RESOLUTION OF BOARD OF THE NATIONAL BANK OF UKRAINE

of August 17, 2012 No. 346

About approval of the Regulations on application of corrective actions by the National Bank of Ukraine

According to article 56 of the Law of Ukraine "About the National Bank of Ukraine", article 74 of the Law of Ukraine "About banks and banking activity" and for the purpose of increase in efficiency and providing the proper organization of implementation of the liquidating procedure of the Board of the National Bank of Ukraine DECIDES: banks

1. Approve Regulations on application of corrective actions by the National Bank of Ukraine which are applied.

2. Recognize invalid regulatory legal acts of the National Bank of Ukraine according to the list which is attached.

3. The liquidation procedure of bank begun to the introduction in operation of the Law of Ukraine "About system of guaranteeing household deposits" comes to the end according to the procedure established by the legislation which was effective to the introduction in operation of this Law.

4. (Novikov V. V.) to submit to department of normative and methodological ensuring bank regulation and supervision (Ivanenko N. V.), Legal department this resolution on state registration to the Ministry of Justice of Ukraine.

5. To department of normative and methodological ensuring bank regulation and supervision (Ivanenko N. V.) after state registration in the Ministry of Justice of Ukraine to report contents of this resolution to structural divisions of central office, territorial administrations of the National Bank of Ukraine, and also liquidators of banks for use in work.

6. The resolution becomes effective from 22:09. 2012, but not earlier than day of its official publication.

7. To impose control over the implementation of this resolution on the vice-chairman of the National Bank of Ukraine Sorkin I. V.

Approved by the Resolution of Board of the National Bank of Ukraine of August 17, 2012 No. 346

Regulations on application of corrective actions by the National Bank of Ukraine

I. General provisions

1. Basic provisions

1.1. This Provision is developed according to the Laws of Ukraine "About the National Bank of Ukraine", "About banks and banking activity" (further - the Law on banks), "About prevention and counteraction of legalization (washing) of income gained in the criminal way, to financing of terrorism and financing of distribution of weapons of mass destruction" (further - the Law on prevention of legalization), "About currency and currency transactions" (further - the Law on currency), "About financial services and finance companies" (further - the Financial services act), "About payment services" (further - the Law on payment services), the legislation of Ukraine on economic societies concerning protection of critical infrastructure, cyberprotection and information security, about consumer protection of financial services, about advertizing in the markets of financial services, about distribution of information on financial and accompanying services, other legal acts of Ukraine and regulatory legal acts of the National Bank of Ukraine (further - National Bank).

1.2. This Provision determines the bases and procedure for application by National Bank of corrective actions, financial / penalties (further - corrective actions) to banks, branches of foreign banks and other persons who are covered by supervising activities of National Bank, in case:

1) violations by banks, their separate divisions, branches of foreign banks, banking groups, responsible persons of banking groups, other members of banking groups or other persons which are object of check of National Bank according to the Law on banks:

bank law;

foreign exchange legislation;

legislations in the field of prevention and counteraction of legalization (washing) of income gained in the criminal way or to terrorism financing, namely: The law on prevention of legalization, regulatory legal acts of National Bank regulating activities of banks in the field of prevention and counteraction of legalization (washing) of income gained in the criminal way, to financing of terrorism and financing of distribution of weapons of mass destruction (further - the legislation concerning financial monitoring);

legislations concerning protection of critical infrastructure, cyberprotection and information security;

consumer protection laws of financial services, including requirements for interaction with consumers in case of settlement of overdue debt (requirements for ethical behavior);

legislations on advertizing in the markets of financial services;

legislations on distribution of information on financial and accompanying services;

requirements and/or decisions of National Bank made according to articles 66 and 67 of the Law on banks;

regulatory legal acts of National Bank;

2) violation by banks of requirements of the legislation regulating procedure of payment transactions (except the legislation provided by part two of article 82 of the Law On payment services), legislations of rather information security and providing continuity of provision of payment services, the legislation governing the relations between suppliers and users of payment services, the legislation which fulfillment of requirements is condition of authorization of activities according to the law on payment services, and legislations concerning advertizing in the payment market (further - the legislation regulating activities in the payment market);

3) implementation by banks, their separate divisions, branches of foreign banks, banking groups, responsible persons of banking groups, other members of banking groups or other persons which are object of check of National Bank according to the Law on banks, risk activities which poses threat to interests of investors or other creditors of bank (further - implementation of risk activities);

4) application to banks or owners of essential participation in banks of sanctions foreign states (except the states which performed or performing the armed aggression against Ukraine in the value given in the Law of Ukraine "About defense of Ukraine") either interstate associations, or the international organizations and/or application of sanctions according to the Law of Ukraine "About sanctions", the investors or other creditors of bank and/or banking system stability posing threat to interests in connection with deprivation/restriction of the right of person to which sanctions are applied, to dispose of assets.

