Ukraine is the first country in the world to disclose information on companies' beneficial owners and make it publicly available. On October 14, 2014, the law was adopted requiring all companies to submit information about their beneficial owners to the Unified State Register of Legal Entities, Individual Entrepreneurs and Civic Formations, and the register became operational since September 26, 2015.

However, due to numerous technical flaws of the register and weak legislative framework, the data on beneficial owners in the register is of very poor quality. The analysis of beneficial owner data is onerous because the information in the register is not in a machine-readable format and contains many errors. Also, many companies simply do not provide information about their beneficial owners or likely intentionally provide false information.

Anti-corruption Action Centre (AntAC) in cooperation with the chief designer and architect of the NGO White-collar Hundred analyzed open data (in a machine-readable format) from the Unified State Register of Legal Entities and Individual Entrepreneurs. Thus, we have identified companies that do not provide information on the beneficial owner or indicate a nominal owner. The Anti-Corruption Action Center has also analyzed data on the beneficial owners of UK companies that are owners or co-owners of Ukrainian companies in order to identify any discrepancies with information in the Ukrainian register.

One in four Ukrainian legal entities did not provide information on their ultimate beneficial owner. However, even the provided information is probably not reliable. Companies try to circumvent the law in different ways, for instance, by using offshore jurisdictions in the ownership structure, submitting the information that the beneficial owner is absent, identifying manager as a beneficial owner, or indicating nominal owner as a beneficiary.

The register needs to be significantly improved by the introduction of a mechanism of verifying information on beneficial owners, strengthening the responsibility for submitting false information, the introduction of number of technical improvements to the register (for instance, the introduction of unique identifiers and a single address database).

The shadow economy, the use of anonymous companies in criminal activity, as well as syphoning capital into low-tax and offshore jurisdictions threatens investment attractiveness and harms the Ukrainian economy. As of March 2017, $ 148 billion was syphoned from Ukraine through foreign companies since the independence. Each year, the foreign jurisdictions accumulate approximately $ 11-12 billion. The main problem for Ukraine is the concealment of a real business owner and, as a result, the inability to track the legality of cash flows. Therefore, transparency of ownership of companies has become a priority for Ukraine.

Ukraine is the first country in the world to disclose information on companies' beneficial owners and make it publicly available. On October 14, 2014, the Parliament adopted the Law "On amending some of the legislative acts of Ukraine regarding disclosure of the ultimate beneficiaries of legal entities and politically exposed persons". The Law introduced obligatory disclosure of beneficial owners by legal entities via Company register. The register is operational since September 26, 2015. Until this date the companies had to submit information on their beneficial owners.

Due to the technical unreadiness of the register and the heavy overload of registrars, the Parliament had adopted amendments, which came into force on May 26, 2015. It provided that legal entities shareholders of which are exclusively individuals were allowed to not disclose information on a beneficial owner if those shareholders were beneficial owners. Amendments also exempted civic formations from the obligation to provide information on the beneficial owner (2).

The information on the ultimate beneficial owner of the legal entity is provided at the time of its registration of legal entities and execution of registration activities. The disclosed information includes surname, name, patronymic, date of birth, country of residence. Ukrainian legislation does not provide for submission of any additional documents confirming beneficial ownership. The state registrar is not obliged to verify the accuracy of the submitted beneficial ownership data. Starting from 2018, if the legal entity does not have beneficial owner, the reasoning for such absence should be stated in the register.

Non-submission of the information on beneficiary owners by a legal entity to the state registrar entails a fine from 300 to 500 untaxed minimum incomes (i.e. from UAH 5,100 to 8,500). Eight state agencies have a right to impose such a fine. However, in practice even the holder of the register, the Ministry of Justice, does not have the technical capacity to do so because the procedure of making administrative offence report is too complicated. At the same time, there are no sanctions for providing false information at all.

All financial institutions are required to verify the information about the beneficial owners in order to carry out the identification, verification and examination of customers (KYC procedures).

