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840 Money Laundering ET

By Joann Nelson,2014-11-22 16:38
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840 Money Laundering ET

[Official Gazette 840, 10 Aqrab 1383]

    LAW ON CAMPAIGN AGAINST MONEY LAUNDERING

    AND INCOME FROM CRIME

    Chapter One

    General Provisions

Article 1 ? Purpose

    This law has been enacted to prevent and prohibit the use of financial institutions or any economic activities for money laundering and for the financing of terrorism.

Article 2 ? Terminology

    1) For the purposes of the present law, the terms below shall have the following meanings:

    a) "confiscation" means the permanent deprivation of funds and property by final order of a competent court whereby the ownership of [such] funds and property and the documents, evidencing such ownership is transferred to the state; b) "criminal organization" means any structured group of two or more persons acting in concert with the aim of committing one or more criminal offences, in order to obtain, directly or indirectly, funds and property or any kind of financial or other material benefit;

    c) “customer” in relation to a transaction or an account includes:

    1. the person in whose name a transaction or account is arranged, opened or undertaken;

    2. a signatory to a transaction or account;

    3. any person to whom a transaction has been assigned or

    transferred;

    4. any person who is authorized to conduct a transaction; or

    5. such other person that is regarded to be related to a transaction. d) “financial institutions” means any person or entity who conducts as a business one or more of the following activities or operations for or on behalf of a customer: i. Acceptance of deposits and other repayable funds from the public, including private banking;

    ii. Lending, including consumer credit; mortgage credit; factoring, with or without recourse; and finance of commercial transactions (including forfaiting);

    iii. Financial leasing, not extended to [financial] leasing arrangements in relation to consumer goods and products;

    iv. The transfer of money or its equivalent, including financial activity in both the formal or informal sector,

    v. Issuing and managing means of payment (e.g. credit and debit cards, cheques, traveler‟s cheques, money orders and bankers‟ drafts,

    electronic money transfers);

    vi. Financial guarantees and commitments;

vii. Trading in:

    i. Money market instruments (cheques, bills, notes, derivatives etc.); ii. foreign exchange;

    iii. instruments whose value is determined by reference to an interest rate [or yield] or a foreign exchange rate or an index of prices or values of interest rates [or yields], foreign exchange rates, securities or commodities;

    iv. transferable securities;

    v. Commodity futures.

    viii. Participation in securities issues and the provision of financial services related to such issues;

    ix. Individual and collective portfolio management;

    x. Safekeeping and administration of cash or liquid securities on behalf of other persons;

    xi. Otherwise investing, administering or managing funds or money on behalf of other persons;

    xii. Underwriting and placement of life insurance and other investment related insurance, including insurance undertakings and insurance intermediaries (agents and brokers); and

    xiii. Money and currency changing.

    e) “Freeze” means provisionally (i) deferring the execution of a transaction or (ii) prohibiting or restraining the transfer, alteration, sale [conversion], disposition or movement of funds and property, on the basis of an order or directive from a competent authority.

    f) “Financing of terrorism” means the offence of financing of terrorism as defined in the law [of CFT]

    g) "funds and property" means assets of every kind, whether corporeal or incorporeal, movable or immovable, tangible or intangible, and legal documents or instruments, including electronic or digital, evidencing title to, or interest in, such assets; h) "Instrumentality" means any funds and property used or intended to be used in any manner, to commit one or more criminal offences.

    i) “Money laundering” shall mean the offence set forth in Article 3 of this Law. j) "money transmission services" means carrying on a business of:

    (a) Exchanging cash or its equivalent;

    (b) collecting, holding, exchanging or remitting money or its equivalent or [otherwise] arranging transfers of money or of its equivalent, on behalf of other persons;

    (c) delivering funds; or

    (d) Issuing, selling or redeeming traveler’s cheques, money orders or similar

    instruments.

    “politically exposed person” means any person who is or has been entrusted with a

    prominent public function in the Afghanistan or in other

    countries, for example, heads of state or of government, senior politicians, senior government, judicial or military officials, senior executives of state-owned entities, and important political party officials. All family members of such persons, and close associates who have business or financial relationships with such persons are also

included herein.

    k) "Predicate offence" means obtaining the proceeds of funds and property as defined in subparagraph (I) of this article.

    l) "Proceeds of crime" means any funds and property [derived from or] obtained directly or indirectly through the commission of an offence.

    m) “reporting entity” means the natural and legal persons referred to in Article 4 of this Law;

    n) “Seizure” means provisionally assuming custody or control of funds and property by a competent authority on the basis of an order issued by a court.

    o) ““Suspicious transaction” means a transaction described in Article 16 of this Law.

