On Combating Money Laundering And Terrorist Financing

Original Language Title: О противодействии легализации доходов, полученных преступным путём, и финансированию терроризма

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On legalization of proceeds from crime



 and terrorist financing

 
(Statements of the Mejlis of Turkmenistan, 2009 г., no. 2, p. 42)
 
(With changes and additions made by the laws of Turkmenistan dated 04, no. 214-IV and 01.10.2011. No. 235-IV) this law is aimed at protecting the rights and legitimate interests of citizens, society and State, as well as the integrity of the financial system of Turkmenistan against crime by creating a legal framework for anti-money laundering and terrorist financing.
 


Section i. General provisions

 
Article 1. The main terms and concepts used in this law, the terms and concepts used in this law have the following meaning: 1) income received by criminal way, "money and other movable and immovable property acquired as a result of illegal actions against objects protected by the criminal law of Turkmenistan;
2) legalization of criminal proceeds, is giving a legitimate kind of possession, use or order of funds or other assets knowingly acquired illegally, as well as the use of such funds or property for entrepreneurial or other economic activities, including the financing of terrorism;
3) property-any object which may own, use, dispose of and acquire an unlimited number of legal and physical persons are not prohibited by law and is not contrary to morality;
4) suspicious transaction and transaction-transaction and operation subject to signs of suspicious transactions and operations in accordance with this law and in accordance with the list of indicators of suspicious transactions, approved by the authorized State body, that is, transactions and transactions involving money and/or other assets that do not have a clear economic or visible lawful purpose, and are not specific to the activities of the legal or natural person (s);
5) authorized State body is a public body created by the acts of the President of Turkmenistan and in accordance with the present law, authorized to carry out the collection, analysis and transmission of information on suspicious transactions and transactions and potential financing of terrorism, as well as to conduct the proper measures aimed at counteracting legalization of criminal proceeds and terrorism financing;
6) financing of terrorism-a socially dangerous act, to terrorist activities financial, logistical and other resources;
7) persons representing the information-any legal and/or natural person from the following: banks, licensed and controlled by the Central Bank of Turkmenistan;
other financial and credit institutions;
insurance organizations;
institutions engaged in leasing activities;
pawn shops;
business participants of securities market;
commodity exchanges;
currency exchanges;
legal and natural persons, who are the organisers of gambling;
agencies conducting State registration of rights to immovable property, as well as agencies providing services on State registration of rights to real property, or deals with other assets subject to state registration;
the Organization of postal and telegraph communications, carrying out money transfers, and other organizations making settlements and/or payments;
real estate agents (Realtors) when they are involved in transactions for the purchase or sale of real estate for the client;
dealers in precious metals and dealers in precious stones, when they conduct cash transactions with the client over the established threshold amount;
bidding and auction organizers;
lawyers, persons carrying out notary activities, other independent lawyers and accountants, individual entrepreneurs providing legal services when they prepare or commit for a client transaction for purchase and sale of real estate, management, money, securities or other assets of the client; management of Bank, savings or securities accounts; as well as the accumulation of funds for the purpose of creation, operation or management of companies, and their establishment, functioning or management of a legal person or entity and the purchase and sale of enterprises;
bodies which, in accordance with the legislation of Turkmenistan exercised control and registration of cash, goods, other property or vehicles imported into Turkmenistan exported and transit and lead information, prepare reports on foreign trade of Turkmenistan;
8) compulsory control is a set of measures taken by the notified body measures regulated by this law and other legislative acts of Turkmenistan, adopted in accordance with it, to monitor transactions with funds or other assets, carried out based on information provided by organizations engaged in such operations, as well as the verification of that information in accordance with the legislation of Turkmenistan;

9) internal control-activities of organizations conducting transactions with funds or other assets to provide information to the authorized State body on transactions subject to mandatory control and other transactions with funds or other assets connected with the legalization of proceeds from crime and financing of terrorism;
10) the beneficiary is a natural person who ultimately owns or exercising control over the customer or the person on whose behalf a transaction is made;
11) shell-bank registered in States and territories where he is physically not present;
12) offshore zone-a zone with special favourable conditions for banking and insurance operations in foreign currency to service non-residents;
13) verification-verification of the validity and accuracy of information and documents submitted by the client;  
14) country with inadequate system-a country which does not fulfil or insufficiently fulfils the Recommendations of the financial action task force on money laundering for anti-money laundering and terrorist financing;
15) foreign public official means any appointed or elected person holding a legislative, Executive, administrative or judicial office of a foreign State or any person exercising a public function for a foreign State, including for a public agency or public enterprise.
 


