RESOLUTION OF BOARD OF NATIONAL BANK OF THE REPUBLIC OF BELARUS

of February 28, 2008 No. 34

About approval of the Instruction about implementation by banks and non-bank credit and financial organizations of measures for prevention and identification of the financial transactions connected with legalization of income gained in the criminal way, and financing of terrorist activities

Based on article 26 of the Bank code of the Republic of Belarus the Board of National Bank of the Republic of Belarus DECIDES:

1. Approve the enclosed Instruction about implementation by banks and non-bank credit and financial organizations of measures for prevention and identification of the financial transactions connected with legalization of income gained in the criminal way, and financing of terrorist activities (further - the Instruction).

2. Determine that explanations in the order of application of regulations of the Instruction approved by this resolution can be this signed by the vice chairman of the board of the National Bank of the Republic of Belarus directing activities of head department of currency control and currency exchange control.

3. To banks and the non-bank credit and financial organizations in three-months time after entry into force of this resolution to bring the local regulatory legal acts regulating questions of prevention of legalization of income gained in the criminal way and financings of terrorist activities into compliance with the Instruction approved by this resolution.

4. To the banks, the non-bank credit and financial organizations, structural divisions of National Bank of the Republic of Belarus performing the financial transactions which are subject to special control no later than 1 year and 3 months after entry into force of this resolution to bring questionnaires of clients into accord with requirements of the Instruction approved by this resolution.

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

Approved by the Resolution of Board of National Bank of the Republic of Belarus of February 28, 2008 No. 34

The instruction about implementation by banks and non-bank credit and financial organizations of measures for prevention and identification of the financial transactions connected with legalization of income gained in the criminal way, and financing of terrorist activities

CHAPTER 1. GENERAL PROVISIONS

1. The instruction about implementation by banks and non-bank credit and financial organizations of measures for prevention and identification of the financial transactions connected with legalization of income gained in the criminal way, and financing of terrorist activities (further - the Instruction), is developed according to article 26 of the Bank code of the Republic of Belarus and establishes requirements for implementation by banks and the non-bank credit and financial organizations of internal control for the purpose of prevention of legalization of income gained in the criminal way and financing of terrorist activities.

The procedure is determined by National Bank of the Republic of Belarus of measures for prevention and identification of the financial transactions connected with legalization of income gained in the criminal way, and financing of terrorist activities in separate regulatory legal act of National Bank of the Republic of Belarus.

2. The terms applied in this Instruction are used in the values specified in the Law of the Republic of Belarus of July 19, 2000 "About measures for prevention of legalization of income gained in the criminal way and financings of terrorist activities" (The national register of legal acts of the Republic of Belarus, 2000, No. 75, 2/201; 2005, No. 196, 2/1165) (further - the Law).

3. In relation to this Instruction the terms below are used in the following values:

banks - the banks and the non-bank credit and financial organizations which are those according to the legislation of the Republic of Belarus;

internal control system - internal control, and also the organizational structure, strategy, policy, technique and procedures which are policy tools of internal control;

rules of internal control - the local regulatory legal act of bank regulating the organization of internal control system in bank and its structural divisions for the purpose of prevention of legalization of income gained in the criminal way and financing of terrorist activities;

the responsible official (persons) - person (persons) responsible for the organization of internal control in bank and (or) its structural division and accomplishment of rules of internal control;

special structural division - division of bank which competence includes implementation of measures for prevention and identification of the financial transactions connected with legalization of income gained in the criminal way, and financing of terrorist activities;

physical persons are the physical persons which are not serviced or not performing financial transactions in bank as individual entrepreneurs;

corresponding banks - banks with which correspondence relations with opening of the correspondent and (or) clearing account are established;

clients - the physical persons, individual entrepreneurs, the organizations which are serviced (the performing financial transactions) in bank, and also bankikorrespondenta;

questioning - creation by bank of the questionnaire containing the information about the client and his activities established by this Instruction;

beneficiaries - physical persons, individual entrepreneurs, the organizations, in interests, according to the order or on behalf of which clients and their partners act;

the financial transaction causing suspicions - financial transaction concerning which the bank had suspicions that it is performed for the purpose of legalization of income gained in the criminal way or financing of terrorist activities, before adoption by bank of the decision on reference its (not reference) to the financial transaction which is subject to special control;

suspicious financial transaction - financial transaction concerning which the bank had suspicions that it is performed for the purpose of legalization of income gained in the criminal way or financing of terrorist activities, after adoption by bank of the decision on its reference to the financial transaction which is subject to special control;

clients without opening of the account are clients (except for corresponding banks) with whom agreements on implementation of financial transactions in writing are not signed;

the analyzed period - small interval of time for which the bank analyzes financial transactions of the client at stage of the subsequent control;

the same financial transactions - the financial transactions of one type performed repeatedly during the analyzed period by one person or concerning the same person.

For the purposes of this Instruction systematicity of implementation of financial transactions is understood as their implementation by the client 3 and more times during the analyzed period.

CHAPTER 2. ORGANIZATION OF THE INTERNAL CONTROL SYSTEM

4. The organization of internal control system in bank shall provide:

non-admission of intentional or involuntary involvement of bank in process of legalization of income gained in the criminal way and financings of terrorist activities;

risk minimization (credit, risk of loss of goodwill, operational, including legal, and others), and other property which is in the bank, or confiscation of the money which is in bank and other property of clients that can entail both real financial loss of bank, and indirect connected with danger of embezzlement of bank, seizure of money: loss of trust from investors and clients, outflow of funds of investors and creditors, refusal in provision of interbank resources, accountability by supervisory, tax and law enforcement agencies;

timely submission according to the legislation of the Republic of Belarus of data to body of financial monitoring;

confidentiality of the fixed information on financial transactions and their participants, and also on the measures taken by bank for the purpose of prevention and identification of the financial transactions connected with legalization of income gained in the criminal way, and financing of terrorist activities.

The basic principle of the organization of internal control system is participation of all employees of bank within their job responsibilities in the course of identification of clients and identification of the financial transactions which are subject to special control.

5. The internal control system is implemented in the following main directions:

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