An additional problem of the register is its imperfect software. It made it possible to enter beneficiary information in the same field as shareholder information. Thus, separate search by the beneficial owner was not possible. From 2017, the register added the option of paid search by the final beneficial owner. It allows obtaining a list of legal entities, the final beneficiary of which has been an individual (resident or non-resident of Ukraine) as of a specified date.

Anti-corruption Action Centre (AntAC) in cooperation with the chief designer and architect of the NGO White-collar Hundred analyzed open data (in a machine-readable format) from the Unified State Register of Legal Entities and Individual Entrepreneurs. Thus, we have identified companies that do not provide information on the beneficial owner or indicate a nominal owner. The Anti-Corruption Action Center has also analyzed data on the beneficial owners of UK companies that are owners or co-owners of Ukrainian companies in order to identify any discrepancies with information in the Ukrainian register.

In order to analyze the data, we used limited copies of the register, so-called dumps, and paid API. The dumps were characterized by data limitations (i.e., absence of shareholders' addresses or EDRPOU codes if shareholders were legal entities). Paid API provided more information. An open dump did not contain a history of company data changes, so changes were calculated by comparing dumps of different periods.

The information in the register is of rather poor quality, which has made the analysis more complicated and there are certain deviations in the results. The beneficial owner data in the register is unstructured. This means that it is written in a solid text box, thus complicating its automatic processing.

All enterprises are still registered with a tax authority, and the Alliance (22844709) even has a tax debt. The above-mentioned legal entities have been incorporated before the electronic register of legal entities started functioning (2004) and probably did not re-register or make no changes after 2004. The exact number of such companies is currently unknown.

Legal entities also have the tendency of "disappearing" from the register due to the cancellation of registration through the court. Such methods are usually used in illegal takeovers seizures, in order to eliminate competitors during public procurement or to remove a legal entity from the register without notice.

The biggest problem with the register is the lack of unique identifiers in a publicly available version of the register. A unique identifier is internal unique code that can accurately identify different individuals with the same name. Currently, we use the address of the individual as such an identifier, but due to data entry errors or the submission of two different addresses by one individual, this method is not reliable.

As of June 25, 2019, 1 672 576 legal entities were included in the register. Of which more than 772 211 - Limited liability companies, 1860 - Additional liability companies, 6 711 - Private joint-stock companies and 2227 - Public joint-stock companies. 14,839 - state authorities and 6,991 - state-owned enterprises, others – civic formations, private enterprises and others.

Only 21.6% of legal entities (360,660) out of 1,672,576 registered submitted mandatory information about the beneficiary. Another 51.2% (or 856 413) of companies and public entities are owned by individuals or groups of persons who have the right not to submit information about the beneficial owner. Almost 27% (or 455,503) (3) of the companies did not meet the requirements and did not submit to the register information on the beneficiary of the legal entity.

As of June 25, 2019, 360,660 (21.6%) of companies provided information about the beneficial owner. Of these, 78% or 282 538 legal entities indicated that there was at least one beneficial owner. The remaining 22% indicated a legal entity as a beneficial owner or indicated that a beneficial owner was absent or impossible to identify.

This option is provided for in the legislation as there are real examples where a company did not have a beneficial owner. According to the explanation of the National Securities and Stock Market Commission, a legal entity does not have a beneficial owner if the management is carried out by a collegial body. However, there are examples where this option is misused. Some companies provide information that a beneficial owner is absent, although in fact a company can identify it.

For example, the Geo Alliance Group is controlled by businessman Victor Pinchuk through the Cypriot companies Geo Alliance Oil Gas Public Limited and Geo Alliance Oil Gas Gas Limited. An audit report of a Cyprus company for 2012 indicated that its beneficial owner is Victor Pinchuk and his family. At the same time, the Ukrainian register states that a beneficial owner is absent. The submission of information of this type does not in any way affect the possibility of using state natural resources. Thus, companies that have submitted information about the absence of a beneficial owner and are actually controlled by Pinchuk have more than ten subsoil extraction permits.

