Article 5. Due diligence by financial monitoring entities of clients The Law on Countering the Legalization (Laundering) of Proceeds from Crime, the Financing of Terrorism and the Financing of the Proliferation of Weapons of Mass Destruction
1. Financial monitoring entities must take measures to properly verify their clients (their representatives) and beneficial owners in accordance with the legislation of the Republic of Kazakhstan on countering the legalization (laundering) of proceeds from crime, the financing of terrorism and the financing of the proliferation of weapons of mass destruction.
2. Financial monitoring entities shall carry out due diligence of clients (their representatives) and beneficial owners in the following cases::
1) establishing business relations with the client;
2) carrying out transactions with money and (or) other property, including suspicious transactions.
3) excluded by the Law of the Republic of Kazakhstan dated 05/13/2020 No. 325-VI (effective six months after the date of its first official publication).
4) there are grounds for doubting the accuracy of previously received information about the client (his representative), the beneficial owner.
3. Due diligence by financial monitoring entities of their clients (their representatives) and beneficial owners includes the implementation of the following measures:
1) recording of information necessary for the identification of an individual: the individual identification number, the data of the identity document (in case of non-identification of the individual identification number in accordance with the legislation of the Republic of Kazakhstan), as well as the legal address;
2) recording of information necessary for the identification of a legal entity (branch, representative office): information on the certificate of state (accounting) registration (re-registration) of a legal entity (branch, representative office), business identification number (except in cases where the legal entity has not been assigned a business identification number in accordance with the legislation of the Republic of Kazakhstan), the nature of the activity, as well as the address of the place of registration or location;
2-1) recording the information necessary to identify a foreign structure without forming a legal entity: name, number (if any) under which the foreign structure without forming a legal entity is registered in a foreign country (territory), location address, place of main activity, nature of activity, and in relation to trusts and other foreign structures without forming a legal entity with a similar structure or function, the composition of the property under management (ownership), surname, first name, patronymic (if it is indicated in the identity document) and the address of the place of residence (location) of the founders (participants) of a foreign structure without forming a legal entity and the beneficial owners (if any);
2-2) identification of the beneficial owner and recording of the information necessary for his identification, in accordance with subparagraph 1) of this paragraph, except for the legal address.
In order to identify the beneficial owner of a client who is a legal entity or a foreign entity without forming a legal entity, the financial monitoring entity establishes the structure of its ownership and management based on the constituent documents and the register of shareholders of such a client, the register of beneficial owners of legal entities, or information obtained from other sources.
At the same time, the financial monitoring entity, if, upon identification of the beneficial owner, the information provided by the legal entity does not correspond to the information specified in the register of beneficial owners of legal entities, and there are sufficient grounds to believe that the activities of such a legal entity are related to the legalization (laundering) of proceeds from crime, the financing of terrorism and the financing of the proliferation of weapons of mass destruction, is obliged to terminate or refuse to establish business relations with such a legal entity.
If there are grounds for doubt whether an individual who directly or indirectly owns more than twenty–five percent of the shares in the authorized capital or the outstanding (minus preferred and repurchased by the company) shares of a client - a legal entity, a foreign structure without the formation of a legal entity, is the beneficial owner, it is allowed to recognize the beneficial owner of an individual who carries out customer control – by a legal entity, a foreign entity without forming a legal entity in any other way, or in whose interests transactions with money and (or) other property are carried out by a client – a legal entity, a foreign entity without forming a legal entity.
If, as a result of the measures provided for in this subparagraph, the beneficial owner of the client – a legal entity, a foreign structure without the formation of a legal entity has not been identified, it is allowed to recognize the beneficial owner of the sole executive body or the head of the collegial executive body of the client – a legal entity, a foreign structure without the formation of a legal entity.
The information required to identify the beneficial owner is recorded on the basis of information and/or documents provided by the client (his representative) or obtained from other sources.
