diff --git a/contracts/registry/CHANGELOG.md b/contracts/registry/CHANGELOG.md
index 32c684e..e7ba14b 100644
--- a/contracts/registry/CHANGELOG.md
+++ b/contracts/registry/CHANGELOG.md
@@ -21,6 +21,8 @@ Change log entries are to be added to the Unreleased section. Example entry:
 
 ### Features
 
+- New `GovBan` flag. Reserved for accounts with a history of misconduct, limiting their governance role while maintaining their voting rights as valued members of the Voting Body.
+
 ### Breaking Changes
 
 ### Bug Fixes
diff --git a/contracts/registry/README.md b/contracts/registry/README.md
index eab7c04..1a7f3f6 100644
--- a/contracts/registry/README.md
+++ b/contracts/registry/README.md
@@ -54,7 +54,7 @@ See the function docs for more complete documentation.
 
 - `admin_flag_accounts(flag: AccountFlag, accounts: Vec<AccountId>, memo: String)` - sets a flag for every account in the `accounts` list, overwriting if needed. Must be called by an authorized flagger.
 - `admin_flag_accounts(flag: AccountFlag, accounts: Vec<AccountId>, memo: String)` - removes a flag for every account in the `accounts` list, overwriting if needed. Must be called by an authorized flagger.
-  Valid account flags are: "Verified", "Blacklisted".
+  Valid account flags are: "Verified", "Blacklisted", "GovBan".
 - `admin_add_sbt_issuer(issuer: AccountId)` - authorizes new issuer to issue SBTs.
 
 ## Soul transfer
diff --git a/contracts/registry/src/events.rs b/contracts/registry/src/events.rs
index 4cfc18b..cb72fe3 100644
--- a/contracts/registry/src/events.rs
+++ b/contracts/registry/src/events.rs
@@ -16,6 +16,7 @@ pub(crate) fn emit_iah_flag_accounts(flag: crate::AccountFlag, accounts: Vec<Acc
     let event = match flag {
         AccountFlag::Blacklisted => "flag_blacklisted",
         AccountFlag::Verified => "flag_verified",
+        AccountFlag::GovBan => "flag_govban",
     };
     emit_iah_event(EventPayload {
         event,
diff --git a/contracts/registry/src/lib.rs b/contracts/registry/src/lib.rs
index c58649d..a5da3d8 100644
--- a/contracts/registry/src/lib.rs
+++ b/contracts/registry/src/lib.rs
@@ -208,18 +208,13 @@ impl Contract {
 
     pub(crate) fn _transfer_flag(&mut self, from: &AccountId, recipient: &AccountId) {
         if let Some(flag_from) = self.flagged.get(from) {
-            match self.flagged.get(recipient) {
-                Some(AccountFlag::Verified) => require!(
-                    flag_from != AccountFlag::Blacklisted,
-                    "can't transfer soul from a blacklisted account to a verified account"
-                ),
-                Some(AccountFlag::Blacklisted) => require!(
-                    flag_from != AccountFlag::Verified,
-                    "can't transfer soul from a verified account to a blacklisted account"
-                ),
-                None => {
-                    self.flagged.insert(recipient, &flag_from);
-                }
+            if let Some(flag_to) = self.flagged.get(recipient) {
+                require!(
+                    flag_from == flag_to,
+                    "can't transfer soul when there is a flag conflict"
+                )
+            } else {
+                self.flagged.insert(recipient, &flag_from);
             }
         }
     }
@@ -2966,9 +2961,7 @@ mod tests {
     }
 
     #[test]
-    #[should_panic(
-        expected = "can't transfer soul from a blacklisted account to a verified account"
-    )]
+    #[should_panic(expected = "can't transfer soul when there is a flag conflict")]
     fn flagged_soul_transfer() {
         let (mut ctx, mut ctr) = setup(&issuer1(), 2 * MINT_DEPOSIT);
 
@@ -3005,9 +2998,7 @@ mod tests {
     }
 
     #[test]
-    #[should_panic(
-        expected = "can't transfer soul from a verified account to a blacklisted account"
-    )]
+    #[should_panic(expected = "can't transfer soul when there is a flag conflict")]
     fn flagged_soul_transfer2() {
         let (mut ctx, mut ctr) = setup(&issuer1(), 2 * MINT_DEPOSIT);
 
diff --git a/contracts/registry/src/storage.rs b/contracts/registry/src/storage.rs
index 3389f1c..60b177c 100644
--- a/contracts/registry/src/storage.rs
+++ b/contracts/registry/src/storage.rs
@@ -28,9 +28,13 @@ pub enum StorageKey {
 #[serde(crate = "near_sdk::serde")]
 #[cfg_attr(not(target_arch = "wasm32"), derive(Debug))]
 pub enum AccountFlag {
-    /// Account is "blacklisted" when it was marked as a scam or breaking the IAH rules.
+    /// Account is "blacklisted" when it was marked as a scam or suspectible to be a mnipulated account or not a human.
     Blacklisted,
+    /// Manually verified account.
     Verified,
+    /// Account misbehaved and should be refused to have a significant governance role. However
+    /// it will be able to vote as a Voting Body member.
+    GovBan,
 }
 
 /// Composition of issuer address and token id used for indexing