Law On Measures Against Money Laundering And Financing Of Terrorism,. (Money Laundering Act)

Original Language Title: Lov om tiltak mot hvitvasking og terrorfinansiering mv. (hvitvaskingsloven)

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Read the untranslated law here: https://lovdata.no/dokument/NL/lov/2009-03-06-11

Law on measures against money laundering and financing of terrorism,. (Money Laundering Act)


Date LOV-2009-03-06-11


Affairs Ministry

Edited

LOV-2015-09-04-91 from 01/01/2016


Published in 2009 Booklet 3


Commencement 15/04/2009

Changes

LOV-1985-05-24-28, LOV-2003-06-20-41

Promulgated
06.03.2009 kl. 13.45

Short Title
Money Laundering Act - hvvl.

Chapter Overview:

Chapter 1. Introductory provisions (§§ 1-4)
Chapter 2. Client Control and ongoing supervision (§§ 5-16)
Chapter 3. Investigation and Reporting (§§ 17-21) || | Chapter 4. Storage (§22)
Chapter 5. Internal procedures and systems, etc. (§§ 23-26)
Chapter 6. Final provisions (§§ 27-33)
Chapter 7. Commencement and amendments to other laws (§§ 34-35)

Ref. EEA Agreement Annex IX. 23b (Directive 2005/60 / EC). - Cf. Previous Act 20 June 2003 no. 41.

Chapter 1. Introductory provisions

§ 1. Purpose The purpose is to prevent and detect transactions associated with proceeds of crime or associated with terrorist acts.

§ 2. Definitions In this Act apply:

1.
Reportable: persons mentioned in § 4,

2.
Transaction:, dissemination, exchange or placement of assets,

3.
Beneficial owners: natural persons who ultimately own or control a customer or a transaction carried out on behalf of. An individual shall in any case be regarded as a beneficial owner who:

A)
directly or indirectly owns or controls more than 25 percent of shareholdings or voting rights in a company, except a company that has financial instruments admitted to trading on a regulated market in an EEA state or is subject to disclosure requirements consistent with the applies to trading on a regulated market in an EEA State

B)
exercises control over the management of a legal person other than listed in paragraphs a,

C)
according to statute or otherwise shall receive 25 percent or more of the assets of a foundation, trust or a similar legal arrangement or entity,

D)
main interest of the establishment or operation of a foundation, a trust or similar legal arrangement or entity, or

E)
exercises control over more than 25 percent of the assets of a foundation, trust or similar legal arrangement or entity.

4.
Company service providers: natural and legal persons that offer one or more of the following services:

A)
forming companies or other legal persons,

B)
acting as officers or senior executives of the group, participating in a general partnership or limited partnership, or similar positions in other legal entities,

C)
are well addresses, administrative addresses or mail addresses and related services for legal persons,

D)
manages or administers funds or similar assets masses

E)
acting as a shareholder to a third party, unless this is a company that has financial instruments admitted to trading on a regulated market in an EEA state or is subject to disclosure requirements consistent with those that apply to trading on a regulated market EEA state or

F)
ensures that other people act in positions referred to in subparagraph b, d and e.

§ 3. Geographical scope This Act applies to reporting entities that are established in Norway, including branches of foreign firms.
Act applies to Svalbard and Jan Mayen. The Ministry may in regulations provide that parts of the Act shall not apply to Svalbard and Jan Mayen and lay down special rules for these areas for the promotion of legislative intent.

§ 4. The reporting entity Act applies to the following entities:

1.
Financial institutions,

2.
Norges Bank,

3.
E-money institutions,

4.
Enterprises engaged in foreign exchange operations,

5.
Payment institutions and others who have the right to provide payment services,

6.
Investment firm

7.
Fund management companies,

8.
Insurers,

9.
Enterprises engaged in insurance mediation non reinsurance brokerage,

10.
Provider of postal services in mediating value consignments,

11.
Securities depositories,

12.
Enterprises engaged in depository activities

13.
Managers of alternative investment funds.

The Act also applies to the following legal and natural persons in the exercise of their profession:

1.

