People's Democratic Republic of Algeria

Commission for the Organization and Supervision of Stock Exchange Operations – COSOB -

Cell for the Fight Against Money Laundering, Terrorism Financing, and Financing of the Proliferation of Weapons of Mass Destruction

Commission for the Organization and Supervision of Stock Exchange Operations Cell for Combating Money Laundering and Terrorism Financing and the Financing of the Proliferation of Weapons of Mass Destruction

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COSOB Guidelines

Number 03 Issued on March 27, 2025 Concerning Freezing and/or Seizure Measures in the Framework of Targeted Financial Sanctions Version Number 0.1

March 2025

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Introduction:

The last few years have seen a noticeable increase in global security threats, particularly those related to terrorism and its financing, as well as the proliferation of weapons of mass destruction. In light of these challenges, the need for effective international cooperation has emerged to strengthen mechanisms to combat these phenomena, by adopting comprehensive strategies aimed at drying up the sources of illicit financing and disrupting terrorist networks. The United Nations and the Security Council have played a pivotal role in this regard, issuing a series of binding resolutions requiring member states to take strict measures to freeze funds and prohibit dealings with individuals and entities associated with these activities.

In the context of this international effort, Algeria has been keen to fulfill its obligations to the international community, working to update and develop its legal and institutional frameworks to keep pace with international standards, particularly those issued by the Financial Action Task Force (FATF). It has also adopted general local legislation, such as Law No. 01-05 on the Prevention and Fight Against Money Laundering and Terrorism Financing, as amended and supplemented, along with the creation of specialized bodies such as the "Financial Intelligence Processing Unit" to ensure the effective implementation of targeted financial sanctions.

These Guidelines are part of the efforts of the Commission for the Organization and Supervision of Stock Exchange Operations (COSOB) to strengthen the Algerian financial market and make it more resistant to exploitation by terrorist groups or entities seeking to finance illicit activities. They also aim to clarify the procedures to be followed by those subject to COSOB's supervision, ensuring full compliance with local and international laws while protecting the rights of uninvolved parties.

Accordingly, this document has been prepared as a comprehensive reference for regulated entities, containing clear definitions of terms, mechanisms for implementing sanctions, procedures for managing frozen or seized funds, and risk indicators that help detect suspicious activities. In this way, COSOB contributes effectively to Algeria's efforts to enhance financial security and stability, based on its belief that combating terrorism and its financing is a shared responsibility requiring concerted efforts at all levels.

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I. Legal and Regulatory References:

• Ordinance No. 66-156 dated 18 Safar 1386 corresponding to June 8, 1966, containing the Penal Code, as amended and supplemented;
• Law No. 05-01 dated 27 Dhu al-Hijjah 1425 corresponding to February 6, 2005, on the Prevention and Fight Against Money Laundering and Terrorism Financing, as amended and supplemented;
• Legislative Decree No. 93-10 dated May 23, 1993, concerning the securities exchange;
• Executive Decree No. 25-101 dated 12 Ramadan 1446 corresponding to March 12, 2025, concerning procedures for freezing and/or seizing funds and property in the framework of preventing terrorism financing and the financing of the proliferation of weapons of mass destruction;
• Executive Decree No. 25-102 dated 12 Ramadan 1446 corresponding to March 12, 2025, determining the composition, organization, and operation of the Committee for Monitoring Targeted International Sanctions;
• Executive Decree No. 25-103 dated 12 Ramadan 1446 corresponding to March 12, 2025, determining the procedures for registration on and removal from the National List of Terrorist Persons and Entities and the associated effects;
• COSOB Regulation No. 24-01 dated 11 Muharram 1446 corresponding to July 17, 2024, on the Prevention and Fight Against Money Laundering, Terrorism Financing, and Financing of the Proliferation of Weapons of Mass Destruction.

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II. Definitions:

For the purposes of these Guidelines, the following terms are defined as follows:

1. Relevant Security Council Resolutions:

Resolutions of the United Nations Security Council issued under Chapter VII of the UN Charter, relating to the fight against terrorism and its financing and the prevention of the proliferation of weapons of mass destruction and its financing. These include in particular:

• Security Council Resolution 1267 (1999) concerning Al-Qaida, Daesh (ISIS), and associated persons, groups, undertakings, and entities;
• Resolution 1988 (2001) concerning the Taliban and associated persons, groups, undertakings, and entities;
• Resolutions 1718 (2006), 1737 (2006), 1874 (2009), 2087 (2013), 2231 (2015), 2270 (2016), 2356 (2017), and all current and subsequent relevant resolutions.

