Page 43 - bne IntelliNews Ukraine Country Report May 2017

8.1.3 Banks specific issues
Money transfers from Russia to Ukraine via foreign payment systems have been banned by a law signed by Russia’s President Vladimir Putin, TASS reported on April 4, citing the official legal information portal of the Russian government. The decision last month of Russia’s largest state-owned bank Sberbank to accept documents of the separatist territories of East Ukraine has expanded the Russia-Ukraine rift further into the financial sphere . However, Moody's Investors Service said the damage from Ukrainian sanctions to Russian banks will be minimal due to low share of Ukrainian subsidiaries in total assets. Kyiv banned the money transfers to Russia by Russian payment systems and imposed sanctions on Russian banks , while Sberbank branches in the country were sabotaged by far-right activists leading to a hasty sale of its Ukrainian business . Now the amendments to the Law on the National Payment System passed by Putin prohibit cross-border transfers via any foreign payment system to countries that sanction Russian payment systems, a ban that could apply more broadly than to just Ukraine.
Responsibilities for supervision over a number of financial intermediaries will be reassigned from the National Commission for State Regulation of Financial Services Markets to the National Bank of Ukraine (NBU) and the National Securities and Stock Market Commission and should be fully implemented by December 2017. This is stated in the memorandum between the authorities of Ukraine and the International Monetary Fund (IMF), which was posted on the Fund's website on Tuesday. The relevant legislation was adopted by parliament in first reading in July 2016. The IMF is working to ensure that this legislation is adopted in second reading by end-March 2017 and fully implemented by end-December 2017. The NBU will become responsible for the regulation and supervision of insurance and leasing companies, credit unions, credit bureaus and other non-bank lenders, pawnshops and other financial companies and the National Securities and Stock Market Commission for private pension funds, issuers of mortgage certificates, funds for construction financing and real estate funds, according to the memorandum.
The document also says that to improve the functioning of financial markets, enhance transparency and the quality of issuer disclosures , and to reduce the scope for corruption and fraud, we will adopt a new Audit Law and a revised Accounting Law based on EU standards.
43 RUSSIA Country Report April 2017 www.intellinews.com