Guideline on Anti-Money Laundering and Counter-Terrorist Financing: Operational Guide for Regulated Entities — Republic of Djibouti

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GUIDELINE
Anti-Money Laundering and Counter-Terrorist Financing Operational Guide for Regulated Entities — Republic of Djibouti Law No. 178/AN/25/9th L amending Law No. 106/AN/24/9th L on AML/CFT Law No. 104/AN/24/9th L on the Fight Against Terrorist Financing Recipients Credit Institutions · Financial Intermediaries · Electronic Money Issuers · Virtual Asset Service Providers · Insurers · Designated Non-Financial Professions Issuer Financial Intelligence Agency (ANRF) · Republic of Djibouti

AML/CFT Guideline · ANRF Djibouti
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Foreword
This document constitutes the operational guide for implementing legal and regulatory obligations regarding Anti-Money Laundering (AML) and Counter-Terrorist Financing (CFT) in the Republic of Djibouti. It is prepared to support reporting entities in establishing, documenting, and implementing their internal compliance framework, in accordance with the requirements of Law No. 178/AN/25/9th L and Law No. 104/AN/24/9th L. Risk-Based Approach: In accordance with the Financial Action Task Force (FATF) Recommendations and the provisions of Article 2-2-3 of Law No. 178, all procedures described in this guideline are governed by the Risk-Based Approach (RBA). Each entity must identify, assess, and document the specific AML/CFT risks to which it is exposed — based on its clients, products, distribution channels, and geographic areas — and proportion the intensity of its due diligence measures to the identified risk level.

Abbreviations and Definitions
Main Abbreviations

Abbreviation	Full Meaning
ANRF	Financial Intelligence Agency
AML/CFT	Anti-Money Laundering and Counter-Terrorist Financing CTR

Glossary
The definitions below apply for the purposes of this guideline and are consistent with the legal definitions of Law No. 178.
Regulatory Archiving: Secure retention of documents and data for the legally applicable duration (5 years from account closure or cessation of the business relationship).
Financial Intermediaries: Entities routinely engaged in manual foreign exchange and fund transfer activities.
Beneficial Owner: Natural person who ultimately owns or controls the client. Any natural person directly or indirectly holding at least 25% of the capital of a legal person is considered a beneficial owner (Art. 1-2-2 bis of Law No. 178).
Nil Declaration: Declaration submitted in the absence of operations meeting reporting criteria during the regulatory period.
AML/CFT Framework: Set of internal policies, procedures, and controls implemented by the regulated entity to prevent, detect, and report suspicious operations.
Underlying Offenses: Criminal offenses generating proceeds susceptible to money laundering.
KYC (Know Your Customer): Client and beneficial owner identity identification and verification procedure prior to any business relationship.
Enhanced Due Diligence Measures: Additional measures applied to clients or operations presenting a high risk level.
PEP (Politically Exposed Person): Natural person who holds or has held prominent public functions, national or foreign, as well as direct family members and close associates.
Nominee: Person acting on behalf of a third party to conceal the identity of the true beneficial owner.
Compliance Officer: Person designated within the entity as the AML/CFT focal point with the ANRF.
Smurfing (Structuring): Technique consisting of splitting financial operations to circumvent regulatory reporting thresholds.
Tipping-off: Act of informing a client or third party that a suspicious transaction report has been or may be submitted to the ANRF. Strictly prohibited by Article 3-4-2 of Law No. 178.

AML/CFT Guideline · ANRF Djibouti
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SECTION 1 — SCOPE

