Business

The USR has started marking companies with non-transparent ownership, but there are mistakes

The Unified State Register currently contains 15 companies with non-transparent ownership structures. Non-bank financial institutions must receive this designation, and the National Bank can revoke their licenses. Some businesses were included in the list by mistake. This was reported by "Komersant Ukrainian" with reference to Opendatabot.

What is an opaque ownership structure?

Since September 2022, the Law on State Registration of Legal Entities has been supplemented by a requirement to disclose the ownership structure of non-bank financial institutions regulated by the NBU. These companies include insurance companies, credit unions, pawnshops, financial companies, and non-state pension funds. A transparent ownership structure means a clear understanding of who owns a business, what share and through what mechanisms they exercise control.

An opaque ownership structure may arise in the following cases:

• Absence of an owner with a large share, i.e. the actual leader of the company.
• Cyclic ownership, when businesses own each other through a complex chain.
• Use of trust structures in violation of legal requirements.
• Emergence of a new leader without notification or consent of the NBU.
• The presence of nominee owners who are listed only formally.

Who is included in the USR list?

Currently, 15 companies with an opaque ownership structure are marked in the USR. This mark is supposed to signal risks for non-bank financial institutions. The Opendatabot service also adds a corresponding risk factor for such companies, which helps businesses and partners assess their reliability.

However, not all companies on the list are financial institutions or are subject to the NBU. For example, the list includes condominiums, a real estate rental company, and agribusinesses that are not required by law to meet the NBU’s requirements.

This indicates problems with the quality of the USR and the inconsistency of the Ministry of Justice’s actions with the requirements for monitoring registrations.

What are the implications for companies?

For non-bank financial institutions, a mark of non-transparent ownership structure can have serious consequences:

• Fines from the NBU: The regulator may impose financial sanctions for violation of transparency requirements.
• License revocation: The company may lose the right to provide financial services.
• Exclusion from the register: In the worst case scenario, the business is excluded from the State Register of Financial Institutions, which stops its operations.

For companies that have received a mark by mistake, the consequences may include reputational losses, complications in cooperation with partners, and the need to spend resources on appeals.