Article 2. Purpose and scope of application of this law 1. The main objective of this Act is the prevention and detection of activities related to the legalization of income obtained by criminal means and the financing of terrorism, as well as the establishment of legal norms for the establishment of the authorized State body, endowed with the authority to obtain the information, analysis and dissemination of information on suspicious transactions, as well as transactions and transactions subject to mandatory control in accordance with the present law.
2. the present law for the prevention, detection and eradication of offences related to money laundering and the financing of terrorism, regulates the following: 1) the procedure for the execution of transactions and transactions involving funds or other assets of legal entities and individuals;
2) activities of subsidiaries, branches and representative offices of legal entities-residents of Turkmenistan, located in foreign countries;
3) procedure for the activities of State bodies performing control on the territory of Turkmenistan over the execution of transactions and operations involving money or other assets.
Subsidiaries, branches and representative offices of legal entities-residents of Turkmenistan, located in foreign countries, where the applicable minimum requirements on combating money laundering and terrorist financing in Turkmenistan and the receiving State have differences, must comply with higher standards to the extent that it allows legislation of the host State.
The requirements of this law in accordance with international treaties to which Turkmenistan is a party may be applied to natural and legal persons conducting transactions and transactions with funds or other assets outside Turkmenistan.
 
Section II. Prevention of the legalization of funds obtained by criminal means and the financing of terrorism, Article 3. Measures aimed at counteracting legalization of criminal proceeds and terrorism financing 1. Banks and other lending institutions, having the right opening and maintaining bank accounts do not have the right to open anonymous bank accounts (deposits), accounts (deposits) payable to bearer and carry out any operation without identification of contractors and/or clients in accordance with the legislation of Turkmenistan.
2. banks and other credit institutions have the right to open and maintain bank accounts, and other reporting persons shall deny the legal and physical person in opening a bank account (deposit) or conducting transactions on the account, as well as in the preparation and carrying out of the transaction if the person concerned will not be presented the necessary documents for customer identification, or documents, causing an apparent suspicion, or if the information obtained in accordance with this law, indicate that the person is involved in terrorist activities. In the cases referred to in this part, banks and other lending institutions, having the right opening and maintaining bank accounts, has the right to terminate contracts entered into with customers (account holders) and contributors, as well as reporting entities should consider bringing information to the authorized body in accordance with article 4 of this law.
3. Reporting persons shall perform the following procedures:

-install and verify the identity of the client, there are a number of activities, establishing the identity of the client is a natural person (surname, name, place of registration and residence, date of birth, passport number, the authority ordered by means of the account and other information required in accordance with the legislation of Turkmenistan);
-Verify the legal status of the legal entity client, including information about the title or the name of the customer, on the organizational-legal form of activity of the client, address, officials and other data relating to the statutes governing the operations of the client;
-Verify the credentials and identity of persons entitled to carry out transactions on behalf of a client is not physically present; install and verify the identity of the beneficiary, as well as the conduct of verification as to the information and documents submitted by the client;
-perform other operations established by the legislation of Turkmenistan.
4. The procedure referred to in paragraph 3 of this article shall apply in the following cases:-when establishing a business relationship;
-When carrying out any one-off transactions on the threshold amount;
-the suspected laundering of criminal proceeds, or the financing of terrorist activities;
-If the person representing the information, doubt veracity and/or under previously received information relating to the identity of the client.
5. reporting entities regarding existing customers are obliged to on an ongoing basis to maintain proper control after taking them to the service, including in respect of customers taken to service up to the entry into force of this Act.
6. Natural and legal persons carrying out transactions and transactions with funds or other assets, in addition to the measures provided for in the first paragraph of this article shall: 1) take reasonable measures available under the circumstances to identify foreign PEPs among physical persons or service;
2) provide services to foreign public officials only with the written permission of the parent body, and in its absence-oversight or authorized State body;
3) take reasonable measures available under the circumstances to determine sources of funds or other assets belonging to foreign public officials;
4) continuously update the information available on the accepted foreign public officials;
5) to take special control transactions and transactions with funds or other assets held by foreign public officials, their families, close relatives, adoptive parents and usynovlënnymi (udočerënnymi) or on behalf of those persons.
7. banks and other credit institutions have the right to open and maintain bank accounts do not have the right to establish direct correspondent relations with registered offshore banks, their affiliates, subsidiaries and separate entities, are not separate legal entities, including open accounts for respondent banks. This restriction does not apply to the establishment of direct correspondent relations with affiliates, registered in offshore zones, head of the organization which are (registered) out of offshore zones.
You shall not create wrapper banks.
Banks and other credit institutions have the right to open and maintain bank accounts do not have the right to establish or continue direct correspondent relationships with banks-wrappers, as well as the need to take precautionary measures against transactions and transactions with foreign financial institutions-banks, allowing correspondents wrappers use their accounts.
Banks are required to obtain sufficient information about a client and include them in money transfer operations or traffic associated with them, in order to ensure the availability of this information at all stages of operations, as well as increased attention to money transfer operations, which no owner information. Banks are obliged to consider the termination and suspension of all transactions with correspondent banks, banks, banks, respondents and senders of money without performing the above rules.  
8. Legal entity having the status of the company (the company), registered in an offshore zone in accordance with the laws of the State of registration may not be a founder or shareholder of the Bank-resident of Turkmenistan.
9. in order to implement the licensing and regulation of banks and other credit institutions Central Bank of Turkmenistan defines a list of subjects, States and territories of offshore zones and establishes the conditions and restrictions on transactions and operations with them.
10. reporting entities shall:-develop internal control rules anti-money laundering and terrorist financing and procedures for its implementation;

-keep at least five years from the date of completion of the operation information and records related to transactions and transactions with cash and/or other assets. Keep not less than five years from the date of closure of the account and termination of business relations information and records related to the identification of the client, as well as information about business relationships, business correspondence and other information. The information in such records must be sufficient to be able to restore individual transactions and operations with a view to making relevant evidence for consideration and investigation;
-not to disclose the information provided to the authorized State body. Communication to third parties of facts to convey such information to the authorized State body may only in cases specifically provided for by the legislation of Turkmenistan. Employees of reporting entities will have the right to inform clients of these organizations or other persons to submit information to the authorized State body.
11. Natural and legal persons carrying out transactions with funds or other assets without delay and indefinitely suspend operations and transactions with funds or other assets and ensure that they use natural and legal persons, persons over which they exercise control (their shares) or which control them (their assessed participants), in respect of which the authorized State body or other sources received information about involvement in terrorist activities (or the financing of terrorism , extremist activity), and no later than the date of the suspension of operations and transactions represent information about it to the authorized State body.
Cancellation of the decision on the suspension of transactions and operations carried out in accordance with the universally recognized norms of international law and the legislation of Turkmenistan.
The suspension of operations and transactions in accordance with this law, the subsequent renunciation of their conduct on behalf of the owner do not result in the onset of civil liability of natural and legal persons carrying out transactions and transactions with funds or other property in connection with the non-performance of contract terms.
The procedure for bringing to the attention of legal and natural persons carrying out transactions and transactions with funds or other property information (list) of involvement in terrorist activities (or the financing of terrorism, extremist activity), individuals and legal entities and how to use them are determined by the authorized State body.
12. reporting entities and their employees are exempt from liability for damages, loss of profits or moral harm caused by physical and legal persons lawful execution provided for in this law, the obligation to submit the information on suspicious transactions and transactions, unless there were violations of the established procedure for such acts under paragraph 2 of this article.
13. Suspension of operations, failure in opening a bank account (deposit) or conducting transactions on the account, as well as termination of the bank account and the account closing provided for in this article and undertaken in accordance with this Act shall not constitute grounds for the emergence of a civil legal and other responsibilities of reporting entities.
14. Legal and natural persons must pay special attention to business relations and transactions and transactions with organizations and individuals from countries with inadequate system, as well as with subsidiaries, branches and representative offices, parent organizations are registered in such countries. Order of presentation of the list of countries with inadequate system of juridical and physical persons is determined by the authorized State body.
15. the control over the execution of individuals and legal entities of this law in part of the recording, storage and submission of information on transactions and transactions subject to mandatory control over the Organization of internal control is carried out by the relevant oversight bodies in accordance with their competence and in the manner prescribed by the legislation of Turkmenistan, as well as the authorized body in the absence of oversight bodies in the sphere of activities of selected organizations carrying out transactions and transactions with funds or other assets.
 