However, there are "strange" cases in the register that indicate the "absence" of a beneficial owner.

Plant Profnastil LLC (40631517), which is part of criminal proceedings for inefficient use of budget funds, indicated that a beneficial owner is absent. At the same time, the sole shareholder of the company is Olena Kryvoruchko. Typically, a sole shareholder of a legal entity has a decisive influence over such a company and, accordingly, is its beneficial owner. The fact that the company, nevertheless, informed the register that a beneficial owner is absent, may indicate that Kryvoruchko is only a nominal owner.

Also, there is a "strange" option that "beneficial owner information is not verified". This kind of disclosure was submitted to the register by Light System LLC (40303180), owned by Nekros LLC (39592611) and Mega Business Invest LLC (39590148). The beneficial owner of the companies Nekros and Mega Business Invest is Russian citizen Vladimir Potokov, who intended to invest in the construction of a petrochemical plant in Zhytomyr region in 2012. According to media reports, Vladimir Patokov even addressed Viktor Yanukovych and Rinat Akhmetov. Today, Vladimir Patokov is the ultimate beneficiary of 40 legal entities in Ukraine. Each of the companies is co-owned by Nekros LLC, which in turn is owned by Bim Trade Ltd. The latter ceased operations in May 2014. According to the Charter of Bim Trade Ltd, itsowner was Alpha Capital Management ltd, which is incorporated in Anguilla. The offshore company was also the founder of RBS Europe LTD, from which Ministry of Emergency Situations purchased fertilizers worth nearly $ 7.5 million in 2012. According to media reports, at that time the tender committee was headed by Oleg Tsitsak, who was appointed military prosecutor of the anti-terrorist operation in 2017. This means that Vladimir Patokov's participation in the companies is most likely nominal.

However, we identified such cases during the analysis. For example, T&T Ukraine SE (32665672) has indicated that its owner is Danish company T&T APS. It also has indicated that its beneficial owner is another Danish company Independent Bankers Trust k/s, which was liquidated in 2004. The business register of Denmark indicates that the real and sole shareholder of T&T APS is the Ukrainian citizen Oleg Tsebriy.

One more offender is the company of Ukrainian billionaire Konstantyn Zhevago, Poltava Mining and Processing Plant PJSC (00191282). It indicated as beneficial owner Ferrexpo PLC, which is registered in the United Kingdom. 100% of the shares of Poltava Mining and Processing Plant PJSC is owned by Swiss Ferrexpo AG. The latter is controlled by British Ferrexpo Plc. In accordance with UK law, starting from April 22, 2018, Ferrexpo does not disclose information on the beneficial owner because its shares are traded on a stock exchange. However, according to the financial statement of 2018, 50.3% shares of Ferrexpo Plc were owned by Fevamotinico S.a.r.l., which in turn is owned by Minco Trust, the beneficial owner of which is Konstantyn Zhevago.

However, some companies have indicated an unnaturally large number of beneficial owners. 47 companies indicated more than 20 beneficial owners each, 137 indicated from 11 to 19 beneficial owners. The three legal entities that have submitted an abnormally large number of beneficial owners are Mayak ALC (03779142), which has indicated 568 beneficial owners, Pobut LLC (03052977) has indicated 96 beneficial owners, and Ochakivsky Market Cooperative Enterprise (0156065) has indicated 62 beneficial owners. Indicating so many beneficial owners blurs the notion of the ultimate beneficial ownership.

165 406 companies indicated the manager of the legal entity as a beneficial owner. In cases where a manager is not an owner of a company, filing them as a beneficial owner likely constitutes a violation of the law.

A nominal owner is a person who manages another person's corporate rights. There is a certain tendency in Ukraine to indicate nominal owners instead of the real beneficiaries, also due to the efforts of Ukrainian officials and oligarchs to conceal their real control over the companies. For instance, Maxim Yefimov, MP of the 8th convocation, indicated in his asset declaration that he was the beneficial owner of External Industrial Resources LLC (31054999). However, in the register, its beneficial owner is Ludmyla Andriivna Ulyashchenko, who has been MP's pro bono assistant.