Banks, insurance organizations, stock exchanges, organizations engaged in clearing transactions in financial instruments, the central securities depository has the right not to identify and record information about the person specified in the fourth paragraph of subparagraph 3) of Article 1 of this Law if the client is a government agency of the Republic of Kazakhstan, a professional participant in the securities market, an insurance organization, except for except in cases where there is suspicion that the business relationship is being used by the client for the purpose of legalizing (laundering) proceeds from crime, financing of terrorism and financing the proliferation of weapons of mass destruction or financing the proliferation of weapons of mass destruction;
Due diligence of the client (his representative), the beneficial owner is carried out on the basis of information and (or) documents provided by the client (his representative) or obtained from other sources, including based on the results of verification in the scoring module.
The authorized financial monitoring body determines the procedure for proper verification of the client (his representative), the beneficial owner in the scoring module.
3) excluded by the Law of the Republic of Kazakhstan dated 06/10/2014 No. 206-V (effective six months after the date of its first official publication);
4) establishing the intended purpose and nature of the business relationship;
5) conducting an ongoing review of business relationships and examining transactions carried out by the client through this financial monitoring entity, including, if necessary, obtaining and recording information about the source of financing for transactions;
6) verifying the accuracy of information necessary to identify the client (his representative), the beneficial owner, and updating information about the client (his representative) and the beneficial owner.
In relation to the client's representative, the authority of such a person to act on behalf of and/or in the interests of the client is additionally verified.
Information is updated in the cases provided for in paragraph 2 of this article and the rules of internal control.
If there is reason to doubt the accuracy of previously received information about the client (his representative), the beneficial owner, the information about the client (his representative) and the beneficial owner is updated within fifteen working days following the day the financial monitoring entity decides on the existence of such doubt.
The measures provided for in subparagraphs 1), 2), 2-1) and 2-2) of this paragraph are carried out by an insurance (reinsurance) organization, an insurance broker, a mutual insurance company, the Export Credit Agency of Kazakhstan, branches of insurance (reinsurance) organizations that are non-residents of the Republic of Kazakhstan, branches of insurance brokers that are non–residents of the Republic of Kazakhstan before payment of the insurance premium. and (or) making insurance payments.
3-1. The measures provided for in this article shall not be taken in the following cases::
1) during the following one-time operations:
when unidentified owners of electronic money, individuals, carry out transactions for the purchase and use of electronic money that do not exceed the amount provided for in paragraph 4 of Article 44 of the Law of the Republic of Kazakhstan "On Payments and Payment Systems";
when an individual client performs an operation to transfer money to an individual's bank account or make a payment in favor of a service provider using equipment (device) designed to accept cash, if the amount of such an operation does not exceed 500,000 tenge or an amount in a foreign currency equivalent to 500,000 tenge.;
when the client makes a non-cash payment or money transfer without using a bank account, if the amount of such payment or money transfer does not exceed 500,000 tenge or an amount in a foreign currency equivalent to 500,000 tenge, except in cases when the client commits a suspicious transaction.;
when an individual customer performs an operation to purchase, sell or exchange foreign currency in cash at an exchange office, if the amount of such operation does not exceed 500,000 tenge or an amount in foreign currency equivalent to 500,000 tenge, except in cases where the customer commits a suspicious transaction;
when an individual client performs an operation using a payment card that is not a means of accessing the bank account of such a client, if the amount of such an operation does not exceed 200,000 tenge or an amount in a foreign currency equivalent to 200,000 tenge.;
when an individual client performs an operation to pay debts in the framework of enforcement proceedings in favor of government agencies through equipment (devices) designed to accept cash;
when an individual client carries out an operation to purchase jewelry made of precious metals and precious stones at retail, if the amount of such an operation does not exceed 500,000 tenge or an amount in foreign currency equivalent to 500,000 tenge, except in cases when the client commits a suspicious transaction.;
when an individual client carries out an operation to purchase refined gold bullion through exchange offices, if the amount of such an operation does not exceed 500,000 tenge, except in cases when the client commits a suspicious transaction.;
when an individual client performs an operation to pay an insurance premium under an insurance contract, if the amount of such operation does not exceed 100,000 tenge or an amount in a foreign currency equivalent to 100,000 tenge, except in cases where the client commits a suspicious transaction.;
when the client, an individual and (or) a legal entity, performs operations to pay an insurance premium and receive insurance payments under compulsory insurance contracts.;
2) excluded by the Law of the Republic of Kazakhstan dated 07/01/2022 No. 131-VII (effective sixty calendar days after the date of its first official publication).
