Briefly on the parliamentary committee’s decision
The Verkhovna Rada Committee on Law Enforcement recommended that parliament adopt draft law No. 16013 in its second reading and in full. The bill strengthens criminal liability for illegal operations with payment cards and bank accounts.
The bill focuses on the transfer of payment instruments to third parties and proposes new rules to counter fraud and cybercrime. It is an important step in changing the approach to combating financial schemes that enable money laundering.
What exactly is being proposed
The document envisages amendments to the Criminal Code of Ukraine (CCU) and the Criminal Procedure Code of Ukraine (CPCU). Among the key innovations is a proposal to introduce a separate article 200¹ of the Criminal Code of Ukraine which regulates liability for the transfer, receipt, acquisition, storage and other obtaining of payment instruments and access data to accounts for the purpose of committing fraud or another criminal offence.
This primarily concerns the phenomenon of “drop-cards”. “Drops” are people who hand over their cards, accounts or access to them to others so that those others can make transfers and conceal the origin of unlawfully obtained funds. The bill also updates liability for illegal operations with payment instruments and introduces procedural changes for investigations.
Why now
Currently the use of drop-accounts has become part of the infrastructure of fraudulent, cybercriminal and other illegal schemes. The rise of such practices is forcing legislators to bring the rules into line with the realities of the payments market and new threats.
In addition, the bill is intended to bring Ukrainian legislation closer to the requirements of the EU directive on combating fraud and counterfeiting of non-cash means of payment. According to previous publications, the Cyber Police developed a bill that introduces criminal liability for drops — EMA.
Who and how the new rules will affect
By the phrase “drop-cards” the law means cases where a payment instrument or access to an account is transferred with the purpose of committing a crime. This means that the mere act of handing over a card will not necessarily lead to criminal liability if a criminal intent for the action is not proven.
By contrast, persons who knowingly handed over or received cards, accounts or access data in order to conceal the origin of funds or carry out fraudulent operations will face the threat of criminal prosecution under article 200¹ of the Criminal Code of Ukraine (CCU). The bill also changes procedural mechanisms, which should simplify the investigation of such schemes and support law enforcement in tracking illegal operations.