We defined four type individuals indicated as beneficial owners:

Example of a nominee owner of the third or fourth group is an individual with no business history who owns a large number of companies that are not related to each other. This is an indicator of the submission of false information to the register.

Probably, the actual number of companies controlled by the oligarchs is much larger. They may be hiding behind foreign companies, indicate that the beneficial ownership is absent, cannot be identified, or indicate the nominal owner as a beneficial owner of the company.

However, a significant number of legal entities are disclosing individuals with no business history as beneficial owners.

Vitaliy Valentynovych Tretiak is the beneficial owner of 251 legal entities, and Oleksandr Valeriyovych Terletsky, a native of Myronivka village, Vinnytsia region, controls 237 companies.

Igor Ivanovych Tomashevskyi, born in 1980, registered in Kyiv, is the beneficial owner of 201 legal entities. All legal entities are owned by him through Europact LLC, with a statutory fund of UAH 200,000.

Yevgeniy Vitaliyovych Voronin is the beneficial owner of 197 legal entities. He controlled them through Jurconsult Group Law Firm LLC. As of October 2019, he has no longer been the owner of Jurconsult Law Firm Group LLC but is still the beneficiary of all the companies owned by Jurconsult Group. The change of ownership of the company took place on September 14, 2018, transferring shares to Natalia Volodymyrivna Koromysel, a native of Nizhyn. According to the verdict, she is an unemployed mother of three children. This group of companies was used by the grain exporter Olam LLC from Ukraine to Singapore through FG Business Agro Holding (38857979) to form an exaggerated tax liability and declare a negative value of VAT. This led to gaining illegal refund by the state. According to the case file, Yuliya Mykolaivna Kharytska, director of Jurconsult Group, received a reward of UAH 500 for the position of director and did not sign any agreements on establishment of other legal entities. Probably, the owner of Jurconsult Group has "sold" her identity.

Among the "top-ten" beneficial owners is Daria Valeriivna Venedyktova. She is the beneficial owner of 188 legal entities. All companies are controlled not directly, but as in the case of Tomashevsky, through the legal company Morgan-Invest LLC (42487919) with a charter capital of UAH 1,000. However, allegedly she is not the actual beneficiary. According to the verdict, which considered commercial forgery of documents, Daria Venedyktova agreed to become a formal director and owner of a legal entity for a monthly remuneration of UAH 5,000. The purpose of this was performance of fictitious non-commodity transactions.

More than 19,000 legal entities have indicated a foreigner as their beneficial owner. The largest number of companies indicated that their beneficial owners are citizens of the Republic of Cyprus, Germany, the United States, Poland, and Turkey. This complicates the mechanism of finding a real beneficial owner for law enforcement and allows public figures to abuse power and / or conceal their assets. Moreover, the registration of an individual in the country from the list of offshore countries is a factor indicating that the said beneficial owner is a nominal owner.

In the Republic of Cyprus, the definition of "nominal holder" is not legally established, but it is widely used to refer to certain types of relationships in a commercial context.

In Ukraine, 2780 legal entities have indicated Cypriots as beneficial owners. As with the citizens of Ukraine being nominal owners, there is also a trend among Cypriots to be identified as beneficial owners of more than a dozen companies. For instance, 37 citizens of Cyprus are beneficiaries of 613 Ukrainian companies.

Most of the companies (48) are registered in the name of Maria Chatsiantova. According to the YouControl analytical system, Maria Chatsiantova is most often a beneficial owner of companies related to AIS Group. The latter is associated with former MP Dmytro Sviatash.

Christakis Connaris is the beneficial owner of 30 legal entities. According to the pep.org.ua analytical database, together with Panikos Simeu, he is the shareholder of Sykon Secretarial limited. The latter has registered legal entities of the Privat group. Panicos Simeu is listed as the controller of two legal entities. However, Panicos Sumeu has 12 more companies. This person is probably the nominal owner, representing Igor Kolomoisky and featured in the ownership structure of 1 + 1 Channel.