Article 4. Requirements (conditions) mandatory controls 1. Reporting entity the public authority in the prescribed form, have the obligation to report transactions suspected of money laundering or financing of terrorism, as well as transactions and transactions involving monetary assets or other movable and immovable property, subject to a list of criteria of transactions and transactions subject to mandatory control of the authorized State body no later than the business day following the day of the transaction and the transaction.

2. In case of reporting entities, suspect that any transaction or operation carried out for the legalization of income derived from criminal or terrorist financing, the person is under an obligation to provide information to the authorized State body on such transactions and operations regardless of whether or not they relate to transactions and operations provided for in article 5 of this law.
3. persons who provide information, depending on the circumstances, must commit in writing actually circumstances of complex, unusual large transactions, as well as transactions and remittances held in an unusual pattern, with no economic purpose.
 
Article 5. List of criteria in accordance with which the transactions and operations subject to mandatory control 1. Transaction or the operation involving funds or other assets or several interrelated transactions or transactions made within ten days, for compulsory monitoring, if in the nature of the transaction or operation is one of the types of transactions or operations provided by paragraph 2 of this article, and the amount to which it is committed, in foreign and national currency is equal to or exceeds the authorized State Agency of Turkmenistan threshold amount.
2. Transactions or transactions with funds or other property subject to mandatory control are: 1) the internal and external transactions and operations carried out by banks and other lending institutions eligible to open and maintain bank accounts (deposits), by the nature of the operation, suspicious in its feasibility;
2) transaction or transactions, if at least one of the parties is a natural or legal person having respectively registration, residence or location within a State (territory), where (in which) is not provided for the disclosure or provision of information when conducting financial transactions, either one of the parties is a person that is the owner of a bank account registered in the State (in the territory).
The list of such countries and territories shall be determined by the Cabinet of Ministers of Turkmenistan on presentation of the authorized State body on the basis of lists of approved international organizations involved in countering money laundering and terrorist financing;
3) other operations and transactions above a prescribed threshold amount:-the purchase or sale of foreign currency;
purchase an individual securities for cash;
-Exchange of banknotes of the same denomination into banknotes of another denomination;
-introduction of an individual in the Organization's Charter capital funds in cash;
-cash flow of charitable and public organizations and institutions;
4) other transactions with movable and immovable property above a prescribed threshold amount:-placing of securities, precious metals, jewels or other valuables in Lombard;
-payment of an individual insurance premium or obtain his insurance premiums on life insurance and other types of insurance and pension savings;
-deal with real estate;
-deal with movable property;
-receiving or giving the property leasing contract;
-payment of monies in the form of winnings received from playing the lottery, sweepstakes or other games of chance.
5) translation (s) of funds, carried out on behalf of a client (natural person) in excess of the threshold amount.
3. Mandatory control are subject to transaction or transactions with funds or other assets if at least one of the parties involved in these transactions or operations, is a natural or legal person against whom there is evidence of involvement in terrorist activities (or the financing of terrorism).
4. Mandatory control are subject to transactions and transactions suspected of money laundering, proceeds of crime or financing of terrorism.
 