1. Regulated Entities Subject to AML/CFT Obligations
   Law No. 178 subjects all financial institutions and designated non-financial professions to AML/CFT compliance obligations for activities that execute or monitor operations resulting in deposits, exchanges, placements, conversions, or any other movement of capital (Article 2-1-1).
   1.1 Financial Institutions (Article 2-1-1, Paragraph I)
   The following entities are primarily subject to regulation: credit institutions, financial intermediaries (foreign exchange and fund transfer offices), microfinance institutions, La Poste for its fund transmission and manual exchange activities, payment service providers, electronic money institutions, insurance companies, and virtual asset service providers (VASPs). The latter are subject to prior approval by the Central Bank of Djibouti and regulations issued by its Governor.
   1.2 Designated Non-Financial Professions (Article 2-1-1, Paragraphs II and III)
   The following are also subject to regulation, under the conditions set by law: casinos and gaming establishments, dealers in precious metals, precious stones, and works of art, intermediaries in the sale or lease of real estate, non-governmental organizations and non-profit associations, travel agencies, lawyers, notaries, accountants, auditors, and auctioneers in the exercise of certain activities, motor vehicle dealers, intermediaries specialized in international trade, as well as providers of services to trusts and companies.
   1.3 General Obligations and Prohibitions
   Prohibition of Anonymous Accounts: Article 2-2-2 of Law No. 178 strictly prohibits regulated entities from maintaining anonymous accounts or accounts under manifestly fictitious names. Every account opened must be associated with a verified identity. Generally, regulated entities must implement a complete compliance framework including tailored due diligence measures for clients, document retention for the legal duration, an internal control and staff training system, and prompt reporting to the ANRF of any suspicious operation, regardless of amount and without needing to establish the existence of a criminal offense.

AML/CFT Guideline · ANRF Djibouti
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SECTION 2 — FUNDAMENTAL CONCEPTS
2. Money Laundering and Terrorist Financing
2.1 Money Laundering
Under Article 1-2-1 of Law No. 178, money laundering constitutes any operation involving funds or assets of illicit origin, including conversion or transfer of assets to conceal their criminal origin, concealment or disguise of the nature, location, or movement of these assets, and acquisition, possession, or use of assets that a person knows or should know constitute criminal proceeds. The knowledge, intent, or motivation required as elements of the offense may be inferred from objective factual circumstances. Fundamental Principle: Reporting entities are not required to legally qualify the underlying offense or provide formal proof of the criminal origin of funds. Their obligation is to exercise appropriate professional vigilance and promptly report any situation where there is a reasonable suspicion of money laundering, including when the operation has not been completed. Reasonable suspicion is based on professional analysis and common sense, not certainty.
2.2 Terrorist Financing
The offense of terrorist financing corresponds to any operation aimed at providing, collecting, managing, or making available funds, assets, or economic resources to support terrorist acts, terrorist organizations, or individuals involved in terrorist activities, regardless of whether the funds originate from lawful or unlawful sources. Important Distinction: Unlike money laundering, terrorist financing can involve perfectly lawful funds and very small amounts. The absence of personal profit, the apparent lawfulness of the funds, or the humanitarian nature of an operation does not exclude the risk. Whenever reasonable doubt remains regarding the destination or use of funds, even for a attempted operation, a suspicious transaction report is mandatory.

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SECTION 3 — INTERNAL COMPLIANCE FRAMEWORK
3. Due Diligence Obligations and AML/CFT Framework
3.1 Internal Compliance Program
Due diligence constitutes the operational core of the AML/CFT framework. It requires each regulated entity to establish a structured compliance program proportionate to the nature, size, and risk profile of its activities. This program must be formalized in a documented internal policy approved by senior management and include at minimum the following five components:

Component	Description
Internal AML/CFT Policy	Document approved by senior management, defining internal compliance procedures, responsibilities, and rules.
Risk Assessment	Formalized identification and mapping of risks related to clients, products, distribution channels, and geographic areas, regularly updated.
Continuous Monitoring	Mechanisms — automatic and manual — for detecting atypical operations and unusual behaviors.
Internal Controls	Regular internal verifications and periodic independent audit of the framework.
Staff Training	Mandatory and continuous training program, tailored to each staff category, including agents and distributors.
Risk assessment is the foundation of the entire compliance architecture. It must be documented, conducted regularly, and updated with any significant evolution in activities. In accordance with Article 2-2-3 of Law No. 178, this assessment considers the nature of clients, offered products and services, distribution channels (including agent networks), and geographic location. When high risks are identified, enhanced due diligence measures must be applied. It is recalled that the implementation of due diligence measures cannot be delegated to third parties (Article 2-2-25). Governance and Responsibilities General Management: Ultimately responsible for establishing and steering the overall framework, including approval of the internal policy. Compliance Officer: Designated contact point with the ANRF, responsible for implementing and monitoring regulatory obligations. Agents and Tellers: First line of defense, responsible for identifying and escalating atypical operations. These responsibilities must be formalized in a functional organizational chart and communicated to all personnel.
3.2 Know Your Customer — KYC
Client identity identification and verification constitute the first line of defense against AML/CFT risks. In accordance with Articles 2-2-4 and 2-2-9 of Law No. 178, KYC obligations apply before any business relationship is established, but also for occasional clients when they execute an operation or related operations exceeding 177,000 DJF, or before any operation regardless of amount, whenever there is suspicion of AML/CFT. For natural persons, verification is performed by presenting an original, valid official document with a photograph, a copy of which is retained. For legal persons, verification is performed by producing the articles of association and an official registry extract dated less than three months. In all cases, entities must also identify the beneficial owner and verify their identity using the same procedures. Document Type	Persons Concerned

