Law No. 05-01 of 6 February 2005 on the Prevention and Fight Against Money Laundering and Terrorism Financing

OFFICIAL JOURNAL OF THE ALGERIAN REPUBLIC No. 11 30 Dhou El Hidja 1425 9 February 2005

Law No. 05-01 of 27 Dhou El Hidja 1425 corresponding to 6 February 2005 on the prevention and fight against money laundering and terrorism financing.

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The President of the Republic,

Having regard to the Constitution, particularly its Articles 119, 120, 122 (1, 7, 9 and 15), 126 and 132;

Having regard to the United Nations Convention against Illicit Traffic in Narcotic Drugs and Psychotropic Substances, adopted on 20 December 1988 and ratified by Presidential Decree No. 95-41 of 26 Chaâbane 1415 corresponding to 28 January 1995;

Having regard to the Arab Convention on the Fight Against Terrorism signed in Cairo on 25 Dhou El Hidja 1418 corresponding to 22 April 1998 and ratified by Presidential Decree No. 98-413 of 18 Chaâbane 1419 corresponding to 7 December 1998;

Having regard to the Organization of African Unity (OAU) Convention on the Prevention and Fight Against Terrorism adopted during the 35th ordinary session held in Algiers from 12 to 14 July 1999 and ratified by Presidential Decree No. 2000-79 of 4 Moharram 1421 corresponding to 9 April 2000;

Having regard to the International Convention for the Suppression of the Financing of Terrorism adopted by the General Assembly of the United Nations on 9 December 1999, ratified by Presidential Decree No. 2000-445 of 27 Ramadhan 1421 corresponding to 23 December 2000;

Having regard to the United Nations Convention against Transnational Organized Crime, adopted by the General Assembly of the United Nations on 15 November 2000 and ratified by Presidential Decree No. 02-55 of 22 Dhou El Kaada 1422 corresponding to 5 February 2002;

Having regard to the Protocol to Prevent, Suppress and Punish Trafficking in Persons, Especially Women and Children, supplementing the United Nations Convention against Transnational Organized Crime, adopted by the General Assembly of the United Nations on 15 November 2000 and ratified by Presidential Decree No. 03-417 of 14 Ramadhan 1424 corresponding to 9 November 2003;

Having regard to the Protocol against the Smuggling of Migrants by Land, Sea and Air, supplementing the United Nations Convention against Transnational Organized Crime, adopted by the General Assembly of the United Nations on 15 November 2000 and ratified by Presidential Decree No. 03-418 of 14 Ramadhan 1424 corresponding to 9 November 2003;

Having regard to Ordinance No. 66-155 of 8 June 1966, as amended and supplemented, establishing the Code of Criminal Procedure;

Having regard to Ordinance No. 66-156 of 8 June 1966, as amended and supplemented, establishing the Penal Code;

Having regard to Ordinance No. 75-58 of 26 September 1975, as amended and supplemented, establishing the Civil Code;

Having regard to Ordinance No. 75-59 of 26 September 1975, as amended and supplemented, establishing the Commercial Code;

Having regard to Law No. 79-07 of 21 July 1979, as amended and supplemented, establishing the Customs Code;

Having regard to Law No. 88-27 of 12 July 1988 on the organization of the notary profession;

Having regard to Law No. 91-03 of 8 January 1991 on the organization of the bailiff profession;

Having regard to Law No. 91-04 of 8 January 1991 on the organization of the lawyer profession;

Having regard to Law No. 91-08 of 27 April 1991 on the accountant, auditor, and certified public accountant profession;

Having regard to Ordinance No. 95-07 of 23 Chaâbane 1415 corresponding to 25 January 1995 on insurance;

Having regard to Ordinance No. 96-02 of 19 Chaâbane 1416 corresponding to 10 January 1996 on the organization of the auctioneer profession;

Having regard to Ordinance No. 96-22 of 23 Safar 1417 corresponding to 9 July 1996, as amended and supplemented, on the repression of offenses against exchange legislation and regulations regarding capital movements to and from abroad;

Having regard to Law No. 2000-03 of 5 Joumada El Oula 1421 corresponding to 5 August 2000 setting the general rules relating to postal and telecommunications services;

Having regard to Law No. 02-11 of 20 Chaoual 1423 corresponding to 24 December 2002 on the Finance Law for 2003;

Having regard to Ordinance No. 03-11 of 27 Joumada Ethania 1424 corresponding to 26 August 2003 on currency and credit;

After adoption by Parliament;

Promulgates the law whose text follows:

Chapter I General Provisions

Article 1. — In addition to the provisions provided by the Penal Code, the purpose of this law is to prevent and fight against money laundering and terrorism financing.

