THE ORDER OF THE CHAIRMAN OF THE AGENCY OF THE REPUBLIC OF KAZAKHSTAN ON FINANCIAL MONITORING

of August 6, 2021 No. 4

About approval of Requirements to rules of internal control for the purpose of counteraction of legalization (washing) of income gained in the criminal way, to financing of terrorism and financing of distribution of weapons of mass destruction for the non-financial sector

According to Item 3-2 of article 11 of the Law of the Republic of Kazakhstan "About counteraction of legalization (washing) of income gained in the criminal way, to financing of terrorism and financing of distribution of weapons of mass destruction" and Item 8 of article 27 of the Law of the Republic of Kazakhstan "About legal acts", I ORDER:

1. Approve the enclosed Requirements to rules of internal control for the purpose of counteraction of legalization (washing) of income gained in the criminal way, to financing of terrorism and financing of distribution of weapons of mass destruction for the non-financial sector.

2. Declare invalid the order of the Minister of Finance of the Republic of Kazakhstan of September 28, 2020 No. 926 "About approval of Requirements to rules of internal control for the purpose of counteraction of legalization (washing) of income gained in the criminal way and to financing of terrorism for not the financial sector" (it is registered in the Register of state registration of regulatory legal acts at No. 21300).

3. To provide to department on work with subjects of financial monitoring of the Agency of the Republic of Kazakhstan on financial monitoring in the procedure established by the legislation:

1) state registration of this order in the Ministry of Justice of the Republic of Kazakhstan;

2) placement of this order on Internet resource of the Agency of the Republic of Kazakhstan on financial monitoring.

4. This order becomes effective after ten calendar days after day of its first official publication.

Approved by the Order of the Chairman of the Agency of the Republic of Kazakhstan on financial monitoring of August 6, 2021 No. 4

Requirements to rules of internal control for the purpose of counteraction of legalization (washing) of income gained in the criminal way, to financing of terrorism and financing of distribution of weapons of mass destruction for the non-financial sector

Chapter 1. General provisions

1. These Requirements to rules of internal control for the purpose of counteraction of legalization (washing) of income gained in the criminal way, to financing of terrorism and financing of distribution of weapons of mass destruction for the non-financial sector (further - Requirements) are developed according to Item 3-2 of article 11 of the Law of the Republic of Kazakhstan "About counteraction of legalization (washing) of the income received in the criminal way, to financing of terrorism and financing of distribution of weapons of mass destruction" (further - the Law) and International standards of Group of development of financial measures of anti-money laundering (FATF) for the subjects of financial monitoring provided by subitems 7), 8), 13), 15), 16), 18), 21) and 22) of Item 1 of article 3 of the Law (further - the subject).

2. Rules of internal control are the document which regulates the organizational bases of work directed to counteraction of legalization (washing) of income gained in the criminal way, to financing of terrorism and financing of distribution of weapons of mass destruction (further - POD/FT/FROMU), and establishes operations procedure of the subject for the purpose of POD/FT/FROMU.

3. Rules of internal control include programs, stipulated in Item 3 articles 11 of the Law.

The subject has the right to include in programs of rules of internal control of provision, unforeseen Requirements.

4. Rules of internal control affirm the subject (the supreme body of management or the head) and are placed in personal account.

Chapter 2. The program of the organization of internal control for the purpose of POD/FT/FROMU, including the requirement about appointment of person responsible for realization and observance of rules of internal control, from among leading employees of subjects or other heads of subjects is not lower than the level of head of the relevant structural division, and also other requirements imposed to the workers of subjects responsible for realization and observance of rules of internal control including about availability of faultless goodwill

5. The program of the organization of internal control includes:

1) procedure for purpose of person responsible for realization and observance of rules of internal control (further - the responsible person);

2) the powers and obligations assigned to the responsible person;

3) procedure for assignment of obligations of the responsible person for its temporary absence (leave, temporary disability, official journey);

4) powers and obligations of the structural division performing functions on POD/FT/FROMU (in the presence).

