Law of the Republic of Kazakhstan on Counteracting Legalization (Laundering) of Ill-gotten Proceeds and Terrorist Financing
The current Law shall define the legal framework for Counteracting the Legalization (Laundering) of Ill-gotten Proceeds and Terrorist Financing, the legal relations of the authority, the entities of financial monitoring and other governmental bodies of the Republic of Kazakhstan in the sphere of combating the legalization (laundering) of ill-gotten proceeds and the financing of terrorism.
CHAPTER 1. GENERAL PROVISIONS
Article 1. Basic terms used in this Law
The following basic terms are used in this Law:
1)Suspicious transactions with money, and (or) other property (hereinafter - the suspicious transaction) - a transaction that meets the criteria established by this Law, according to which there is a reason to believe that, as a result of its settlement the ill-gotten proceeds are involved in legitimate money turnover or the settlement of this transaction is aimed at terrorist and (or) extremist financing;
2)Transactions with money or other assets - actions of natural and legal entities with money and (or) other property, regardless of the form and manner of their accomplishment, aimed at the establishment, modification or termination of their civil rights and obligations;
3)Ill-gotten proceeds - money and (or) other property obtained as a result of commitment of a crime or an administrative offence;
4)Legalization (laundering) of ill-gotten proceeds - involvement of money and (or) ill-gotten proceeds in legitimate money turnover through accomplishment of transactions, as well as the use of such money and (or) other property;
5)Correspondent bank - a bank, which accomplishes bank transactions provided by the contract of the correspondent account;
6)Financial monitoring - a set of measures to collect and analyze the information on transactions with money and (or) other assets obtained from entities of financial monitoring;
7)Terrorist financing (terrorist activities) - a provision or collection of money and (or) other property or provision of financial services to terrorists and (or) terrorist organizations for carrying out terrorist activity;
8)The Authorized body - the public body that fulfills financial monitoring and takes other measures to counteract the legalization (laundering) of ill-gotten proceeds and terrorist financing, in accordance with this Law;
A foreign public official - an appointed or elected person, holding any position in the legislative, executive, administrative or judicial body of a foreign state, as well as any person exercising a public function for a foreign country;
Article 2. Legislation of the Republic of Kazakhstan on Counteracting the Legalization (Laundering) of Ill-gotten proceeds and Terrorist Financing
1.Legislation of the Republic of Kazakhstan on Counteracting Legalization (Laundering) of Ill-gotten Proceeds and Terrorist Financing shall be based on the Constitution of the Republic of Kazakhstan and shall include this Law and other regulatory legal acts of the Republic of Kazakhstan.
2.If an international treaty, ratified by the Republic of Kazakhstan establishes other rules than those contained in this Law, that the rules of the international treaty shall be implemented.
CHAPTER 2. PREVENTION OF LEGALIZATION (LAUNDERING) OF ILL-GOTTEN PROCEEDS AND TERRORIST FINANCING
Article 3. The entities of financial monitoring
1.For the purposes of this Law, the entities of financial monitoring shall be referred:
1)banks, organizations conducting certain types of banking operations;
2)stock exchanges;
3)insurance (reinsurance) organizations, insurance brokers;
4)funded pension funds;
5)professional participants of securities market, the central depository;
6)notaries, providing notary actions with money and (or) other property;
7)attorneys, other independent specialists on legal issues in the cases when they are involved in transactions with money and (or) property in and for Client and related to the following activities:
real estate purchase and sale;
managing money, securities and other Client’s property;
managing bank accounts or securities accounts;
accumulating proceeds for establishment, maintenance, operation and management of a company;
establishment, operation and management by legal entities or establishment and enterprise’s purchase and sale;
8)auditors and audit organizations;
9)organizers of gambling and lotteries;
10)post office operators, providing money transfer services.
2.The state bodies of the Republic of Kazakhstan shall not be the entities of financial monitoring.
