Some attorneys-at-law, attorneys-at-law and lawyers need to submit a report to the Ministry of Justice
Those law firms, law firms and attorneys who are specially designated subjects of initial financial monitoring must submit reports to the interregional departments of the Ministry of Justice of Ukraine by January 11, 2025.
In accordance with the Law «On Prevention and Counteraction to Legalization (Laundering) of Proceeds of Crime, Terrorist Financing and Financing of Proliferation of Weapons of Mass Destruction», law firms, attorneys and lawyers who practice law individually are specially designated subjects of initial financial monitoring when carrying out certain types of activities. State regulation and supervision in this area is carried out by the Ministry of Justice.
Attorneys, law firms and law firms' associations become specially designated subjects of primary financial monitoring only when they support certain transactions (clause 1, part 1, article 10 of the Law):
- purchase and sale of real estate or property management in the financing of housing construction;
- purchase and sale of business entities and corporate rights;
- management of funds, securities or other assets of the client;
- opening and/or managing a bank or securities account;
- raising funds necessary for the establishment of legal entities and funds, ensuring their operation or management;
- Establishment, operation or management of legal entities, funds, trusts or other similar legal entities.
Procedures established by law oblige us to identify suspicious financial transactions of clients and report them to the State Financial Monitoring Service of Ukraine. In this way, the state prevents the use of attorneys' services by their clients in conducting criminal financial transactions.
At the same time, according to part 3 of Article 10 of the Law, the advocate, bureau and association are not obliged to fulfill the duties established by the legislation on financial monitoring in cases
- providing services for the protection of the client;
- if a person has the status of an advocate, but works under an employment contract at an enterprise, institution or organization as a legal adviser (except when a person enters into a legal aid agreement with his or her employer as an advocate);
- representation of the client's interests in the judicial authorities and in cases of pre-trial settlement of disputes;
- providing advice on defense and representation of the client.
On June 17, 2022, the Ministry of Justice adopted Order No. 2522/5 «Some Issues of Formation of Administrative Reporting by the Ministry of Justice of Ukraine as a Subject of State Financial Monitoring in the Field of Prevention and Counteraction to Legalization (Laundering) of Proceeds of Crime, Terrorist Financing and Financing of the Proliferation of Weapons of Mass Destruction». It approved the reporting form No. 1-finmon (annual) and the Instructions for its completion and submission.
Subjects of initial financial monitoring must submit a report to the relevant interregional departments of the Ministry of Justice of Ukraine by the 11th day after the reporting period.
Detailed recommendations on filling out and submitting the reporting form N 1-finmon by lawyers, bureaus and associations that are specially designated subjects of primary financial monitoring are contained in the information letter approved by the Bar Council of Ukraine at its meeting on December 15, 2023.
You can also watch the webinar «Financial Monitoring in the Practice of Law through the Prism of the UNBA Decisions».
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