A LAW AMENDING THE PREVENTION AND SUPPRESSION OF MONEY LAUNDERING ACTIVITIES LAWS OF 1996 TO 2000 NO 118(I) OF 2003

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1 A LAW AMENDING THE PREVENTION AND SUPPRESSION OF MONEY LAUNDERING ACTIVITIES LAWS OF 1996 TO 2000 NO 118(I) OF 2003 The House of Representative votes as follows: Short Title. 61 (I) of (I) of (I) of (I) of (I) of The present Law will be cited as the Prevention and Suppression of Money Laundering Activities (Amendment) Law of 2003 and will be read in conjunction with the Prevention and Suppression of Money Laundering Activities Laws of 1996 to 2000 (hereinafter to be referred to as the principal Law ) and the principal law and the present Law shall be together referred to as the Prevention and Suppression of Money Laundering Activities Laws of 1996 to section 6 of the section 13 of the Substitution of the side tittle of section 16 of the section 26 of the section 37 of the section 38 of the 2. Article (1) of section 6 of the principal law is amended with the substitution of the word predicate (first line), with the word prescribed. 3. Paragraph (a) of article (7) of section 13 of the principal law is amended with the substitution of the word and (second line) with the word or. 4. The side title of section 16 of the principal law is substituted with the following new side title: Cancellation of restraint and charging orders. 5. Article (2) of section 26 of the principal law is amended with the insertion at the end of this article of the following new paragraph (c): (c) the non-execution or the delay in the execution of an order by the said person, upon instructions of the Unit, with regard to sums or investments referred to above, shall not constitute violation of any contractual or other obligation of the said person or/and his/her employers. 6. Section 37 of the principal law is amended with the insertion of the following paragraph, in the interpretation of the term Convention : (c) the Treaty on Mutual Assistance in Penal Matters between Cyprus USA 7. Article (1) of section 38 of the principal law is amended as follows: (a) With the substitution of the words in the Minister of Justice and Public Order who (second line) with the words in the Ministry of Justice and Public Order which ; and (b) with the insertion after the word application (fourth line), of the words to the Unit which it submits.

2 section 45 of the section 53 of the section 55 of the the title of Part VIII of the section 57 of the 8. Article (1) of section 45 of the principal law, is amended with the substitution of the words Irrespective of any provisions in other laws with the words Without prejudice to the provisions of other Laws, in relation to the receipt of information or documents in the course of investigating the possible commitment of offences. 9. Section 53 of the principal law is amended with the insertion immediately after article (4) of the following new article: (5) Without prejudice to the remaining provisions of the present section, operational posts may be created for the needs of the Unit, under the Law Office of the Republic. 10. Article (2) of section 55 of the principal law, is amended with the substitution of the words the representative of the Ministry of Justice and Public Order or in the case he is absent by the representative of Central Bank of Cyprus (first to third line) with the words the Attorney General of the Republic or his representative. 11. The title of Part VIII of the principal law is amended with the insertion after the word FINANCIAL of the words AND OTHER. 12. Section 57 of the principal law is amended as follows: (a) With the deletion from paragraph (a) of the definition of business relationship of the word and (third line) and the insertion after paragraph (b) of this definition, of the following new paragraph: (c) the arrangement relates to the provision of services ; and (b) With the insertion after the definition of relevant financial business of the following new definition: other business means any other business activity, apart from financial business for which the provisions of the present law apply. section 58 of the 13. Section 58 of the principal law is amended as follows: (a) With the insertion in article (1) of the words and other after the word financial (first line) and in paragraph (a) of article (1) of the words and other, before the word financial (first line); (b) With the substitution of sub-paragraph (iv) of paragraph (a) of article (1) with the following new subparagraph: (iv) such other appropriate procedures of internal control, communication and

