In Ukraine, banks may be allowed to waive the requirement to verify the source of funds used for collateral

In Ukraine, there is a proposal to allow banks, during the period of martial law, to waive the requirement to verify the source of funds used to post bail in criminal proceedings.

People’s Deputy Nina Yuzhanina announced this initiative. According to her, the proposal would allow bail to be posted without banks verifying the source of the funds.

She noted that the proposed changes would be made to the law on preventing and combating money laundering. The proposed provision stipulates that a bank would not be required to determine the source of funds when they are transferred to a special account for the purpose of posting bail.

“The bank shall not take measures to determine the source of the funds if such funds are intended for posting bail in accordance with Article 182 of the Criminal Procedure Code of Ukraine,” Yuzhanina quoted the proposed amendment as stating.

The lawmaker noted that in this wording, there are no restrictions regarding either the amount of the bail or the type of criminal offense. In other words, the provision could apply, in particular, to corruption cases.

At the same time, the authors of the proposal stipulated that after the bail is returned, the bank must verify the origin of the funds. Until such verification is complete, the client will not be able to use the funds, and the bank must notify the client in advance of any possible restrictions.

Yuzhanina believes that in this case, the verification is effectively merely postponed, since funds of unconfirmed origin can already be used to post bail. According to her, a separate issue is how the bank will determine the origin of the funds after the collateral is returned, specifically up to the moment they are deposited into a special account.

She also noted that the Ministry of Finance has a different proposal on this matter, which was discussed by a working group of the parliamentary tax committee.

Source: Nina Yuzhanina/Facebook.

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