Violation of the legislation on financial monitoring: the Ministry of Justice has decided how they will draw up protocols for lawyers and notaries

The Ministry of Justice, as a state body of the financial monitoring system, which draws up protocols on administrative offenses in relation to lawyers, notaries and other judicial personnel, has determined the procedure for processing the relevant procedural documents.

The instruction for the registration of materials on administrative offenses was approved by order of the Ministry of Justice dated 09.12.2020 No. 4248/5. The normative legal act has passed state registration, and its text has recently appeared in the public domain. However, the Instruction will come into force after its official publication.

The instruction establishes the procedure for drawing up by officials of the ministry and its territorial bodies and filing with the court, protocols and materials on administrative offenses provided for by the Code of Ukraine on Administrative Offenses:

- part 1 of article 166-9 (violation of legislation on prevention and counteraction to legalization (laundering) of proceeds from crime);

- Art. 188-34 (failure to comply with the legal requirements of officials of the subjects of state financial monitoring).

Recall that in accordance with the provisions of the Law "On Prevention and Counteraction to Legalization (Laundering) of Criminally Obtained Incomes, Terrorist Financing and Financing the Proliferation of Weapons of Mass Destruction", the financial monitoring system consists of the primary and state levels.

The subjects of primary financial monitoring, including, are:

- law offices, attorneys at law and lawyers who carry out advocacy individually;

- notaries;

- business entities that provide legal services.

At the state level, regulation and supervision of these entities is carried out by the Ministry of Justice of Ukraine.

The Ministry of Justice specified in the Instruction a complete list of violations. They are:

1) violation of the requirements for the implementation of due diligence, the requirements for identifying the belonging of clients and other persons specified by law to politically exposed persons, members of their families, persons associated with politically exposed persons;

2) failure to submit, untimely submission, violation of the procedure for submission or submission of false information to the State Financial Monitoring Service in cases stipulated by the legislation;

3) violation of the requirements for the creation (maintenance) and storage of documents (including electronic), records, data, information;

4) violation of the requirements for refusal to establish (maintain) business relations (conduct a financial transaction);

5) violation of the procedure for the suspension of financial transactions, as well as the procedure for freezing or unfreezing assets related to terrorism and its financing, proliferation of weapons of mass destruction and its financing;

6) failure to comply with the legal requirements of authorized officials to eliminate violations of the law or create obstacles to the performance of their duties.

According to the law, lawyers, notaries and other judicial personnel have responsibilities of the subject of primary financial monitoring when they participate, or acting on behalf of the client, in any financial transaction (or help the client plan or carry out the operation) regarding:

1) the purchase and sale of real estate or property management in financing housing construction;

2) purchase and sale of business entities and corporate rights;

3) management of funds, securities or other assets of the client;

4) opening or management of bank account or securities account;

5) raising funds necessary for the creation of legal entities and foundations, ensuring their activities or managing them;

6) creation, maintenance or management of legal entities, foundations, trusts or other similar entities.

However, the law also provides that the subjects of financial monitoring may not check the client and not inform the state about their suspicions in the event of:

- providing services to protect the client;

- representation of the client's interests in court;

- representation of the client's interests in cases of pre-trial settlement of disputes;

- providing advice on the protection and representation of the client.