The decision on creation of such structural division is made by legal entities independently proceeding from features of structure, the number of staff, client base and degree (level) of risk of making by the client of suspicious transactions with money and (or) other property (further - suspicious transaction);

5) the description of internal control system of the subject and its branch (in the presence), and also order of interaction of structural divisions of the legal entity (workers of the individual entrepreneur) concerning implementation of rules of internal control;

6) procedure for modification of rules of internal control;

7) procedure for test of internal control system;

8) procedure for document storage and the data received as a result of realization of obligations on POD/FT/FROMU.

6. The responsible person designates the physical person who is the subject's worker based on the employment contract and conforming to the following requirements:

has the status of the head (not lower than the level of the head of the structural unit) and submitting directly to the head of the legal entity;

has the higher or secondary professional education;

at least 2 (two) years in the field of POD/FT/FROMU or in the field of activities of the subject have length of service;

has faultless goodwill;

has the certificate on passing of testing for knowledge of the legislation of the Republic of Kazakhstan on POD/FT/FROMU (further - the certificate). The certificate is placed in personal account of the subject.

Person to who obligations of the responsible person for its temporary absence are assigned (leave, temporary disability, official journey) conforms to requirements imposed to the responsible person.

The subject appoints himself the responsible person if he is individual entrepreneur or physical person. At the same time the requirements established for the responsible person do not extend to it, except for certificate availability.

7. At least 1 (one) time a year is performed by the subject internal control systems on compliance to requirements of the legislation of the Republic of Kazakhstan on POD/FT/FROMU.

Check of internal control system includes:

1) check of accomplishment by the subject (responsible person) of rules of internal control and requirements of the legislation of the Republic of Kazakhstan about POD/FT/FROMU;

2) representation to the subject (to the supreme body of management or the head) written reports about results performed;

3) taking measures, the violations directed to elimination revealed by results of checks.

Check of internal control system is performed according to the solution of subject by external audit, internal audit (in case of its availability) or structural division (worker) who is not participating in the POD/FT/FROMU system.

8. The subject from the date of the termination of business relations with the client provides at least 5 (five) years document storage and the data, stipulated in Item 4 articles 11 of the Law.

Chapter 3. The management program risks (low, high risk levels) to legalization (washing) of income gained in the criminal way, to financing of terrorism and financing of distribution of weapons of mass destruction considering risks of clients and risks of use of services in criminal objectives including risk of use of technological achievements

9. The management program risks includes:

1) evaluation procedure and references of the client to degree (level) of risk in case of establishment of business relations, and also applications of the simplified or strengthened measures of proper check of clients;

2) procedure and terms of review of degree (level) of customer risk;

3) procedure for risk management;

4) the evaluation procedure of the risks of use of new services (products) and (or) program technical means for the purpose of legalization (washing) of income gained in the criminal way, financings of terrorism and financing of distribution of weapons of mass destruction (further - OD/FT/FROMU) including development of package of measures, directed to their decrease;

5) procedure for fixation of results of assessment of degree (level) for risk and risk management.

10. Assessment of degree (level) of risk is performed in case of establishment of business relations and in course of dealing.

Assessment of degree (level) of risk is performed on one or on set of the following categories of risks:

the risks connected with the countries and (or) the separate geographical territories;

the risks connected with clients;

the risks connected with services (products), supply channels, transactions with the money and (or) other property (further - transaction) made by the client.

The subject establishes additional categories of risks taking into account features of the activities.

11. The subject in case of assessment of degree (level) of risk considers the following factors:

results of national and sectoral risks assessment;

nature and types of activity of clients, and also the services (products) used by them;

information and data, and also recommendations of authorized body;

typology, the schemes and methods OD/FT/FROMU placed on Internet resource of authorized body and from other available sources;

signs of the transactions, types and conditions of activities having the increased risks of making by clients of transactions for the purpose of OD/FT/FROMU taking into account recommendations of Group of development of financial measures of anti-money laundering (FATF).

The subject develops additional factors for assessment of degree (level) of risk taking into account features of the activities.

12. In case of assessment of degree (level) of risk reference of clients to the following risk levels is carried out:

high degree (level) of risk;

low degree (level) of risk.

13. The decision on assignment to the client of degree (level) of risk is made by the subject following the results of studying of the available customer information (his representative) and the beneficial owner, and also on the transactions made by the client or for the benefit of the client.

