I.O'S ORDER. MINISTER OF FINANCE OF THE REPUBLIC OF KAZAKHSTAN

of January 5, 2017 No. 5

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 pawnshops

According to Item 3-2 of article 11 of the Law of the Republic of Kazakhstan of August 28, 2009 "About counteraction of legalization (washing) of income gained in the criminal way and to terrorism financing" 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 and to financing of terrorism for pawnshops.

2. To committee on financial monitoring of the Ministry of Finance of the Republic of Kazakhstan (Mekebekov A. Z.) in the procedure established by the legislation to provide:

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

2) within ten calendar days from the date of state registration of this order the direction it the copy in printing and electronic type in the Kazakh and Russian languages in the Republican state company on the right of economic maintaining "The republican center of legal information" for official publication and inclusion in Reference control bank of regulatory legal acts of the Republic of Kazakhstan;

3) within ten calendar days after state registration of this order the direction it the copy on official publication in periodic printing editions;

4) placement of this order on Internet resource of the Ministry of Finance of the Republic of Kazakhstan.

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

 

Approved by the Order of the Minister of Finance of the Republic of Kazakhstan of January 5, 2017 No. 5

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 pawnshops

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 and to financing of terrorism (further – Requirements) are developed for pawnshops according to the Law of the Republic of Kazakhstan of August 28, 2009 "About counteraction of legalization (washing) of the income received in the criminal way and to terrorism financing" (further – the Law) and determine the conditions shown to rules of internal control for the purpose of counteraction of legalization (washing) of income gained in the criminal way and to terrorism financing (further – POD/FT) for pawnshops.

2. In these Requirements the following concepts are used:

1) the FM-1 form – the form of data and information on the transaction which is subject to financial monitoring determined by Rules of representation by the subjects of financial monitoring of data and information on the transactions which are subject to financial monitoring, and signs of determination of suspicious transaction approved by the order of the Government of the Republic of Kazakhstan of November 23, 2012 No. 1484;

2) risk of legalization (washing) of income gained in the criminal way and terrorism financings (further – OD/FT) – probability of legalization (washing) of income gained in the criminal way and financings of terrorism by means of use of services of the subject;

3) risk management of OD/FT – set of the measures for monitoring, identification of risks of OD/FT, and also their minimization taken by the subject (concerning services, clients);

4) the subject – pawnshops;

5) internal control – system of the organization, the policy, procedures and methods accepted by the subject for the purpose of POD/FT;

6) rules of internal control – the document, obligatory to observance and realization, developed, accepted and performed by subject which contains programs of implementation of internal control (further – PVK).

Other concepts used in these Requirements are applied according to the Law.

3. PVK include programs according to Item 3 of article 11 of the Law.

4. In case of introduction of amendments and (or) amendments to the legislation in the field of POD/FT, the subject within thirty calendar days from the date of their introduction in action, makes corresponding changes and (or) amendments to PVK.

Chapter 2. The program of the organization of internal control for the purpose of POD/FT, including requirements imposed to the workers of subjects of financial monitoring responsible for realization and observance of Rules of internal control

5. The program of the organization of internal control for the purpose of POD/FT contains:

1) the procedure of the organization of internal control, including the description of functions of the subject when implementing internal control;

2) the procedure of refusal to clients in establishment of business relations and the termination of business relations, refusal in carrying out transaction with money and (or) other property, and taking measures to freezing of transactions with money and (or) other property;

3) the procedure of recognition of the difficult, unusually large and other unusual transaction which is subject to studying as suspicious;

4) the procedure of recognition of transaction of the client having the characteristics corresponding to tipologiya, schemes and methods of legalization (washing) of the criminal income and financings of terrorism as suspicious;

5) the procedure of submission of data and information on the transactions which are subject to financial monitoring about the refusal facts to the client in establishment of business relations, the terminations of business relations with the client, refusal in carrying out transaction with money and (or) other property, about measures for freezing of transactions with money and (or) other property in authorized body, including instructions and regulations of work in the automated information systems and the software used for transfer of data, information and documents in authorized body;

6) the procedure of fixation and document storage and the data received by results of proper check of the client including the file of the client and correspondence with it, documents and data on the transactions which are subject to financial monitoring, including, suspicious transactions and also results of studying of all difficult, unusually large and other unusual transactions.

