تعليمات مكافحة عمليات غسل الا موال وتمويل الا رهاب لشركات التمويل

Transcription

1 إدارة التفتيش البنكي Saudi Arabian Monetary Agency Banking Inspection Department تعليمات مكافحة عمليات غسل الا موال وتمويل الا رهاب لشركات التمويل ذو الحجة ١٤٢٩ ه Anti-Money Laundering and Counter-Terrorism Financing Instructions For Financing Companies First Issue - December 2008

2 TABLE OF CONTENTS Introduction First Regulatory Framework Branches and Affiliate Companies Know Your Customer KYC Requirements and Continuous Customer Due Diligence (CDD) Procedures KYC a) Natural Persons 7 ( b) Legal Persons 7 ( Second Third CDD Procedures Continuous Due Diligence Procedures for Customers and Unusual Operations Documents and Records Keeping Monitoring and Customer and Suspicious Transactions Reporting Monitoring Policies and Procedures First General Policies 16 Second Internal Control Procedures 18 7 Cooperation 21 8 Training of Employees 22 1) 2) 3) Annex No. 1: ML/TF Indicators Indicators at the beginning of any financing transaction Indicators after the beginning of financing transactions Indicators about the Company s Employees Annex No. 2: Reporting Form(Arabic) Annex No. 2: Reporting Form(English) :() () :() () :() ( ( (

3 INTRODUCTION: These Regulations are based on the Ministerial Decision No 1566/1 of 21/7/1420 AH, which granted Saudi Arabian Monetary Agency (SAMA) the power to supervise and regulate the activity of financial leasing and financing companies under its supervision. This also has reference to the Anti Money Laundering Law (AML) and its executive bye-law as issued by Royal Decree No. 39/d of 25/6/1424 AH and to the circulars issued by SAMA for financial leasing companies. These Regulations are in line with the local and international regulatory and supervisory requirements for AML/CFT, SAMA is issuing these regulatory instructions as compulsory policies and measures for the financing companies it has licensed in order to combat Money Laundering (ML) and Terrorism Financing (TF). These instructions aim at protecting financing companies and their clients from illegal operations that may involve ML or TF transactions or any other criminal activity, with the perspective of enhancing the integrity of the financing sector in the Kingdom and the confidence of the public therein. Therefore, financing companies licensed by SAMA are required to comply with these instructions and implement them. Non-compliance with these instructions shall be considered as a : / //, / //.,..

4 violation of the terms of the license. Companies shall be held accountable for the acts of their employees or for any reluctance to enforce such instructions. Therefore, companies may be subject to the sanctions as provided for in the AML Law and they are required to notify SAMA of any impediments to complying with these instructions., 1- Regulatory Framework 1. These instructions constitute as minimum, basic information required to combat ML/TF operations. 2. Financing companies shall make these instructions an integral part of their internal regulations and procedures and they are required to apply them to all the products and services they offer, whether directly or indirectly in cooperation with other establishments. These companies are also required to take into consideration the enforcement of these instructions along with the provisions of the AML Law and its executive and other relevant instructions, including the FATF 40 recommendations for AML and 9 special recommendations for CFT, in addition to other instructions and circulars issued by SAMA in this regard. 3. The ultimate responsibility for implementing these instructions lies upon the financing companies who will also be accountable for the acts committed by their employees or for their negligence in implementing : /.,,,.,

5 these instructions. Non compliance to these instructions shall be considered as a violation of the license conditions and may lead to imposing sanctions as provided for in the AML Law and in other relevant regulations. 4. Financing companies shall inform SAMA about any difficulties they may encounter in complying with these instructions. 2- Branches and Affiliate Companies 1) The Company is required to ensure that its branches and affiliates inside and outside the Kingdom comply with these instructions, the AML/CFT regulations and by-laws issued in the country and the FATF Recommendations. 2) The Company is required to implement these instructions in its branches and affiliates outside the Kingdom within the limits authorized by the laws and regulations applicable in the host country. 3) In case of a conflict between the AML/CFT requirements that are applicable in the Kingdom and those applicable in the host countries for the branches or affiliate companies, the Company shall apply the higher requirements within the limits authorized by the laws and regulations applicable in the host country. 4) In case of a conflict between the host country s law and the regulations, by-laws and instructions,. : /.