Art. 2. — Money laundering is considered to be: a) the conversion or transfer of property, knowing that such property is the proceeds of a crime, for the purpose of concealing or disguising the illicit origin of the said property or of assisting any person involved in the commission of the principal offense to evade the legal consequences of his acts;

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b) the concealment or disguise of the true nature, source, location, disposition, movement, rights with respect to, or ownership of property, knowing that such property is the proceeds of a crime; c) the acquisition, possession or use of property by a person who, at the time of receipt, knew that such property constituted the proceeds of a crime; d) participation in one of the offenses established pursuant to this article or any other association, conspiracy, attempt or complicity by providing assistance, aid or advice with a view to its commission.

Art. 3. — Terrorism financing is considered, within the meaning of this law, any act by which any person, by any means whatsoever, directly or indirectly, illicitly and deliberately, provides or collects funds with the intention that they should be used or in the knowledge that they are to be used, in full or in part, in order to commit offenses qualified as terrorist or subversive acts, as provided for and punished by Articles 87 bis to 87 bis 10 of the Penal Code.

Art. 4. — For the purposes of this law: — the term "funds" means assets of every kind, whether corporeal or incorporeal, movable or immovable, acquired by any means whatsoever, and legal documents or instruments in any form, including electronic or digital, which evidence title to or an interest in such assets, including bank credits, travelers' checks, bank checks, money orders, shares, securities, bonds, drafts and letters of credit. — the term "predicate offense" means any criminal offense, even committed abroad, which enabled its perpetrators to obtain the property provided for in this law. — the term "obligated entity" means natural and legal persons obliged to file a suspicious transaction report. — "the specialized body" means the financial intelligence unit provided for by current regulations.

Art. 5. — Predicate offenses committed abroad may only give rise to criminal prosecution for money laundering and/or terrorism financing if they constitute a criminal offense in the country where they were committed and under Algerian law.

Chapter II Prevention of Money Laundering and Terrorism Financing

Art. 6. — Any payment exceeding a threshold set by regulatory means must be made by payment methods through banking and financial channels. The implementation details of this article are specified by regulatory means.

Art. 7. — Banks, financial institutions and other related financial institutions must verify the identity and address of their clients before opening an account or passbook, holding securities, bonds or certificates, assigning a safe deposit box, or establishing any other business relationship. The verification of the identity of a natural person is done by presenting an original valid official document bearing a photograph; the verification of their address is done by presenting an official document establishing proof thereof. A copy is kept. The verification of the identity of a legal entity is carried out by presenting its statutes and any document establishing that it is legally registered or approved and that it has a real existence at the time of identification. A copy is kept. The information cited in paragraphs 2 and 3 must be updated annually and upon any modification. Agents and employees acting on behalf of others must present, in addition to the documents provided above, the delegation of authority as well as documents proving the identity and address of the beneficial owners of the funds.

Art. 8. — The identification of occasional clients is carried out under the conditions provided in Article 7 above.

Art. 9. — In cases where it is not certain that the client is acting for their own account, banks, financial institutions and other related financial institutions must inquire, by any lawful means, into the identity of the beneficial owner or the person on whose behalf they are acting.

Art. 10. — When a transaction is carried out under conditions of unusual complexity or without justification, or appears to have no economic justification or lawful purpose, banks, financial institutions or other related financial institutions are required to inquire into the origin and destination of the funds as well as the purpose of the transaction and the identity of the economic participants. A confidential report is drawn up and kept, without prejudice to the application of Articles 15 to 22 of this law.

