Parliament decided on Oct. 8 to postpone the deadline for companies to disclose their ultimate beneficial owners.
The final date has been changed from Oct. 11 to July 11, 2022. An overwhelming majority of 342 out of 422 lawmakers voted to postpone it.
The deadline was moved back because the state registry cannot cope with so many people submitting their documents at the same time, according to a statement by parliament.
Ukrainians have had to wait in long lines to register information about the ultimate beneficial owners of their businesses and non-profit organizations.
According to Justice Minister Denis Malyuska, as of Oct. 6, only 171,333 companies out of 1 million have disclosed their ownership structure.
This amendment gives Ukrainian companies more time to prepare all documents and avoid big fines ranging from $645 to $1,935 if they don’t submit them by deadline, said Dmytro Natalukha, a lawmaker with the 244-member Servant of the People faction.
The disclosure law is meant to prevent Ukraine’s tycoons from hiding their companies behind lawyers, anonymous corporations, trusts, foundations or proxies, thus sucking money out of the country.
The Pandora Papers, an investigation of a massive leak of financial documents published on Oct. 3, revealed how more than 300 politicians and businesspeople from 90 countries use offshore schemes to hide their wealth, including 38 highly-placed Ukrainians.
However, the disclosure law affects all kinds of legal entities, not only wealthy enterprises. Ukraine’s trade unions, lawyers’ associations, chambers of commerce, religious organizations and nonprofit organizations also have to disclose their ownership structure.
Some have called it another bureaucratic burden for small businesses. MPs, including Servant of the People member Igor Fris, who lobbied to postpone the date of the mandatory disclosure, said that they want to exclude construction cooperatives, community organizations and other small entities from the law.
“In the next nine months, we have to correct everything in the law that contradicts common sense,” Fris wrote on Facebook.