6 adopted in the Kingdom and in case the branch or affiliate company is unable to fully comply with the highest requirements, the company s headquarters shall notify SAMA thereof and comply with any directives that may be issued in this regard. 5) The Company shall remain in constant contact with SAMA, to be aware of the latest developments and any weaknesses in the AML regulations that are applicable in other countries that it operates in. 3- Know Your Customer (KYC) Requirements and Continuous CDD Procedures First Know Your Client 1. The Company shall apply the KYC criteria on all direct and indirect customers (whether they are natural or legal persons). 2. The Company is prohibited from performing or entering into any transactions, financial or commercial relations or any other operations with an unknown or fictitious name. 3. The identity and legal status of the customers and beneficial owners shall be verified, based on official documents that become effective at the beginning of the transactions. 4. The Company is required to update the aforementioned data on a periodical basis for all customers, including customers existing during the implementation of these instructions. It shall also update such data in case of emergence of any doubts about the accuracy or / : : : ) ) ( (.,

7 authenticity of the information already obtained, in any stage of dealing with the beneficial owner or the customer or in case of a suspicion of a ML or TF operation. 5. The customers identities shall be verified as follows: a) Natural Persons: Saudi Nationals: - National ID Card or Family Record. - Personal address, place of residence and place of work. - Contact Numbers. Individual Expatriates - A residence permits (Iqama) or The 5-year Residence Card or passport of the citizens of the countries of Gulf Cooperation Council (GCC) or the diplomatic card for diplomats. - Personal address, place of residence and place of work. b) Legal Persons: The Company shall obtain sufficient information about the nature of the business and the customer s ownership structure as well as appropriate specimen signatures of the officials authorized to manage the customer s account, as follows: Licensed Companies and Establishments - The Commercial Register issued by the Ministry of Commerce and Industry. - The license issued by the Ministry of Municipalities and Village Affairs for service facilities and private stores. : : - : : -. - : - : : -. -

8 - The articles of association and memorandum of association and its appendices, if any. - The national ID card of the Saudi citizen, owner of the licensed commercial or service facility, to verify that the name of the tradesman stated in the commercial register or the licenses coincides with the name and the information mentioned on the national ID Card and to verify the validity of the ID Card. - List of the persons authorized by the owner to operate the accounts, according to what is stated in the commercial register document or by virtue of a power of attorney issued by the Notary Public or an agency prepared within the Company. A copy of the ID card of each of the said persons shall also be obtained. Resident Companies and Establishments. - Copy of the commercial register issued by the Ministry of Commerce and Industry. - Copy of the Articles of Association and the annexes thereto. - Copy of the license to exercise the activity. - Copy of the ID Card of the manager in charge. - A power of attorney Issued by a Notary Public or a special authorization issued by the person(s) having the power to authorize other individuals to sign documents, as per the Articles of Association. - Copy of the ID Card of the facility s owners whose names are mentioned in the Articles of Association and the amendments thereof : " " -.