1.3. Terms in this Provision are used in the following values:

1) gross violation of requirements of the legislation regulating activities in the payment market - violation by bank (its separate division) of requirements of the legislation, the regulatory legal acts of National Bank regulating activities in the payment market during payment transactions by bank within 30 days on the amount exceeding 10000 minimum wages;

2) gross violation of requirements of regulatory legal acts concerning the cash address - violation by bank (its separate division) of requirements of the regulatory legal act of National Bank concerning the cash address that led to failure to provide of safety and loss of cash and/or other values in the amount exceeding 200 minimum wages, and/or discrepancies in the amount exceeding 100 minimum wages, the actual balances in cash and/or other values which are stored in operational cash desk of bank (its separate division), to accounting data of bank (turnover and balance balance / turnover balance sheet);

3) application of foreign and/or Ukrainian sanctions - application to bank or owners/owners of essential participation in bank of sanctions foreign state (except the states which performed or performing the armed aggression against Ukraine in the value given in the Law of Ukraine "About defense of Ukraine", either interstate consolidation, or the international organization and/or application of sanctions according to the Law of Ukraine "About sanctions", the investors or other creditors of bank and/or banking system stability posing threat to interests in connection with deprivation/restriction of the right of person to which sanctions are applied to dispose of assets;

4) the transactions performed by bank - are actions or events during provision of banking and other financial services, implementation of other activities owing to which there are changes in financial condition of bank reflected according to balance or off-balance accounts of bank;

5) stop of transactions - time, for certain term, prohibition of bank to perform separate transaction types;

6) restriction of transactions - time, for certain term, prohibition of bank to perform separate transaction types on amount/amount/providing/rate/circle to clients/region;

7) the termination of transactions - termless prohibition of implementation by bank of separate transaction types;

8) systematic violation of requirements of the legislation regulating activities in the payment market - violation by bank (its separate division) of the requirement of the regulatory legal act of the National Bank regulating activities in the payment market which is established/is revealed by National Bank and corresponds at least to one of the following conditions:

in quantity three and more cases allowed during the period which is subject to check;

same with that (similar to that) which was established when implementing supervisions/checks within the last three years preceding date of its detection;

established after application by National Bank to bank at least two corrective actions for violation of the requirement of the regulatory legal act of the National Bank regulating activities in the payment market within three years preceding date of establishment of violation;

9) systematic violation of requirements of regulatory legal acts concerning the cash address violation by bank (its separate division) of the requirement of the regulatory legal act of National Bank concerning the cash address which is established/is revealed by National Bank and corresponds at least to one of the following conditions:

in quantity three and more cases allowed during the period which is subject to check;

same with that (similar to that) which was established when implementing supervisions/checks within the last three years preceding date of its detection;

established after application by National Bank to bank at least two corrective actions for violation of the requirement of the regulatory legal act of National Bank concerning the cash address within three years preceding date of establishment of violation;

10) the authorized officer of National Bank - the official of National Bank having right to sign of documents on behalf of National Bank according to the legislation of Ukraine or regulatory legal acts of National Bank, or administrative acts of National Bank or the power of attorney.

Other terms used in this Provision get on in the values determined in the law On banks and other legal acts of Ukraine and regulatory legal acts of National Bank.

1.4. The National Bank performs administrative production on decision making, determined by this provision, according to the Law of Ukraine "About ministerial procedure" taking into account the features established by the Law of Ukraine "About the National Bank of Ukraine", the Law on banks.

2. Corrective actions which are applied by National Bank

2.1. The National Bank applies to banks of corrective action, the stipulated in Article 73 Laws on banks.

2.2. The National Bank for violations in activities of separate division of bank applies corrective actions directly to bank - the legal entity (except for discharge of the official of separate division of bank from position).

The National Bank has the right to make the decision on the termination of implementation by separate division of bank of transactions according to part seven of article 23 of the Law on banks.

2.3. The National Bank applies to branches of foreign banks of corrective action, provided by part one (except Items 2, of 4, 7 regarding the owner of essential participation and person who acquired or increased essential participation in bank with violation of requirements of Articles 34, of 34-1 Law on banks, 8, 9 and 11 regarding reference to category of insolvent) article 73 of the Law on banks.

In case of assumption branch of foreign bank of violations of the bank, foreign exchange legislation, legislation concerning financial monitoring, the legislation regulating activities in the payment market of regulatory legal acts of National Bank the National Bank can make to foreign bank demands concerning their elimination, report about the allowed violation to the supervisory body of foreign state both before application of adequate corrective actions, and after their application.

