According to Article 52 of the Law of Ukraine "On Banks and Banking Activities", persons related to the bank include:
* Associated person is a husband or wife, direct relatives of this person (father, mother, children, siblings, grandfather, grandmother, grandchildren), direct relatives of the husband or wife of this person, husband or wife of a direct relative.
* Bank affiliate - any legal entity in which the bank has a significant participation or which has a significant participation in the bank.
* Dependent person - a legal entity that has common owners of substantial participation with the bank.
According to Article 52 of the Law of Ukraine “On Banks and Banking Activities”, transactions made with persons related to the bank cannot provide for conditions that are not current market conditions.
Market conditions not including, in particular:
Agreements concluded by the bank with persons related to the bank on terms that are not current market conditions are invalidated from the moment of their conclusion.
If the transaction is declared invalid, each of the parties is obliged to return to the other party in kind everything that it received in the execution of this transaction, and if such a return is impossible, in particular when the received consists in the use of property, work performed, service rendered, reimburse the cost what was received at the prices that exist at the time of compensation (Article 216 of the Civil Code of Ukraine).
The bank is prohibited from providing loans to any person for the repayment of any obligations by that person to a person related to the bank; acquisition of assets of a person related to the bank, with the exception of products manufactured by this person; purchase of securities placed or signed by a person related to the bank.
The National Bank of Ukraine exercises control over the operations of banks with persons related to the bank.
The National Bank of Ukraine has the right to establish restrictions on bank transactions with persons related to the bank.
According to clauses 4 and 7 of part four of Article 26 of the Law of Ukraine "On the system of guaranteeing deposits of individuals", the Fund for Guaranteeing Deposits of Individuals (hereinafter referred to as the Fund) does not reimburse the deposit in the guaranteed amount of compensation at the expense of the Fund:
Do I need to contact the bank if I received a letter of notification stating that I am a person related to the bank?
No, you do not need to contact the bank. The letter was sent to you for informational purposes in pursuance of the requirements of the National Bank of Ukraine.
Why did I receive a letter identifying me as a person related to the bank if I am not a client of the bank and do not have any business relationship with the bank?
You received the letter because you meet the criteria established by the Law of Ukraine "On Banks and Banking Activities" for identifying persons related to the bank and in pursuance of the requirements of the Regulation on determining persons related to the bank, approved by the Resolution of the Board of the National Bank of Ukraine No. 315 dated 12.05.2015.
After identifying me as a person related to the bank, can I use the services of the bank?
The status of a person related to the bank does not restrict the use of the bank's services if the bank provides services on current market conditions.
In accordance with Article 58 of the Law of Ukraine "On Banks and Banking Activities", a person associated with the bank for violating the requirements of the legislation, including the regulations of the National Bank, carrying out risky transactions that threaten the interests of depositors or other creditors of the bank, or driving the bank to insolvency, bears civil, administrative and criminal responsibility.
A person related with the bank, whose actions or omissions have led to damage to the bank through his fault, shall be liable with his property. If, as a result of the actions or inaction of a person connected with the bank, the bank is damaged, and another person associated with the bank, as a result of such actions or inaction, directly or indirectly received property benefit, such persons shall be jointly and severally liable for the damage caused to the bank.
Article 1665 of the Code of Ukraine on Administrative Offenses: for violation of banking legislation and regulations of the National Bank of Ukraine by persons connected with the bank, except for violations specified in Article 73 of the Law of Ukraine "On Banks and Banking Activities", including the provision of inaccurate (incomplete) reporting, in particular the quality of assets, conducting transactions with persons related to the bank, the essence of transactions or performing risky transactions that threaten the interests of depositors or other creditors of the bank, provides for the imposition of a fine in the amount according to the violation.
Article 2181 of the Criminal Code of Ukraine: when bringing a bank to insolvency, that is, deliberately, out of selfish motives, other personal interest or in the interests of third parties, any actions associated with the bank that led to the classification of the bank as insolvent, if this caused great material damage* to the state or the creditor, it is punishable by restriction of freedom for a period from one to five years or imprisonment for the same period, with the imposition of a fine from five thousand to ten thousand non-taxable minimum incomes of citizens and deprivation of the right to hold certain positions or engage in certain activities for up to three years.
* Material damage is considered large if it is ten thousand or more times higher than the non-taxable minimum income of citizens.