Ukraine in the crosshairs: consequences of account closure for business

First, let's be honest about why we decided to write this post. Like everyone else, we learned yesterday that Mercury decided to close accounts for companies whose shareholders and beneficiaries are Ukrainian citizens. Ukraine was added to a list alongside countries such as Syria, Venezuela, Cuba, and others. Moreover, Ukraine was placed in the same category as terrorist states like the Russian Federation and North Korea.

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If you are among those clients affected by Mercury's decision, you can contact us directly for consultation and assistance in finding payment solutions. We will not only help you but also prioritize this assistance, understanding that you have until August 13 to open a new corporate account.

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Although we are a British international consulting firm, TAXUS LAW & FINANCE , our origin, the idea of the firm, and our founder are from Ukraine. Such news affects us personally, not only because of the ban on servicing citizens of our country but also because Ukraine is being grouped with countries that cause Ukraine to suffer, which should be obvious to the Western world.

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Why did this decision arise? Mercury, as a "neo-bank," was one of the few financial institutions that could remotely open accounts for businesses, including startups, with founders who are Ukrainian citizens who moved to the USA and decided to start their business there. Let's be honest: this decision was not Mercury's personal initiative. Firstly, they are a fintech company operating under Choice Financial Group and Evolve Bank & Trust , which are FDIC members. Also, to confirm my words, they are not the first financial group in the USA to make such a decision not to cooperate with Ukrainian citizens. Let’s remember that recently Chase Bank or even the financial service Robinhood stopped serving Ukrainian clients as early as 2021.

Also, this week, We spoke with a private banking group from Liechtenstein, which has offices in Switzerland, Britain, and the USA. They also said they could not service Ukrainian citizens due to US regulatory requirements.

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From our experience, we have noticed that some European financial institutions have completely refused to receive or send payments to Ukraine since last year. In the lists of countries where they do not want to process payments, Ukraine is alongside Russia and Belarus. But, to the credit of the European region, they at least separate countries they do not cooperate with and "high-risk" countries, allowing payments to and from Ukraine but with very high fees.

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It is frustrating when you see the slogan "We Stay with Ukraine" on a payment institution's website, but payments to Ukraine do not go through. Or national banks in European countries that write rules for financial institutions, and place the Ukrainian flag on all social networks, but actually do not support working with Ukrainian businesses or are very cautious about international businesses where the founders are Ukrainian citizens.

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Why do Ukraine and Ukrainians end up on such lists? We are often told it is because of the war, that they cannot cooperate with countries where there are hostilities. But from our experience, not all payment institutions even want to open the Deep State map and see which territories of Ukraine are occupied and which are not. For example, Zaporizhzhia, one of the largest regional and industrial centers of Ukraine, is partially occupied, but the regional center itself is not. Banks, seeing payments related to the city of Zaporizhzhia, immediately refuse to process them. Recently, in a personal conversation with bankers from old European banks, I heard from them about large amounts of cash coming from Ukraine, and in their opinion, PEPs from Ukraine are considered even less acceptable than PEPs from Kazakhstan or Uzbekistan. Sometimes it is very difficult for banks to find accurate information about a client in Ukrainian information resources because there is a lot of poor-quality journalism and yellow press. Additionally, it is easier for compliance managers to refuse service to a client than to verify information or seek clarification directly.

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What can be said to founders from Ukraine and the Ukrainian international business community? Do not give up: if some opportunities close, other doors will always be found and opened. Not everything depends on us. The Ukrainian community has already shown the Western market what innovative and necessary businesses they can establish in the Western market or even relocate existing businesses. Your innovations and ideas resonate loudly for Europe and the USA, which has not seen such service. Everything is ahead. How do you feel about that? Share your opinion in the comments or contact us directly https://taxus.tech/contact/