RESOLUTION OF THE NATIONAL COMMISSION ON THE FINANCIAL MARKET

of December 25, 2007 No. 63/5

About Recommendations about application of measures for the prevention and anti-money laundering and financing of terrorism in the non-bank financial market

Based on the Law N 192-XIV of 12.11.1998. "About the National commission on the financial market" (it is repeatedly published: The official monitor of the Republic of Moldova, 2007, N 117-126 BIS) and the Law N 190-XVI of 26.07.2007. "About the prevention and anti-money laundering and terrorism financing" (The official monitor of the Republic of Moldova, 2007, N 141-145, Art. 597) the National commission on the DECIDES: financial market

1. Approve Recommendations about application of measures for the prevention and anti-money laundering and in the non-bank financial market (are applied) by financing of terrorism.

2. To professional participants till three months from the date of entry into force of this resolution to approve according to the legislation own programs for the prevention and anti-money laundering and terrorism financing, considering provisions of these recommendations and to provide them to the National commission on the financial market.

3. To impose control of execution of provisions of item 2 of this resolution on department of securities, department of insurance and department of collective investments and microfinancing.

4. Declare invalid the Resolution of the National commission on securities N 11/1 of 28.02.2005. "About approval of the Regulations on the prevention and anti-money laundering in the security market" (The official monitor of the Republic of Moldova, 2005, N 36-38, Art. 121).

5. This resolution becomes effective from the date of publication.

 

Appendix

to the Resolution of the National commission on the financial market No. 63/5 of December 25, 2007

Recommendations about application of measures for the prevention and anti-money laundering and financing of terrorism in the non-bank financial market

1. General provisions

1.1. Recommendations about application of measures for the prevention and anti-money laundering and financing of terrorism in the non-bank financial market (further - recommendations) are developed according to provisions of the Law N 192-XIV of 12.11.1998. "About the National commission on the financial market", the Law N 190-XVI of 26.07.2007. "About the prevention and anti-money laundering and terrorism financing" and other existing legal acts.

1.2. The prevention and anti-money laundering and financing of terrorism are essential contribution to national economy and promote growth of trust to non-bank financial system.

1.3. These recommendations establish requirements to creation of own programs for the prevention and anti-money laundering and financing of terrorism in the non-bank financial market by the professional participants of the non-bank financial market (further - professional participants) specified in the Law N 192-XIV of 12.11.1998. "About the National commission on the financial market", in particular the professional participants of the security market performing activities for maintaining the register, broker, dealer, underwriting activities, activities for trust management of investments, professional participants of the market of insurance, non-state pension funds, savings and loan associations, the organizations of microfinancing, the organizations of mortgage lending.

1.4. The purpose of these recommendations is establishment of measures for the prevention and anti-money laundering and financing of terrorism in the non-bank financial market, and also management of professional participants (assistance to professional participants) in case of development of own programs, in respect of investment with their powers on provision of financial services to legal clients, for the purpose of prevention of the risks connected with money laundering and financing of terrorism.

1.5. Vulnerable sectors on which money laundering and financing of terrorism is possible are:

a) difficult and unusual transactions;

b) international financial transactions;

c) transactions on the Internet;

d) broker transactions;

e) trust transactions;

f) acceptance of savings fees;

g) provision of loans.

1.6. Basic elements of process of money laundering and financing of terrorism are:

a) placement - initial cash flow or other income gained owing to criminal activities, for the purpose of change of their initial form or the place therefore they become unavailable to law enforcement agencies;

b) investment - department of income gained from criminal activities from source of their origin by means of different financial transactions;

c) integration - use of legal transaction for concealment of the illegal income therefore there is possible return to the criminal of the washed funds.

1.7. The professional participant informs the Center for fight against economic crimes and corruption (further - the Center) and the National commission on the financial market (further - the National commission) according to the legislation on the activities for the prevention and anti-money laundering and financing of terrorism in the non-bank financial market.

1.8. These recommendations do not change the obligation of the professional participant on observance of the current legislation about the prevention and anti-money laundering and terrorism financing.

2. Responsibility

2.1. Governing bodies of the professional participant are responsible for development, approval and ensuring application of adequate own program for the prevention and anti-money laundering and terrorism financing on which the timely prevention and identification of doubtful transactions depends. Availability of such program is the most effective remedy for protection of the professional participant against involvement in the transactions promoting carrying out illegal actions and also for ensuring compliance with the applied regulations of informing on doubtful actions.

2.2. Governing bodies of the professional participant are responsible for reduction of its activities in compliance with provisions of the current legislation in the field of the prevention and anti-money laundering and terrorism financing.