14. In case of long (lasting) nature of business relations the subject performs permanent monitoring of risk level of the client.

The decision on review of risk group is made in case of identification of factors based on which degree (level) of risk is estimated.

15. Risk management is implemented by means of implementation of actions for decrease in risk within measures, stipulated in Item the 7th article 5 of the Law.

Updating of information about clients with high degree (level) of risk is performed at least 1 (one) time a half-year.

16. The risks assessment of new services (products) and (or) program technical means is carried out before their introduction.

17. The subject annually performs assessment of degree (level) of exposure of clients, services (products) to risks of OD/FT/FROMU.

Results of assessment of degree (level) of risk of OD/FT/FROMU are placed in personal account of the subject till 10 on the (tenth) of January the year following after accounting year.

Chapter 4. Program of identification of clients

18. The program of identification of the client includes:

1) procedure for taking measures of proper check of the client (his representative) and the beneficial owner, and also confirmation of reliability of the received data;

2) verification of presence of the client (his representative) and the beneficial owner in lists of the organizations and faces tied with financing of terrorism and extremism, and financing of distribution of weapons of mass destruction;

3) procedure for identification of foreign public officials, and also persons which are in the list of public officials approved by the President of the Republic of Kazakhstan with determination of sources of origin of money or other property;

4) procedure for identification of the physical persons and legal entities having registration, the residence or the location in the state (in the territory) which does not implement the recommendation of Group of development of financial measures of anti-money laundering (FATF).

19. Methods and forms of fixation of the data received as a result of identification of clients (their representatives) and beneficial owners are determined by the subject independently.

Chapter 5. The program of monitoring and studying of transactions of clients, including studying of difficult, unusually large and other unusual transactions of clients

20. The program of monitoring and studying of transactions of clients includes:

1) procedures of identification of the transactions which are subject to financial monitoring and suspicious activities;

2) procedure for decision making about refusal in carrying out transaction or establishment (termination) of business relations;

3) procedure and frequency of carrying out reconciliation on availability of the clients to whom measures for freezing of transactions shall be applied;

4) procedure for taking measures to freezing of transactions;

5) operations procedure, the transactions connected with suspension;

6) order of interaction and informing the client on the applied measures for POD/FT/FROMU taking into account the requirements provided by Items 5 and 5-1 of article 11 of the Law;

7) order of interaction with clients for implementation of transactions, stipulated in Item the 8th article 12 of the Law;

8) procedure for submission to authorized body of messages on the refusal facts in making of transaction or establishment (termination) of business relations, freezings and suspensions of transactions.

21. The program of monitoring and studying of transactions of clients joins signs of suspicious transactions and (or) activities, typology, the scheme and methods OD/FT/FROMU.

The subject has the right to include additional signs of suspicious transactions and (or) activities, typology, the scheme and methods OD/FT/FROMU in the program of monitoring and studying of transactions of clients.

22. The decision on recognition of transaction and (or) activities of the client suspicious is accepted by the subject based on information on financial and economic activities, financial position and goodwill of the client (his representative) and the beneficial owner.

For the purpose of identification of suspicious transaction and (or) activities by the subject monitoring of transactions of the client and studying of information which is available at its order is carried out. In the solution of subject date and the bases of recognition of transaction and (or) activities suspicious are fixed.

23. Messages on the transactions which are subject to financial monitoring go the subject to authorized body by means of personal account.

24. Results of monitoring of transactions of clients and studying of information are used by the subject for annual assessment of degree (level) of risk and risk management of OD/FT/FROMU, and also for review of risk level of clients.

Chapter 6. The program of preparation and training of subjects in the field of POD/FT/FROMU

25. The program of preparation and training of the subject in the field of POD/FT/FROMU is developed according to the Requirements to subjects of financial monitoring on preparation and training in the field of counteraction of legalization (washing) of income gained in the criminal way, to financing of terrorism and financing of distribution of weapons of mass destruction approved by the order of the Chairman of the Agency of the Republic of Kazakhstan on financial monitoring of August 9, 2021 No. 6 (registered in the Register of state registration of regulatory legal acts No. 23952).

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