Article 4 Transactions with money and (or) other property, subject to financial monitoring
Transactions with money and (or) other property are subject to financial monitoring, if due to its nature, it is related to one of the types of transactions, described in item 2 of this Article, and is accomplished in cash, except for transactions described in subitems 6), 7), 9), 11) and 18) of item 2 of this Article, in the amount which equals or exceeds:
for the transaction specified in subitem 1) of item 2 of this Article - in the amount equal or exceeding 1,000,000 KZT or amount in foreign currency equivalent or exceeding 1,000,000 KZT;
for the transactions specified in subitem 6), 7) and 9) of item 2 of this Article - in the amount equal or exceeding 2,000,000 KZT or amount in foreign currency equivalent or exceeding 2,000,000 KZT;
for the operations specified in subitems 2) - 5), 8), 10) - 17) of item 2 of this Article - in the amount equal or exceeding 7,000,000 KZT or amount in foreign currency equivalent or exceeding 7,000,000 KZT;
for the operations specified in subitems 18) and 19) of item 2 of this Article - in the amount equal or exceeding 45,000,000 KZT or amount in foreign currency equivalent or exceeding 45,000,000 KZT.
2. Transactions with money or other property, subject to financial monitoring shall include:
1)winnings, including in electronic form, as a result of a bet, gamble in gambling establishments, as well as a lottery;
2)purchase, sale and exchange of foreign currency in cash through exchange offices;
3)receipt of money by check or bill as one-off transaction or transactions carried out during seven consecutive calendar days;
4)the exchange of banknotes of one denomination for banknotes of otter denominations as one-off transaction or transactions, carried out during seven consecutive calendar days;
5)withdrawal or allocation of money to a bank account of a client, both as one-off transaction, and transactions carried out during seven consecutive calendar days;
6)allocation or transfer of money into a bank account by a natural or legal entity with appropriate registration, place of residence or location in the offshore zone, as well as having a bank account registered in the offshore zone, or transfer of money by the client in favor of the specified category of persons both as one-off transaction and transactions carried out during seven consecutive calendar days;
7)money transfers abroad to anonymous accounts (deposits); receipt of money from abroad, from anonymous account (deposit), accomplished as one-off transaction and transactions carried out during seven consecutive calendar days;
8)opening a savings account (deposit) in favor of a third person and (or) deposition of funds to such an account both as one-off transaction or transaction carried out during seven consecutive calendar days;
9)payments and transfers of money, accomplished by a client to another person on a gratuitous basis;
10)acquisition (sale), import into the Republic of Kazakhstan, or export from the Republicof Kazakhstanof cultural property;
11)transactions, accomplished by legal entities, after the state registration, which took place less than three months ago;
12)import or export to/from the Republic of Kazakhstan of foreign currency in cash, except for import or export, carried out by the National Bank of Kazakhstan, Banks and the National Post Office;
13)insurance payment or receipt of insurance bonus;
14)deposition, transfer of voluntary pension contributions to savings pension funds, as well as the accomplishment of pension payments from savings pension funds at the expense of voluntary pension contributions;
15)receipt or provision of property under a contract of financial leasing;
16)deals for rendering the services, including contracting shipment, transport expedition, storage, commissions, trust property management;
17)purchase and sale and other transactions with precious metals, precious stones and articles thereof;
18)transactions with real estate and other property subject to compulsory state registration;
19)securities transactions.
3.Suspicious transactions are subject to financial monitoring, regardless of the amount to which they are committed or may be committed.
4.The suspicious transaction criteria shall be:
1)transactions, which have no obvious economic sense;
2)actions, directed to avoiding financial monitoring procedures, provided by the this Law;
3)transactions, for which there is reason to believe that this transaction is aimed at financing of terrorism and (or) extremism.
Article 5. Customer Due Diligence by the Entities of Financial Monitoring
1.The entities of financial monitoring should take measures on due diligence of their clients in accordance with the law of the Republic of Kazakhstan on Counteracting the Legalization (Laundering) of Ill-gotten Proceeds and Terrorist Financing.