3. The risks connected with money laundering and financing of terrorism

In case of development of own anti-money laundering programs and terrorism financing professional participants shall consider the risks connected with money laundering and financing of terrorism for the purpose of their reduction.

3.1. Risk of legality - risk that resolutions of degree of jurisdiction or the agreement, in essence, are impracticable and can negatively influence transactions or on provision of professional participants. For the purpose of legality risk minimization professional participants shall perform the correct observation in case of identification of physical persons and legal entities, and also the real beneficiary.

3.2. Risk of reputation - the risk connected with money laundering and financing of terrorism which is connected with possibility of loss of trust owing to emergence of anti-advertizing about business practicians of physical persons and legal entities and the real beneficiary.

3.3. Operational risk - risk of real or indirect loss as a result of inadequate or unfortunate internal processes, persons or events from the outside.

3.4. Risk of information technologies - risk which can appear owing to emergence of the new and developing information technologies when they can create the conditions favoring to money laundering and financing of terrorism.

4. Basic provisions of own programs for the prevention and anti-money laundering and financing of terrorism in the non-bank financial market

4.1. Own programs for the prevention and anti-money laundering and financing of terrorism represent policy and procedures, including the rules about measures of identification of clients promoting support of ethical and professional standards in the non-bank financial sector and preventing deliberate or inadvertent use of the professional participant criminal elements. Policy and procedures shall provide carrying out financial transactions with reliable and circumspect method.

4.2. The national commission insists on creation of timely own programs for the prevention and anti-money laundering and terrorism financing, considering these recommendations. The structure of these programs is established according to the sample provided in appendix to these recommendations.

4.3. In case of development of own programs for the prevention and anti-money laundering and terrorism financing professional participants shall consider these recommendations and adapt them for the activities depending on size, complexity, nature and amount of actions of the professional participant, the list of clients, the risk level associated with different clients and with the transactions performed by them, considering provisions of the Law N 190-XVI of 26.07.2007. "About the prevention and anti-money laundering and terrorism financing" and the practice accepted in this area.

4.4. The structure of own programs for the prevention and anti-money laundering and financing of terrorism in the non-bank financial market shall provide, but not be limited to the following:

a) obligations of governing body and executive body which shall include:

- knowledge of circumstances of clients with the increased risk level;

- knowledge of information sources of the third parties;

- approval of essential transactions of clients with the increased risk level;

- determination of the sectors put risk of money laundering and financing of terrorism with clear split of the powers of each division directed to the prevention and anti-money laundering and terrorism financing;

- ensuring elimination of the established discrepancies in the field of the prevention and anti-money laundering and financing of terrorism in the non-bank financial market;

b) determination of possible process of money laundering and financing of terrorism depending on characteristics of the professional participant;

c) measures for identification of the client (know-your-customer rule);

d) establishment of system of ensuring compliance of the program for the prevention and anti-money laundering and terrorism financing;

e) procedure of provision of information on doubtful transactions.

5. Identification measures in relation to the client

5.1. Professional participants apply identification measures to clients:

a) before establishment of business relations;

b) when making one-time transactions a minimum of 50 thousand lei, and also when making electronic transactions a minimum of 15 thousand lei regardless of that, transaction in one or several stages is made;

c) in the presence of doubts concerning money laundering or financing of terrorism;

d) in the presence of doubts concerning reliability and accuracy of the obtained identification data.

5.2. The professional participant identifies the client and takes the measures corresponding, based on risk for check of the personality so that to have confidence and customer information, about structure of its property and methods of its check.

5.3. The professional participant constantly watches transactions or business relations of the client to be assured that they correspond to the provided information and are constantly staticized.

5.4. Elements of identification are:

a) the physical person or legal entity having the account at the professional participant or those faces on behalf of which the account is opened;

b) vygodopriobretayushchy owners of the transactions performed by professional intermediaries;

c) any physical person or legal entity involved in the transaction with substantial risk of reputation or other risk.

5.5. Subject of identification of clients by professional participants are:

a) trust accounts;

b) corporate securities;

c) the customer accounts opened by professional intermediaries;

d) politically vulnerable persons.

5.6. The professional participant shall obtain information on the purposes and nature of the business relation, on difficult and unusual transactions.

5.7. Measures for identification of the client are considered under different aspects, such as experience of the client, country of source, the social status, business activity, and other hazard rates. Procedures of the acceptance of clients shall include several stages depending on risk level of clients, at the same time placing emphasis on clients with the high income whose source is unknown. Decisions on the beginning of business relations with clients with high risk level shall be made only at the level of management. It is important that process of the acceptance of clients did not influence access for general public to non-bank financial services.