2. Competent Security Council Authorities:

Sanctions committees of the UN Security Council established by Resolutions 1267 (1999) and 1989 (2011) concerning Daesh (ISIS), Al-Qaida, and associated individuals, groups, organizations, and entities; the committee established by Resolution 1989 (2011) concerning the Taliban; the committee established by Resolution 1718 (2006); the committee established by Resolution 2231 (2015); and other relevant committees. The Security Council also acts when imposing targeted financial sanctions under Chapter VII of the UN Charter to prevent terrorism and its financing and the proliferation of weapons of mass destruction and its financing.

3. Unified Sanctions List:

A list containing the full identity of persons and information regarding all entities and groups subject to targeted financial sanctions imposed by the UN Security Council related to terrorism and its financing or the proliferation of weapons of mass destruction and its financing.

4. The Committee:

The Committee for Monitoring Targeted International Sanctions established by Article 20 bis of Law No. 01-05 on the Prevention and Fight Against Money Laundering and Terrorism Financing, as amended and supplemented, placed under the Minister responsible for Foreign Affairs.

5. Ombudsman's Office:

The body established pursuant to Security Council Resolution 1904 (2009) to examine requests for the removal of names of persons, entities, organizations, and groups listed in the sanctions lists imposed on Daesh and Al-Qaida.

6. Coordination Center:

The center established pursuant to Security Council Resolution 1730 (2006) to examine requests for the removal of names of persons, entities, organizations, and groups from Security Council lists, provided that they were not listed by the Committee for Monitoring the Implementation of Sanctions on Daesh and Al-Qaida.

7. Entity:

Any association, organization, group, or organization, regardless of its form or name, whose purpose or activities fall under the provisions of Article 87 of the Penal Code.

8. Immediately and Without Delay:

The speed in taking the measures provided for in these Guidelines, applying UN Security Council resolutions related to terrorism and the financing of the proliferation of weapons of mass destruction. In any case, this deadline is set at 24 hours from the issuance of Security Council resolutions at the latest.

9. Targeted Financial Sanctions:

Freezing of assets and prohibitions to prevent the provision of funds, directly or indirectly, for the benefit of persons, entities, organizations, and groups listed in the Unified Sanctions List.

10. Prohibition of Dealings:

Prohibition of providing funds or financial services or other related services, wholly or partially, or jointly with others, to any person or entity listed in the Unified Sanctions List or entities owned or controlled by them directly or indirectly.

11. Specialized Body:

The Financial Intelligence Processing Unit provided for in the prevailing legislation and regulations.

12. Freezing and/or Seizure:

Imposition of a temporary ban on transferring, exchanging, or disposing of funds, or temporary possession or control of property based on a judicial or administrative decision.

13. Funds:

Includes funds, property, other assets, and economic resources, including in particular:

• Funds and property: all funds and property defined by law.
• Other funds or assets: any financial or economic assets, including oil and natural resources.
• Economic resources: assets that can be used to obtain funds, goods, or services.

14. Exceptional Expenses:

Costs related to public benefits or legal services, or expenses related to the preservation or maintenance of frozen property.

15. Essential Needs:

Financial amounts allocated to cover basic expenses such as food, clothing, rent, medicine, and taxes.

16. Due Payments:

Amounts due under a contract or judicial or administrative decision issued before the date of listing in the lists.

17. Bona Fide Third Parties:

Persons who were not subject to investigation or criminal prosecution and hold valid title or possession of the frozen funds.

18. Regulated Entities:

Stock exchange intermediaries, account holders, custodians of securities, collective investment schemes in securities, the Algerian Stock Exchange, the Central Securities Depository, capital investment companies, and crowdfunding platform operators.

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III. Application of Targeted Financial Sanctions (UN Security Council Unified List):

Algeria has established a clear and organized mechanism for applying targeted financial sanctions, aiming to ensure that institutions and individuals comply with Security Council resolutions regarding the freezing and seizure of funds of persons, groups, and entities listed in international lists. The following is a detailed explanation of the mechanism:

1. Obligation of Regulated Entities to Consult UN Security Council Lists

Prevailing legislative and regulatory texts impose a legal obligation on regulated entities to permanently review the Unified Sanctions List through the following sources:

• The institutional website of the Financial Intelligence Processing Unit (http://www.mf-ctrf.gov.dz)
• The institutional website of the UN Security Council (https://www.un.org/securitycouncil)

These websites must be consulted and verified daily, including on weekends and official holidays.

The Financial Intelligence Processing Unit ensures the publication of updates to the UN Security Council Unified List on its institutional website without delay. The publication of the Unified Sanctions List on the Unit's official website constitutes notification to regulated entities to initiate freezing and/or seizure procedures for the funds and property of persons, groups, organizations, and entities listed therein and to take necessary measures to prohibit the activities of listed persons or entities.