State authorized and registered public accountants and auditors responsible for audits of financial statements for the local authority, as well as for municipal and county enterprises, in accordance with regulations laid down by the Ministry in accordance. Law on municipalities and counties § 78 paragraph. 8 ,

2.
Chartered accountants,

3.
Lawyers and others who professionally or constantly providing independent legal assistance, when they assist or act on behalf of clients in planning or execution of financial transactions or transactions concerning real property or items of a value exceeding 40,000 kroner

4.
Estate agents and housing associations that act as real estate,

5.
Undertakings against remuneration, offer services similar to those mentioned in Nos. 1 to 4

6.
Company service providers,

7.
Dealers in objects, including auctioneering firms, commission agents and the like, by cash transactions of 40,000 Norwegian kroner or more or an equivalent amount in foreign currency, and

8.
People with limited authorization to provide payment services.

Act also applies to companies and individuals who perform services on behalf of or for persons referred to in subsections.
When a lawyer acts as trustees, the provisions of §§ 17, 18, 20, 21, 27 and 28.
Ministry may in regulations provide exceptions from one or more of the provisions of the Act for certain reportable. The ministry may in regulations make one or more of the provisions of law applicable to dealers of objects by transactions above certain thresholds when using specific types of payment.
Ministry may issue regulations further specifying who is covered by § 4 subsections and rules that the Act applicable to undertakings operating gaming activities, debt collection agencies, pension funds and intermediaries of shares in general partnerships and limited partnerships.

Chapter 2. Client Control and ongoing monitoring

§ 5. Risk-based customer due diligence and ongoing monitoring reporting entity shall conduct customer due diligence pursuant to §§ 6 to 13 and ongoing monitoring by § 14 Customer Control and continuous monitoring shall be based on an assessment of the risk of transactions associated with proceeds of crime or offenses under the Penal Code §§ 131 to 136 a, in which risk is assessed based on type of customer, business relationship, product or transaction.
Reporting entity should be able to demonstrate that the extent of the measures carried out are tailored to the relevant risks.

§ 6. Obligation to undertake customer due diligence reporting entity shall conduct customer due diligence by

1.
Establishing a business relationship,

2.
Transaction concerning 100,000 Norwegian kroner or more for customers with whom the reporting entity does not have an established customer relationship,

3.
Suspects that a transaction is associated with proceeds of crime or offenses under the Penal Code §§ 131 to 136 A, or

4.
Doubt whether previously collected information about the customer are correct or sufficient.

Thresholds in the first paragraph. 2 calculated total of transactions carried out in several operations that appear to be associated with each other. If the amount is not known when the transaction is completed, the customer checks carried out as soon as the reporting obligation becomes aware that the threshold has been exceeded.
Ministry may issue further rules concerning when a customer relationship shall be deemed established.

§ 7. Implementation of customer due diligence Customer due diligence measures referred to in § 6 shall include

1.
Record of the information mentioned in § 8,

2.
Verification of customer's identity on the basis of valid credentials,

3.
Verify the identity of beneficial owners on the basis of appropriate measures and

4.
Collecting information on customer relationship purposes and intended nature.

If the customer is a legal person, the identity of the person acting on behalf of the client confirmed on the basis of valid identification. Furthermore, it must be documented by a certificate of registration, memorandum, written authorization or the like, that person is entitled to represent the client outwardly.
If other than the customer is entitled to operate the account or a custodian, or is entitled to carry out the transaction, the person's identity is confirmed on the basis of valid identification.
If confirmation of a natural person's identity shall be based on physical credentials without their personal attendance, it must produce additional documentation to verify the person's identity.

Confirmation of natural persons Pursuant to the first paragraph. 2, subsection and subsection may be made on a basis other than a valid ID if the reporting entity is sure that person's identity.
Ministry may issue further regulations on the implementation of customer due diligence, including what is considered valid identification.

