Strengthening Efforts Against Money Laundering and Terrorism Financing
In an effort to combat money laundering and terrorism financing, the government has introduced new regulations for financial institutions and legal persons.
New Reporting Requirements
According to Article 7 of the new law, reporting entities are now obligated to file regular reports with the Authorized Body. The reports must include:
- Details about suspicious transactions or business relationships
- Grounds for recognizing a transaction or relationship as suspicious
- Description of the transaction or relationship
- Indication of whether the transaction or relationship was suspended, rejected, or frozen
Reports will be submitted with an indication of their successive number, signature of the responsible employee, and registration number of the reporting entity at the Authorized Body. In cases where a government body or local self-governance body acts as a customer, authorized person, or party to a business relationship or transaction, only the name of the body will be indicated in the report.
Additional Scrutiny of Transactions
Financial institutions are now obligated to conduct additional scrutiny of:
- Complex and unusually large transactions
- Transactions with unusual patterns and no apparent economic or legitimate purpose
- Data on transactions must be maintained for at least five years after termination of the business relationship or execution of the transaction
New Technologies and Preventive Mechanisms
Financial institutions are required to provide for and apply measures to counteract money laundering or terrorism financing risks associated with:
- New or developing technologies
- Non-face-to-face business relationships or transactions
Registration of Legal Persons and Licensing of Financial Institutions
The law requires legal persons to file a declaration on the beneficial owners of the legal person during registration, and financial institutions must request information stipulated by normative legal acts of the Authorized Body and check its veracity during licensing.
Reporting entities must also register with the Authorized Body within one month after licensing.
The Authorized Body
The Authorized Body is responsible for:
- Receiving reports from reporting entities
- Analyzing received reports and information
- Sending statements to criminal investigation authorities in cases stipulated by Article 13 of the law
- Requesting other information from reporting entities and state bodies
- Imposing sanctions on financial institutions and legal persons that fail to comply with the law
The Authorized Body will also define:
- Cases and frequency for conducting internal audits by financial institutions
- Requirements for external audit
- Suspension, rejection, or freezing of suspicious transactions or business relationships, or funds linked to terrorism