Instruction No. 109/DGSIF/DSB of January 11, 2023 on the Application Modalities by Financial Institutions of the Law on Combating Money Laundering and Terrorist Financing in the Republic of Guinea

[IMAGE]

INSTRUCTION NO. 109/DGSIF/DSB OF JANUARY 11, 2023 PORTANT MODALITES D'APPLICATION PAR LES INSTITUTIONS FINANCIERES DE LA LOI RELATIVE A LA LUTTE CONTRE LE BLANCHIMENT DE CAPITAUX ET LE FINANCEMENT DU TERRORISME EN REPUBLIQUE DE GUINEE

THE GOVERNOR

Having regard to Law L/2017/017/AN of June 8, 2017, repealing Law L/2016/064/AN of November 9, 2016, which itself amended Law L/2014/016/AN of July 2, 2014 on the Statutes of the Central Bank of the Republic of Guinea (BCRG); notably Article 152; Having regard to Law L/2021/AN of August 17, 2021 on Combating Money Laundering and Terrorist Financing, notably Articles 22 and 31; Having regard to Law L/2013/060/CNT of August 12, 2013 on Banking Regulation in the Republic of Guinea; Having regard to Law L/2017/031/AN of July 4, 2017 on the Regulation of Inclusive Financial Institutions in the Republic of Guinea; Having regard to Law L/2016/034/AN/SGG of July 28, 2016 on the Insurance Code of the Republic of Guinea; Having regard to Law L/2000/006/AN of March 28, 2000 on the Regulation of Financial Relations Related to Transactions between the Republic of Guinea and Foreign Countries; Having regard to Instruction No. 112/DGAEM/RCH/00 of September 11, 2000, establishing the regime for financial relations related to transactions between the Republic of Guinea and Foreign Countries; Having regard to BCRG Directive No. 001/DGE/SNP/2014/ on the Launch of a New Interbank Telecompensation System in the Republic of Guinea; Having regard to Decree D/2021/0145/PRG/CNRD of November 25, 2021 on the Appointment of the Governor of the Central Bank of the Republic of Guinea (BCRG).

DECIDES

PRELIMINARY TITLE: GENERAL PROVISIONS
Article 1: Definitions
For the purposes of this Instruction, the following terms shall mean:

• Agent: A person recruited by an EMI or electronic money distributor to provide customers, within the limits of the contract binding them, with services for loading, reloading, transferring, or collecting electronic money.
• BC: Money Laundering

12, boulevard du Commerce, 6e avenue de la République C/Kaloum - BP 692 - Conakry - République de Guinée Tél : (+224) 664 67 77 77 - Fax : (+224) 669 08 88 88 - secretariat.gouv@bcrg-guinee.org www.bcrg-guinee.org

---

• CENTIF: National Financial Intelligence Unit, which is Guinea's Financial Intelligence Unit (FIU);
• CDD: Customer Due Diligence;
• CSNU: United Nations Security Council;
• Financial Company: A company established in the Republic of Guinea whose main activity is to take and manage financial holdings and which, either directly or through companies with the same object, controls one or more companies carrying out financial operations, at least one of which is a credit institution;
• Electronic Money Distributor: A company, merchant, or service provider offering, in execution of a contract concluded with an electronic money institution, a service for loading, reloading, or collecting electronic money on behalf of Agents;
• Electronic Money Distribution: The execution by a company, merchant, or service provider of a service for loading, reloading, or collecting electronic money on behalf of Agents, pursuant to a contract concluded with an electronic money institution;
• Credit Institutions: Legal entities that habitually carry out at least one of the following banking operations as a profession:
  o The receipt of funds from the public, and/or; o The granting of credit, and/or; o The provision to customers and management of any means of payment.
• Electronic Money Institution (EMI): An inclusive financial institution authorized under the Law on Inclusive Financial Institutions to issue and distribute electronic money and to offer customers any related payment service.
• TF: Terrorist Financing.
• FATF: Financial Action Task Force.
• GIABA: Intergovernmental Action Group against Money Laundering in West Africa.
• Senior Management: A person assuming responsibility for management and charged with taking the main decisions based on powers delegated by the Board of Directors or any equivalent body within a financial institution (General Manager, Deputy General Manager, or their equivalents);
• Electronic Payment Service Intermediary (EPSI): Any person who presents, proposes, or assists in concluding electronic payment services or carries out all preparatory work and advice for their realization, as a regular occupation, for remuneration or any other form of economic benefit, without assuming liability as a guarantor and without being an employee of an issuing institution.
• Inclusive Financial Institution: An authorized financial institution that professionally offers specific financial services to populations operating largely outside the traditional banking circuit, within the limits permitted by their category and authorization. Inclusive financial institutions include the following categories:
  • Microfinance Institutions;
  • Electronic Money Institutions;
  • Postal Financial Services;

---

- Other inclusive financial institutions.  