Section III. Organization of activities on counteraction to legalization of criminal proceeds and financing of terrorism, article 6. The authorized State body 1. The objectives, functions and competence of the authorized State body created by an act of the President of Turkmenistan in the sphere of counteraction to legalization of criminal proceeds and financing of terrorism, are established on the basis of this Act.
The intervention of public authorities in matters which are covered by this law to the conduct of the authorized State body shall not be permitted, except in cases established by this law.
2. Authorized State body within its competence: 1) gather and analyze information relating to transactions and transactions subject to mandatory control;
2) sets the size limit for transactions or transactions in foreign or national currency provided for by part one of article 5 of this law;

3) requires persons representing the information, the adoption of measures aimed at counteracting legalization of criminal proceeds and financing of terrorism in accordance with the present law and other legislative acts of Turkmenistan;
4) develops and implements measures to improve the system of prevention, detection and suppression of suspicious transactions, as well as transactions involving the legalization of criminal proceeds and financing of terrorism, including providing clarification on the application of measures to counter money laundering and terrorist financing, in particular, to identify suspicious transactions and report on them;
5) presents to the Court (judge), Prosecutor, investigative bodies and bodies of inquiry documents and other materials related to the legalization of proceeds from crime and the financing of terrorism on the basis of formal written requests by nervous cases in accordance with the legislation of Turkmenistan. This information may be provided by the authority in law enforcement bodies and courts and on its own initiative;
6) carries out its activities on the prevention and control of the laundering of criminal proceeds;
7) in accordance with the current legislation has the right of access (use) databases (registries), formation and (or) which are implemented by the public authorities;
8) has the right to ask the persons representing the information, as well as bodies, prosecutors, and court information and documents in order to counter money laundering and the financing of terrorist activities;
9) when there are sufficient grounds to show that the transaction or the transaction is related to money laundering and the financing of terrorism, forwards relevant information and materials to law enforcement agencies in accordance with their competence.
3. Authorized State body may suspend transactions with funds or other assets in the following special cases: 1) if in respect of one of the parties (legal or physical person) is involved in the transactions and operations, controlled (with its equity participation) or controlling her (her equity participant), there is evidence of involvement in terrorist activities (or the financing of terrorism, extremist activity), indefinitely;
2) if there are grounds to substantiate or enough to believe that the person has carried out, attempted to carry out or carries out a transaction or operation that is associated with the legalization of criminal proceeds, up to five working days;
3) on request by the competent authority of a foreign State under the circumstances referred to in paragraph 1 of this article is indefinitely, according to the circumstances referred to in the second paragraph of this part, for the period specified in the request, but not more than thirty days.
The decision of the authorized State body to suspend transactions shall be communicated to the individuals and legal entities carrying out transactions and transactions with funds or other assets on the date of its adoption and executed them without delay.
 
Section IV. International cooperation in the sphere of counteraction to legalization of criminal proceeds and financing of terrorism, article 7. Exchange of information and legal assistance 1. The authorized State body in accordance with the international treaties of Turkmenistan shall cooperate with the competent bodies of foreign States in the information-gathering stages, preliminary investigation, trial and execution of judicial decisions in the sphere of counteraction to legalization of criminal proceeds and terrorism financing.
2. Authorized State body and other State authorities and management bodies of Turkmenistan, implementing activities related to countering money laundering and terrorist financing, provide relevant information to the competent authorities of foreign States, at their request or on its own initiative in accordance with the procedure and on the grounds provided for in international treaties of Turkmenistan, with the consent of the President of Turkmenistan.
3. transfer to the competent authorities of a foreign state information associated with the identification, seizure and confiscation of the proceeds of crime and/or in connection with the financing of terrorism is carried out with the consent of the President of Turkmenistan in the event that it is not detrimental to the interests of national security.
4. Information related to the identification, seizure and confiscation of the proceeds of crime and/or in connection with the financing of terrorism, is available upon request by the competent authority of a foreign State, provided that it will not be used without the prior consent of the relevant State authorities and management bodies of Turkmenistan providing it for purposes not specified in the query.