Nicoletta Garofina Angonas is a shareholder of 23 legal entities in Ukraine. She worked as a lawyer at Andreas Sofocleous & Co and was a nominal owner in companies that were affiliated with Oleksandr Onyshchenko and Privat Group (Borivazh LLC). Nicoletta Garofina also owned 50% of the Cyprus company Wipasena Holding LTD, which in 2017 owned 8.44% of shares of the Russian bank "Vozrozhdenie".

Another type of ambiguous indication of registration address and citizenship is the simultaneous entry of different citizenships of one individual to the register. For instance, Viktor Yevhenovych Ponomarchuk simultaneously indicated that he is a citizen of the Russian Federation for some companies and citizen of the Republic of Cyprus for others. A citizen of the Russian Federation of the same name is the owner of two legal entities in the Russian Federation, namely Als Terminal LLC and Belbiotech LLC. The absence of a unique identifier for individuals in the register does not allow the correct identification of an individual who holds dual citizenship.

Almost 1,500 legal entities have indicated German beneficial owner. We assume that German beneficial owners may be both nominal owners and real beneficial owners.

The probable example of the nominal owner is traced in the ownership structure of 112 Ukraine TV channel. According to the report of Schemes investigative journalist project, Viktor Medvedchuk established control over 112 Ukraine in August 2018. At that time German citizen Eduard Katz, who used to sell used cars and had no relations with the media business, was indicated as the beneficial owner of the channel. Journalists have determined that Edward Katz is most likely a nominal owner. Confirmation of this is the actual structure of ownership of the channel. Today, Taras Kozak, a member of Viktor Medvedchuk's party, owns the TV channel, and their brothers are co-owners of several companies.

The probable example of the real beneficial owner is traced in the ownership structure of Ukrenergobud Constructing Company PJSC. The beneficial owner of the company is German citizen Leo Warth through Fenoris Holding LLC (36258845). The latter owns 67% of the company's shares. 99.99% of shares of Fenoris Holding LLC is owned by Fenoris Group LLC, which in turn is controlled by the UK company Кrederi ltd. The latter is known for filing a lawsuit against Ukraine for $ 120 billion with the International Centre for Settlement of Investment Disputes. The reason for the lawsuit is deprivation of ownership of land plot in Kyiv city centre (at 3 Instytuska Str) during Yanukovych presidency.

Among Top-3 of foreign beneficiaries are citizens of the United States of America. Many US investors are expatriates from Ukraine. Therefore, it is difficult to determine whether they are the real owners. For instance, one of Mykola Zlochevsky's business partners, Mikhail Afendikov has been born in Donetsk region and now is the US citizen. Another odious American investor of Ukrainian descent is Alexander Rovt, who is Dmitry Firtash's business partner in the Joint Venture A-B-I-Stirol LLC (23412320), located in the occupied territory. Alexander Rovt is known for trying to send $ 10,000. donations to Donald Trump's presidential campaign, however, the sum has been returned because of a cap of $ 2,700. Alexander Rovt also co-funded Spruce Capital. The latter is co-founded by Trump's real estate partner Joshua Crane and Flood and connected to a company that provided $3.5 million loan to Paul Manafort. Alexander Rovt is still a co-owner or owner of 17 legal entities in Ukraine, most of which are located in Transcarpathia.

According to the Law of Ukraine "On Prevention of Corruption", persons authorized to perform functions of the state or local self-government are obliged to submit electronic asset declarations. One of the sections of a declaration is disclosure of legal entities, the ultimate beneficial owner of which is the person submitting declaration or members of his or her family. The declaration register is now another "register" of beneficial owners, covering not only Ukrainian companies but also foreign ones. For the period from 2015 to 2018, the officials indicated that they are the beneficial owners of 3672 legal entities in the declarations. However, 1225 companies declared in the period from 2015 to 2017 ceased to be declared in 2018. Most of the companies have actually changed ownership, but other legal entities have been "rewritten" in the name of the close family members of officials or related entities who do not need to be disclosed in the declaration.