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3.3 Document Retention
Article 2-2-19 of Law No. 178 requires regulated entities to retain all documents related to their clients and implemented due diligence measures for five (5) years, from account closure or cessation of the business relationship. For occasional operations, the period runs from the end of the relationship or the last operation. Covered documents include identification documents, operation-related information, and reviews and analyses conducted as part of due diligence. These documents must be retained under conditions allowing rapid availability to competent authorities, including the ANRF and judicial authorities.

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SECTION 4 — REPORTING OBLIGATIONS
4. Reporting Obligations
4.1 Cash Transaction Reports (CTR)
Due to the high risks associated with cash usage, Article 3-3-2 of Law No. 178 imposes a mandatory reporting obligation to the ANRF for any cash operation amounting to or exceeding one million Djiboutian Francs (1,000,000 DJF), or its equivalent in foreign currency. This obligation is purely mechanical: it applies regardless of suspicion, once the threshold is reached. The 30-day rolling cumulative rule is essential. When a client conducts multiple cash operations whose total, calculated over a rolling thirty-day period, reaches or exceeds the 1,000,000 DJF threshold, the entity must report all these operations, even if each individually falls below the threshold. Entities must therefore implement systems enabling automatic aggregation of amounts per client over 30 days and generation of internal alerts upon threshold breach. Vigilance on Structuring: Intentional splitting of operations to remain below the threshold constitutes a serious indicator of structuring. This behavior must trigger not only a CTR, but also an alert to the Compliance Officer for a potential Suspicious Transaction Report. In the absence of any operations reaching the threshold during the regulatory period, the entity must submit a NIL declaration. This obligation ensures continuity of dialogue between the entity and the ANRF and confirms that the monitoring framework is active. Operation Description | Obligation --- | --- A client deposits 300,000 DJF on the 5th, then 800,000 DJF on the 20th of the same month. Mandatory declaration — cumulative 1,100,000 DJF over 30 days. Three cash operations of 400,000, 350,000, and 300,000 DJF within 30 days. Mandatory declaration — cumulative 1,050,000 DJF. A customer buys 600 USD then sells 700 USD within the same period. Mandatory declaration, regardless of operation nature. Repeated operations just below the threshold (e.g., 490,000 DJF × 3). Mandatory declaration + alert for attempted structuring. No client exceeded the threshold during the regulatory period. Mandatory NIL declaration. The cash transaction report form (Annex 1) is attached to this document to standardize submissions.

