Transfer from card to card: for which money transfers the account will be closed

Transfer from card to card: for which money transfers the account will be closed

In Ukraine, starting from February 1, banks have implemented restrictions on transfers from card to card (no more than 150 thousand UAH per month). This restriction is a continuation of the fight against money laundering through individual accounts. Financial monitoring has significantly intensified in recent years. Now, any suspicious transaction can be blocked, and due to suspicion of law violation, a bank can close a Ukrainian’s account without disclosing the reason.

Journalists have analyzed dozens of court cases where Ukrainians demanded the reinstatement of their closed accounts. Read about the reasons why banks most often penalize and how it happens in the article on OBOZ.UA.

How Banks Block Ukrainian Accounts

"The latest restrictions were introduced because of casinos. Ukrainians suffer because our casinos used drops, and the National Bank didn’t find a better solution than to limit everyone’s transfers," says a high-ranking government representative. "Drops" are Ukrainians who sell their bank cards for cash withdrawals. In some casinos, half of all funds deposited by players allegedly do not participate in the game and return to individual accounts. And then these individuals (actually "drops") withdraw the money.

The scheme looks like this: the casino receives money from players for the game, but to avoid paying taxes on them, the money is officially returned to the players. Instead of real players, the money is withdrawn to the cards of thousands of drops. This scheme has become so widespread that, according to various estimates, the Ukrainian budget underreceives about 12.2 billion UAH in taxes annually (the figure was stated by a government source with OBOZ.UA).

"It’s possible to collect 25-30 billion UAH in taxes, but in 2024, only 17.7 billion UAH were collected. That is, about 71 operators underpay up to 12.2 billion UAH. But no one knows the exact figure," the government reports. Moreover, it’s not so easy to block the accounts of a "drop." The scheme organizers employ a whole staff of lawyers.

Due to suspicious receipts from casinos, banks block accounts first. Journalists analyzed dozens of court cases (referring to Ukrainians’ lawsuits against banks). The majority of lawsuits against banks come from people whom the bank considers "drops." A notable example is the civil case 757/4118/24-c, which was considered a few months ago by the Pechersk District Court of Kyiv. The lawyer demanded that "Raiffeisen Bank" unlock the account where the client’s salary was credited. "No illegal operations were conducted, yet the bank groundlessly blocked the account," stated the complainant’s representative.

However, the bank’s representative informed the court that their former client opened a salary card account to receive a salary, but together with a small salary, he also received over 663 thousand UAH from casinos within just four months.

"In addition to the salary, the account received funds from companies slotscity.ua, Cosmolot.ua, SENSE 02 CARD totaling 535,442.62 UAH," the case materials state. Furthermore, he also received income from these gambling companies in the amounts of 71.3 thousand and 48.5 thousand UAH, respectively. In total, the plaintiff received 663.9 thousand UAH from casinos over four months. The man explained such transactions by saying he topped up casino accounts and decided, without placing bets, to withdraw the money to his account at "Raiffeisen Bank." Such actions fully match the behavior of "drops."

"The plaintiff managed to top up the deposit in these casinos for 663 thousand UAH (according to the provided certificates) over a certain period in 2023, with funds from unknown sources, and then withdraw these funds to his bank account. If compared, the plaintiff’s annual income for the entire 2022 year amounted to 634 thousand UAH (according to the provided OK-5 certificate). Regarding these transactions, the plaintiff could not disclose the sources from which he made bets in online casinos," states the court decision. It should be noted that this is a civil case; the plaintiff was not accused of money laundering. However, the Pechersk District Court of Kyiv decided to deny the claim and agreed that the bank legally closed the account.

But most often, the reason for account blocking is that the level of expenses significantly exceeds the level of official income. For example, the materials of case 296/813/24 state that the Korolyov District Court of Zhytomyr denied a client the restoration of a closed account in PrivatBank.

The bank client also demanded moral compensation in the amount of 733 thousand UAH. "The prospect of investigative actions being conducted concerning the plaintiff and him being accused of money laundering or terrorism greatly depresses him. Considering this, the plaintiff requests to satisfy the claims and collect 733,000 UAH of moral damages from JSC CB "PrivatBank," states the lawsuit.

The bank established that from January 1, 2023, to February 21, 2024, large sums were credited to the client’s account: from 78 thousand to 317.2 thousand UAH. Meanwhile, the income he indicated in the questionnaire amounted to 35 thousand UAH.

A similar case was considered by the Khmelnytskyi City District Court (686/18990/24). PrivatBank closed the client’s accounts, and the client tried to oblige them to reinstate them through the court. However, it emerged during the court proceedings that legal income amounted to 17.3 thousand UAH in 2023, with an additional 32.2 thousand UAH of pension accrued during this period. At the same time, from January 2023 to the end of April 2024, 521.4 thousand UAH was credited to the card, and expenditures amounted to 528.8 thousand UAH.

"Considering the provisions of the legislation, as well as the terms of JSC CB "PrivatBank," during the analysis of the plaintiff’s activities based on the available documents and information, the bank established an unacceptably high risk, in connection with which it decided to refuse to maintain business relations with the plaintiff," states the case materials. Naturally, the court denied the bank client’s request.

How to Avoid Account Blocking

It’s necessary to follow financial hygiene rules; then there will be no issues with banks. For example, if you borrow money, you should prepare a loan agreement. It’s also important to have "white income." If the bank has questions for you, which you can answer, there will be no problems with financial monitoring.

All Ukrainian banks block accounts for violating financial monitoring rules. And even if a client didn’t know they were violating them, the bank will automatically check the transaction and identify it as "risky." If there are many risky operations, they can terminate the cooperation agreement.

Sometimes, exchanging cryptocurrency and receiving money from an account previously used by fraudsters is enough to block an account. Any "atypical" transaction can also be blocked: with a large amount of cash. Special attention is paid to all politically significant persons. Therefore, if you are, for example, a member of parliament, the bank will more frequently ask you to explain who transferred you funds.

A card can even be blocked for non-updated personal data, if there was an arrest imposed by the executive service (due to unpaid child support, unenforced court decision, overdue fines, etc.) or if an individual cannot prove the legal origin of funds.

Pay particular attention to such cases:

• Withdrawing an unusually large amount of cash in a region you don’t usually reside in;
• Large online purchases, especially at night;
• Receiving a large amount on the card and withdrawing it in cash;
• Transactions with cryptocurrency or other virtual assets over 30 thousand UAH;
• Large-sum transactions.

Financial monitoring in Ukraine will only intensify over time. It is the responsibility of banks to ensure that the client uses "white" money and that the financial institution does not help launder money earned in the "shadow".