Documentary fixation of the transactions which are subject to financial monitoring and directed to authorized body is performed in numbered, strung together, under seal and the signature of the subject register of data on the transactions which are subject to financial monitoring.

In register of data on the transactions which are subject to financial monitoring are fixed:

number and date of information transfer in authorized body;

basis for submission of the message;

number and date of the notice on acceptance/rejection of the FM-1 form by authorized body;

7) the procedure of informing the first head by workers on the facts of violation of the law which became to them known about POD/FT, PVK allowed by the subject's workers.

6. PVK provide appointment of the responsible person or determination of structural division for implementation of monitoring of observance of PVK.

The person who does not have the higher education, having not removed or not extinguished criminal record for making of crimes in the field of economic activity, or intentional crimes of average weight, heavy or especially serious crimes is not appointed to position of the ranking officer.

7. The subject within the program of the organization of internal control performs:

1) modification and (or) amendments in PVK;

2) the organization and control for submission of data and information on the transactions which are subject to financial monitoring in authorized body according to Item 2 of article 10 of the Law;

3) decision making about recognition of transactions of clients suspicious;

4) decision making about reference of transactions of clients to difficult, unusually large and other unusual transactions, to the transactions having the characteristics corresponding to tipologiya, schemes and methods of legalization (washing) of the criminal income and financings of terrorism;

5) decision making about suspension or about refusal of carrying out transactions of clients and need of the direction of information on transactions in authorized body;

6) execution of decisions of authorized body on suspension of carrying out suspicious transaction;

7) decision making about establishment, continuation or the termination of business relations with clients;

8) documentary fixation of the decisions made on transaction of the client (his representative) and the beneficial owner;

9) forming of the file of the client based on the data obtained as a result of realization of PVK;

10) taking measures to improvement of risk management system and internal control;

11) providing measures for document storage and the data received by results of proper check of the client including the file of the client and correspondence with it, documents and data on the transactions which are subject to financial monitoring, including, suspicious transactions and also results of studying of all difficult, unusually large and other unusual transactions, at least five years from the date of the termination of business relations with the client;

12) ensuring confidentiality of information obtained when implementing the functions;

13) submission of information to the relevant state bodies for control of execution of the legislation on POD/FT;

14) submission to authorized body on its request necessary for information, data and documents according to Item 3-1 of article 10 of the Law.

8. The subject and his workers have no right to inform clients and other persons on submission to authorized body of information, data and documents on such clients and on the transactions made by them according to Item 5 of article 11 of the Law.

Chapter 3. The management program risk of OD/FT considering risks of clients and risks of use of services in criminal objectives including risk of use of technological achievements

9. The management program risk of OD/FT considering risks of clients and risks of use of services in criminal objectives including risk of use of technological achievements provides carrying out making by the subject of risk assessment by the client of the transactions with money and (or) other property connected with OD/FT with assignment of risk degrees.

Risk degrees are created based on the available information about the client (his representative) and the beneficial owner.

Results of risks assessment are documentary fixed and represented upon the demand of the relevant state bodies and non-profit organizations which member is the subject.

Review of risk level of the client (customer group) is performed by the subject in process of updating of information about the client (customer group) and results of monitoring of transactions (business relations).

10. In the management program the high risk of OD/FT is appropriated by risk:

1) to business relations and transactions with clients from the states (territories):

not implementing and (or) not enough financial measures of anti-money laundering implementing recommendations of Group of development (further – FATF);

with the increased level of corruption or other criminal activities;

undergone to the sanctions, embargo and similar measures imposed by the United Nations (further – the UN);

providing financing or support of terrorist (extremist) activities and in which there are established terrorist (extremist) organizations.