3) excluded by the Law of the Republic of Kazakhstan dated 07/01/2022 No. 131-VII (effective sixty calendar days after the date of its first official publication).
3-2. The financial monitoring entities specified in subitems 1) – 5), 11) and 12) of paragraph 1 of Article 3 of this Law, within the framework of remotely established business relations with the client, are entitled to carry out transactions, with the exception of cross-border payments, without taking measures to verify the accuracy of information necessary to identify the client (his representative)., the beneficial owner, provided for in subparagraph 6) of the first paragraph of paragraph 3 of this Article, in the following cases::
1) performing operations by the client for the payment of taxes, penalties, fines and other mandatory payments to the budget, as well as insurance premiums under compulsory insurance contracts;
2) crediting money to the client's bank account.
4. Due diligence by financial monitoring entities of their clients (their representatives) and beneficial owners is carried out in accordance with the rules of internal control.
5. The financial monitoring entity has the right to require the client (his representative) to provide information and documents necessary or sufficient to identify the client (his representative), identify the beneficial owner, as well as provide information about the tax residence, type of activity and source of financing of transactions.
Clients (their representatives) are required to provide financial monitoring entities with the information and documents necessary for them to fulfill their duties provided for by this Law, including information about beneficial owners.
Subjects of financial monitoring specified in the sub-paragraphs 1), 2), 3), 4), 5), 11) and 12) paragraph 1 of Article 3 of this Law, when taking the measures provided for in this article, ensure that information about the beneficial owners of clients is obtained in a form approved by the authorized body in coordination with government agencies., exercising, within their competence, state control over compliance by financial monitoring entities with the legislation of the Republic of Kazakhstan on countering the legalization (laundering) of proceeds from crime, financing of terrorism and financing the proliferation of weapons of mass destruction.
Information on beneficial owners is provided by clients (their representatives) at the request of the financial monitoring entity in accordance with the procedure determined by the authorized body.
6. The financial monitoring entities specified in sub–paragraphs 1) - 5), 11) and 12) of paragraph 1 of Article 3 of this Law may rely on the measures provided for in sub-paragraphs 1), 2), 2-1), 2-2), 4) and 6) paragraph 3 of this article, adopted in relation to the relevant clients (their representatives) and beneficial owners of other financial monitoring entities, as well as foreign financial organizations, subject to the following conditions:
1) a financial monitoring entity that relies on due diligence measures taken by another financial monitoring entity or a foreign financial institution must immediately receive information about the client (his representative), the beneficial owner, including copies of supporting documents, within the framework of the measures provided for in paragraphs 1), 2), 2-1), 2-2), 4) and 6) of paragraph 3 of this article;
2) a financial monitoring entity that relies on measures for due diligence of the client (his representative) and the beneficial owner taken by a foreign financial institution must establish that the activities of such a foreign financial institution are subject to licensing, regulation and supervision in the State in which it is registered, and that such a financial monitoring entity or a foreign financial institution Takes measures for due diligence of the client (his representative) and the beneficial owner, similar to the requirements of this article., It also stores documents and information obtained as a result of due diligence for at least five years from the date of termination of business relations with the client (his representative) and the beneficial owner.
