Law No. 12-008/AU on the Fight Against Money Laundering and the Financing of Terrorism

UNION OF THE COMOROS Unity - Solidarity - Development President of the Union Moroni, [Date] 2012 DECREE NO 12-013/PR Promulgating Law No. 12-008/AU of June 28, 2012, on the law concerning the fight against money laundering and the financing of terrorism,

THE PRESIDENT OF THE UNION,

HAVING REGARD TO the Constitution of the Union of the Comoros of December 23, 2001, revised, particularly Article 17;

DECREE:

ARTICLE 1: Law No. 12-008/AU, concerning the law on the fight against money laundering and the financing of terrorism, adopted on June 28, 2012, by the Assembly of the Union of the Comoros, is promulgated, the text of which follows:

TITLE I: TERMINOLOGY

Article 1.1: For the purposes of this Law, the following are considered:

1 - Money Laundering The conversion, transfer, or manipulation of property or revenues, where the perpetrator knows or should have known that they originate from a crime or misdemeanor or participation in such crime or misdemeanor, with the aim of concealing or disguising the illicit origin of said property or funds, or of assisting any person involved in the commission of the principal offense to escape the legal consequences of their acts; The concealment or disguise of the nature, origin, location, disposition, movement, or real ownership of property or rights related thereto, where the perpetrator knows or should have known that they originate from a crime or misdemeanor; The acquisition, possession, or use of funds by a person who suspects or should have known that said property or funds constitute a product of any crime or misdemeanor for the purposes of this Law.

2 - Terrorist Act Any offense in relation with an enterprise, individual, or collective having the aim of seriously disturbing public order through intimidation or terror; Any act having the aim of intentionally attacking the life or integrity of a person, kidnapping, and hostage-taking; Any act whose context is to intimidate a population or to compel a government or an international organization to commit or abstain from committing any act.

The knowledge, intention, or motivation necessary as an element of the offense may be deduced from objective factual circumstances.

3 - Financing of Terrorism The act of financing a terrorist enterprise by gathering, holding, or providing funds, or any other property, or by giving advice for this purpose, with the intention of seeing them used or knowing that they are destined to be used, in whole or in part, to commit a terrorist act.

The offense is committed, whether the act referred to in paragraph 1 occurs or not and whether the funds have or have not been used to commit this act; The offenses of financing terrorism will be constituted regardless of whether the person accused of having committed the offenses is a national of the Union of the Comores or of another country than that in which the terrorists or terrorist acts are located, or in which the terrorist acts were to take place, have taken place, or will take place.

4 - Terrorist Group A group formed or an agreement established with a view to the preparation of a terrorist act. Any group or agreement for the preparation of a terrorist act, characterized by one or more criminal acts, one or more crimes or misdemeanors.

5 - Complicity The act consisting of aiding, assisting, inciting, or advising a physical person to commit the offense of terrorism or to facilitate its commission.

6 - Underlying Offenses to Money Laundering The expression "underlying offense" designates any offense that generates a product of crime and may correspond to any crime or misdemeanor provided for and repressed by the Penal Code and other repressive texts.

Article 2.

1 - Definitions of Offenses

A - Trafficking in Human Beings For the purposes of this Law, trafficking in persons means the recruitment, transport, accommodation, transfer, or reception of persons, by means of the threat or use of force or other forms of coercion, by abduction, fraud, deception, abuse of authority or of a situation of vulnerability, or by the offering or acceptance of payments or benefits to obtain the consent of a person having authority over another, for the purpose of exploitation.

Exploitation includes, at a minimum, the exploitation of the prostitution of others or other forms of sexual exploitation, forced labor or services, slavery or practices similar to slavery, servitude, or the removal of organs.

B - Smuggling of Migrants Smuggling of migrants consists for any person or group of persons in organizing the transport (on land, on sea, or by air), accommodation, or transit of clandestine migrants in order to derive directly or indirectly a financial or other material advantage, when the national territory serves as a zone of origin, transit, or destination.