The branch of foreign bank not later than three working days from day of receipt of the decision of National Bank on application of corrective action to it (the written requirement) reports about it to foreign bank and the supervisory body of the corresponding foreign state.

2.4. The National Bank applies to banking group, the responsible person of banking group, other members of banking group of corrective action, the stipulated in Article 73 Laws on banks (except Items 2, of 11, 12 parts one of this Article).

The National Bank in case of need of application of corrective actions to non-bank financial institution which is member of banking group for violation of the bank law addresses state body which exercises supervision of it, concerning application to this person of adequate corrective actions.

2.5. The National Bank applies to other faces which are object of check of National Bank according to the Law on banks, the corrective actions provided by Items 1, 7 - 9 parts one of article 73 of the Law on banks.

The paragraph two is excluded according to the Resolution of Board of the National Bank of Ukraine of 03.11.2023 No. 140

3. Bases and procedure for application of corrective actions

3.1. The National Bank applies corrective actions by results:

inspection checks of activities of banks;

checks of banks concerning financial monitoring (exit check concerning financial monitoring, permanent supervision concerning monitoring);

permanent banking supervision behind activities of banks;

the analysis of observance by banks of requirements of the bank law with use of the statistical reporting, monthly and daily balances and so forth;

audit inspections of banks by auditing firms which have the right according to the legislation of Ukraine to carrying out external audit of banks;

checks of observance by banks of the foreign exchange legislation;

control of elimination by banks of the violations revealed in their activities, accomplishment of decisions of National Bank on application of corrective actions, accomplishment of the imposed (made) demands, the termination of implementation of risk activities, compliance of goodwill of heads of banks, owners of essential participation in banks, key participants in structure of property of bank to requirements of the legislation of Ukraine;

The paragraph the ninth is excluded according to the Resolution of Board of the National Bank of Ukraine of 02.12.2021 No. 129

application of foreign and/or Ukrainian sanctions;

supervision of observance by banks and other faces which are covered by supervising activities of National Bank, requirements of the bank law and regulatory legal acts of National Bank concerning registration and licensing of banks, acquisition (increase) of essential participation in bank and disclosure of information on structure of property (further - the sanctions legislation);

supervision of observance of requirements of regulatory legal acts of National Bank by banks about realization of special economic and other rationing measures (sanctions) (further - the sanctions legislation);

supervision of observance of the consumer protection law of financial services by banks, including requirements for interaction with consumers in case of settlement of overdue debt (requirements of rather ethical behavior);

checks of observance by banks of the legislation of Ukraine concerning protection of critical infrastructure, cyberprotection and information security;

checks concerning the compliance with law regulating activities in the payment market;

permanent supervision concerning the compliance with law regulating activities in the payment market;

checks concerning the cash address;

control of observance by banks of the legislation on advertizing in the markets of financial services;

control of observance by banks of the legislation on distribution of information on financial and accompanying services.

3.2. Materials of administrative production concerning violation of the law of Ukraine from the list determined in subitems 1, 2 Items 1.2 of Chapter 1 of the Section I of this provision, implementation of risk activities, application of the sanctions determined in the subitem 4 of Item 1.2 of Chapter 1 of the Section I of this provision (further - administrative production), are any documents:

1) bank, requirements of the legislation, regulatory legal acts of National Bank, testimonial of violation;

2) National Bank in which violation by bank of requirements of the legislation, the regulatory legal acts of National Bank, including fixing of the fact of failure to provide by bank of access authorized by National Bank of persons / the duly authorized officer (duly authorized officers) of National Bank on implementation of supervision of activities of bank to information systems and/or premises of bank, and/or to systems of automation of banking activities is fixed;

3) the documents containing information obtained from relevant organs of foreign states (except the states which performed or performing the armed aggression against Ukraine in the value given in the Law of Ukraine "About defense of Ukraine"), interstate associations or the international organizations, public authorities of Ukraine, and/or officially published (promulgated, including by placement on official websites) information on application of foreign and/or Ukrainian sanctions;

4) other documents concerning administrative production.

3.3. Corrective actions which are applied by National Bank to banks shall be adequate to specific violations which were allowed by them.

The choice of the adequate corrective actions applied to banks according to the Law on banks and this Provision shall be performed taking into account:

nature of the violations allowed by bank;

the reasons which caused emergence of the revealed violations;

general financial condition of bank;

the size of possible negative effects for creditors and investors;

the paragraph of the seventh is excluded according to the Resolution of Board of the National Bank of Ukraine of 03.11.2023 No. 140

possible reputation risks for bank;

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