2.The entities of financial monitoring shall perform customer due diligence when:
1)establishing business relations with a client;
2)accomplishing transactions with money and (or) other property, subject to financial monitoring;
3)there are grounds for doubt about authenticity of the previously obtained data on the natural parson.
3.Customer Due Diligence performed by the entities of financial monitoring shall include following measures:
1)to record the identification information of a natural person, who accomplishes a transaction with money and (or) other property: data of the identity card, the taxpayer identification number, the personal identification number (except for the cases when a client is not assigned a taxpayer identification number, a personal identification number in accordance with the legislation of the Republic of Kazakhstan);
2)to record the identification information of a legal entity, which accomplishes a transaction with money and (or) other property: data of the constitutive documents, the taxpayer identification number, business -identification number (unless a client is not assigned a taxpayer identification number, business -identification number in accordance with the legislation of the Republic of Kazakhstan) as well as the address of the location;
3)to record the identification information of a recipient of a transaction with money and (or) other property, and its representative, including the taxpayer identification number, the personal identification number (if available) of the recipient and its representative, as well as a mark on the signature verification of a recipient or representative (if available);
4)to establish a presumptive purpose and nature of business relations;
5)to conduct continuous examination of business relations and to scrutinize the transactions, accomplished by a client through this entity of financial monitoring.
4. Customer Due Diligence shall be performed by the entities of financial monitoring in accordance with the internal control regulations.
Article 6. Customer Due Diligence by the entities of financial monitoring in the event of establishment of business relationship with a client
The entities of financial monitoring should take the measures, provided by sub items 1) - 4) of item 3 of Article 5 of this Law, prior the establishment of business relations with customers.
1.
Article 7. Customer Due Diligence by the entities of Financial monitoring in transactions with money and (or) other property, subject to financial monitoring
1.The entities of financial monitoring prior the transactions with money and (or) other property, subject to financial monitoring pursuant to Article 4 of the current Law, shall take the measures, specified in subitems 1) - 4) of item 3 of Article 5 of this Law.
2.In the event of a failure to take measures under subitems 1) - 4) of item 3 of Article 5 of this Law, the entities of financial monitoring shall not establish business relationship with customers and shall not accomplish transactions.
Article 8. Due diligence of foreign public officials by the entities of financial monitoring
The entities of financial monitoring besides the measures, specified by item 3 of Article 5 of this Law in respect of foreign public officials additionally shall be obliged:
1)to check a client's affiliation to a foreign public official;
2)to assess the reputation of the foreign public official in relation to its involvement in cases of legalization ( laundering) of ill-gotten proceeds and (or) terrorist financing;
3)to obtain a permission of a management of an organization for establishment, continuation of business relationships with such customers;
4)to take available measures to establish the source of funds.
Article 9. Due diligence of correspondent banks by the entities of financial monitoring
The entities of financial monitoring besides the measures imposed by item 3 of Article 5 of this Law in respect of correspondent banks additionally shall be obliged:
1)to collect information about the reputation of the correspondent bank;
2)to assess the involvement of a correspondent bank in legalization (laundering) of ill-gotten proceeds or terrorist financing cases;
3)to obtain a permission of a management of an organization for establishment of new correspondent relationships.
Article 10. Collection of data and documentary record-keeping in due diligence
1. The entities of financial monitoring when conducting customer due diligence shall be obliged to keep documentary records on a client.
The list of documents for customer due diligence on the types of the entities of financial monitoring shall be determined by the Authorized body in coordination with respective state agencies.
2.Data and information on transactions, subject to financial monitoring shall be submitted by the entities of financial monitoring to the Authorized body in the order, determined by the Authorized body in coordination with respective state agencies.
3.Data and information on transactions, subject to financial monitoring, shall not be submitted by attorneys, if any data and information is obtained in connection with rendering legal assistance on the issues of representation and protection of natural and legal entities in the agency of inquiry, preliminary investigation, the courts.
4.Costs related to transfer of the information to the Authorized body on transactions subject to financial monitoring, obtained after customer due diligence, shall be covered by the entities of financial monitoring.
