In Ukraine, the rules of card-to-card transfers have been changed: what cannot be done and what are the next steps
Date: 2024-09-04 Author: Nazar Litvin Categories: ECONOMY
This restriction has been actively discussed for several months. The regulator changed its announced rules after a series of proposals. First, the limit of the monthly amount that can be sent from one card to another will be UAH 150,000 (UAH 100,000 was planned). Secondly, restrictions on the number of transactions were canceled (some banks introduced them at their own request).
Read the article about how transfers will work from October and what you should know about financial monitoring.
The limit should help fight schemes ("drops"). But this may not be enough
"According to the NBU, 98% of bank clients make monthly transfers that do not exceed the specified amount (150,000 hryvnias - Ed.). Therefore, the established restrictions will in no way affect their financial activity," the NBU notes. There were some concerns that the limit would discourage donations, but the limit would not apply to volunteer accounts.
But those for whom the limit should really create problems are "droppers". Some Ukrainians sell their card accounts in order to use them to launder large sums of money. Millions of hryvnias can pass through the accounts of one dropper in a year. Banks are supposed to stop suspicious transactions, but they do not always manage to do so.
"At the TSC (temporary investigative commission. - Ed.) the Cyber Police heard about "drops". How it is used in various types of crimes. Three areas of application: online casinos, sale of cigarettes, drugs and weapons (on the darknet), fraud. We are losing ( according to the Cyber Police) at least 1 billion in taxes," said Yaroslav Zheleznyak, head of the parliamentary TSK.
Drop schemes use:
- shadow (or illegal) markets: from the sale of counterfeit goods to drugs and weapons;
- fraudsters: they collect the funds of their victims on drop accounts;
- those who try to avoid taxation: for example, some gamblers.
Drop schemes are used in almost all countries of the world, but in Ukraine in recent years they have gained significant scale. The changes announced by the National Bank were supported by the Committee on Finance, Tax and Customs Policy, most of the expert environment, and law enforcement officers.
The only question is whether these changes are enough. Olesya Danylchenko, the deputy director of the EMA Interbank Payment System Association, is sure that setting a limit is not enough. This will indeed complicate the scheme, but it will not make it impossible. The NBU also announces certain changes (read more about them below).
The limit should help fight schemes ("drops"). But this may not be enough
"According to the NBU, 98% of bank clients make monthly transfers that do not exceed the specified amount (150,000 hryvnias - Ed.). Therefore, the established restrictions will in no way affect their financial activity," the NBU notes. There were some concerns that the limit would discourage donations, but the limit would not apply to volunteer accounts.
But those for whom the limit should really create problems are "droppers". Some Ukrainians sell their card accounts in order to use them to launder large sums of money. Millions of hryvnias can pass through the accounts of one dropper in a year. Banks are supposed to stop suspicious transactions, but they do not always manage to do so.
"At the TSC (temporary investigative commission. - Ed.) the Cyber Police heard about "drops". How it is used in various types of crimes. Three areas of application: online casinos, sale of cigarettes, drugs and weapons (on the darknet), fraud. We are losing ( according to the Cyber Police) at least 1 billion in taxes," said Yaroslav Zheleznyak, head of the parliamentary TSK.
Drop schemes use:
- shadow (or illegal) markets: from the sale of counterfeit goods to drugs and weapons;
- fraudsters: they collect the funds of their victims on drop accounts;
- those who try to avoid taxation: for example, some gamblers.
Drop schemes are used in almost all countries of the world, but in Ukraine in recent years they have gained significant scale. The changes announced by the National Bank were supported by the Committee on Finance, Tax and Customs Policy, most of the expert environment, and law enforcement officers.
The only question is whether these changes are enough. Olesya Danylchenko, the deputy director of the EMA Interbank Payment System Association, is sure that setting a limit is not enough. This will indeed complicate the scheme, but it will not make it impossible. The NBU also announces certain changes (read more about them below).
