From August, Bank Transfers will Be Carried Out According to IBAN Standard

From August, Bank Transfers will Be Carried Out According to IBAN Standard

From August 5, 2019, banks open new accounts to customers in accordance with the requirements of the IBAN standard.

The corresponding standard is contained in the resolution of the Board of the National Bank No. 162 “On the Introduction of an International Bank Account Number (IBAN) in Ukraine”.

At the same time, banks will change the valid account numbers in accordance with the requirements of this standard, with preservation of the current analytical accounting number.

From November 1, 2019, the use of IBAN becomes mandatory for customers of all banks of Ukraine during the transfer of funds in both national and foreign currencies, in particular, in cross-border transfers.

New accounts will consist of 29 alphanumeric characters, set out in the following sequence:

– Ukraine code – UA – 2 letters;

– check digit – 2 digits;

– bank code – 6 digits;

– account – the lengthwise number of characters of the account number is not fixed (till October 31, 2019, it will consist of a number figuring from 5 to 14 characters, from November 1, 2019, it will be composed of numbers from 5 to 19 characters).

The beneficiary bank is obliged to transfer funds to the beneficiary’s account as follows:

– through a couple of bank details (“Bank Code” and “Account”, if the account is not yet assigned to IBAN standard or the payer is not aware of the beneficiary’s account details according to the IBAN standard);

– in accordance with the IBAN standard.

The variation chosen by the payer for filling in the bank details cannot be a reason for returning the document for the fund’s transfer without performing or not crediting the funds to the client’s account.

As stated in the press release, the introduction of IBAN will provide an opportunity to harmonize the Ukrainian payment area with the European one and will also contribute to the planned modernization of the electronic payments system of the National Bank. In general, the use of the IBAN standard due to the reduction of the details should make it easier to issue settlement documents.

Through such measures, bank customers will be able to:

– identify the payer and the beneficiary of funds in the more convenient and easy way, as well as the Bank of Ukraine, that serves them;

– avoid errors in account details due to reduced details in the settlement documents;

– transfer and receive funds faster.

In addition, in connection with the introduction of an international bank account number according to the IBAN standard, changes concerning taxpayers and the State Fiscal Service are already in place.

The question is to update the procedure for submitting messages on opened / closed taxpayers accounts in banks and other financial institutions to regulatory authorities (the Order of the Ministry of Finance dated August 18, 2015 No. 721). This will happen thanks to the order number 292 of the Ministry of Finance of July 9, 2019.

In order the banks have the opportunity to introduce changes to the software intended to exchange electronic documents with the State Fiscal Service, to create and process documents in the format established by Order No. 292, and to make this software operational before August 5, 2019, the updated electronic forms of documents are placed for each type messages and control schemes files.