Why banks are changing the rules for FOPs
Ukrainian banks continue to strengthen the financial monitoring system in accordance with the requirements of the National Bank of Ukraine and international anti-money laundering standards.
The main goal of the new rules is to detect cases when the accounts of individual entrepreneurs are not used for real business, but for conducting transit operations, hiding income or avoiding taxes.
At the same time, the restrictions will not apply to all entrepreneurs. Banks do not introduce the same limits for each FOP, but will evaluate clients individually depending on the level of risk.
Most attention will be paid to entrepreneurs who:
- recently registered FOP;
- did not carry out activities for a long time, but suddenly resumed large turnovers;
- carry out operations that do not correspond to the declared type of activity;
- have significant income without a clear economic explanation.
For example, if an entrepreneur is registered as a specialist in the provision of consulting services, but large payments for goods, equipment or transactions with other areas of activity pass through the account, the bank may request additional explanations.
What exactly will the banks check?
When analyzing accounts, financial institutions will evaluate not only the amount of transfers, but also the overall picture of the entrepreneur's activity.
The bank will pay attention to whether financial transactions correspond to real business.
In particular, they will analyze:
The purpose of opening an account and the direction of activity of the FOP.
The financial institution will check what the entrepreneur does, what services he provides or what goods he sells, as well as what turnover is typical for this type of business.
Correspondence of income to the declared activity.
If an entrepreneur has a small official business, but millions of transactions pass through the account without confirming their origin, this may be a reason for additional verification.
Regularity and nature of payments.
Unusual transfers, a large number of transactions between different accounts or transfers at unusual times can attract the attention of the bank.
Availability of supporting documents.
In case of questions, the bank may request contracts, invoices, tax statements, documents regarding the origin of funds or information about counterparties.
What limits are introduced for FOPs
For entrepreneurs with an increased level of risk, there are phased restrictions on transfers.
The new rules provide for two stages of the introduction of limits: the first will come into effect three months after the signing of the relevant amendments to the Memorandum, and the second - after another three months.
The maximum volumes of transactions for risk categories will be:
FOP of the first group:
- at the first stage — to UAH 600,000 per month;
- after tightening of restrictions — to UAH 400,000 per month.
FOP of the second and third groups:
Legal entities with characteristics of shell companies:
It is important that these restrictions will apply to clients that the bank considers risky. For entrepreneurs with transparent activities, the usual mode of operation of accounts should be preserved.
What to do if you need to exceed the limit
If a business needs to carry out a transaction for a larger amount than the set limit provides, this does not mean an automatic refusal of payment.
The entrepreneur will be able to confirm the legality of the transaction and the source of the funds.
For this purpose, the bank may request:
contracts with customers or suppliers;
documents regarding the sale of goods or provision of services;
tax reporting;
confirmation of income;
payment assignment documents.
For example, if the FOP received a large payment for the performance of the contract, it will be able to confirm the operation with the contract and other documents.
Who will not be affected by the new restrictions
For most Ukrainian entrepreneurs, the rules for working with accounts will not change significantly.
Banks do not plan to apply restrictions to FOPs that conduct real business and can confirm their activities.
Such entrepreneurs include those who:
- works within the limits of registered activities;
- regularly pays taxes;
- officially registers employees;
- has clear sources of income;
- can confirm cooperation with counterparties;
- makes payments with a clear purpose.
Thus, the main criterion will not be the fact of the existence of a sole proprietorship, but the transparency of the entrepreneur's work.
Why did FOPs come under increased attention
In recent years, FPO accounts have often been used in schemes where companies effectively split the business between several entrepreneurs in order to reduce the tax burden or avoid certain restrictions.
Also, the so-called transit operations, when funds pass through the entrepreneur's account without actually providing services or selling goods, remain a common problem.
That is why banks are moving to a more detailed analysis not only of individual payments, but of the entire financial behavior of the client.
Data from state registers, income information, tax data and other open sources can be used for this.
What will change for small businesses
For small businesses, the new rules mean the need to pay more attention to documents and financial discipline.
If the entrepreneur works officially, keeps contracts, records income and can explain the origin of funds, the risk of problems with the bank will be minimal.
At the same time, businesses should avoid situations where payments that are unrelated to the registered activity pass through the account.
For example, a retail FPO should not use a business account to receive large transfers for services it does not officially provide.
Can banks block accounts?
The very fact of exceeding the limit does not mean automatic blocking of the account.
The bank may request additional information or temporarily suspend the operation until confirmation is received.
If the entrepreneur provides the necessary documents and explains the economic content of the transaction, the payment can be made.
Problems most often arise when the client cannot explain the origin of funds or his activities do not correspond to the flow of money in the account.
Conclusion: what entrepreneurs need to do
The new financial monitoring rules are not directed against all FOPs, but primarily against risky schemes.
For entrepreneurs with transparent activities, the main thing is to prepare documents correctly, control the purpose of payments and keep proof of income.
In today's conditions, bank control is becoming a part of normal business operations. The clearer the entrepreneur's business model is, the fewer questions will arise during inspections.
The main principle of the new rules is simple: honest business should not experience additional restrictions, but operations without a clear economic explanation will come under much greater control.
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