the risk-based approach to PEP clients, including the establishment of an unjustified risk level and/or the implementation of disproportionate measures based on the risk level.