**** (This act directly concerns the regulation of financial institutions’ activities under martial law, as well as issues of financial monitoring and sanctions legislation).
### 1. Essence of the Resolution
This Resolution of the National Bank of Ukraine is aimed at significantly updating and increasing the efficiency of supervision in the areas of financial monitoring, currency control, and compliance with sanctions legislation. The document details the procedures for conducting scheduled and unscheduled inspections of financial institutions, in particular their separate subdivisions and currency exchange offices. The NBU introduces a risk-based approach to determining the frequency of inspections, legalizes the use of professional judgment by inspectors, and establishes a clear mechanism for its appeal. Special attention is paid to ensuring the continuity and safety of supervisory activities under martial law.
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### 2. Structure of the Act, Key Provisions, and Amendments
The Resolution has a clear structure and consists of the main body (7 paragraphs) and three annexes that amend the fundamental supervisory documents of the NBU:
1. **Amendments to Regulation No. 90** (on the procedure for organizing and exercising supervision).
2. **Amendments to Regulation No. 106** (on the application of enforcement measures for financial monitoring violations).
3. **Amendments to Resolution No. 165 and Regulation No. 153** (specifics of supervision during the period of martial law).
**Key amendments compared to previous versions:**
* **Risk Assessment:** A mandatory periodic (quarterly) risk assessment of the financial institution has been introduced to determine the frequency of on-site and off-site inspections.
* **Professional Judgment:** The NBU is officially vested with the right to state professional judgment in inspection reports, while financial institutions are granted the right to appeal it.
* **Currency Exchange Inspection Reform:** Obsolete paragraphs 7–28 have been excluded from Resolution No. 165; instead, Regulation No. 90 has been supplemented with a new extensive Section VIII, which fully regulates unscheduled inspections of currency exchange offices.
* **Electronic Document Management:** Requirements for the use of qualified and advanced electronic signatures (QES/AES) during inspections have been modernized.
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### 3. Most Important Provisions for Practical Use
For the practical activities of banks and non-bank financial institutions, the most critical innovations are as follows:
* **Procedure for Appealing Professional Judgment:** If an institution disagrees with the inspectors’ professional judgment in the inspection report, it has the right to submit an application for its review within 15 business days. The NBU Committee is obliged to consider it within 90 calendar days. At the same time, the inspection report itself is not annulled, even if the decision is made in favor of the institution.
* **Control (Verification) Foreign Exchange Transactions:** NBU inspectors have the right to perform test transactions for the purchase/sale of foreign currency without prior warning. An employee of the exchange office is obliged to perform a reversal (storno) transaction and return the funds to the inspectors within 15 minutes after the presentation of the inspection order.
* **Strict Control of Video Archives:** Upon request of the inspection team, a copy of the video recording of a specific transaction or written explanations of the inability to provide it must be provided by the cashier within a maximum of 1 hour.
* **Force Majeure during Martial Law (Air Raid Alerts):** A clear algorithm has been established: in the event of an alert, the inspection is suspended, and the inspectors leave the premises. However, the financial institution’s employee is obliged to ensure the resumption of the inspection within 30 minutes after the air raid alert is cleared. If less than 30 minutes remain until the end of the exchange office’s working day after the alert is cleared, the inspection is terminated early, with a corresponding report being drawn up.
* **Reports on Refusal and Obstruction:** An exhaustive list of grounds for drawing up a report on refusal to conduct an inspection (for example, failure to provide access to automation systems or premises) has been defined. Such a report is a ground for the application of severe enforcement measures.
* **Deadline for Automation:** Market participants are granted 6 months (starting from the month following the month of the resolution’s entry into force) to automate the generation of new standard templates for responses to NBU requests.