Article 3 ? Money laundering offence

    (1) A person commits the offence of money laundering if the person:

    (a) Conceals, disguises, converts, transfers, removes from or brings into the country funds and property, knowing that it is derived directly or indirectly from acts or omissions which constitute an offence against any currently enacted law in the country or outside or in the place where they occurred

    (b) acquires, possesses or uses funds and property knowing or having reason to believe that it is derived directly or indirectly from the offence; or

     (c) enters into or participates directly or on behalf of another person in an arrangement or transaction knowing or having strong reasons to believe that it facilitates (by whatever means) the acquisition, retention, use or control of funds and property derived directly or indirectly from the offence.

    (2) Concealing or disguising funds and property includes concealing or disguising its nature, source, location, disposition, movement or ownership or any rights with respect to it.

    (3) Knowledge or belief as an element of the offences in subsection 1 shall be inferred from objective factual circumstances.

    Chapter 2. Prevention of Money Laundering and Financing of Terrorism by

    Institutions and professions

Article 4 ? Institutions and professions subject to this law

    1) The following institutions and professions, hereinafter referred to as “reporting entities,” shall be subject to the measures and obligations prescribed by this law:

    a) financial institutions, including branches and representative offices of nonresident financial institutions; ;

    b) Da Afghanistan Bank, to the extent that it engages in commercial banking services under the DAB Law;

    c) persons dealing in bullion, precious metals and precious stones, to the extent that they are engaging in a cash transaction equal to or exceeding 1,000,000 Afghani or its equivalent in other currency;

    d) a lawyer, rahnamai mamelaat (transaction guide), other legal

    professional, or accountant, when they arrange or carry out transactions for their client concerning the following activities:

    i) buying and selling immovable assets;

ii) managing client money, securities or other assets;

    iii) opening or managing bank savings accounts or a securities service provider

    account`;

    iv) securing capital necessary for the creation, operation or management of companies; and

    v) Creating, operating or managing a legal person or business organization and buying and selling of business entities.

    e) real estate agent to the extent that such agent is engaging in transactions concerning the buying and selling of real estate;

    f) Such other entities and activities as may be prescribed by regulation of Da Afghanistan Bank.

    Chapter 3. Transparency in financial transactions

    Article 5 ? Transfers of Funds Via Financial Institutions and the originator information on electronic funds transfers

    1) Any transfer to or from foreign countries of monies or securities involving a sum equal to or exceeding 1,000,000 Afghani or its equivalent in foreign currency shall be effected through an authorized financial institution or an authorized money transmission service.

    2) A financial institution and the money remittance service provider shall provide and keep accurate originator information on electronic funds transfers and other forms of transfers.

    3) Paragraph 2 shall not apply:

    1. to an electronic funds transfer, effected from the use of a credit or debit card as means of payments, provided that the

    credit or debit card number is included in the information accompanying [such a transfer].

     2. to electronic funds transfers and settlements between

    financial institutions where the originator and beneficiary [of the funds transfer] are acting on their own behalf.

Article 6 ? Currency Reporting at the Border

    1) Any person who leaves or arrives in the Islamic Republic of Afghanistan with or imports or exports, by mail, courier, or otherwise more than one million AFs or its equivalent in foreign currency in cash or negotiable bearer instruments without first having reported in writing the fact to the relevant authority is guilty of an offence and shall be punishable on conviction by a fine of an amount equal to the cash he holds as well as by confiscation of his cash or negotiable instrument.

    2) For the purpose of this article, the terms:

    (a) “authorized officer” means: a Police Officer; or a Customs Officer; and an employee of financial intelligence unit.

    (b) “negotiable bearer instrument” means a writing representing a promise

    to pay money, (including bills of exchange, promissory notes, traveler‟s cheques or

    certificates of deposit) which may be payable to the bearer.

    3) Where a person is about to leave Afghanistan or has arrived in

the Islamic Republic of Afghanistan; or

     is wants to board or leave any ship or aircraft; then. an authorized officer, examine any

    article which a person has with him or her or in his or her

    luggage; and in case of disobedience, the officer may use force to carry out the examination.