9 Second: Customer Due Dilligence(CDD) Procedures 1. The Company shall keep a credit file for all its customers, which shall comprise of all the data and information about them. This information shall be authenticated in writing, in order to identify all the risks associated with the customers and financing operations. In order to avoid these risks, the file shall comprise an appropriate evaluation and an analysis of the Company and its sector. The credit file of the customers (whether natural or legal persons) shall also include all the basic information relating to the customer and his activities, including: - The data stated in the credit form - The complete data about the customer s identity - The transactions performed by the customer with other establishments, if any - The references to be used in order to obtain additional information about the customer, as necessary - The review of the customer's credit report obtained from The Saudi Credit Information Company (SIMAH), if there is. - The names of the real owners, beneficial owners, associates and stockholders (holding more than 5% shares) - The purpose of the financing - The authorized signatories and the entitled persons - The customer s address, including his phone numbers, mail address, the name and location of the street, : :, ) ( : () -.(% ) - - -

10 his and fax number. - The nature of the customer s activities - The customer s financial statements, capital, sources of revenue and wealth, the number of the branches of the affiliate establishments or companies, if their locations are known. 2. Essential due diligence shall be conducted on all customers on a continuous basis to verify the accuracy of the business relationship with the information provided to the Company. 3. Additional due diligence shall be granted to all high risk business relationships and operations that shall be monitored on a continuous basis. The approval of the senior management shall also be obtained at the beginning of the business relationship while taking into account the following factors: a) The geographical location of the operations, the beneficiary and the place of business. b) The nature of the operations and services requested by the customer. c) Any other information that may indicate that the customer represents a high risk such as politically exposed persons (PEPs) or the customers are located in countries that do not or insufficiently apply the FATF recommendations. 4. It is prohibited to deal with new customers unless they appear before the Company and meet the. - -,.. : ()

11 officials in person. This includes the applications submitted through the post, internet and phone, except for those submitted by a legal power of attorney that provides for an official authorization to perform all measures of financing and loan taking, provided such power of attorney must include the personal data of both parties. The phone and internet service can only be provided for existing customers. 5. The Company shall monitor business relationships with its customers on a continuous basis and verify the accuracy of the information obtained about the customer. 6. The Company is required to verify the names of the customers (whether individuals, establishments or companies) whose transactions shall be reported or with whom transactions are prohibited according to the lists published by SAMA or the UN, before starting the transactions with them or upon establishing the business relationships. 7. In case the name of the customer is mentioned on any lists issued by SAMA or the UN, the Company shall enforce the instructions relating to manner of dealing with the customer, which may require the freezing of the transaction, the notification of the concerned authorities and the transmission thereto of all the information relating to the transaction or the customer. The company is not. ) (,,,.

12 allowed to suspend or lift unless under SAMA s instructions. The Company is required to immediately comply with SAMA s instructions in this regard. 8. The Company is required to refer to the UN & CFT lists and update its own lists periodically from the following website: /consolist.shtml 9. The company shall keep in its records, updated lists about all the persons with whom transactions are prohibited and whose names are transmitted by SAMA. 10. The Company shall apply CDD measures and be cautious and prudent when dealing with customers listed on the black lists that are published by other countries, in order to avoid damage to itself or its customers. Third - Continuous Due Diligence Procedures for Customers and Unusual Operations 1. The Company is required to monitor and review all complicated, large and unusual transactions that do not have a clear economic or visible legal purpose. The Company is also required to obtain complete information about the purpose and nature of such large and unusual operations and transactions, review and inspect them when necessary, authenticate them in writing and report any suspicious transactions. 2. The cases that require CDD are: Initiating a business relationship. : /consolist.shtml.. : : :

13 Suspicion of an ML or TF operation. Questioning the accuracy of the data, information or documents obtained from the customer. 3. Companies shall reinforce and intensify CDD measures for the customers, business relationships or operations involving a high degree of risks. 4- Document and Record Keeping; 1. The Company is required to retain, in its control all the transaction documents, the customer s ID data and correspondence for at least ten years and shall undertake to keep them for a longer period, at the request of the authorities concerned with AML/CFT in the Kingdom as appropriate. 2. The Company shall keep records that enable stakeholders to followup and reconcile operations. 3. The Company shall obtain SAMA s prior approval to provide any local or foreign authorities with documents or information about its customers or the operations they perform, at their request. 4. The Company shall establish written policies and procedures that shall be applied by employees in order to provide local or foreign authorities with the information and documents they request, subject to all relevant laws and rules. 5. The Company shall provide.. : /,.

