The Ministry of Finance has debunked a false claim regarding estate agents’ reports on all property transactions
This is stated in an official clarification from the Ministry of Finance of Ukraine.
The Ministry of Finance emphasised that the information circulating in the media and on social media regarding the alleged obligation of estate agents to report every property transaction worth over 400,000 UAH does not comply with the law. The ministry specifically emphasised that this does not involve comprehensive control of all transactions, but rather financial monitoring based on a risk-oriented approach.
The Ministry of Finance explained that estate agents are classified as specifically designated entities subject to primary financial monitoring. This is precisely why they are not required to report information on so-called threshold financial transactions, as other categories of financial monitoring entities do. Their key obligation is to inform the State Financial Monitoring Service exclusively about a client’s suspicious financial transactions or attempts to carry them out.
The Ministry also noted that these rules are not new. They have been in force for several years, and the mechanism for registering estate agents and submitting information in the field of financial monitoring is regulated, in particular, by Government Resolution No. 850 of 9 September 2020. In an earlier official clarification, the Ministry of Finance also noted that estate agents are registered with the State Financial Monitoring Service as entities subject to primary financial monitoring in cases specified by law.
The impetus for the new clarification came from publications claiming that estate agencies and private estate agents were allegedly receiving letters from the Ministry of Finance demanding that they register with the State Financial Monitoring Service’s financial monitoring system and submit data on all transactions exceeding UAH 400,000. The Ministry of Finance has effectively refuted this interpretation.
The ministry emphasised that financial monitoring is carried out taking into account the nature of the transaction, the business relationship with the client, the sources of funds and other risk factors. In other words, the size of the transaction alone does not mean that the estate agent must automatically report to the State Financial Monitoring Service.
That is precisely why the scenario in which a estate agent would have to, without exception, verify the origin of funds for all clients, submit data on every transaction exceeding 400,000 UAH and effectively act as a total controller of the property market, was described by the Ministry of Finance as a misinterpretation of the current rules.