    4) A person shall not be searched except by a person of the same sex.

    5) An authorized officer, and any person assisting such officer, may stop, examine and search any ship, aircraft and other means used for the transportation . 6) Where an authorized officer in the course of an examination or search, detects cash or negotiable bearer instruments that may afford evidence as to the commission of a covered offence the officer may seize the cash or negotiable bearer instruments. 7) An authorized officer who has seized cash and negotiable bearer instrument under paragraph (6) of this article shall report such seizure to the Financial Intelligence Unit within five working days after a seizure. An officer shall forward written reports to the Financial Intelligence Unit once per month of all cross-border transfers of cash and other negotiable instruments.

    8) Where the cash and negotiable bearer instruments have not been claimed by any person within two years of it being seized, an authorized officer may

    make an application through the relevant office of prosecutors to the Court that such cash or negotiable instrument be forfeited [to the State of Afghanistan].

    9) No cash or negotiable bearer instruments seized under this section by court [sic] shall

    be released where

    a. an application is made under chapter II of this Law for the purpose of the forfeiture of the whole or any part of the money or negotiable bearer instrument; b. its continued detention is required pending determination of its liability to forfeiture; or

    c. proceedings are instituted in the Afghanistan or elsewhere

    against any person with whom the cash or negotiable bearer instrument is connected for an offence,

Article 7? Overriding of secrecy

    Each reporting entity, supervisory authority and auditor shall comply with the requirements of this Law notwithstanding any of their obligations as to secrecy or other restriction on the disclosure of information imposed by any law or otherwise.

Article 8 ? Prohibition of anonymous accounts

    Reporting entities shall not keep anonymous accounts, or accounts in obviously fictitious names.

Article 9 ? Identification of customers

    1) Reporting entities shall identify and verify the identity of their customers in the following circumstances when:

    a. establishing business relations with any person,

    b. carrying out transactions equal to or exceeding 1,000,000 Afghani or its equivalent in foreign currency;

    c. an electronic transfer does not contain complete originator

information

    d. there is a suspicion of money laundering or financing of terrorism; or d. The reporting entity has doubts about the veracity or adequacy of previously obtained customer identification data.

    2) A natural person's identity shall be verified by the presentation of an original national identity card or passport that is legal, a copy or record of which shall be retained by the reporting entity, or such other documentation as may be prescribed in regulations by Da Afghanistan Bank.

    3) A legal person shall be identified by the production of its current certificate of registration, license, or articles of association, a copy or record of which shall be retained by the reporting entity, or such other documentation establishing that it has been lawfully registered and that it is actually in existence at the time of the identification, as prescribed in regulations by Da Afghanistan Bank.

    4) Directors, employees or agents acting or purporting to act on behalf of a customer shall provide appropriate evidence, including but not limited to a [current] power of attorney,

    The representative of a natural person shall be obliged to provide proof of identity of the person he represents in accordance with paragraph (2) of this Article.

    A copy or record of these documents shall be retained by the reporting entity. Documentation which shall constitute appropriate evidence may be prescribed in regulations by Da Afghanistan Bank.

    Article 10 ? Identification of customers in case of a series of related transactions If [ a series of] transactions are or appear to be connected and would together surpass one million Afs or its equivalent in foreign exchange, identification shall be required for each transaction.

    Article 11 - Consequences of failure to identify customers or beneficial owners If a reporting entity is unable to meet its obligations with respect to the identification procedures under articles 9 and 10 or any doubt remains as to the true identity of the customer or beneficial owner, it shall not open the account, commence or continue business relations or perform the transaction.

Article 12 ? special monitoring of transactions

    1) Reporting entities shall pay special attention to all complex, unusual large transactions, and all unusual patterns of transactions, which have no apparent economic or visible lawful purpose. The background and purpose of such transactions should, as far as possible, be examined, the findings established in writing, and be presented to competent authorities and auditors.

    2) The report shall be maintained as specified in article 14 of this law. 3) Reporting entities shall pay special attention to business relationships and transactions with persons from countries which do not or insufficiently apply anti-money laundering and combating the financing of terrorism requirements equivalent to those contained in this law.

    4) In relation to paragraphs (1) and (3), a reporting entity shall report the transactions and its findings to the Financial Intelligence Unit as a suspicious transaction under

Article 16 of this law.

