Procedure for verifying the ultimate beneficial owner

The topic of ultimate beneficial owners (UBOs) has long since moved beyond a purely “technical” registration requirement and has become a key element of financial monitoring, compliance and business transparency, closely watched by the Ministry of Justice, banks and the tax authorities. Law No. 361‑IX requires companies not only to disclose UBO data but also to keep it up to date and confirm the ownership structure, while the Ministry of Justice uses special regulations to set out a detailed algorithm for state registrars to verify this information.

Regulatory framework: what governs UBO checks
The core act is Law of Ukraine No. 361‑IX “On preventing and counteracting money‑laundering”, which defines a UBO as a natural person who exercises decisive control over a legal entity regardless of their formal ownership stake. The procedure for checking UBO and ownership‑structure information submitted by a legal entity is detailed in MoJ Order No. 3265/5, substantially updated in 2025 by Order No. 1173/5, which clarified the registrar’s workflow, timelines, required data and grounds for removing a “data unreliable” mark from the companies register.

When the verification procedure starts
Verification of UBO data is triggered either by the company itself (when it files documents to confirm or update information) or by red flags about potential inaccuracies from the Ministry of Justice, banks, supervisory bodies, other registers or inconsistencies found in the companies register. If doubts arise, the registrar may send a formal request for explanations and supporting documents; the company usually has up to 10 business days to respond, and unjustified failure to do so risks a “data unreliable” mark in the register and financial penalties.

Which UBO data is checked
The updated procedure specifies what must be identified for the UBO and for persons through whom indirect control is exercised. For an individual UBO, the registrar checks, in particular: full name, citizenship (all, if multiple), place of residence, date of birth, passport details and tax identification number (where available), plus the nature and degree of participation or control in the company. For legal entities in the ownership chain, the registrar reviews the name, registered address, identification code (for residents) and size of the equity or voting stake, paying special attention to foreign companies, trusts and other vehicles that could conceal the true controlling person.

Registrar’s workflow
Order No. 3265/5 sets out a step‑by‑step review of the company’s explanations and documents. The registrar first performs a formal check of completeness, format and timing (including how recent notarised UBO documents are), then conducts a substantive review of the ownership structure and identification data, assessing the transparency of the control chain and the presence of an individual as UBO and, if needed, requesting extra documents or foreign registry extracts. Based on the results, the registrar issues a notice either confirming the UBO data or identifying discrepancies and requesting remediation; once the information is deemed reliable, a corresponding entry is made in the register and any “data unreliable” mark is removed.

When checks are not carried out or are discontinued
The revised rules expressly list cases where UBO checks are not performed or can be discontinued, for example where the company falls into a category exempt from UBO disclosure (state bodies, certain public companies, etc.) or where the register already contains confirmed, up‑to‑date data without any red flags. Verification also stops if the company is liquidated or if the required documents cannot be obtained for objective reasons, and the registrar informs the Ministry of Justice accordingly; however, such situations do not relieve officers of liability for failure to submit or update UBO data on time where this was in fact possible.

UBO checks in financial‑monitoring and banking practice
Alongside the registration process, there is a “parallel front” of UBO verification by primary financial‑monitoring entities, especially banks. They must identify their clients’ UBOs, obtain the ownership structure, take steps to verify the UBO’s identity and keep this information current for as long as the business relationship lasts. In practice this means that even if the registry data is formally “in order”, a bank may refuse to open an account or may block transactions if it doubts the reality of the declared UBOs, so the quality of the ownership‑structure mapping and the consistency of information across registers, internal documents and actual business processes is just as important as formally meeting Ministry of Justice requirements.

Risks and liability for inaccurate UBO data
Breaches of UBO obligations now carry significant financial penalties for failure to submit, late updating or knowingly false information, and a “data unreliable” label in the register immediately alerts banks, counterparties and regulators and can effectively paralyse a company’s operations. Additional risks arise from the use of nominee owners, offshore chains and complex trust structures that hide real control; in such cases the Ministry of Justice and financial‑monitoring bodies pay close attention to identifying the true beneficial owners, and violations can lead not only to fines but also to suspicions of money‑laundering or terrorist‑financing.

How businesses should prepare for UBO checks
Modern UBO requirements are essentially a question of a company’s overall legal and compliance maturity. Companies should move beyond one‑off ownership charts and create an internal process around UBO information: maintain up‑to‑date internal diagrams of ownership and control, align data across charter documents, the register, bank questionnaires and contracts, prepare document packages in advance for potential MoJ or bank requests, and appoint a responsible person for liaising with registrars and financial‑monitoring entities. With this setup, even a more detailed UBO verification regime becomes part of a normal compliance cycle rather than a stress factor. If you have questions about identifying UBOs, confirming ownership structures or dealing with registrars or banks on UBO issues, it makes sense to seek professional advice to assess your risks and design an appropriate disclosure model.

Author: Ihor Yasko, Managing Partner at Winner Law Firm, PhD in Law.