• Approved Intermediary: Any credit institution established on Guinean territory that has received the status of approved intermediary, by approval of the Approvals Committee;
• Banking Operations Intermediary (BOI): Any natural or legal person other than a credit institution who, as a regular occupation, exercises as a main or ancillary activity, the bringing together of parties with a view to concluding a banking operation, without guaranteeing the execution of a party's obligations. The activity of banking operations intermediary may only be exercised between two persons, at least one of whom is a credit institution;
• Microfinance Operations Intermediary (MOI): Any person who presents, proposes, or assists in concluding microfinance services or carries out all preparatory work and advice for their realization, as a regular occupation, for remuneration or any other form of economic benefit, without assuming liability as a guarantor and without being an employee of an institution.
• AML/CFT: Combating Money Laundering / Terrorist Financing.
• Electronic Money: Monetary value representing a claim on the issuer that is:
  o Stored in electronic form, including magnetic; o Issued without delay against the receipt of funds in an amount not less than the issued monetary value; o Accepted as a means of payment by natural or legal persons other than the issuer.
• PEPs: Politically Exposed Persons
• RCCM: Trade and Movable Credit Register.
• Manual Foreign Exchange Operations: Immediate exchange of banknotes or currency denominated in different currencies carried out by transfer or delivery of cash, against payment by another means of payment denominated in another currency.
• Payment Services: Any activity carried out professionally and intended to make available to the public instruments or offer services enabling them to carry out, regardless of the infrastructure, medium, or technical method used, the following operations:
  a) Issuance and management of electronic money; b) Collections; c) Deposits; d) Withdrawals; e) Transfers; f) Payments; g) Direct debits; h) Management and provision of checks; i) Opening and management of accounts with the exclusive purpose of carrying out payment operations.

---

• Sub-agent in fund or value transfers: A natural or legal person who carries out the activity of transferring funds or values under the responsibility of an approved intermediary or a financial institution;
• Sub-delegatee in customer foreign exchange repurchase operations: An institution that carries out customer foreign exchange repurchase operations under the responsibility of an approved intermediary;
• Sub-distributor of electronic money: A legal or natural person or an Inclusive Financial Institution offering customers, in execution of a contract with the distributor, under the responsibility of the issuer, a service for the distribution of electronic money.

Article 2: Object
This Instruction aims to specify the application modalities, following a "risk-based approach", by the financial institutions referred to in Article 3 below, of the Law on Combating Money Laundering and Terrorist Financing in the Republic of Guinea. This Instruction must be read together with the provisions of said Law. The requirements set out in this Instruction are mandatory.

Article 3: Scope
This Instruction applies according to the risks related to the nature of the activity of the different categories of financial institutions listed below:

• Banks;
• Specialized financial institutions;
• Leasing companies;
• Financial companies;
• Insurance and reinsurance companies;
• Insurance and reinsurance brokers and general agents;
• Microfinance Institutions;
• Electronic Money Institutions;
• Fund or value transfer companies;
• Postal financial services;
• Manual foreign exchange approved dealers;
• Virtual asset service providers;
• Any other structure determined by the Central Bank.
  The provisions to be implemented by the financial institutions referred to in the first paragraph above relate to all operations carried out under their responsibility, including those outsourced.
  They also include, where applicable, those carried out by sub-agents in insurance, money transfers, banking operations intermediaries, sub-delegatees in customer foreign exchange repurchase operations, as well as distributors, sub-distributors, and Agents of electronic money. However, the provisions of Article 6 first paragraph, Article 7, and Article 12 of this Instruction do not apply to manual foreign exchange approved dealers. The implementation of the provisions of the Law on Combating Money Laundering and Terrorist Financing in the Republic of Guinea and of these instructions should take into account ML and TF risks. Recognizing that risk profiles differ from one category of financial institution to another, a number of clarifications are provided in Annex 3 of this Instruction, specific to insurance companies, money transfer companies, and other financial institutions.

---

TITLE II: GOVERNANCE
Article 4: Responsibilities of the Board of Directors and Senior Management
The responsibility for a financial institution's compliance with the obligations of the Law on Combating Money Laundering and Terrorist Financing and its implementing instructions lies with the Board of Directors or an equivalent body of the financial institution. The Board of Directors is required to demonstrate to the Central Bank that the financial institution has taken effective measures to ensure that:
i) the financial institution, including its Board of Directors and senior management, maintains a sound understanding of the money laundering and terrorist financing risks that may arise from the institution's activities; ii) the financial institution has determined its policy based on the type and maximum level of risk it would accept (risk appetite and client acceptance policy); iii) and, taking into account the assessed risks of money laundering and terrorist financing, that:
a) risk management policies and procedures are developed, maintained, and effectively implemented to deter and detect money laundering and terrorist financing through the financial institution; b) a culture of compliance with legislative obligations is maintained throughout the financial institution through continuous awareness and periodic traceable training provided to employees, new hires, and service providers, through modules adapted and compliant with their respective degrees of exposure to money laundering and terrorist financing risks; and c) financial, material, and human resources are provided to ensure that staffing and systems are adequate for the effective implementation of risk-based policies and procedures. iv) the financial institution fully complies with the obligation to cooperate with supervisory authorities and investigative and prosecutorial authorities as provided in Article 55 of the Law on Combating Money Laundering and Terrorist Financing.