For instance, in his first declaration, Arsen Avakov indicated that the owner of Investor PJSC is his wife, Inna Avakova. On December 28, 2016, the shares of Investor were transferred from his wife to his son, Oleksander Avakov. Thus, the joint-stock company disappeared from all subsequent declarations of the current minister.

In the declaration for 2018, MP Sergiy Skurativskyi from the Radical party Lyashko, the former chairman of the Committee on construction, did not indicate ZhEO Sofia Kyivska LLC (39018680). The company belonged to his wife. In November 2018, her share was transferred to Sofia Bud Group (40544482), owned by Panamanian Brooke Business Ltd. According to the pep.org.ua database, in fact it is related to Skurativskyi.

These examples show the attempts of politically exposed persons to conceal assets or control over the assets by re-registering companies to close or related parties.

Such legal entities may be controlled only by legal entities or may still have individuals in their ownership structure. 7,553 legal entities, which are owned only by legal entities, did not provide any information at all about the beneficial owners. It is worth noting that some of these companies have "discontinued" status. At the same time, other active legal entities violate legal requirements.

For example, 1,990 legal entities have been registered after the requirement to disclose beneficial owners effective since September 26, 2015. Those companies indicated legal entity as shareholder and did not indicate a beneficial owner that is in violation of applicable law.

An example of this violation is Aster Finance LLC (40033382) with a charter fund of UAH 5.101 million. It is owned by Benefit Asset LLC (40031249) and does not indicate a beneficial owner.

Aster-Finance LLC also visualizes an example of a circular ownership structure of a legal entity. For example, Benefit Asset LLC is owned by FC Aster Finance LLC (a subsidiary) and Andriy Baliuk (owning 0.009% of shares). The latter was most likely the nominal owner of another legal entity. He was the founder and director of Top-Top Planet LLC (42557928) with a charter fund of UAH 1,000. According to media reports, in May 2019, Tip-Top Planet LLC purchased a portion of the bankrupt Ukrgasbank's headquarters for UAH 47 million. In June 2019, AMC Trust Center LLC (33606246) became the owner of Tip-Top Planet LLC instead of Baliuk . The beneficial owner of this company is not disclosed in the register.

Such a circular ownership structure and the absence of a beneficial owner does not prevent FC Aster Finance LLC from participating in auctions and buying claims under the credit agreements of bankrupt Boguslav and Mercury banks.

In general, as of June 25, 2019, 2,040 (995) legal entities have a direct circular ownership structure, that is they are co-owners of "themselves". An illustrative example of such ownership is Yurnero LLC (41423084), which "bought out" 100% of its equity, amounting to UAH 9.5 million, and currently a beneficial owner is not identifiable. It is likely that this transaction has been done due to the fact that Yurnero appears in criminal proceedings considering fictitious entrepreneurship since the ownership structure was changed two weeks before the date of the decision.

Another way to hide the beneficial owner is the use of an indirect circular ownership structure. In such cases, the company owns itself but through other legal entities. There are over 1700 legal entities of this type identifiable in the register. One of their main features is the size of the charter capital, as the contributions to all enterprises of the ownership structure are the same, or differ by 1-2%. Most circular structures introduce an individual or other legal entity as a shareholder with a share of ownership ranging from 0.01% to 20%. At the same time, the companies of a structure sometimes may indicate a beneficial owner, for instance, an "introduced" individual or a beneficial owner of a shareholding company.

The UK is the second country in the world (after Ukraine) to establish a register of beneficial owners of legal entities. As in Ukraine, information about beneficial owners is open and accessible in a machine-readable format. This allows us to compare the data of Ukrainian and British registers with regard to disclosure of beneficial owners of the same companies. Starting from 2020, all EU countries should have open registers of beneficial owners of legal entities, which will increase the scope for further comparison.