References to lists of such states (territories) are placed on Internet resource of authorized body.

2) to the client in case:

client is the foreign public official;

client is the official of the public international organization;

client is person which is acting for the benefit of (to benefit) foreign public official;

client is person who is the family member, the close relative of foreign public official;

the client (his representative), the beneficial owner, or the client's partner on transaction are registered or perform activities in the state (in the territory) entering the List of offshore zones approved by the order of the acting minister of finance of the Republic of Kazakhstan of February 10, 2010 No. 52 "About approval of the List of offshore zones for the purposes of the Law of the Republic of Kazakhstan "About counteraction of legalization (washing) of income gained in the criminal way, and to terrorism financing" (further – the Order) (registered in the Register of state registration of regulatory legal acts for No. 6058);

the client (his representative), the beneficial owner, or the client's partner on transaction consist in the List of the organizations and faces tied with financing of terrorism and extremism according to article 12 of the Law;

the client is person without citizenship;

the client is the citizen of the Republic of Kazakhstan who does not have registration address or stay in the Republic of Kazakhstan;

the client is nonresident;

business relations with the client are performed under unusual circumstances (for example, too long inexplicable geographical distance between the subject and the client);

the subject has difficulties in case of verification of the data provided by the client;

the client insists on non-standard or unusually difficult settlement schemes which use differ from customary practice of the subject;

the client uses new products and new business practice, including the new mechanisms of transfer new or the developing technologies both for new, and for already existing products;

the client makes the actions directed to evasion from procedures of financial monitoring;

transactions of the client were recognized as suspicious earlier;

the client does not attach special significance to conditions and the storage location of mortgage property in case of receipt of loan the subject;

the client is not interested in features of repayment of loan, including interest rates of the subject by provision of loan, terms of its repayment and penalties for untimely payment of loan;

the profile of activities of the client does not correspond to availability at it legitimate rights for ownership of the mortgage property provided for receipt of loan the subject;

the client, repeatedly obtained loans without subsequent redemption of pledge;

the client hands over under pledge or in buying up jewelry from precious metals and gemstones with signs of false prints of assay brands or without prints of assay brands;

the client, systematically hands over under pledge or in buying up several pieces of jewelry and/or the same jewelry including having commodity labels;

there is other customer information connected with high risk of OD/FT.

3) transactions with money and (or) other property:

connected with anonymous bank accounts or with use of anonymous, fictitious names, including cash calculations;

not making common economic intendment or the visible legal purpose;

frequency made with unusual for the client;

made on unusually large amount;

on which there is information on OD/FT high risk.

11. The strengthened measures of proper check of clients, according to Item 7 of article 5 of the Law are applied to clients to whom OD/FT high risk is appropriated.

To clients to whom based on the available information about the client (his representative) and the beneficial owner, the high risk is not appropriated the low risk degree is appropriated, and the simplified measures of proper check of clients according to Item 7 of article 5 of the Law are applied.

Chapter 4. Program of identification of clients

12. The program of identification of the client consists in holding by the subject actions for identification, updating of earlier received information about clients (his representatives) and the beneficial owners, including data on source of financing made by the client of transactions.

The program of identification of the client includes:

1) need and the procedure of observance of measures for proper check of the client (his representative) and beneficial owners according to requirements of article 5 of the Law depending on the appropriated risk degree;

2) need and the procedure of check of reliability of information about the client (his representative) and the beneficial owner according to the subitem 6) Item 3 of article 5 of the Law;

3) need and the procedure of check of finding of data on the client (his representative) and the beneficial owner in the List of the organizations and faces tied with financing of terrorism and extremism according to article 12 of the Law;

4) need and the procedure of check of accessory and (or) participation of the client in foreign public official, his family members and close relatives according to requirements of article 8 of the Law;

5) need and the procedure of identification of the clients having respectively registration, the residence or the location:

in the state (in the territory) which does not carry out and (or) implements recommendations of FATF insufficiently or uses bank accounts, the specified state registered in (in the specified territory) according to the subitem 4) of item 4 of article 4 of the Law;

in the List of offshore zones approved by the Order;

6) need and procedure of establishment of the expected purpose and nature of business relations.