AML/CFT Guideline · ANRF Djibouti
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4.2 International Electronic Transfer Reports (IETR)
In accordance with Article 3-3-2 of Law No. 178, institutions must report to the ANRF electronic transfers originating from or destined for abroad amounting to or exceeding one million Djiboutian Francs (1,000,000 DJF) or its equivalent in foreign currency. This applies exclusively to cross-border flows. Purely domestic transfers do not fall under the IETR but remain subject to continuous due diligence obligations under Article 2-2-7. Important Clarification: The IETR applies only to international transfers (inbound or outbound). It does not apply to domestic bank account transfers, transfers between national electronic money wallets, or internal commercial payments — even though these operations may be subject to other due diligence obligations. As with CTRs, the cumulative rule applies: multiple international transfers from the same client whose total reaches or exceeds the threshold within a close period must be reported. Detection of fragmented transfers is therefore imperative. In the absence of operations reaching the threshold, a NIL declaration must be submitted. The minimum content of any IETR is identical to that of CTRs: full client identity, nature of the operation, amount and currency, date, destination and origin of funds, and any useful observations. Operation Description | Obligation --- | --- Transfer received from abroad: 1,200,000 DJF Mandatory declaration (amount ≥ 1,000,000 DJF) Transfer sent abroad: 1,500,000 DJF Mandatory declaration International transfer in currency equivalent to ≥ 1,000,000 DJF Mandatory declaration Two international transfers from the same client of 600,000 DJF within 30 days Mandatory declaration (cumulative = 1,200,000 DJF) No international transfer ≥ 1,000,000 DJF during the period Mandatory NIL declaration The electronic transfer report form (Annex 2) is attached to this document.

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SECTION 5 — SUSPICIOUS TRANSACTION REPORTING
5. Suspicious Transaction Reports (STR)
5.1 Principle and Scope
The STR constitutes the central mechanism of the AML/CFT framework. Established by Article 3-3-1 of Law No. 178, it must be submitted to the ANRF whenever the entity knows, suspects, or has reasonable grounds to suspect that funds, regardless of amount, are the proceeds of a crime or related to AML/CFT, or that operations or attempted operations are linked thereto. There is no minimum threshold for STRs. Suspicion may arise from unusual client behavior, inconsistencies between the operation and the client's economic profile, or repetitive patterns suggesting an attempt to conceal. It may also apply to an unexecuted operation: if a client, questioned about the purpose of their operation, exhibits suspicious behavior (anxiety, inconsistent reason, unjustified anger) and ultimately cancels the operation, this attempt must still be subject to an STR. ANRF Power of Opposition: Article 3-3-4 of Law No. 178 grants the ANRF the power to oppose the execution of an operation for a maximum duration of 8 days. If this duration must be extended, the ANRF refers the matter to the President of the First Instance Court of Djibouti. In practice, when an entity is about to execute a suspicious operation, it is recommended to inform the ANRF in advance and indicate the timeframe within which the operation must be completed.
5.2 Internal Procedure
As soon as an agent identifies suspicious behavior, they must immediately inform the Compliance Officer. The latter analyzes the available information and decides whether an STR must be submitted to the ANRF. The STR must be sent without delay as soon as suspicion is established. When suspicion arises only after the operation has been executed, the report must be filed immediately upon acquiring knowledge. In accordance with Article 3-3-1, Paragraph 5, any new information tending to reinforce or refute suspicion must also be reported without delay.
5.3 Documents to Attach to the STR
The STR must be accompanied by supporting documents enabling the ANRF to refine its analysis. Non-exhaustively: the client's account statements for the last 36 months, copies of presented identification documents, proof of executed transactions, the client file noting the KYC performed, any proof of income or source of funds, and any document identifying other involved persons. Any incomplete declaration may lead to rejection or processing delays.

AML/CFT Guideline · ANRF Djibouti
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SECTION 6 — AML/CFT INDICATORS
6. Alert Indicators and Typologies
6.1 Frequently Encountered Typologies
Detecting money laundering and terrorist financing is complex, particularly in economies with a strong predominance of cash payments. The ANRF lists below three frequently encountered stratagems for pedagogical illustration.
The Nominee: A person conducts financial transactions in the name of or on the instruction of a third party, without being the true beneficial owner of the funds. This practice becomes illicit when it aims to conceal a criminal origin.
Smurfing (Structuring): Several individuals deposit small sums into the same account to avoid reporting thresholds. The funds are then aggregated and withdrawn as various financial instruments.
Abusive Use of Transit Accounts (or Dormant Accounts): Funds are deposited into a little-used or recently opened bank account, then quickly transferred to other accounts, often abroad, without clear economic justification. These operations may aim to complicate the traceability of financial flows and conceal the illicit origin of funds.
6.2 Alert Indicators Table
The table below presents the main indicators