14 [ through SAMA in a timely manner, copies of the records and information relating to the customer and his operations to the Financial Investigation Unit (FIU) at the Ministry of Interior, to investigation authorities and to the judicial authorities concerned with AML/CFT, at their request. 6. The Company shall update the data, records and documents that are obtained as per CDD procedures in order to verify their accuracy and integrity. The Company is required to review such documents periodically or as necessary.,. 5- Monitoring of Suspicious Customer and Transactions Reporting 1. The Company shall conduct continuous monitoring on the activities of its customers in order to identify suspicious operations and to notify the concerned authorities and SAMA of the issues noted. The Company shall also take official measures to identify abnormal and suspicious activities, such as all transactions exceeding specific limits and transactions that do not have a clear economic or visible legal purpose and it shall authenticate the same in writing. 2. The Company is required to immediately report any transactions that are suspected to be related to ML or TF, including reporting the attempts to perform / :.

15 such transactions of whatever amount to the FIU at the Ministry of Interior and providing SAMA with a copy of the reporting form, according to the reporting form attached herein (annex N 2). 3. The Company is required to appoint a compliance officer specialized in combating ML/TF operations with the responsibility for reporting and following-up suspicious transactions. 4. The Company is required to establish and adopt internal policies and procedures in writing that clarify the mechanisms and procedures to be followed by its employees including the compliance officer concerned with combating ML/FT to report to the concerned authorities upon suspecting any operation. The Company shall notify all the employees of this mechanism and require their compliance thereto. 5. The Company shall give special attention to transactions exhibiting a pattern different from that of usual operations, such as large funds transactions or small funds transfers performed repeatedly on a periodical basis without having an acceptable purpose or a clear economic or legal reason. 6. The Company shall provide copies of all the documents, data, and files of the persons related to the suspicious transaction as reported and transmit them to the FIU at the Ministry of Interior. 7. The special unit or the AML/CFT compliance officer shall draft an,.(),.

16 annual report and submit it to the Company s senior management to inform them about all the reported cases, the measures taken in this regard, the developments therein and any proposals made to enhance the efficiency and effectiveness of the Company s measures, policies and internal controls. He shall also provide a copy thereof to SAMA. 8. The Company is prohibited from warning or informing its customers or any party related to suspicious transactions about the reports or information that were or would be sent to the FIU. 9. Warning, assisting or failing to report any person concerned with ML/TF operations may expose the employee to legal and financial liability. The Company and reporting employee shall be relieved from any responsibility due to its/his reporting, whether the suspicions were proven to be true or not as long as the reporting was done in good faith.,,., 6- Monitoring Policies and Procedures First General Policies 1. The Company shall establish policies, measures and internal controls that contribute to combating ML/TF and notify all of its employees thereof. : / : :

17 2. The Company shall establish adequate policies and measures to identify high risk customers, monitor and review their transactional activities on a periodical basis, and obtain the senior management s approval at the beginning or during the transactions. 3. The Company shall establish policies and take necessary measures to prevent the misuse of modern communication technologies and technical means for ML/TF purposes. 4. The Company shall not provide its services to the customer through technical means such as the internet unless there is a business relationship authenticated with the Company and after obtaining and verifying his identity by meeting him in person. 5. The Company shall establish policies, measures and internal controls that enable it to deal with the risks associated to performing operations for new customers without meeting them in person. Any related risks shall be addressed by applying specific and effective criteria during the establishment of the business relationship, as an integral part of the continuous CDD procedures. 6. Dealing with the customer shall be terminated in case the Company is unable to apply the KYC principle, including when failing to obtain or verify his identity or obtain information about him or the purpose of the operation. The,..,. ) (,