6-1. Financial monitoring entities specified in subitems 1) – 5), 11) and 12) of paragraph 1 of Article 3 of this Law and being members of a financial group may rely on measures for due diligence of clients (their representatives) and beneficial owners provided for in subitems 1), 2), 2-1), 2-2), 4) and 6) of paragraph 3 of this article, adopted in respect of the relevant clients (their representatives) and beneficial owners by other participants of such a financial group, subject to the following conditions:
1) provided for in paragraph 6 of this Article;
2) the participants of the financial group comply with the internal control rules of the relevant financial monitoring entity;
3) the responsible organization of the financial group implements and ensures compliance by the participants of the financial group with the internal control rules of the relevant financial monitoring entity in accordance with the procedure established by the internal control rules.;
4) the written consent of the client (his representative) and the beneficial owner of the financial monitoring entity specified in subitems 1) – 5), 11) and 12) of paragraph 1 of Article 3 of this Law and being a member of a financial group, to transfer information and documents about the client to other participants of such a financial group and to use them (his representative) and the beneficial owner.
7. In cases and in accordance with the procedure provided for by the rules of internal control, as well as depending on the degree of risk of legalizing (laundering) proceeds from crime, financing terrorism, and financing the proliferation of weapons of mass destruction, financial monitoring entities apply enhanced and simplified due diligence measures for clients.
The application of simplified customer due diligence measures includes the implementation by the financial monitoring entity of one or more of the following actions::
1) reducing the frequency of updating customer identification data;
2) reducing the frequency of checking business relationships and examining transactions carried out by the client through this financial monitoring entity;
3) determining the objectives and nature of the business relationship based on the nature of the transactions.
Simplified measures of due diligence of clients are not applied if the financial monitoring entity has grounds to believe that the purpose of a business relationship or an operation performed by the client is the legalization (laundering) of proceeds from crime, financing terrorism or financing the proliferation of weapons of mass destruction, as well as in cases of a high risk of legalization (laundering) of proceeds from crime. financing of terrorism and financing the proliferation of weapons of mass destruction.
When applying enhanced customer due diligence measures, financial monitoring entities, in addition to the measures provided for in paragraph 3 of this article, additionally perform one or more of the following actions::
1) establishing the reasons for planned or performed operations;
2) increasing the number and frequency of inspections and identifying the nature of transactions that require further verification;
2-1) obtaining information about the type of activity and the source of financing of the operations performed;
3) obtaining permission from a senior employee of the organization to establish and continue business relationships with clients.
Enhanced due diligence measures for clients (their representatives) and beneficial owners are applied when there is a high risk of legalizing (laundering) proceeds from crime, financing terrorism, and financing the proliferation of weapons of mass destruction.
Simplified due diligence measures for clients (their representatives) and beneficial owners are applied when there is a low risk of money laundering, terrorist financing, and financing the proliferation of weapons of mass destruction.
8. Financial monitoring entities have the right to instruct other persons, including other financial monitoring entities, to apply the measures provided for in sub-paragraphs 1), 2), 2-1), 2-2) and 4) paragraph 3 of this article, on the basis of contracts concluded with such persons.
A financial monitoring entity that has delegated, on the basis of a contract, to another person the application of measures provided for in paragraphs 1), 2), 2-1), 2-2) and 4) paragraph 3 of this Article, is obliged to:
1) ensure that such a person complies with the rules of internal control of the financial monitoring entity, taking into account the terms of the contract;
2) ensure timely receipt from such person of information about the client (his representative), the beneficial owner, including copies of supporting documents;
3) periodically monitor the compliance of such a person with the rules of internal control of the financial monitoring entity, as well as the requirements of this Law and regulatory legal acts adopted in accordance with it on proper verification of clients (their representatives) and beneficial owners.
The requirements provided for in part two of this paragraph also apply to cases when financial monitoring entities specified in subitems 1) – 5) of paragraph 1 of Article 3 of this Law grant other persons the right to conclude financial services contracts on behalf of such financial monitoring entities in cases provided for by the laws of the Republic of Kazakhstan.