§ 8. Registration information reporting obligation shall record the following information about customers:

1.
Full name or company name,

2.
Identity number, organization number, D-number or, if the customer has no such number, another unique identity code,

3.
Fixed address, and

4.
Reference to proof that is used to verify the customer's identity.

Obligation to record the customer's permanent address pursuant to subsection. 3 does not apply if the National Registry has decided that the customer's address will be kept confidential or strictly confidential.
For individuals not been assigned a Norwegian identity number or D-number, the recorded date of birth, place of birth, sex and nationality. If the reporting entity is aware that the client has dual nationality, must be registered.
For legal persons not registered in a public registry, it shall also be recorded concerning legal form, date of establishment and general manager, owner or equivalent person. If contact is a legal person shall also be entered by an individual as a contact person and recorded information as mentioned in the first paragraph the competent.
Reporting obligation shall record information uniquely identifying beneficial owners.

§ 9. Time for customer due diligence Customer due diligence measures to be implemented before establishing a business relationship or carrying out a transaction.
From the first paragraph following exceptions apply:

1.
Confirmation of the identity of customers and beneficial owners should be permitted under establishing a business relationship, if the establishment of the customer relationship is necessary in order not to hinder the normal business operations and there is little risk of transactions associated with an offense or offenses covered by Penal Code §§ 131 to 136 a.

2.
Confirmation of the identity of the beneficiary for a life insurance policy can be made by drawing of the policy, provided confirmation of identity made before the date of payment or the date on which the beneficiaries exercise their rights under the policy.

3.
Confirmation of the identity of the customer and the beneficial owners may be made by opening a bank account provided that there are measures that ensure that transactions associated with the account can not be performed by the customer or on his behalf before the confirmation of identity is undertaken.

§ 10 Consequences of the customer due diligence can not be completed If the customer control inapplicable the reporting entity shall not establish business relationship or perform the transaction. An established customer relationship shall be terminated if continuation of the customer relationship entails risk of transactions associated with proceeds of criminal offenses or offenses under the Penal Code §§ 131 to 136 a.
The first paragraph does not apply when lawyers and other professional or regular providing independent legal assistance is in the process of ascertaining a client's legal status or representing the client in legal proceedings.

§ 11. Customer due diligence measures performed by third parties for the implementation of customer controls as mentioned in § 7 no. 2 to 4, reporting entities to assume measures carried out by the following third parties:

1.
Financial institutions,

2.
Investment firm

3.
Fund management companies,

4.
Insurers,

5.
Enterprises engaged in insurance mediation non reinsurance brokerage,

6.
Securities depositories,

7.
State authorized and registered auditors,

8.
Chartered accountants,

9.
Lawyers and others who professionally or constantly providing independent legal assistance, when they assist or act on behalf of clients in planning or execution of financial transactions, such transactions concerning real estate or transactions involving objects with value over 40 000, | ||
10.
Estate agents and housing associations that act as real estate or

11.
Corresponding legal and natural persons referred to in Nos. 1 to 4 and 6 to 10 from another state, if they are subject to legal registration requirements and rules on customer due diligence, retention and supervision pursuant to the provisions of this Act.

Right to apply the customer controls carried out by third parties pursuant to the first paragraph does not entail exemption from the reporting

1.

Obligation to record information as mentioned in § 8 and store documents and information mentioned in § 22, or

2.
Responsibility for customer due diligence measures in accordance with this Act and regulations issued pursuant to this Act.

Reporting entity can apply the customer due diligence undertaken by third parties that are not established in Norway, although confirmation of the identity, cf. § 7 first paragraph. 2, is made on a basis other than a valid ID.
Third party shall make the data collected for the implementation of measures referred to in § 7 no. 2 to 4, available to the reporting entity which customer is being referred. A third party shall, upon request, promptly forward copies of identification and verification data and other relevant documentation for the customer or the beneficial owner's identity, to the reporting entity. Disclosure of information and documents that are necessary to enable the reporting entity to fulfill its obligations under §§ 5 subsection 8 or 22, does not entail a breach of statutory duty of confidentiality when the client is informed that the information be disclosed.
Ministry may in regulations provide exceptions from the right to apply customer due diligence performed by third parties.