18 Company shall consider submitting its report thereof to the FIU at the Ministry of Interior. 7. The Company may rely on a third party to apply the KYC Principle. Yet, in all cases, the essential and ultimate responsibility to verify the customer s identity shall lie with the Company itself and not on the third party. 8. High risk customers and operations shall be subject to intensive and continuous monitoring and basic indicators shall be put in place to assist in identifying them, according to the customer s country of origin, sources of revenue and the quality of operations, etc The senior management shall grant high attention to administrative information systems and high risk personal financing activities..,( ).. Second Internal Control Procedures 1. The Company shall put in place adequate technical and nontechnical systems to assist in monitoring operations and in following-up suspicious transactions. 2. Internal control programs in the Company shall comprise auditing and internal control systems that verify the availability of essential AML/CFT requirements. The Company shall develop and enforce policies, plans and internal measures, including the appointment of highly qualified employees in the senior : :.,

19 management to apply such measures. It shall also establish adequate recruitment criteria that ensure the selection of its employees with high competency and integrity. The Board of directors or the person who deputizes him shall be in charge thereof. 3. The internal control department in companies shall conduct regular evaluation operations to verify the effectiveness of AML/CFT policies, measures and internal controls and ensure compliance therewith. 4. The external auditor shall, in addition to his usual functions, verify the compliance of the Company to AML/CFT policies. 5. The Company shall provide the necessary and sufficient financial and human resources for internal control functions in the AML/CFT field. 6. The Company shall create a special unit or appoint a compliance officer specialized in combating ML/TF and provide it/him with the following: - a total independence from the other departments of the Company with a direct reporting line to the senior management. - the power to be aware of and have access to all the operations and the customers data on a timely basis - adequate technical and human capacities that help in performing the functions appropriately 7. The functions of the said unit or the AML/CFT compliance officer shall,,... : -. -

20 include the following: a) Verifying that written and effective policies and procedures are established and that they prevent the misuse of the Company in ML/TF operations. These policies shall comprise indicators that assist in identifying this information. The unit or officer shall update such policies on a periodical basis and in proportion with the occurring developments. b) Establishing AML/CFT policies and procedures and verifying that they are adequate, at a minimum, with relevant legal and regulatory requirements. c) Operating and developing the appropriate mechanism that ensures compliance with all instructions, regulations and internal control measures. Establishing prevention and internal control procedures to detect any activity related to ML/TF or any abuses thereof. d) Review AML policies and procedures on a regular basis to verify their effectiveness and taking necessary measures to identify any changes therein and the influence thereof on the procedures followed in the Company. e) Establishing and applying ethical criteria and high professional rules - : -,,. -. -, -,. -

21 that are observed by all employees to prevent the misuse of the Company, whether intentionally or unintentionally, for criminal purposes. 7- Cooperation 1. The Company shall promote the cooperation mechanisms with similar companies and various competent authorities, whether directly or indirectly, in order to combat ML/TF and exchange and share relevant information. However, at the same time the company must strictly follow the legal and regulatory procedures that aim to protect customer confidentiality and secrecy. Prior SAMA guidance should be obtained, if companies agree to mutually assist or exchange information pursuant to agreements between them. 2. The company is required to have in place appropriate policies and procedures,as follows: The manner and the method in which the company should contact the authorities and pass relevant transactional and customer information to them. Where records are to be provided to the authorities, establishing the form of such records (original or copies) and the receipt and forms to be used for providing and receiving information by the company. When information is to be : /, : ).,(

22 providing verbally to authorities, establishing the manner and the form of such information. Any sharing of information with a foreign party whether with another financial institution or a foreign governmental authority should not be done without the prior approval of and in coordination with SAMA. 8- Training of Employees 1. The Company shall prepare and organize regular training programs for its employees in order to enhance their awareness of the AML/CFT regulations and by-laws and their understanding of such operations, their different patterns and the internal instructions to combat them, including identifying suspicious operations, reporting measures as well as customer identification and CDD procedures and being aware of the latest developments in that field. 2. The Company shall provide training programs for new employees, particularly for those dealing directly with the public 3. The Company shall update the training programs occasionally, according to the latest developments in that field. The Company shall put in place plans, programs and financial budgets especially allocated to the training of its workers in the AML/CFT field. : /,.,..