2. Reporting Mechanisms (for Regulated Entities)

All regulated entities must provide dedicated email addresses to the Commission for the Organization and Supervision of Stock Exchange Operations (COSOB). These addresses are used to receive official notifications regarding the Unified Sanctions List, including amendments, additions, or deletions.

These procedures are essential to ensure the smooth flow of notifications and updates between regulated entities and COSOB.

3. Requesting Assistance from the Specialized Body (The Unit)

Regulated entities may request direct assistance from the Specialized Body when needed to ensure the execution of tasks related to freezing and seizure procedures and monitoring updates.

The Specialized Body provides the necessary support and guidance to ensure full compliance with required procedures. To achieve this, the Specialized Body makes communication means available to regulated entities.

4. Obligations of Regulated Entities:

Regulated entities must update the Unified Sanctions List or any amendments (additions, deletions, or modifications of names) on the official website of the Specialized Body, enabling them to take immediate measures to prohibit any activity related to listed persons or entities. These measures must be implemented without delay, even on official holidays or weekends, to ensure uninterrupted execution of resolutions. These measures include freezing or seizing funds owned by individuals or entities listed in the list, preventing them from disposing of or using these funds.

Ensuring Regular Screening of Lists:

Regulated entities must constantly verify that persons or entities listed in the Unified Sanctions List are their clients or hold funds in their possession. If a client, principal, or beneficial owner's name is found in the Unified Sanctions List, any operation related to them must be prohibited immediately and without delay. The Specialized Body and COSOB must be notified. Regulated entities are committed to regularly screening lists and conducting accurate checks on listed names. These checks include names of new clients and beneficial owners.

If a match is found with names listed in the lists, regulated entities must take immediate measures to freeze or seize funds without delay, while respecting the rights of bona fide third parties. In this case, COSOB must be notified immediately.

Verification When Establishing a New Business Relationship:

When establishing a business relationship with a new client or conducting an occasional financial transaction, regulated entities must verify that these clients or transaction beneficiaries do not fall under the Unified Sanctions List.

They must verify that clients or transaction beneficiaries are not among persons or entities listed in the sanctions list.

If it is determined that the client or beneficiary is listed, regulated entities must immediately refrain from completing the transaction, while freezing or seizing the funds received to execute the transaction. They must also immediately notify the Specialized Body and COSOB of this attempt.

Prohibition of Providing Any Financial Services or Economic Resources:

Regulated entities are prohibited from providing any funds, economic resources, financial services, or other related services for the benefit of persons or entities listed, whether directly or indirectly, wholly or in cooperation with other parties. This includes assets acquired from or derived from funds owned by listed persons, groups, organizations, or entities, or which they control directly or indirectly, as well as for the benefit of parties acting on behalf of or under the direction of listed persons, groups, organizations, or entities. These services may only be provided if a license or authorization permits it.

Allowing Addition of Interest and Profits to Frozen Amounts:

Adding interest, profits, or other due revenues to frozen accounts is permitted, provided that these funds remain subject to the same freezing provisions stipulated.

Lifting the Freeze on Funds:

If the name of a person or entity is removed from the Unified Sanctions List, the freeze must be lifted. In the same manner, and then allowing dealings with funds that have been exempted from freezing and/or seizure immediately upon receipt of confirmation to that effect.

Notifying the Specialized Body and COSOB:

• Regulated entities must notify the Specialized Body and COSOB immediately, within 24 hours, of freezing or seizing funds. Details of the frozen funds, their type, value, and date of freezing, or any attempt to conduct transactions, must be reported.
• Regulated entities must also immediately notify the Specialized Body and COSOB if it is determined that a former or current client, principal, beneficial owner, or any client dealt with, is listed in the Unified Sanctions List.
• When attempting to conduct any transaction for the benefit of a person or entity listed in the Unified Sanctions List, in addition to the reporting obligation mentioned above, the funds related to executing the transaction must be frozen and/or seized.
• If there is suspicion that a former or current client, principal, beneficial owner, or any occasional client is listed in the Unified Sanctions List.
• Requests to lift freezing and/or seizure due to name similarity or lack of available or accessible information.

Establishing Internal Controls and Procedures:

Regulated entities must prepare and implement internal controls and procedures ensuring rapid and effective compliance with obligations arising from the implementation of measures related to listing names in the Unified Sanctions List. These procedures include a clear system for monitoring financial activities and verifying customer identities to ensure they are not associated with persons or entities listed in the list.