Article 13 ? Due diligence measures for politically exposed persons

    Reporting entities should, in relation to politically exposed persons, in addition to performing normal due diligence measures:

    1. have appropriate risk management systems to establish transactions of politically exposed persons;

    2. obtain senior management approval for establishing business relationships with customers referred to in section 1 of this Article;

    3. take reasonable measures to establish the source of wealth and source of funds; and

    d. Conduct ongoing monitoring of the business relationships of persons mentioned in section 1 of this Article.

Article 14 ? Record-keeping

    1) Reporting entities should maintain, for at least five years, all necessary records on transactions, both domestic and international, including the amounts and types of the currency involved which must be sufficient for reconstruction of [individual] transactions. 2) Reporting entities should keep records on the customer identification data obtained through the customer due diligence process as required by article 9 for at least five years after the business relationship has ended, so that it shall be available to domestic officials who are legally authorized.

    3) Da Afghanistan Bank may require banks to establish and maintain a

    centralized database in their branches and headquarters on the identity of customers, principals, beneficiaries, agents and beneficial owners, and

    on suspicious transactions.

Article 15 ? Reporting of certain transactions

    A reporting entity shall report to the Financial Intelligence Unit in such form and manner and within such period as may be prescribed in regulations by Da Afghanistan Bank any transaction in cash in an amount as may be so prescribed, by Da Afghanistan Bank, unless the recipient and the sender are financial institutions.

Article 16 ? Reporting of suspicious transactions

    1) Where a reporting entity:

    (a) Suspects that any transaction or attempted transaction may be

    related to or derived from the commission of an offence;

    (b) Suspects that funds are linked or related to, or are to be used

    for terrorism, terrorist acts or by terrorist organizations,

    The reporting entity, as soon as practicable after forming that suspicion , but no later than such period as may be prescribed in regulations by Da Afghanistan Bank, shall report the transaction or attempted transaction, to the Financial Intelligence Unit. 2) The reports required of reporting entities under this Law shall be sent to the Financial Intelligence Unit in a form and by any rapid means of communication as may be determined in regulations of Da Afghanistan Bank.

    3) Reporting entities shall also be required to report a suspicious transaction carried out even if it became clear only after completion of a transaction that there were grounds for suspicion.

    4) After having submitted a suspicious transaction report under this law, reporting entities shall be required to report without delay any additional information that might confirm or invalidate the suspicion.

    Article 17 obligations of supervisory authority or auditor to which to submit suspicious transaction report

    A Supervisory authority or an auditor as defined in Article 18(2) who, 1. suspects that any transaction or attempted transaction may be related to or derived from the commission of an offence; or

    b.has information that it suspects are relevant to an act preparatory to an offence of the financing of terrorism or relevant to an investigation or prosecution of a person or persons for an offence, or [otherwise be] of assistance in the enforcement of this Law; Shall as soon as practicable after forming that suspicion but no later than such period as may be prescribed in regulations by Da Afghanistan Bank, shall report the transaction, attempted transaction to the Financial Intelligence Unit.

Article 18 ? Internal programs at reporting entities

    1) Reporting entities shall develop the following programs for the prevention of money laundering:

    a. Development of internal policies, procedures and controls, for appropriate compliance of law and regulations;

    b. Designation of the administrative officials responsible for enforcing the policies, procedures and controls;

    c. Create adequate screening procedures to ensure high standards when hiring employees;

    d. Ongoing training for officials or employees; and

    e. Internal audit arrangements to check compliance with and effectiveness of the measures taken to apply the present law;

    2) Reporting entities are not required to implement subparagraphs (b) and (e), paragraph (1) above if the total number of persons comprising staff and management consists of less than 5 workers.

    Chapter 4. Detection Of Money Laundering Crimes

    Article 19? Establishment of Financial Intelligence Unit and Collaboration with Anti-money Laundering Authorities

    1) A Financial Intelligence Unit shall be established under the authority of Da Afghanistan Bank.

    2) The Financial Intelligence Unit shall have independent decision-making authority for purposes of exercising its functions as specified in this law.

    3) The budget of the Financial Intelligence Unit shall be determined by the Supreme Council of Da Afghanistan Bank.

Article 20? Organization

    1) The Financial Intelligence Unit shall be headed by a Director General appointed for a term of five years by the Supreme Council; the Director General shall be eligible for reappointment [for an additional term.]