5. Authorized State body, which sent the request to the competent authority of a foreign State shall ensure the confidentiality of the information provided and uses it only for the purposes specified in the query. Bodies of State power and administration of Turkmenistan, implementing activities related to countering money laundering and terrorist financing, in accordance with international treaties to which Turkmenistan is a party and the laws of Turkmenistan acted within its competence, the requests of the competent organs of foreign States on the confiscation of criminal proceeds, as well as the production of separate proceedings in cases of identification of proceeds received by criminal way, seizure of property on seizure of property, including conducting expertise, interrogations of suspects, accused persons, witnesses, victims and other persons, searches, seizures, transmit the evidence, carry out delivery and transmission of documents.
6. costs associated with the execution of these requests shall be reimbursed in accordance with the international treaties to which Turkmenistan is a party.
7. the requirement of submission and presentation of information (materials) for the purpose of combating money laundering and financing of terrorism, are delivered and executed on the territory of Turkmenistan in accordance with the conditions laid down by this law.
8. By the courts and other competent authorities of foreign States which have entered into force, in respect of persons having income obtained illegally, as well as participating in the legalization of the proceeds and the financing of terrorism, and recognized, in accordance with the law and international treaties to which Turkmenistan is a party.
By the courts and other competent authorities of foreign States which have entered into force, the Decree on the confiscation of criminal proceeds, as well as the funds involved in the financing of terrorism, or the equivalent of that property located on the territory of Turkmenistan shall be recognized and shall be executed in accordance with the law and international treaties to which Turkmenistan is a party. These revenues, funds or property on the basis of an international treaty can be wholly or partly transferred to a foreign State, the courts and other competent authorities which ruled their seizure or the competent authorities of which have helped to identify the facts that gave rise to confiscation.
 


Title v. final provisions

 


Article 8. Liability for violation of this law 1. Violation of the organizations or individuals involved in the transaction or transactions with funds or other assets, the requirements stipulated by this law, shall incur liability in the manner prescribed by the legislation of Turkmenistan.
2. The management and staff of the public authority and other public officials, including the former, which, in accordance with the present law have or had access to information from reporting entities bear criminal liability for the illegal and non-disclosure, use of a utility, commercial, banking, tax secrets and secrets of communication (part of the information on postal remittances), abuse of public office in accordance with the legislation of Turkmenistan.
3. provision of information on suspicious transactions and transactions with funds or other assets and transactions subject to mandatory control to the authorized State body in accordance with the requirements established by this Act shall not constitute a breach of official, commercial, banking, tax secrets and secrets of communication (part of the information on postal remittances).
4. The Central Bank of Turkmenistan, the main state tax service of Turkmenistan, register transactions and transactions with funds and other assets and ownership, as well as supervisory and licensing authorities are authorized State body on request information and documents necessary for its activities, and in order to counter money laundering and terrorist financing pursuant to the request of the authorized State body shall hold an extraordinary supervisory review and controlled bodies , licensees and other accountable legal and physical persons, the results of which are to the authorized State body within 10 days.
5. provision of information to the public authority, and instruments of State power and administration bodies, local self-government bodies, with a view to and in the manner stipulated by this law, does not constitute a breach of official, commercial, banking, tax secrets and secrets of communication (part of the information on postal remittances).

6. legal entities (separated subdivisions, branches, representative offices of foreign States legal entities located on the territory of Turkmenistan) involved in the legalization of criminal proceeds, or the financing of terrorism, or created for such purposes, shall be liquidated and their assets confiscated by the Court on the basis of the application of the authorized State body or bodies to prosecute, in accordance with the legislation of Turkmenistan.
Prohibition in Turkmenistan of activity of legal persons of foreign States (their separate divisions, branches, representative offices, located on the territory of Turkmenistan), recognized by the courts as involved in the legalization of criminal proceeds, or the financing of terrorism, or created for these purposes, the Elimination of their separate divisions, branches, representative offices, located on the territory of Turkmenistan, and confiscation of property belonging to them or property of legal entities located on the territory of Turkmenistan shall be carried out in accordance with the legislation of Turkmenistan.
 


Article 9. Prosecutorial supervision supervision of the enforcement of this Act in accordance with the legislation of Turkmenistan carries out Turkmenistan's Prosecutor General and the prosecutors under his supervision.
 


Article 10. The entry into force of this law 1. This law shall enter into force on the expiry of three months from the date of its official publication.
2. the laws of Turkmenistan, other legislative acts of Turkmenistan to bring them into conformity with this Act if they do not contradict this law.
 
         President Gurbanguly Berdymukhamedov of Turkmenistan Ashgabat.
May 28, 2009, no. 41-IV
 
 

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