Article 11. Internal control by the entities of financial monitoring
1.The entities of financial monitoring shall take measures, under which their services will not be used by others for the purpose of committing or assisting in the legalization (laundering) of ill-gotten proceeds and terrorist financing.
2.The entities of financial monitoring in order to prevent the legalization (laundering) of ill-gotten proceeds and terrorist financing shall develop regulations of internal control and a programs of their implementation, shall appoint special offices, responsible for compliance with regulations and programs.
3.Internal control regulations shall be developed, adopted and performed by the entities of financial monitoring, taking into account the requirements approved by the Authorized body in coordination with respective state agencies.
4.Documents, confirming the information specified in Article 5 of this Law, as well as copies of identification documents, shall be stored by the entities of financial monitoring for not less than five years from the date of termination of the relationship with a client.
5.The entities of financial monitoring, providing information to the Authorized agency shall not be entitled to notify the customers and other persons about it in respect of which the information is transmitted.
6.Provision of information and documents to the Authorized body by the entities of financial monitoring for the purpose and in the order, prescribed by the current Law, shall not be deemed as disclosure of official, commercial, banking or other legally protected secrecy.
7.When providing the information to the Authorized body in accordance with the current Law, the entities of financial monitoring, their officers, regardless of the outcome of information provision, shall not be liable under the laws of the Republic of Kazakhstan, and a civil law contract as well.
Article 12. List of organizations and individuals, related to financing of terrorism and extremism
1.The authorized body shall compile a list of organizations and individuals related to financing of terrorism and extremism, and shall forward it to respective state agencies, which shall pass it to the entities of financial monitoring.
2.A state body, which, within its competence, carries out statistical work in the field of legal statistics and special records, as well as other competent state bodies shall forward a list of organizations and (or) individuals indicated in item 4 herein to Authorized body.
3.The list of organizations and individuals related to financing of terrorism and extremism shall be updated according to information provided by state body, which carries out within its competence statistical work in the field of legal statistics and special records, as well as other competent state authorities.
4.Reasons for inclusion of an organization or individual into the list of organizations and individuals related to financing of terrorism and extern ism shall be:
1)decision of the court of the Republic of Kazakhstan, which came into force, on elimination of
organization due to it's carrying out terrorist activities and (or) extremism;
2)decision of the court of the Republic of Kazakhstan, which came into force, on recognition of a foreign or an international organization, carrying out terrorist activity or extremism in the territory of the Republic of Kazakhstan and (or) another state, as extremist or terrorist;
3)verdict of the court of the Republic of Kazakhstan, which came into force, on adjudging individual guilty of a crime that contains sips of extremism, or a crime under Articles 233 - 233-3 of the Criminal Code of the Republic of Kazakhstan;
4)verdicts (decisions) of courts and decisions of other competent authorities of foreign states in respect of organizations or individuals engaged in terrorist activities recognized in the Republic of Kazakhstan in accordance with international treaties and laws of the Republic of Kazakhstan;
5)lists of organizations and individuals related to terrorist organizations or terrorists compiled by international organizations combating the terrorism, or by authorized by them bodies, and recognized by the Republic of Kazakhstan,
Article 13. Refusal to carry out transactions with money and (or) other property and suspension of suspicious transactions
1.The entities of financial monitoring shall be obliged to refuse to conduct transactions with money and (or) other property, subject to financial monitoring in the event of failure to take measures, provided by subitems 1) - 4) of item 3 of Article 5 herein,
2.The entities of financial monitoring in order to prevent and suppress the facts of legalization (laundering) of ill- gotten proceeds and terrorist financing shall be obliged to inform immediately the Authorized body about a suspicious transaction before it is accomplished.
Information on suspicious transactions, which cannot be suspended, shall be provided by entities of financial monitoring to Authorized body not later than three hours after they occurred, or within twenty-four hours after revelation of such transactions.
Procedure for suspension of suspicious transactions shall be determined by the Authorized body in coordination with relevant state bodies.