Banking Financial Monitoring as an ESG Filter of International Donor Capital in the Reconstruction of Ukraine (Middle European Scientific Bulletin)

Summary

• The Ukraine Facility provides external financial support amounting to EUR 50 billion tied to obligations in the Ukraine Plan.p.4
• Beneficial ownership verification under FATF Recommendation 24 and Law No. 361-IX establishes an ownership share threshold of 25 %.p.11
• Directive (EU) 2026/470 under the Omnibus I package sets CSRD threshold criteria for EU companies at over 1,000 employees and net annual turnover exceeding EUR 450 million.p.12
• Directive 2026/470 limits the scope of CSDDD due diligence obligations to EU companies with over 5,000 employees and EUR 1.5 billion in net turnover.p.12

Key insights

1. The proposed ESG filter integrates traditional AML/CFT procedures with environmental, social, and governance verification for reconstruction projects.p.3
2. Ukraine's post-war reconstruction needs are estimated at almost USD 588 billion over the next decade according to RDNA5 estimates.p.4
3. The verification mechanism operates across four blocks, assessing donor funds, beneficial ownership, geographic risks, and economic rationale.p.7
4. Banks use proportionate risk-based controls to prevent the unjustified de-risking of non-profit and volunteer organisations.p.8
5. German regulatory cooperation between BaFin and Deutsche Bundesbank provides an institutional model for bank supervision and compliance.p.9
6. Supply chain due diligence principles from Germany's LkSG act can be adapted to evaluate contractors and subcontractors on reconstruction projects.p.10
7. Division of responsibilities delegates financial and beneficial ownership checks to banks, while specialized experts handle environmental impact assessments.p.13