A comparative analysis of the beneficial owners disclosed in the different registers allows identifying the submission of inaccurate data, to confirm the filing of a proxy as a beneficial owner, and to obtain additional information about the beneficiary such as the existence of another citizenship or residence abroad. For example, only 24% of legal entities have submitted to the Ukrainian register the same beneficiary as the UK parent company has disclosed in the UK. In 50% of cases the data on the final beneficiary does not match. Currently, the quality of the data does not allow such a comparison to be made automatically, so in the register there should be a field for the identification code and the name of the non-resident legal entity in English.

According to analysts, the sanctions in the UK for failure to submit or incorrect submission of data on the ultimate beneficial owner increases the percentage of submission of reliable data, so the data on the beneficial owner in the UK register may be more reliable.

As a result of a comparison of Ukrainian and UK registers, 401 Ukrainian legal entity have been identified that are owned or co-owned by UK company. Of the 401 Ukrainian companies, 12 companies are being wound up and 23 companies are dissolved. The latter were not taken into the scope of analysis.

As for other 14 of 401 Ukrainian companies, we failed to identify parent companies in the UK register. The reason is that in Ukrainian register the names of foreign legal entities are transliterated into Ukrainian and not always such transliteration is provided by the company correctly. There may also be several legal entities of the same name in the UK register. In the Ukrainian register, the address of the British company is not updated, so the identification of the parent legal entity is complicated. To solve this problem, the Unified State Register of Legal Entities of Ukraine should have a field for entering the code of the non-resident legal entity that owns the Ukrainian company, as well as providing the possibility to enter the name in English.

Finally, we selected 364 Ukrainian legal entities, owned or co-owned by UK companies. We compared data on beneficiaries, disclosed by parent companies in the UK register, and the ones disclosed by their subsidiaries in the Ukrainian register.

Terra Garant LLC (30447506), which is owned by British Geoford LLP (24%) and by Motor Garant Insurance Company ALP (39%), has reported to the Ukrainian register that its beneficial owner is "in the process of being established". At the same time, the register states that the beneficial owner of the parent insurance company is Motor Insurance Garant is is Viacheslav Boguslayev, former MP of 6^th-8^th convocations. He is known for supplying parts for engines of the Russian army, despite the ban on the export of military equipment to the Russian Federation. Also the Russian companies, beneficially owned by him, were in FSB service. According to the NBU, Geoford LLP owns 9.9% of the shares of Motor Bank PJSC, and MP's son, Oleksandr Boguslayev represented the company in December 2014. The limited partners of British company Geoford LLP are Belize Modena Corporation Ltd and Dominican Cib Corporation Ltd. The information on beneficial owner of Geoford LLP is not indicated in the UK register. However, in addition to the legal entities mentioned above, the British company is a co-owner of at least thirteen legal entities controlled by the Boguslayev family. According to the UK register, as of 2018, the company has invested £ 3,206,807 in Ukrainian companies.

Therefore, there is a high probability that the beneficial owner of Terra Garant LLC is also Viacheslav Boguslayev, and the company has falsely reported that the alleged beneficiary is "in the process of being established". Moreover, Boguslayev did not declare beneficial ownership of the company, which is a violation of the Ukrainian legislation on asset disclosure of public officials and may constitute a criminal offence.

Different beneficial owners have been disclosed by the Arkadia group of companies, which according to journalist reports is controlled by Volodymyr Halaternik.

Abrakadabra Design Association LLC (35178203) has indicated Olekdsandr Shevliakov as its beneficial owner in the Ukrainian register.. At the same time, UK company Abrakadabra creations ltd, which owns 100% shares of Abrakadabra, has indicated Natalia Zinko as a beneficial owner in the UK register. Zinko is a well-known designer. She is the wife of Volodymyr Halaternik, a businessman from Odessa with reputation of a criminal, who is also known as the grey cardinal of Odessa. There are good reasons to believe that Natalia Zinko is the beneficiary of Abrakadabra.

According to media reports, Oleksandr Shevliakov is the husband of Inna Shevliakova, who in turn is the owner of Law Firm UK ltd in the UK. This firm services British companies affiliated with Halaternik. Since 2000, Oleg Degtyarov has been director of the Law firm UK Limited.


