Ukraine's government has moved to restore an anti-corruption safeguard it had quietly weakened — the rule that requires banks to monitor the accounts of former senior officials. It has registered a new bill, No. 16051, that rewrites the provision, Deputy Olha Vasylevska-Smahliuk says, Ekonomichna Pravda reports.

The new bill changes the rules for monitoring former PEPs: enhanced financial monitoring after leaving office must remain in place for at least 12 months and will no longer automatically end upon its expiration, Deputy Yaroslav Zhelezniak says.

After that, the bank must conduct an individual risk assessment. If the risks associated with PEP status persist, enhanced monitoring will continue until the bank determines that those risks no longer exist. The assessment must be repeated at least once a year.

The same approach is proposed for family members and close associates of former PEPs.

A tax law hid the loosening

The weak version reached the statute book by stealth. Lawmakers slipped it into an unrelated measure, the digital-platform tax law No. 15111-d, passed in June, to gather the votes they needed. Under that wording, a bank could continue monitoring a former official for more than 12 months only with documented high risk.

That reversed the burden of proof. Ukraine's European partners were caught off guard, arguing the new text no longer matched the EU directive it was meant to implement. The EU Council and European Commission urged the president not to sign, and he refused. In June, the IMF said the change pushed Ukraine's anti-money-laundering system out of the FATF standards it must meet.

Former PEP status alone cannot justify bank's refusal

At the same time, the mere fact that a person was once a PEP cannot, after the 12-month period has expired, by itself constitute sufficient grounds for a bank to refuse to provide services. If a bank nevertheless refuses to establish or maintain a business relationship, the client would have a separate right to request a review of that decision.

The difference is fundamental. Under Bill No. 15111-d, after one year, a bank would have to separately establish that the client posed a high or unacceptably high risk in order to continue enhanced monitoring.

“The new government bill, No. 16051, provides for enhanced monitoring for at least one year, after which it continues for as long as an individual assessment shows that risks associated with PEP status persist,” Vasylevska-Smahliuk adds.