§ 12. Outsourcing implementation of customer due diligence reporting entity may enter into written agreements with contractors concerning outsourcing of implementation of customer control.
Following legal and natural persons may function as service after the first paragraph:

1.
Reportable, with the exception of company service providers mentioned in § 4, second paragraph. 6 and dealers of items mentioned in § 4, second paragraph. 7, and

2.
Deliverable provider of postal services.

The reportable responsible for their customer due diligence measures in accordance with applicable laws and regulations and the establishment of appropriate procedures and taken appropriate measures under § 23
Disclosure of information and documents, which the contractor has obtained on the basis of outsourcing of implementation of customer control, which is necessary for the reporting entity to fulfill its obligations under §§ 5 subsection 8 and 22, shall not constitute a breach of statutory duty of confidentiality.
Ministry may in regulations provide that persons other than those covered by the second paragraph may function as service providers.

§ 13. Simplified customer due diligence Ministry may in regulations provide exceptions from the obligation to undertake customer due diligence in accordance with § 6, first paragraph. 1, 2 and 4 and subsection. The reporting entity shall, prior to application of the exception gather sufficient information to establish that the circumstances covered by the exception concerned.
The first paragraph does not entail exemption from the obligation to record information under § 8 subsections at account creation.

§ 14. Continuous follow-up reporting obligation shall conduct ongoing monitoring of existing customer relationships, and ensure that transactions which the reporting entity becomes aware of is in accordance with the knowledge of the customer and its business. The reporting entity shall update the documentation and information about customers.

§ 15 Enhanced control in situations which by their nature involve a high risk of transactions associated with proceeds of criminal offenses or offenses under the Penal Code §§ 131 to 136 a, reportable based on risk assessment using other control as well to the measures imposed by §§ 5 to 14.
reporting entity shall provide adequate controls to determine whether the customer is a politically exposed person. The reporting entity shall, at the customer relationship or transactions for such persons

1.
Ensure that decision-maker obtains approval from senior management before establishing a business relationship,

2.
Take appropriate measures to determine the origin of the customer's assets and the capital included in the customer relationship or transaction, and

3.
Cause enhanced ongoing monitoring of the business relationship.

By politically exposed person mentioned in the second paragraph refers to a natural person who

1.
Holds or during the past year has held high public office or position in a state other than Norway,

2.
Is a close family member of a person as mentioned in no. 1, or

3.
Known employee to a person mentioned in paragraph 1.

Reporting obligation shall pay particular attention to products and transactions that promote anonymity and if necessary take action to prevent transactions associated with proceeds of criminal offenses or offenses under the Penal Code §§ 131 to 136 a.

Ministry may issue further regulations on the situations to be covered by subsection and what control measures in such cases should be applied. The Ministry may issue further regulations on who should be considered as politically exposed persons.

§ 16. Correspondent House Banks Using an institution from outside the EEA as a correspondent bank, the credit institutions

1.
Obtain sufficient information about the correspondent institution to fully understand the nature of its activities and on the basis of publicly available information to determine the institution's reputation and the Authority's quality

2.
Consider correspondent institution control measures for the prevention and combating of acts described in Penal Code §§ 332, 335, 337, 340 and 135.

3.
Ensure that decision-maker obtains approval from senior management before establishing new correspondent banking relationships,

4.
Documenting the individual institution's responsibility, and

5.
In connection with the settlement accounts, ensure that the correspondent institution

A)
has verified the identity of and leading continuous monitoring of, customers have direct access to accounts at the credit institution, and

B)
at the request may submit relevant information from the customer checks to the credit institution.

Credit institutions shall not enter into or maintain correspondent bank to shell banks. Credit institutions shall take appropriate measures to ensure that they do not engage in or continue correspondent banking relationships with credit institutions which are known to allow their accounts to be used by shell banks.
With empty bank as referred to in subsection means a credit institution established in a state in which the institution is not physically present with a meaningful mind and management, and not affiliated with a regulated financial group.

Chapter 3. Investigation and reporting

§ 17. Duty to investigate If a reporting obligation suspects that a transaction is associated with proceeds of crime or offenses under the Penal Code §§ 131 to 136 a, shall be carried out further investigations to confirm or disprove the suspicion.
Reporting obligation shall in writing or electronically record the results of the investigations.
Ministry may issue further regulations on the duty to investigate.