Establishing Strict Confidentiality Policies:

Regulated entities must establish clear and strict policies prohibiting users from informing clients or any other parties, directly or indirectly, that freezing, seizure, or related measures will be applied. This policy aims to maintain the confidentiality of procedures and prevent any attempt to evade or manipulate funds or economic resources.

Cooperation with Competent Authorities:

Regulated entities are required to fully cooperate with the Specialized Body and COSOB to verify the accuracy of provided information and ensure the effective implementation of required procedures. This cooperation includes providing necessary documents and reports and responding promptly to any inquiries or requests issued by COSOB and the Specialized Body.

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Review of Bona Fide Third-Party Rights:

It must be ensured that any measures taken under these obligations do not violate the rights of third parties acting in good faith.

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5. Measures Related to the Management of Frozen and Seized Funds:

The Specialized Body is committed to immediately and without delay notifying the Minister responsible for Finance of any frozen or seized funds reported by implementing entities, to ensure appropriate measures are taken.

Decisions of the Minister Responsible for Finance:

• The Minister responsible for Finance issues one or more decisions including in particular:
  • Determining the entity responsible for managing frozen or seized funds.
  • Authorizing the use of part of the funds to cover essential or exceptional needs of listed individuals and their families, according to specified procedures.
  • Permitting the settlement of due payments related to contracts or agreements concluded before the imposition of sanctions, according to detailed procedures.

Payment Settlement Procedures:

For individuals or entities listed by Security Council Resolution 1718 (2006) or 2231 (2015), due payments may be settled under the following conditions:

• Sending prior notice to competent Security Council authorities 10 days before authorization.
• As for persons, groups, organizations, and entities listed by Security Council Resolution 1737 (2006), and after the adoption of Security Council Resolution 2231 (2015) or if listed under Resolution 2231 (2015), settlement is subject to conditions including:
  • Contracts are not related to any prohibited activities or materials subject to restrictions under Security Council Resolution 2231 (2015).
  • Delivery of the amount does not go directly or indirectly to the person, group, or entity subject to the measures in paragraph 2 of the Annex to Security Council Resolution 2231 (2015).
  • Prior notice is submitted in coordination with the Ministry responsible for Foreign Affairs to competent Security Council authorities of the intention to allow or authorize the settlement of due payments or to authorize lifting the freeze and/or seizure of funds for these purposes, at least 10 days before the date of authorization.
• As for settling due payments based on a contract or judicial decision under Security Council Resolution 1718 (2006), or any subsequent resolutions, which date back to a period prior to the international resolutions, it is subject to the condition:
  • It is proven that such contract or decision is not for the benefit of any person, group, organization, or entity, or for the benefit of any other person, group, organization, or entity determined by the competent Security Council authorities established under Resolution 1718 (2006).

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6. Measures Related to Prohibition of Activities and Financing:

Prohibition of Activities:

Individuals or entities listed in the sanctions list are prohibited from engaging in any activity whatsoever. If the entities are associations, their activities are suspended during the listing period, unless a judicial ruling dissolves them.

Prevention of Providing Financing and Services:

Regulated entities are prohibited from making funds or financial or economic services available to listed individuals or entities, whether directly or indirectly. The prohibition includes entities owned by listed persons or controlled by them or acting on their behalf.

Use of Frozen Funds:

Requests may be submitted to the Specialized Body to obtain permission to use part of the funds to cover essential or exceptional expenses. The request must be accompanied by all required documents to precisely determine the amounts to be used.

The necessary documents for the request are submitted, and the request is referred to the Minister responsible for Finance for consideration.

If the Minister responsible for Finance decides to reject the request in advance, and the Specialized Body conveys the meaning of the decision, the rejection with its reasons can be appealed before the competent judicial authorities.

If the request concerns covering essential expenses, the Minister responsible for Finance, in coordination with the Ministry responsible for Foreign Affairs, informs and approves the request only after receiving notification from competent Security Council authorities that there is no objection.

If the request is accepted, the Minister responsible for Finance issues a decision to that effect and notifies the applicant through the Specialized Body.

The entity holding the frozen and/or seized funds is notified of the request and must take necessary measures to implement the authorizations.

In all cases where the request is accepted, the entity holding the frozen and/or seized funds must notify the Specialized Body of the reporting procedures it is committed to directly to implement the Minister responsible for Finance's decision within 3 working days.

Management of Frozen Funds:

Frozen funds in bank accounts and securities accounts are transferred to the Central Treasury Custodian for accurate registration in its records. These funds remain frozen in the Central Treasury until an official decision to lift the freeze is issued by the competent authorities.

The State Property Management Agency is tasked with facilitating the management of assets requiring active management until the freeze is lifted.