5.8. Professional participants shall have systematic policy and the procedure of identification of clients and those who act from their name, and shall not establish any connection before check of the identity of the new client. All information necessary for the corresponding identification of each new client, including the purpose, nature of business relations shall be obtained. Professional participants shall identify the client and undertake reasonable measures for check of his personality, using noted information or data obtained from reliable sources so that the professional participant was aware who is his client. Special attention should be paid in case of clients - nonresidents, and also the clients receiving funds from abroad at the same time considering provisions of the Law on the prevention and anti-money laundering and terrorism financing.

5.9. Identification measures are not applied in case:

a) receipts of the life insurance policy provided that the insurance premium, one-time or paid by installments within year, does not exceed 15 thousand lei or lump insurance sum payment does not exceed 30 thousand lei;

b) subscriptions to insurance policies of the pension fund based on the employment contract or proceeding from occupation of person provided that such policy cannot be ahead of schedule paid and cannot be used as guarantee or pledge for receipt of loan.

5.10. The procedures relating to continuous observation of accounts and transactions include:

a) determination of ordinary/characteristic transactions of the client;

b) monitoring of transactions of the client for determination of their compliance to ordinary transactions for this purpose the client or for clients of the same categories;

c) availability of the managerial information systems acceptable for representation of information to the responsible person necessary for identification, the analysis and effective observation of customer accounts with the increased risk level;

d) identification by the professional participant of limited and doubtful transactions, including possible, and also sources of the means used by the client in these transactions.

If the account is opened, but there are problems connected with checks within the financial relations which cannot be resolved to the professional participant it is recommended to inform on it the Center. The professional participant shall not contain the anonymous accounts or accounts opened under dummy name.

5.11. Procedures for ownership and storage of information which shall include, at least, the following:

a) contents of the register of the identified clients within at least seven years (which includes: name of the client, fiscal code, account number, date of opening, closing date);

b) storage of all records about transactions within at least seven years after transaction;

c) storage of cases on the identity of clients within at least seven years after closing of their accounts;

d) exact establishment of the data which are subject to storage in the case of the identity of the client and about the carried-out transactions.

6. Measures of the increased precaution

6.1. Professional participants apply identification measures, establishing their amount depending on the risk determined by type of the client, business relations, property or the transaction. The professional participant shall be able to show to the Center and the National commission that the amount of precautionary measures is adequate taking into account risks of money laundering and financing of terrorism.

6.2. Professional participants should apply measures of the increased precaution in case the physical person or legal entity does not appear personally for identification, and to undertake the following measures:

a) ensuring identification of person by means of additional documents, data or information;

b) additional check and the certificate of the submitted documents;

c) ensuring carrying out the first payment through the account opened addressed to person in financial institution.

6.3. When carrying out (registration) transactions with participation of the legal entity - the resident of offshore zone this legal entity provides the following information:

a) series, number and date of issue of the identification document, address and other data necessary for identification of the representative of the legal entity;

b) the representative document (the power of attorney, the order, the statement from the charter of society, etc.) containing surname and powers of the representative of the legal entity certified of the procedure established by the legislation;

c) this to legal identification (the registration document of the legal entity), the address and other data necessary for identification of the legal entity;

d) the documents confirming identification of founders of the legal entity to the level of determination of founders - physical persons.

6.4. Special attention needs to be paid in case of nonresident clients, and also to the clients or vygodopriobretayushchy owners receiving funds from abroad at the same time considering provisions of the Law on the prevention and anti-money laundering and terrorism financing.

7. System of ensuring reduction in compliance of own programs for the prevention and anti-money laundering and financing of terrorism in the non-bank financial market

For the purpose of ensuring compliance with own programs for the prevention and anti-money laundering and terrorism financing, the professional participant shall have:

7.1. The special provisions relating to internal control system for ensuring permanent compliance for the purpose of risk minimization in case of money laundering and financing of terrorism. These provisions shall include, but not be limited, the following:

a) procedures of identification of limited and doubtful transactions;

b) monitoring of the clients performing transactions, uncharacteristic for the activities, in large number. In these purposes the professional participant conducts researches for establishment of belonging of clients to the group which is subject to monitoring;

c) monitoring of the actions connected with the accounts opened at the professional participant;

d) internal procedures of informing on doubtful transactions.

7.2. Auditing service of the professional participant on check of compliance of the program for the prevention and the anti-money laundering and financing of terrorism realized by personnel of the professional participant or the impartial person which obligations include at least following:

a) independent assessment of domestic policy and procedures of the professional participant, including observance of requirements of the current legislation;

b) monitoring of activities of personnel by testing of compliance;

c) testing of transactions in case of need;

d) acquaintance of governing body with results of check.