3 detailed examination of any transaction which by its nature may be considered to be associated with money laundering for the purpose of preventing or forestalling money laundering ; and (c) With the substitution of article (2) with the following new article: (2)(a) Any person who allegedly fails to comply with the provisions of this section, after giving him the opportunity to be heard, is subject to an administrative fine of up to three thousands pounds which is imposed by the competent Supervisory Authority. (b) Lawyer or auditor who allegedly fails to comply with the provisions of this section, is referred to by the competent Supervisory Authority to the competent Disciplinary body which decides accordingly. (c) Any other person who is not included in paragraphs (a) and (b) of the present article and is not subject to supervision by any Supervisory Authority and violates the provisions of this section is guilty of an offence punishable, in case of conviction by imprisonment of two years or by a pecuniary penalty of up to three thousand pounds or by both of these penalties. section 60 of the section 61 of the 14. Section 60 of the principal law is amended with the deletion of article (4) and the renumbering of article (5) to article (4) and article (6) to article (5), after deleting from the latter the words under subsection (4) (first line). 15. Section 61 of the principal law is amended by the insertion after the word financial (first line) of the words and other, as well as the following new paragraphs: (14) Insurance policies taken in the General Insurance Sector by a company registered in Cyprus according to the Companies Law, either as resident or oversea company, but which carries on insurance business exclusively outside the Republic. (15) Exercise of professional activities by auditors, external accountants and tax advisors, including transactions for the account of their customers in the context of carrying on relevant financial business.

4 (16) Exercise of professional activities on behalf of independent lawyers, with the exception of privileged information, when they participate, whether (a) by assisting in the planning or execution of transactions for their clients concerning the - (i) buying and selling of real property or business entities; (ii) managing of client money, securities or other assets; (iii) opening or management of bank, savings or securities accounts; (iv) organization of contributions necessary for the creation, operation or management of companies; (v) creation, operation or management of trusts, companies or similar structures; section 62 of the (b) or by acting on behalf and for the account of their clients in any financial or real estate transaction. 16. Section 62 of the principal law is amended by the insertion at the end of that section of the following new article: (5) The provisions of the present section do not apply (a) In the case that the sum of the periodic insurance premiums to be paid in a given year does not exceed EUR1.000 or EUR2.500 where a single premium is to be paid; the principal law by the insertion of a (b) in cases of insurance policies in respect of pension schemes taken out by virtue of a contract of employment or the insured s occupation, provided that such policies contain no surrender clause and may not be used a s collateral for a loan. 17. The principal law is amended by the insertion immediately after section 62 of the following new section:

5 new section. Distance business relationships or transactions 62.A When establishing business relationships or carrying out an one-off transaction or a series of one-off transactions which exceed EUR15.000, with a customer, who is not physically present, in order to verify the customer s identity, it is required:- (i) (ii) (iii) the production of additional documentary evidence; or supplementary measures to verify or certify the documents supplied; or the receipt of confirmatory certification by an institution or organization operating in a member state of the European Union; or (iv) the first payment in the context of the business relationship or one off transactions to be made through an account maintained in the customer s name with a credit institution operating in a member state of the European Union. 18. Section 64 of the principal law is substituted with the following new section: section 64 of the Exemptions 64. From the identification procedures under sections 63 and 64 are exempted (a) Persons which are subject to the provisions of section 58 of this Law. ; the principal law by (b) Financial institutions incorporated in countries which apply, in the opinion of the competent Supervisory Authority, procedures for the prevention of money laundering which are equivalent with those provided in Part VIII of the present Law. 19. The principal law is amended by the insertion immediately after section 67 of the following new section:

6 the insertion of a new section. Non-execution or delay in the execution of a customer s transaction by a person engaged in relevant financial business 67A. The non-execution or the delay in the execution of any transaction for the account of a customer by a person engaged in relevant financial business, as defined in section 61 of the present law, due to the non provision of sufficient details or information for the nature of the transaction and/or the parties involved, as required by Guidance Notes or circulars issued in accordance with section 60(3) of the present law by the competent Supervisory Authority in respect of procedures for customer identification and record keeping, shall not constitute breach of any contractual or other obligation of the said person towards its customer. Official Gazette, Supplement I(I) No. 3742, 25/7/2003