So, for 98% of Ukrainians, nothing will change from October, when the rules for card-to-card transfers will be tightened. And the remaining 2% will lose the opportunity to transfer more than UAH 150,000 monthly. At the same time, the limit does not apply to transfers of funds between the client's own accounts and to transfers of legal entities. Operations using IBAN details are not limited.
What should Ukrainians prepare for?
The National Bank has already announced such steps in its press release. For now, these are just plans. It is about:
- increase in fines for violators of payment legislation (draft law 11043),
- the introduction of legal norms to bring to justice the organizers and conscious participants of illegal schemes:
- creation of an appropriate register, which will be a source of information for banks when establishing business relations and customer service;
- making changes to the payment legislation that will expand the NBU's regulatory powers to apply influence measures and restrictions;
- increased requirements for banks and non-banking institutions to strictly comply with the requirements of the law.
Danylchenko believes that it is necessary not only to introduce limits, but also to introduce criminal liability for those who sell their accounts. "We all believe that, after all, there is a need for criminal liability. This does not completely solve the problem," she believes.
The National Bank is still more cautious in voicing the proposal regarding responsibility for sellers of their own cards. As long as those who make it possible for their account to be used in drop schemes do not bear any responsibility, it gives the false impression that such activity is completely legal.
What you should know about financial monitoring
Even now, banks must carefully check their customers and block suspicious transfers, demand explanations and documents that will confirm the legality of the origin of the funds. However, given the scale of drop schemes, not all banks manage to create an effective system of financial monitoring.
Moreover, if the bank doubts that it is the cardholder who is using it, it can close the account. Art. 15 of the law regulating financial monitoring establishes the following reasons for terminating the contract at the initiative of the bank:
- if it is impossible to identify and/or verify the client;
- establishment of an unacceptably high risk for the client or failure of the client to provide documents or information necessary for proper verification;
- submission of false information by the client or his representative or submission of information for the purpose of misleading;
- if it is impossible to identify the person on whose behalf or in whose interests the financial transaction is being carried out.
The main rule of financial monitoring: the client must be understandable to the bank. If you have a legal source of income, do not participate in dubious financial transactions, do not earn on the shadow market, financial monitoring will not cause problems.
The National Bank has already announced such steps in its press release. For now, these are just plans. It is about:
- increase in fines for violators of payment legislation (draft law 11043),
- the introduction of legal norms to bring to justice the organizers and conscious participants of illegal schemes:
- creation of an appropriate register, which will be a source of information for banks when establishing business relations and customer service;
- making changes to the payment legislation that will expand the NBU's regulatory powers to apply influence measures and restrictions;
- increased requirements for banks and non-banking institutions to strictly comply with the requirements of the law.
Danylchenko believes that it is necessary not only to introduce limits, but also to introduce criminal liability for those who sell their accounts. "We all believe that, after all, there is a need for criminal liability. This does not completely solve the problem," she believes.
The National Bank is still more cautious in voicing the proposal regarding responsibility for sellers of their own cards. As long as those who make it possible for their account to be used in drop schemes do not bear any responsibility, it gives the false impression that such activity is completely legal.
What you should know about financial monitoring
Even now, banks must carefully check their customers and block suspicious transfers, demand explanations and documents that will confirm the legality of the origin of the funds. However, given the scale of drop schemes, not all banks manage to create an effective system of financial monitoring.
Moreover, if the bank doubts that it is the cardholder who is using it, it can close the account. Art. 15 of the law regulating financial monitoring establishes the following reasons for terminating the contract at the initiative of the bank:
- if it is impossible to identify and/or verify the client;
- establishment of an unacceptably high risk for the client or failure of the client to provide documents or information necessary for proper verification;
- submission of false information by the client or his representative or submission of information for the purpose of misleading;
- if it is impossible to identify the person on whose behalf or in whose interests the financial transaction is being carried out.
The main rule of financial monitoring: the client must be understandable to the bank. If you have a legal source of income, do not participate in dubious financial transactions, do not earn on the shadow market, financial monitoring will not cause problems.