In the Ukrainian register, he is indicated as the beneficial owner of a number of legal entities, namely Arkadia-City LLC (37812482), Arkadia City LTD (39198809), IV-Immobilie LLC (36435543), Creata Center LLC ( 35881135), PE "Interinveststroy-2007" (34931064) and PE "Storm-57" (337221271). Media associate all these companies with Halaternik. The official owners of these Ukrainian companies are UK based Global world investments ltd and Citi group development Ltd. In both UK companies, German citizen Michael Berzun is indicated as the beneficial owner in the UK register. At the same time, the address for correspondence is indicated as City Group Office, 5 floor, Gretska Str, Odessa.

These facts allegedly indicate that Michael Berzun is, in fact, a nominal owner of British Global world investments ltd and Citi group development Ltd, and Oleg Degtiarov is a nominal owner of their Ukrainian subsidiaries. Allegedly the true beneficiary of all these legal entities is Volodymyr Halaternik.

Michael Berzun is indicated as a beneficial owner of Green planet Ltd in the UK. According to media reports, this company controls media business of Halaternik. Green planet Ltd owns 100% of the shares of GMG Group LLC (36044524). In the Ukrainian register, Igor Gusev is indicated as its beneficial owner. Although according to the UK register the beneficiary has been changed in May 2018. Moreover, Michael Berzun is the beneficial owner of all Ukrainian companies where GMG Group LLC (36044524) owns from 90% to 100% of shares, namely TRK Odessa Mama LLC (35828294), TRK Kupol LLC (13676632), TRK Andser LLC (24542639), TRK Club TV LLC (33659151) and TRK Kanal Family LLC (35640650).

Confusion with beneficial owners and disclosure of trusted managers indicates that they are not the ultimate beneficial owners.

UK company Donnea Bussiness LP (LP019428) owns 100% of shares of 48 legal entities in Ukraine. This company was incorporated in the United Kingdom in the form of partnership on April 13, 2018. As of July 5, 2019, it filed a document stating that it was terminated. Its limited partner was Allard Corp, contributing £ 100 to the charter capital. Under UK law, Partnerships have the right not to submit any reports, so they are completely anonymous. This makes them "popular" in the ownership structure of Ukrainian companies. At least seven Ukrainian companies owned by Donnea Business LP are part of criminal proceedings of fictitious entrepreneurship. In 2014-2018, they facilitated the illegal activities in the tax minimization scheme. This resulted in the non-payment of about UAH 400 million of taxes to the state budget.

According to the UK Register, Millenium trade bank limited was terminated on December 20, 2016. This company owns 100% of shares (UAH 4.3 million) of the Eastern Enterprise Center Subsidiary Enterprise (32108856). In the Ukrainian register, it indicated UK citizen, Kamaldzhit Sonja Kaur Dhesi, as a beneficial owner. She was a director of a UK company for only one day, so she is probably the nominal owner of a Ukrainian company. Since the parent company is already terminated, it is impossible to establish a real beneficiary. Despite this, Eastern Investment Center is a co-owner of Institute of Cell Therapy LLC (32379957), director of which is Serhiy Martynenko. According to the AntAC, the latter is the cousin of Mykola Martynenko, the former MP of the 3^rd-8^th convocations. According to the YouControl analytical database, the Institute of Cell Therapy has registered 33 trademarks and its gross income has been over UAH 59 million in 2018.

Despite the legal requirement and administrative penalty, one in four legal entities did not disclose information on its beneficial owner. However, even the provided information is probably not reliable. Companies try to circumvent the law in different ways, such as use of offshore companies in the ownership structure (making impossible to determine beneficial owner), stating that the beneficial owner is absent, or indication of manager of company as a beneficial owner, or indication of a nominal owner. At the moment, there is no verification mechanism for a beneficial owner, so it is not always easy to prove that indicated beneficial owner is a nominal owner.

However, there are certain factors that may indicate the submission of a nominee instead of a real beneficial owner.