Art. 11. — Inspectors of the Bank of Algeria mandated by the Banking Commission and acting both within the framework of on-site inspections within banks and financial institutions and their subsidiaries and participations and within the framework of document control, immediately transmit a confidential report to the specialized body as soon as they detect a transaction exhibiting the characteristics cited in Article 10 above.

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Art. 12. — The Banking Commission opens, insofar as it is concerned, a disciplinary procedure in accordance with the law against the bank or financial institution whose failure of its internal control procedures regarding suspicious transaction reporting, cited in Article 20 below, has been established. It may inquire into the existence of the report referred to in Article 10 above and request its communication. The Banking Commission ensures that banks and financial institutions have adequate programs to detect and prevent money laundering and terrorism financing.

Art. 13. — The specialized body must be informed of the outcomes of all procedures opened in this matter by the Banking Commission.

Art. 14. — Banks, financial institutions and other related financial institutions are required to retain and make available to competent authorities:

1. documents relating to the identity and address of clients for a period of at least five (5) years after the closure of accounts or the cessation of the business relationship;
2. documents relating to transactions carried out by clients for at least five (5) years after the execution of the transaction.

Chapter III Detection

Art. 15. — The specialized body is responsible for analyzing and processing information communicated to it by authorized authorities and suspicious transaction reports to which the persons and organizations mentioned in Article 19 below are subject. Information communicated to the specialized body is confidential; it may not be used for purposes other than those provided for by this law.

Art. 16. — The specialized body acknowledges receipt of the suspicious transaction report. It collects all information and clues enabling the establishment of the origin of the funds or the true nature of the transactions subject to the report and ensures the transmission of the file to the competent Public Prosecutor in accordance with the law, whenever the reported facts are likely to constitute the offense of money laundering or terrorism financing.

Art. 17. — The specialized body may oppose, on a conservatory basis, for a maximum duration of 72 hours, the execution of any banking transaction by any natural or legal person against whom there are strong presumptions of money laundering or terrorism financing. Mention of this measure is noted on the acknowledgment of receipt of the suspicious transaction report.

Art. 18. — Conservatory measures taken by the specialized body may not be maintained beyond 72 hours except by judicial decision. The President of the Court of Algiers may, upon request from the specialized body and after opinion from the Public Prosecutor attached to the Court of Algiers, extend the deadline provided in the paragraph above or order the provisional seizure of funds, accounts or securities subject to the report. The Public Prosecutor attached to the Court of Algiers may file a petition for the same purposes. The order granting the petition is enforceable on the original before notification to the party concerned by the transaction. If the acknowledgment of receipt of the suspicious transaction report is not accompanied by the conservatory measures provided above or if no decision from the President of the Court of Algiers or, where applicable, the investigating judge seized, has reached the persons and organizations referred to in Articles 19 and 21 of this law, within the maximum deadline of 72 hours, they may execute the transaction subject to the report.

Art. 19. — The following are subject to the obligation to file a suspicious transaction report: — banks and financial institutions, financial services of Algérie Poste, other related financial institutions, insurance companies, exchange offices, mutual societies, betting and gaming establishments and casinos; — any natural or legal person who, within the framework of their profession, advises and/or carries out transactions involving deposits, exchanges, placements, conversions or any other movement of capital, notably regulated liberal professions, and more particularly lawyers, notaries, auctioneers, accountants, auditors, brokers, customs agents, stockbrokers, intermediaries in stock market transactions, real estate agents, factoring companies as well as dealers in precious stones and metals, antiques and works of art.

Art. 20. — Without prejudice to the provisions of Article 32 of the Code of Criminal Procedure, the natural and legal persons mentioned in Article 19 above are required to report to the specialized body any transaction when it involves funds appearing to originate from a crime or misdemeanor, notably organized crime and the trafficking of narcotic drugs and psychotropic substances, or appear to be destined for terrorism financing. This report must be made as soon as there is suspicion, even if it was impossible to suspend the execution of the transactions or subsequently to their completion. Any declaration of information tending to reinforce or refute the suspicion must be made without delay to the specialized body. The form, model, content and acknowledgment of receipt of the suspicious transaction report are determined by regulatory means on the proposal of the specialized body.