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7. Procedures for Submitting Delisting Requests:

Algerian individuals, groups, organizations, or entities listed in Security Council lists may submit delisting requests directly or via email to the Ombudsman's Office, the Coordination Center, or through the Specialized Body.

The request must be accompanied by all necessary information and documents supporting the request.

In Case the Request is Submitted to the Specialized Body:

Upon receiving the delisting request, the Body transfers it to the competent Committee (placed under the Minister responsible for Foreign Affairs), which follows up on relevant Security Council resolutions and lists resulting from their implementation.

The Committee refers the request to the Ombudsman or the Coordination Center depending on the case, in coordination with the Ministry responsible for Foreign Affairs, attaching its opinion on the merit of the request.

The Committee has the right to submit the delisting request on its own initiative or based on a submitted request.

In cases of death, the Committee, in coordination with the Ministry of Foreign Affairs, may submit delisting requests for deceased Algerians, provided that documents supporting the death and proof of heir status are attached.

The Committee may also remove the names of entities that no longer exist or have no actual activity in Algeria.

Response and Notification:

The Committee notifies the Specialized Body of the competent authorities immediately upon receipt of the request. The Specialized Body also notifies the applicant and regulated entities of the legal procedures regarding the Security Council decision immediately upon receiving it from the Committee.

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8. Processing Requests to Lift Freezing or Seizure Due to Name Similarity:

Request Submission Procedures:

Individuals, groups, or organizations whose names match those listed in Security Council lists may submit requests to lift freezing or seizure to the Specialized Body. Requests may also be submitted directly (via email) to the Ombudsman's Office or the Coordination Center. Requests are accompanied by supporting information and referred to the Committee immediately for consideration within 10 working days.

Request Processing Mechanism:

In Case of Approval:

The Committee notifies the Specialized Body of the approval, and the Body notifies the relevant parties and the applicants that the funds or

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V. Obligation of Regulated Entities to Consult the National List:

Prevailing legislative and regulatory texts impose a legal obligation on regulated entities to permanently review the National List through the following sources:

• The institutional website of the Ministry of Interior, Local Communities, and Urban Planning (https://www.interieur.gov.dz)
• The institutional website of the Financial Intelligence Processing Unit (http://www.mf-ctrf.gov.dz)
• Publications in the Official Journal.

These websites must be consulted and verified daily, including on weekends and official holidays.

Both the Committee and the Financial Intelligence Processing Unit ensure the publication of updates to the National List on the official website immediately and without delay. The publication of other national sanctions lists is considered a notification procedure.

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2. Regulated Entity Notification Mechanisms:

Regulated entities are required to register on the Committee's official website and the Specialized Body's official website and provide an email address to receive notifications regarding registration on the list and/or updates thereto.

These procedures are essential to ensure the smooth flow of notifications and updates between the Specialized Body, regulated entities, and COSOB.

Requesting Assistance from the Specialized Body:

Regulated entities may request direct assistance from the Specialized Body when needed to ensure the execution of tasks related to freezing and seizure procedures and monitoring updates.

The Specialized Body provides the necessary support and guidance to ensure full compliance with required procedures. To achieve this, the Specialized Body makes communication means available to regulated entities.

The Specialized Body also takes all legal measures to find solutions to issues raised by regulated entities or COSOB in the context of implementing obligations related to the implementation of Security Council resolutions.

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3. Obligations of Regulated Entities:

Obligation of Regulated Entities to Freeze and Seize Funds Immediately and Without Delay:

Upon publication of the National List or any amendments thereto (additions, deletions, or modifications of names) on the official website of the Specialized Body, regulated entities are required to take immediate measures to prohibit any activity related to listed persons or entities. These measures must be implemented without delay, even on official holidays or weekends, to ensure uninterrupted execution of resolutions.

These measures include freezing or seizing funds owned by individuals or entities listed in the list, preventing them from disposing of or using these funds.

Ensuring Regular Screening of Lists:

Regulated entities must constantly verify that persons or entities listed in the National Sanctions List are their clients or hold funds in their possession. If a client, principal, or beneficial owner's name is found in the National Sanctions List, any operation related to them must be prohibited immediately and without delay. The Specialized Body and COSOB must be notified. Regulated entities are committed to regularly screening lists and conducting accurate checks on listed names. These checks include names of new clients and beneficial owners.

If a match is found with names listed in the lists, regulated entities must take immediate measures to freeze or seize funds without delay, while respecting the rights of bona fide third parties. In this case, COSOB must be notified immediately.

Verification When Establishing a New Business Relationship:

When establishing a business relationship with a new client or conducting an occasional financial transaction, regulated entities must verify that these cl