Ukrainian PEPs won’t be subject to intensive scrutiny all life, NBU assures

Ukrainian central bank governor Andriy Pyshnyy has said that former officials and their families will not face enhanced financial monitoring for the rest of their lives under the recently adopted law on politically exposed persons, or PEPs.

Earlier this week, the Verkhovna Rada, Ukraine’s parliament, approved a bill to reintroduce lifelong financial monitoring of PEPs, which was a requirement of the International Monetary Fund and European Union.

Some of the MPs were reluctant to greenlight the law, fearing that it might lead to banks scrutinising their accounts and payment when they retire from politics—as was the case when a similar measure was approved several years ago and then suspended.

"No one is going to punish PEPs with some kind of lifelong enhanced checks," Mr Pyshnyy posted on Facebook.

He explained that a year after the dismissal, an ex-official would be subject to "normal financial monitoring procedures like any other client" if his financial transactions are clear and the risks inherent in PEPs—such as scope of powers in the past—are no longer present.

The governor of the Ukrainian central bank, NBU, acknowledged that some banks are prone to a formal approach to servicing PEPs and promised to crack down on this, including with fines of up to UAH 10 million (USD 270,000).

"I can assure you that if there are grounds for this, we will apply them. The NBU will no longer tolerate an approach where the best way to avoid hassle with PEPs is to refuse to serve them at all," Mr Pyshnyy said.

He added that the banking system should change its attitude to PEPs since the requirements for them are preventive and not criminal.