23 ATTACHMENTS

24 Annex No. 1 ML/TF Indicators: The indicators listed below aim at raising the awareness of the Company s employees regarding ML/TF operations and any financial activities associated therewith and at assisting them in detecting any ML/TF operation. In case there is one or several indicator(s), this means that suspicions exist about a specific operation and that an accurate investigation is required about a ML/TF operation. The following indicators were defined as guidelines and the Company shall adjust them and add new ones based on reasonable motives. 1) Indicators at the beginning of any financing transaction Review of the transaction s data, in case the transaction was unusually good for the customer or inappropriate to his activity or financial status. Inadequacy of the transaction with the volume of the transactions performed by the customer. Probability of inadequacy between the customer and the Company. Does the financed asset relate to the customer s nature of work and need. Possibility of exaggeration of the value of the financed asset. Probability of inexistence of the financed asset. () :,.,. :,......

25 Large raise in the number of the customer s transactions with the Company. Request of credit facilities in consideration of guarantees issued by a bank operating outside the KSA. Reluctance of the customer to provide data about the source of his funds or attempt of the customer to provide the Company with misleading information. The Company is aware that the customer is involved in ML/TF operations or in any criminal or regulatory offences. The customer is unable to give a description of the nature of his work or is unaware of the activities he exercises, in general. Another financial institution refuses to start or maintain a business relationship with the same customer. Existence of large cash transactions performed by the customer, when reviewing his bank statements... 2) Indicators after the beginning of financing transactions Cases of annulment or early settlement of financing contracts. The customer requests that the financing contracts be transferred to another customer. In case financing installments are paid on a continual basis and in large amounts that exceed the agreed upon limit. In case the amount of financing installments is paid through :..

26 cheques issued by other persons or parties. The customer attempts to pay financial obligations in cash in contrary to other usual payment systems. The customer s obligations exceed his visible or usual financial capabilities. The customer pays his financial obligations through the accounts he owns in banks operating outside the Kingdom. Use of the credit facilities granted to the customer for purposes other than those stated upon submittal of the request. The customer pays an unusual attention to the compliance with the AML/CFT requirements. The customer seems exaggeratedly careless about the risks and commissions or any other expenditure. The customer attempts to change or cancel a deal, after being informed of the requirements of information verification or record keeping by the Company. The customer requests the termination of the procedures of a deal in which he uses the minimum possible amount of documents ) Indicators about the Company s Employees The employee having living conditions that are inadequate with the salary he receives from the Company The employee continues to work for a long time without taking any leaves The employee attempts to :..

27 facilitate the provision of the Company s services to a client (whether a natural or legal person) and attempts to ignore the applicable usual procedures ( ).

28 : / / : / / : : () () : : :,,, : :.( ):

29 Annex n (2) (Confidential) Reporting of a suspicious financial transaction Ref: Date: / /14 AH Corresponding to: / /20 AD Financial Institutions Non financial institutions Contact of the reporting party Type of the transaction Date of execution Amount Account of the transaction s operator Name City Branch Phone Name of the party City Branch Phone Name: Phone: Address: Information about the reporting party Content of the Reporting Deposit Withdrawal Bank Transfer Others Cheque Branch Local Cash ATM Foreign Time Day Date Month Year In numbers In letters Currency Account Number Branch N Transaction s operator Grounds of Suspicion Name ID Card Number Nationality The Beneficiary Name ID Card N Nationality State City Account Number Branch N Bank of the Beneficiary Your Excellency, the Director of the Financial Investigations Directorate Kindly find above our report about a suspicious financial transaction for perusal and adoption of appropriate measures. Function: Official Seal: N.B.: (Any additional information shall be sent in a separate paper)