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Art. 21. — The tax and customs services immediately address a confidential report to the specialized body as soon as they discover, during their verification and control missions, the existence of funds or transactions appearing to originate from crimes or misdemeanors, notably organized crime or trafficking of narcotic drugs or psychotropic substances, or appear to be destined for terrorism financing. The implementation details of this article are specified by regulatory means.

Art. 22. — Professional secrecy or banking secrecy is not opposable to the specialized body.

Art. 23. — No prosecution for violation of banking or professional secrecy may be initiated against persons or managers and employees subject to the suspicious transaction report who, in good faith, transmitted the information or made the declarations provided for by this law.

Art. 24. — Natural and legal persons subject to the suspicious transaction report who acted in good faith are exempt from any administrative, civil or criminal liability. This exemption from liability remains valid even if the investigations did not lead to any follow-up or if the prosecutions resulted in decisions of non-prosecution, dismissal or acquittal.

Chapter IV International Cooperation

Art. 25. — The specialized body may communicate to bodies in other States performing similar missions the information it holds on transactions that appear to have the purpose of money laundering or terrorism financing, subject to reciprocity.

Art. 26. — Cooperation and exchange of information, referred to in Article 25 above, are carried out in respect of international conventions and internal legal provisions applicable in matters of protection of privacy and communication of personal data, provided that the competent foreign bodies are subject to the same obligations of professional secrecy as the specialized body.

Art. 27. — In the framework of the fight against money laundering and terrorism financing, the Bank of Algeria and the Banking Commission may transmit information to bodies responsible for the supervision of banks and financial institutions in other countries, subject to reciprocity and provided that these bodies are subject to professional secrecy with the same guarantees as in Algeria.

Art. 28. — Communication of information may not be granted if a criminal procedure has already been initiated in Algeria based on the same facts or if such communication is likely to harm national sovereignty and security or public order and the fundamental interests of Algeria.

Art. 29. — Judicial cooperation is established between Algerian courts and foreign courts during investigations, prosecutions and judicial procedures relating to money laundering and terrorism financing, subject to reciprocity and in respect of bilateral and multilateral conventions applicable in this matter, ratified by Algeria, and in accordance with internal legislation.

Art. 30. — Judicial cooperation may cover requests for investigation, international letters rogatory, extradition of wanted persons in accordance with the law as well as the search and seizure of the proceeds of money laundering and those destined for terrorism financing for the purpose of their confiscation, without prejudice to the rights of bona fide third parties.

Chapter V Penal Provisions

Art. 31. — Whoever makes or accepts a payment in violation of the provisions of Article 6 above is punishable by a fine of 50,000 DA to 500,000 DA.

Art. 32. — Any obligated entity who knowingly and deliberately abstains from establishing and/or transmitting the suspicious transaction report provided for by this law is punishable by a fine of 100,000 DA to 1,000,000 DA, without prejudice to more severe penalties and any other disciplinary sanction.

Art. 33. — Managers and agents of financial organizations as well as obligated entities who have knowingly brought to the knowledge of the owner of the funds or transactions subject to the report the existence of this report or communicated information on the follow-up given to it are punishable by a fine of 200,000 DA to 2,000,000 DA, without prejudice to more severe penalties and any other disciplinary sanction.

Art. 34. — Managers and employees of banks, financial institutions and other related financial institutions who have knowingly repeatedly violated the prevention measures against money laundering and terrorism financing provided for in Articles 7, 8, 9, 10 and 14 of this law are punishable by a fine of 50,000 DA to 1,000,000 DA. The financial institutions referred to in this article are punishable by a fine of 1,000,000 DA to 5,000,000 DA, without prejudice to more severe penalties.

Chapter VI Final Provisions

Art. 35. — The provisions of Articles 104 to 110 of Law No. 02-11 of 20 Chaoual 1413 corresponding to 24 December 2002 on the Finance Law for 2003 are repealed.

Art. 36. — This law will be published in the Official Journal of the Algerian Democratic and Popular Republic.

Done in Algiers, on 27 Dhou El Hidja 1425 corresponding to 6 February 2005. Abdelaziz BOUTEFLIKA.