§ 18. Duty to report If inquiries referred to in § 17 not disprove the suspicion, the reporting entity on its own initiative to send information to the Norwegian authorities concerning the transaction and about the factors that have caused suspicion. The reporting obligation shall on request give ØKOKRIM all necessary information about the transaction and the suspicion.
Lawyers and other professional or regular providing legal assistance shall not be obliged to report on matters that they become aware of through efforts to determine the client's legal position or on information they have obtained before, during or after a trial when the circumstances the information applies are directly associated with the litigation. The same applies to auditors and other reporting entities when they assist lawyers or other professional or regular providing legal aid as referred to in the first sentence.
Ministry may in regulations impose a reporting obligation to transmit information to the Norwegian authorities electronically. The Ministry may issue further rules concerning the reporting obligation.

§ 19. Suspicious transaction reporting obligation shall not carry out transactions involving reporting requirements as specified in § 18 before notifying Økokrim. Norwegian authorities may in special cases give orders not to carry out transactions.
A transaction may nevertheless be carried out before notifying Økokrim if failure to carry out the transaction may complicate ØKOKRIM`s inquiries or investigations or not it is possible to refrain from carrying out the transaction. Information shall then be forwarded ØKOKRIM immediately after the transaction is completed.

§ 20. Duty of secrecy communication of information to the Public Prosecutor in good faith pursuant to § 18 shall not constitute breach of confidentiality and provides no basis for liability or criminal liability.
Financial institutions and insurance companies may notwithstanding the secrecy exchange necessary customer data when deemed necessary as part of the investigations referred to in § 17


§ 21. Prohibition against disclosure research, reporting or investigation Customers or third parties shall not be aware that inquiries are being conducted as specified in § 17, that it is provided as referred to in § 18 or that it is initiated an investigation.
First paragraph does not preclude the exchange of information mentioned in § 20, second paragraph.
First paragraph does not preclude reporting entities referred to in § 4, second paragraph. 1 to 3 attempts to get a client to refrain from committing an illegal act.
Ministry may in regulations provide exceptions from the first paragraph.

Chapter 4. Storage

§ 22 Retention of documents and information reporting obligation shall retain copies of documents used in connection with customer control as mentioned in § 7, and recorded data, as mentioned in § 8, five years after the customer relationship has ended or the transaction is completed, unless extended deadlines another statute or regulation. If the qualified certificate is used, the certificate identification code and information about the certificate issuer's identity store. It should be using the account number or otherwise detected a clear connection between customer relationships and records referred to in § 8
reporting entity shall retain documents relating to the transactions referred to in § 17 at least five years after the transaction is completed .
Documents and information mentioned in subsections shall be kept in a satisfactory manner, protected from unauthorized access and deleted within one year after the retention period. The Personal Data Act applies to the retention of personal data.
Ministry may issue further regulations concerning the storage and destruction of information.

Chapter 5. Internal procedures and systems, etc.

§ 23. Control and communication procedures reporting obligation shall have satisfactory internal control and communication procedures that ensure fulfillment of obligations under this Act.
Routines should be established at the highest level in the reporting entity. It shall designate one member of management who shall have a specific responsibility to follow up the procedures.
Reporting obligation shall take the necessary measures for ensuring that employees and other persons who perform functions on behalf of the reporting entity

1.
Is aware of the duties incumbent on the reportable under this Act

2.
Learn to recognize transactions referred to in § 17, and

3.
Familiar with the reporting procedures for handling such transactions.

§ 24. Electronic monitoring Financial institutions shall establish electronic surveillance.
Ministry may in regulations impose on others reportable to establish electronic surveillance and further rules on such systems.

§ 25. Systems for an overview of customer relationships reporting obligation referred to in § 4, first paragraph should have systems that enable rapid and complete response to requests by Norwegian authorities or supervisory authority as to whether they have or in the past five years has had customer relationship specific people and about the customer portfolio art.

§ 26. Branches and subsidiaries in countries outside the EU reporting obligation referred to in § 4, first paragraph shall ensure that branches and subsidiaries established in countries outside the EU

1.
Familiar with control and communication procedures as described in § 23, and

2.
Applying similar measures for customer due diligence, ongoing monitoring and storage as described in Chapters 2 and 4.