For the client with OD/FT high risk in case of establishment of the expected purpose and nature of business relations data on kind of activity and source of financing of the made transactions are in addition requested.

For the client with low risk degree of OD/FT establishment of the expected purpose and nature of business relations is determined on the basis of nature of transactions of the client.

7) need and the procedure of updating of the data received as a result of identification in process of change of identification information about the client (his representative) and the beneficial owner, but at least once a year.

Updating of information about the client (his representative) and the beneficial owner with high risk of OD/FT is performed at least once a half-year. Updating of information about the client (his representative) and the beneficial owner with low risk degree of OD/FT is performed at least once in two years.

12-1. If the subject according to the Law based on the agreement charged to the other person application concerning clients of the subject of the measures provided by subitems 1), 2), 2-1) and 4) of Item 3 of article 5 of the Law, the subject develops rules of its interaction with such persons who include:

the procedure of the conclusion the subject, contracts with persons to which carrying out identification is entrusted, and also the list of officials of the subject of representatives to sign such agreements;

the procedure of identification of the client (his representative) and the beneficial owner according to contracts between the subject and persons to whom carrying out identification is entrusted;

the procedure and terms of transfer by the subject of the data received when carrying out identification, persons to whom carrying out identification is entrusted;

the procedure of implementation by the subject of control of observance by persons to whom carrying out identification, requirements for identification, including the procedure, terms and completeness of transfer to the subject of the received data, and also the measures taken by the subject on elimination of the revealed violations is entrusted;

the bases, the procedure and terms of adoption by the subject of the decision on unilateral refusal of agreement performance with persons to whom carrying out identification is entrusted, in case of non-compliance with requirements for identification, including the procedure, terms and completeness of transfer to the subject of the received data by them, and also the list of officials of the subject, representatives to make such decision;

regulations on responsibility of persons to whom the subject charged carrying out identification, for non-compliance by them with requirements for identification, including the procedure, terms and completeness of transfer to the subject of the received data;

the procedure of interaction of the subject with persons to whom carrying out identification, concerning rendering the methodological help to them for the purpose of fulfillment of requirements on identification is entrusted.

Inclusion by the subject of additional terms in rules of interaction is allowed.

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

13. The program of monitoring and studying of transactions of clients, including studying of difficult, unusually large and other unusual transactions of clients, consists in identification of the transactions specified in article 4 of the Law.

In case of assignment to the client of high risk of OD/FT the subject in addition studies all operations which were performed at it by the client for the purpose of establishment of the reasons planned or the performed operations, and reveals nature of transactions which require further check. In case of assignment to the client of low risk degree of OD/FT the subject studies current transaction of the client.

14. Received within program implementation of monitoring and studying of transactions of clients of the data are documentary fixed and brought in the file of the client.

15. Data and information on the transactions of the clients specified in Items 1, of 2, of the 3 and 5 article 4 of the Law revealed as a result of monitoring are represented by the subject in the Kazakh or Russian languages to authorized body in the FM-1 form.

16. The message on the transaction which is subject to obligatory studying is submitted subjects in authorized body no later than the working day following behind day of recognition of such transaction suspicious.

Chapter 6. The program of preparation and training of employees of the subject concerning POD/FT

17. The program of preparation and training of employees of the subject concerning POD/FT is performed according to the order of the Minister of Finance of the Republic of Kazakhstan of November 28, 2014 No. 533 "About approval of requirements to subjects of financial monitoring on preparation and training of workers" (registered in the Register of state registration of regulatory legal acts on December 25, 2014 for No. 10001).

 

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