    2) No person shall serve as Director General unless he satisfies the requirements of the Law of Da Afghanistan Bank.

    3) The Director General shall be removed by the Supreme Council for any reason specified under the Law of Da Afghanistan Bank;

    no such removal shall be effective until such Director General or his

    legal representative has been afforded a reasonable opportunity to present his views before the Supreme Council.

    4) The Director General, with the approval of the Governor, shall establish the number and type of staff positions for the Financial Intelligence Unit, and shall have the power to hire and dismiss such persons.

Article 21 ? Confidentiality

    The officers, [employees, agents] or such other persons appointed to posts in the Financial Intelligence Unit shall be required to keep confidential any information obtained [within the scope of their duties], during, and even after the cessation of, those duties within the Financial Intelligence Unit. Such information may not be used for any purposes other than those provided for by this law and may not otherwise be disclosed except by order of a court [of competent jurisdiction].

Article 22 ? Limitation of duties of employees

    1) The employees or such other persons appointed to posts in the Financial Intelligence Unit may not concurrently perform duties in any reporting entity or hold any assignment which might affect the independence of their position.

    2) No member of the staff of the FIU shall simultaneously have other employment, whether gainful or not, without the prior written approval of the Supreme Council. 3) The officers or such other persons appointed to posts in the

    Financial Intelligence Unit shall cease to exercise any investigatory powers held by them in their former employment.

    4) The Supreme Council shall adopt a staff regulation covering conditions of employment at the Financial Intelligence Unit.

Article 23 ? Receipt and analysis of reports

    The Financial Intelligence Unit shall receive the reports transmitted by reporting entities. It shall analyze such reports on the basis of [all relevant] information available to the Financial Intelligence Unit.

Article 24 ? Collection of data

    The Financial Intelligence Unit shall, in conformity with any applicable laws and regulations on the protection of privacy and on computerized databases, operate a database.

Article 25 ? annual reporting

    1. An annual report shall be drawn up by the Financial Intelligence Unit and submitted to the Supreme Council and the Council of Ministers. The report shall provide an overall analysis and evaluation of the reports received, money laundering trends, financing of terrorism and other work that Financial Intelligence Unit is engaged in, and such other matters as the Supreme Council and Council of Ministers may require.

    2. The Financial Intelligence reports listed in paragraph one (1) of this Article does not include the annual report of personal information connected to a suspicious transactions.

Article 26 ? Access to and exchange of information

    1) In the Financial Intelligence Unit may ask any reporting entity to submit, without charge, any information, documentation and records, for the purposes of exercising its functions as specified in this law, and any such reporting entity shall comply with such request.

    2) In order to perform its functions under this law, the Financial Intelligence Unit shall, upon request or directly, be granted access to databases of the public authorities. Such authorities shall respond to such requests for information in an expeditious manner. In all cases, information thus obtained shall be used by the Financial Intelligence Unit in accordance with the provisions of this law.

    3) The Financial Intelligence Unit, Da Afghanistan Bank, and the law enforcement authorities may exchange information on matters within the scope of this law.

Article 27 ? Relationships with foreign counterparts

    1) The Financial Intelligence Unit may, spontaneously or on request, provide, receive or exchange information with foreign financial counterpart intelligence units performing similar functions with respect to reports of suspicious

    transactions, provided that this is done on a reciprocal basis, and that such counterparts are subject to similar requirements of confidentiality. FIU may, for that purpose, conclude cooperation or other agreements with such units.

    2) Upon receipt of a request for information or transmission from a foreign financial intelligence unit regarding a report of a suspicious transaction, the Financial Intelligence Unit shall respond to that request in an expeditious manner. 3) Prior to forwarding data to foreign authorities the Financial Intelligence Unit shall obtain assurances that such information will be protected by the same confidentiality provisions as apply to similar information from domestic sources obtained by the foreign financial intelligence unit. The foreign authority shall use the data solely for the purposes stipulated by this Law.

Article 28 Prevention of money laundering

    The Financial Intelligence Unit shall perform the following duties for the prevention of money laundering:

    a. Proposing to competent bodies the enactment, change, amendment, or nullification of the relevant laws and regulations.

    b. participating in drawing up the list of indicators for recognizing suspicious transactions; [and]

    c. [providing] professional training of the staff of reporting entities, state bodies, and organizations with official authorizations.

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