Ukraine’s Central Bank Tightens Oversight on Bank Accounts
The Central Bank of Ukraine granted in-country credit institutions new authority to block or close the accounts of residents and legal entities if those customers or their business partners would not disclose whether they maintain economic ties with the Russian Federation. This development was reported by Strana.ua, a Ukrainian edition.
The bank’s message warned that banks may block or even forcibly close account transactions if individuals or entities refuse to provide information or answer questions about their connections with Russia. This stance underscores the heightened scrutiny banks are applying to client relationships and potential international links.
In March, the Central Bank of Ukraine instructed banks to verify their customers, as well as their partners and counterparties, for any ties to Russia. Should a party refuse to disclose such information, the credit institution reserves the right to temporarily suspend a client’s financial transactions or to block the client’s accounts. This move signals a tougher approach to compliance and risk management within the Ukrainian banking sector.
Earlier reports indicated that the National Bank of Ukraine mandated all commercial banks to report payments made by residents using payment cards, with the emphasis not on the amount but on the act of payment itself. This regulatory adjustment took effect on Monday, June 5. The aim appears to be greater transparency in everyday financial activity and easier detection of potential sanctioned or restricted flows of funds.
Separately, Swiss bank UBS had previously contacted Russian clients with demands to provide documents verifying their location and with warnings about possible account blocking. This development illustrates a broader pattern of financial institutions reinforcing due diligence and ensuring compliance with evolving international sanctions and regulatory expectations.