A financial monitoring entity that has delegated, on the basis of a contract, to another person the application of measures provided for in paragraphs 1), 2), 2-1), 2-2) and 4) paragraph 3 of this Article, is responsible for such person's compliance with the requirements of this Law and the regulatory legal acts adopted in accordance with it on due diligence of clients (their representatives) and beneficial owners.
A financial monitoring entity that has commissioned, on the basis of a contract with a foreign financial institution, the application of measures for due diligence of clients (their representatives) and beneficial owners provided for in sub-paragraphs 1), 2), 2-1), 2-2) and 4) of paragraph 3 of this Article, is obliged to take into account the possible risks of the legalization (laundering) of proceeds from crime, financing of terrorism and financing the proliferation of weapons of mass destruction.
9. Requirements for due diligence of clients in the case of remote establishment of business relations by financial monitoring entities specified in subitems 1) (with the exception of legal entities operating exclusively through exchange offices on the basis of a license from the National Bank of the Republic of Kazakhstan for exchange operations with foreign currency in cash), 2) (with the exception of commodity exchanges), 3), 4), 5) and 11) of paragraph 1 of Article 3 of this Law, are established by the authorized regulatory body, control and supervision of the financial market and financial organizations in coordination with the authorized body.
Financial monitoring entities are prohibited from establishing business relations remotely if:
1) the client (his representative) and the beneficial owner are a person included in the list of persons involved in terrorist activities, as well as the list of organizations and persons associated with the financing of proliferation of weapons of mass destruction, and (or) in the list of organizations and persons associated with the financing of terrorism and extremism;
2) the client (his representative) and the beneficial owner are an identified person or organization subject to international sanctions in accordance with the resolutions of the United Nations Security Council;
3) the client is a person who has been assigned a risk level that requires the use of enhanced due diligence measures in accordance with paragraph 7 of this Article and the rules of internal control, with the exception of insurance companies concluding insurance contracts in electronic form, the insurance premium and (or) insurance payment for which are carried out through bank accounts.
10. Financial monitoring entities, as part of the due diligence of clients (their representatives) and beneficial owners, are required to apply additional measures to persons who are registered, domiciled or located in a State (territory) who do not comply and/or insufficiently comply with the recommendations of the Financial Action Task Force on Money Laundering (FATF).:
1) implementation of enhanced customer due diligence measures;
2) review or, if necessary, terminate correspondent relations with financial institutions.
The measures for due diligence of clients (their representatives) and beneficial owners provided for in paragraphs 6, 6-1 and 8 of this Article shall not be applied by financial monitoring entities in the case of establishing business relations with a person registered, domiciled or located in a State (territory) that do not perform and (or) insufficiently perform Recommendations of the Financial Action Task Force on Money Laundering (FATF).
Financial monitoring entities may not perform the actions provided for in paragraphs 6, 6-1 and 8 of this Article if another financial monitoring entity or a foreign financial organization is registered, located or located in a State (territory) that does not comply with and/or insufficiently implements the recommendations of the Financial Action Task Force on Money Laundering money (FATF).
11. The requirements for proper customer verification in the case of remote establishment of business relations with financial monitoring entities specified in subparagraph 19) of paragraph 1 of Article 3 of this Law are established by the AIFC Committee on Financial Services Regulation in coordination with the authorized body.
The Law of the Republic of Kazakhstan dated August 28, 2009 No. 191-IV.
This Law defines the legal basis for countering the legalization (laundering) of proceeds from crime, the financing of terrorism and the financing of the proliferation of weapons of mass destruction, the legal relations of financial monitoring entities, the authorized body and other state bodies of the Republic of Kazakhstan in the field of countering the legalization (laundering) of proceeds from crime, the financing of terrorism and the financing of the proliferation of weapons of mass destruction., as well as mechanisms for the implementation of targeted financial sanctions, related to the prevention and prevention of terrorism, the financing of terrorism and the financing of the proliferation of weapons of mass destruction, and the prevention, prevention and cessation of the proliferation of weapons of mass destruction and their financing.
President
Republic of Kazakhstan
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