Banks, Financial Services, Latvia, Legislation, Ukraine

The bank is also subject to a number of legal obligations, including the submission to the FCMC, within a specified time frame, a plan of action to address the breaches and deficiencies identified by the FCMC, and carrying out an independent review of its internal control system.

The FCMC conducted an on-site inspection at PrivatBank, during which the commission ascertained a number of violations concerning the bank's internal control system, customer base risks and their management. The violations indicate serious deficiencies in the bank's internal control system for the prevention of money laundering and terrorism and proliferation financing.

The FCMC points out that the bank has not set up an internal control system for the prevention of money laundering and terrorism and proliferation financing that would be commensurate with the bank's operational risks and ensure effective compliance with regulatory requirements.

According to the FCMC, PrivatBank on several occasions did not obtain documents and did not take sufficient steps to ascertain the origin of the funds in customers' accounts, did not ensure timely and quality customer research, and did not made timely decisions to terminate business relationship with certain customers.

In view of the above, the FCMC has concluded that the bank has failed to ensure effective operation of its internal control system for the prevention of money laundering and terrorism and proliferation financing so it would comply with the legal requirements. At the same time, the FCMC takes note measures implemented by PrivatBank so far to address the shortcomings identified by the FCMC.

The amount of the fine imposed on the bank is 90% of the maximum fine amount laid down in the law - 10% t of the bank's total annual turnover. The fine imposed on PrivatBank must be paid into the state budget within one month.