7.3. Designate person given authority to make decisions, with assignment on it of responsibility for ensuring compliance of policy and procedures of the professional participant to requirements and regulations on anti-money laundering and terrorism financing, in view of these recommendations.

The responsible person promotes implementation of provisions of the internal program for the prevention and anti-money laundering and financing of terrorism for the purpose of the suppression of money laundering and financing of terrorism coming from illegal (criminal) actions. For this purpose person is allocated with at least following powers:

a) provide consultations to employees of the professional participant on the questions which arose in implementation process of the program for the prevention and anti-money laundering and terrorism financing including in case of the identification and consideration of clients of the professional participant and risk assessment of money laundering which came from illegal (criminal) actions, and terrorism financing;

b) make decisions based on the acquired information;

c) organize training of the employees of the professional participant in problems of suppression of money laundering coming from illegal (criminal) actions and financing of terrorism;

d) undertake measures for representation of information to the Center according to the legislation in the field;

e) at least once a year to represent to governing body of the professional participant in writing the report on results of implementation of the internal program for the prevention and anti-money laundering and terrorism financing;

f) cooperate with auditing service of the professional participant on accomplishment of tasks on check of compliance of activities of the professional participant to the current legislation in the field of the prevention and anti-money laundering and terrorism financing;

g) performs other functions according to these recommendations and internal documents of the professional participant.

7.4. The adequate procedures of selection containing relevant requirements to personnel.

7.5. The program of permanent personnel training concerning structure and compliance of provisions of the program for the prevention and anti-money laundering and terrorism financing. The training program shall include all aspects of process of the prevention and anti-money laundering and terrorism financing, and the personnel of the professional participant shall be appropriately trained. The schedule and content of training adapts to individual requirements of the professional participant. Personnel training is performed depending on the level of its involvement in process of the prevention and anti-money laundering and terrorism financing. Training shall contain at least:

a) instructing of new personnel about need of the internal program for the prevention and anti-money laundering and financing of terrorism and about the main requirements of this program;

b) instructing of personnel of the first line concerning check of the identity of new clients, permanent monitoring of accounts of already existing clients and identification of indicators of doubtful activities;

c) permanent instructing for aktualizirovaniye of responsibility of personnel, including informing on new achievements in the area.

7.6. The regulations providing accountability of workers who purposely do not report (do not report of own will) about doubtful transactions to the responsible person, management of safety or it is direct to management, and/or personally promotes carrying out transaction on money laundering and financing of terrorism.

8. Informing on doubtful transactions

8.1. The professional participant shall have the clear procedures corresponding to provisions of the Law on the prevention and anti-money laundering and terrorism financing, which are brought to the attention of all personnel which provide personnel of information on all doubtful transactions to the special person entering management of the professional participant responsible for accumulating of information and taking measures against money laundering and financing of terrorism. Also certain connection, both shall be established with management, and with management of internal security, for the message on problems, belonging to money laundering and financing of terrorism.

8.2. In case of identification of doubtful transactions, these transactions are registered the professional participant by filling of special forms and/or data presentation according to the current legislation, with the subsequent informing the Center with respect for privacy.

8.3. The professional participant will provide to the Center and the National commission information on doubtful transactions or on the cases of fraud having significant effect on safety, stability or reputation of the professional participant.

8.4. The professional participant shall inform without delay the Center on any doubtful activities or the transaction which is in process of preparation, making or already committed. Data on doubtful transactions are reflected in the special form which is transferred to the Center in time, not exceeding 24 hours.

8.5. The professional participant fills in the special form for the transactions made or which are made in one stage of over 500 thousand lei, and also made in several stages in the specified amount within 30 calendar days. The form is transferred to the Center no later than the 15th following for reporting.

8.6. According to the solution of the Center the professional participant stops accomplishment of doubtful transactions for the term specified in the decision, but no more than for five working days.

8.7. The professional participant and his workers shall not report to the physical persons or legal entities performing activities or making the transaction or the third parties, about the information transfer fact to the Center.

Appendix

to Recommendations about application of measures for the prevention and anti-money laundering and financing of terrorism in the non-bank financial market

Sample of structure of the internal program for the prevention and anti-money laundering and terrorism financing

     Цель и задачи
     Организация
     Ответственные органы и лица, их обязанности и ответственность:
          Руководящий орган
          Исполнительный орган
          Ответственное лицо
          Работники
     Правила "Знай своего клиента":
          Акцепт клиента
          Идентификация клиента
          Мониторинг сделок
          Сохранение информации
     Проверки
     Ответственность аудита
     Требования к отбору работников
     Обучение
     Требование к предоставлению отчета:
          Срок представления
          Переписка с компетентными органами
 

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