In Ukraine, the number of complaints against banks due to blocking of bank cards is increasing. Financial institutions freeze accounts after suspicious transactions if the client cannot document the origin of the funds.
Why are cards and transfers of Ukrainians blocked?
“PrivatBank blocked all accounts without warning!” – one of the common complaints on specialized forums. All Ukrainian banks block accounts due to violation of financial monitoring rules. And even if the client did not know that he was violating, the bank will automatically check the transaction and determine it as “risky”.
Sometimes, to block it, it is enough to exchange cryptocurrency and receive funds from an account previously used by scammers. They can also block any “atypical” transaction: for a large amount of cash. All publicly significant persons are also under special attention. Therefore, if you, for example, are a people’s deputy, the bank will be much more likely to ask you to explain who transferred the funds to you.
Banks are fined for violating financial monitoring, because they not only can check transactions, but are obliged to do so. Recently, there have been more and more fines, says Roman Kornilyuk, Doctor of Economics, financial analyst at YouControl.
“The increase in the number of fines is associated with global trends in strengthening the role of financial monitoring in the activities of financial institutions, the strengthening role of the state in the economy in conditions of geo-economic fragmentation, increased social demand for transparency and accountability, and the development of technologies for automated analysis of large data sets. In the context of Ukraine’s course towards European integration, financial monitoring requirements will continue to intensify if we as a society strive to become part of the civilized democratic world,” notes Kornilyuk.
Nadezhda Chalenko, head of the legal department of YouControl, says: a card can be blocked even for non-updated personal data, if an arrest has been imposed by the executive service (due to unpaid alimony, an unfulfilled court decision, overdue fines, etc.) or if an individual cannot prove the legal origin of funds.
Particular attention should be paid to the following cases:
- withdrawing an unusually large amount of cash in an area where you are not usually located;
- large online purchases, especially at night;
- receiving a large amount on the card and withdrawing it in cash;
- transactions with cryptocurrency or other virtual assets in the amount of more than 30 thousand UAH;
- transactions worth UAH 400 thousand or more.
How to use the account correctly and is it possible to unblock the card?
“The best option is to avoid the above situations, as well as signs that may raise suspicion and lead to increased financial monitoring. If you do find yourself in the bank’s sights, be prepared to answer questions quickly and in detail,” says Chalenko.
The Bank has the right to ask questions related to:
- with a transaction that has attracted the attention of the bank;
- with the source of funds used in this transaction;
- with all parties involved in this operation.
You should also be prepared to provide the bank with all the necessary supporting documents. Don’t be afraid to ask your bank manager exactly what information needs to be provided and in what format. The more accurate the answers, the greater the chance that the account will not be blocked or will be unblocked faster.
There are no “life hacks” on how to bypass financial monitoring, says Andrey Dubas, President of the Association of Ukrainian Banks. Financial monitoring was created to ensure that suspicious customer transactions do not go unnoticed.
“If you always receive an advance on your card on the 15th, a salary on the 1st, one of your relatives helps you a little and you receive about 20 thousand UAH monthly, but suddenly 50 thousand, 100 thousand or an even larger amount, this will be an atypical operation for you. And the bank will ask you to explain this operation,” explains the banker.
Dubas advises to always practice financial hygiene. For example, if you lent someone 100 thousand UAH in cash, and the debtor returns this amount to you within 10 months in 10 thousand UAH, immediately prepare a loan agreement. Even if you trust the person to whom you provided the funds, such an agreement may become a document that you can provide to the bank upon request.
“Tips for Ukrainians are to monitor financial hygiene. If funds are lent and the person repays the debt, have a loan agreement in hand. So that we can explain. All financial transactions are monitored. The bank can always ask questions. And blocking an account to study the nature of these funds is a permitted normal phenomenon,” says the expert.
Director of the Academy of Financial Monitoring Rostislav Marchuk tells OBOZ.UA: Ukraine is quite successfully fulfilling its obligations in terms of adopting legislation to combat money laundering. For example, EU assessments say that the list of anti-money laundering reforms specified in the completed status has been implemented. “What they set as priority standards has been fulfilled. But at the same time, there are a number of other positions that Ukraine implements,” he explained.
Over time, financial monitoring standards will only become stricter. And Ukrainians will have to learn the rules of financial hygiene and legalize their income.