---

TITLE II: RISK UNDERSTANDING AND ASSESSMENT
Article 5: Risk Assessment
Financial institutions are required to demonstrate to the Central Bank that they have assessed money laundering and terrorist financing risks in all their aspects, in accordance with Article 21 of the Law on Combating Money Laundering and Terrorist Financing. Financial institutions must, in their internal risk assessments, ensure at minimum that:

---

i) the risk assessment covers all activities of the financial institution, including those carried out by subsidiaries or branches, through agencies or outsourcing agreements, inside or outside the Republic of Guinea; ii) the risk assessment is documented in sufficient detail to allow a clear understanding of the methodology, data sources used, and justification for the conclusions drawn; iii) the risk assessment is based on a methodology that:
a. corresponds to the risks arising from the nature, scale, and complexity of the activities carried out by the financial institution. b. takes into account available documents on threats, inherent risks, vulnerabilities, and typologies regarding money laundering and terrorist financing, including the conclusions of the national risk assessment and any other documents published by competent authorities, the Central Bank, and the CENTIF, as well as other reliable information sources.
c. takes into account:
i) inherent risks related to clients, products, services, and transactions, distribution channels, and geographical risk factors, to the extent appropriate to the financial institution's activities; ii) historical incidents of money laundering and terrorist financing recorded initially over the last ten years, and subsequently between two updates of the risk mapping, taking into account their frequency and severity as well as the quality of their management; iii) the effectiveness of the financial institution's internal controls in mitigating identified risks and the timely follow-up on the implementation of action plans and/or resulting recommendations; and iv) exogenous factors (political instability with suspensions and/or changes in Laws) occurring occasionally and leading to periods of disruption favorable to these scourges. A financial institution may demonstrate compliance by developing its own risk assessment method, choosing an internationally recognized method, or adapting the method described in Annex 1 of this Instruction. The methodology is reviewed and updated as often as necessary to ensure that the assessment conclusions remain valid. Financial institutions must demonstrate compliance by conducting the assessment annually and/or whenever there are significant business developments impacting the institution, new technologies, as well as during updates or organizational changes, or changes in the legal and regulatory environment. The internal risk assessment serves as the practical basis for maintaining and implementing risk-based policies and procedures used to deter and detect money laundering and terrorist financing. The risk assessment results in the development of a complete and synthetic mapping of money laundering and terrorist financing risks.

---

TITLE III: INTERNAL ORGANIZATION FOR COMBATING MONEY LAUNDERING AND TERRORIST FINANCING
Article 6: Internal AML/CFT Prevention Programs
Subject financial institutions shall develop and implement internal AML/CFT prevention programs, in accordance with the provisions of Article 22 of the Law on Combating Money Laundering and Terrorist Financing in the Republic of Guinea. Financial institutions should ensure that these internal programs include policies concerning:
i) the need for senior management and all relevant personnel of the financial institution to maintain an understanding and awareness of money laundering and terrorist financing risk factors; ii) the overall risk appetite and the financial institution's approach to client acceptance, taking into account the importance of financial inclusion; iii) the implementation of a risk-based approach at the operational level and the allocation of resources reflecting identified risks, with particular emphasis on higher-risk activities; iv) taking measures to ensure that the financial institution obtains and retains sufficient information and knowledge about its clients to be able to identify unusual or suspicious activities that could justify filing a suspicious transaction report with the CENTIF; v) maintaining and implementing compliance procedures consistent with the analysis and conclusions of the financial institution's internal risk assessment; vi) commitment to comply with all obligations arising from the Law on Combating Money Laundering and Terrorist Financing, and its implementing instructions. Before their implementation, the internal programs referred to in the first paragraph above should be documented and validated by the Board of Directors or the equivalent deliberative body of the financial institution. The senior management of the financial institution must ensure their implementation. To account for the evolution of the financial institution's activity as well as the legal and regulatory environment, the internal programs are subject to a periodic review of their effectiveness by the internal audit body, at least once a year, in accordance with the provisions of Article 18 of this Instruction.

Article 7: Internal AML/CFT Prevention Procedures
Subject financial institutions shall establish internal procedures to ensure compliance with legal and regulatory provisions regarding the prevention of money laundering and terrorist financing in the Republic of Guinea. These procedures should prescribe the due diligence to be performed and the rules to be respected regarding:

1. Client identification and knowledge for better profiling;
2. Establishment and updating of client, representative, and beneficial owner files;
3. Setting deadlines for verifying the identity of clients, representatives, beneficial owners, and updating related information;
4. Identification and monitoring of operations concerning politically exposed persons at risk of money laundering and terrorist financing