If the law of that State does not permit application of the measures mentioned in the first paragraph. 2, the reporting entity

1.
Inform the supervisory authority about this and

2.
Take other appropriate measures to counteract the risk of transactions associated with proceeds of crime or offenses as described in Penal Code §§ 131 to 136 a.

Chapter 6. Final provisions

§ 27. Orders and coercive measures Supervisory bodies can provide the reporting entities orders that contravene this Act or regulations issued pursuant to the Act shall cease. Supervisory bodies may set a deadline for such matters to be brought in conformity with the order.
If the reporting entity does not comply with an order under subsection supervisory bodies impose fines. Coercive fine may be imposed in the form of lump-sum fine or a daily fine. Imposed fine is enforceable by execution.
Ministry may issue further rules for determining fines, including size of the fine.


§ 28. Penalties Any person who willfully or through gross negligence violates this Act §§ 5, 6, 7, 8, 15, 17, 18 or 22, or regulations issued pursuant to these provisions.
In especially egregious cases, imprisonment for up to 1 year used.

§ 29. ØKOKRIM`s handling of information Information ØKOKRIM receive pursuant to § 18 shall be destroyed no later than five years after the information was recorded, unless this period is registered new information or it is undertaken investigations or legal proceedings against the registered.
If ØKOKRIM`s surveys show that there is no criminal offense shall be erased as soon as possible.
Ministry may issue further rules on ØKOKRIM`s and police associated with reports received, including deletion of data.

§ 30. Exchange of information for combating terrorism etc. Norwegian authorities can provide information that Norwegian authorities received pursuant to § 18, to public authorities other than the police who have responsibilities related to prevention of offenses under the Penal Code §§ 131 to 136 a.
Information that ØKOKRIM receive under the provisions of this Act may ØKOKRIM disclose in tax and customs and excise authorities to use in their work with taxes, duties and customs.

§ 31. Supervisory Board for Measures against Money Laundering Supervisory Board for Measures against Money Laundering (Supervisory Board) shall supervise:

1.
ØKOKRIM`s handling of information received under § 18,

2.
ØKOKRIM`s orders and authorizations under § 19 first paragraph and

3.
ØKOKRIM`s handling of information under § 29.

Supervisory Board shall consist of at least three members appointed by the King. Moreover appoint one or more deputies. Chairman of the committee shall comply with the requirements for Supreme Court justices. The Supervisory Board members are bound to secrecy about what they learn in the exercise of their duties.
ØKOKRIM shall provide the Supervisory Board with the information, documents etc. Supervisory Board finds necessary for its supervision. When required by the Supervisory Board, Økokrim officials are obliged to explain to the Supervisory Board without regard to confidentiality.
Ministry may issue further rules concerning the responsibilities and procedures of the Supervisory.

§ 32. Information that shall accompany a transaction in the payment chain, etc. The Ministry may issue regulations concerning the information about the remitter shall accompany a transaction in the payment chain, as well as rules concerning money disclosure and due diligence obligations in connection with such transactions.

§ 33. Persons or companies with ties to countries or areas that have not implemented adequate measures Ministry may lay down special rules for reporting transactions with or for persons or undertakings associated with countries or areas that have not implemented satisfactorily measures for acts described in Penal Code §§ 332, 335, 337, 340 and 135 or the financing as described in Penal Code § 136 a. the Ministry may also issue regulations laying down special rules on prohibitions or restrictions in reporting entities to establish business relationship with or transactions with or for persons or undertakings associated with countries or areas that have not implemented adequate measures for acts described in Penal Code §§ 332, 335, 337, 340 and 135 or the financing as described in Penal Code § 136 a.

Chapter 7. Commencement and amendments to other laws

§ 34. Commencement This Act comes into force when the King bestemmer.1
obligation to terminate customer relationships pursuant to § 10 first paragraph applies only to customer relationships established by the Act.

§ 35. Amendments to other Acts From the time the law comes into force, the following amendments to other Acts - - -