C - Piracy By "Piracy" is meant any of the following acts: a) any illicit act of violence or detention or any act of depredation committed by the crew or passengers of a private ship or aircraft, acting for private ends, and directed against another ship or aircraft, or against persons or property on board; b) any act of voluntary participation in the use of a ship or aircraft, when its perpetrator has knowledge of facts that lead to the conclusion that this ship or aircraft is a pirate ship or aircraft; c) any act having the aim of inciting to commit the acts defined in a) or b) above, or committed with the intention of facilitating them.

D - Market Manipulation The offense of market manipulation occurs when a person exercises or attempts to exercise, directly or through an intermediary, a maneuver, sometimes taking the form of interventions on the stock market, in order to mislead other investors.

E - Insider Dealing Insider dealing is the fact for social executives, public agents, or any other person having, on the occasion of the exercise of their profession or function, privileged information on the situation of a securities issuer, the perspectives of evolution of securities, or a contract to be signed, to realize or permit the realization, either directly or indirectly, one or more operations on the same, or to communicate these operations to a third party before the public has knowledge thereof.

2 - Legal Notions

F - Product of Crime The term "product of crime" designates any property or any economic and financial advantage derived directly or indirectly from any crime or misdemeanor.

This advantage may consist in a property or revenues as defined in paragraph H) of this present article.

G - Terrorism and Terrorist The term "terrorism" designates the set of acts of violence committed to create a climate of insecurity, to exert pressure on a government, to satisfy hatred towards a community, a country, or a political system. It is any act having the aim of seriously disturbing public order through intimidation or terror, and notably acts of violence, theft, extortion, destruction, degradation, and deterioration, computer offenses, offenses regarding weapons, explosive products, or nuclear materials, and money laundering offenses.

The term "Terrorist" designates any physical person who commits or attempts to commit terrorist acts by any means, directly or indirectly, illegally and deliberately, who participates as an accomplice in terrorist acts, who organizes terrorist acts or gives instructions to others to commit them, who contributes to the commission of terrorist acts by a group of persons acting in a common purpose, when this contribution is intentional and aims to realize the terrorist act or is provided with knowledge of the intention of the group to commit a terrorist act.

H - Property and Revenues The term "property" and the term "revenues" designate all types of assets, corporeal or incorporeal, movable or immovable, tangible or intangible, regardless of their mode of acquisition, as well as documents or legal instruments in whatever form they may be, including electronic or digital, proving ownership or interests in said properties, including, but not limited to, bank credits, travel checks, bank checks, money orders, deposits, securities, bonds, bills of exchange, or letters of credit, as well as eventual interests, dividends, or other revenues or values derived from or generated by such assets.

I - Terrorist Organization The expression "terrorist organization" designates any group of terrorists who: a) commits or attempts to commit terrorist acts by any means, direct or indirect, illegally and deliberately; b) participates as an accomplice in terrorist acts; c) organizes terrorist acts or gives instructions to others to commit them; or d) contributes to the commission of terrorist acts by a group of persons acting in a common purpose when this contribution is deliberate and aims to favor the terrorist act or is provided with knowledge of the intention of the group to commit a terrorist act.

J - Politically Exposed Persons (PEPs) The expression "foreign Politically Exposed Persons (PEPs)" designates persons who exercise or have exercised important public functions in a foreign country, for example, heads of State and government, senior politicians, senior officials in public powers, senior military and police officials, public enterprise executives, and senior officials of political parties.

The expression "national PEPs" designates physical persons who exercise or have exercised important public functions in the country, for example, heads of State and government, senior politicians, senior officials in public powers, magistrates and senior military officials, public enterprise executives, and senior officials of political parties.

Persons who exercise or have exercised important functions within or for an international organization designates the members of the senior management, namely directors, deputy directors, and members of the administration, and all persons exercising equivalent functions.

The notion of PEP does not cover persons of middle or lower rank falling into the above categories.

K - Instrument The term "instrument" designates any object used or intended to be used in any way, in whole or in part, to commit one or more penal offenses.

L - Organized Criminal Group The expression "organized criminal group" designates a structured group of three or more persons acting in concert with the aim of committing one or more serious offenses to obtain, directly or indirectly, a financial or other material advantage.

M - Beneficial Owner The expression "beneficial owner" designates the physical person or persons who, in fine, own or control a client or an account, the person for whose account an operation is carried out. Also included are persons who exercise ultimate effective control over a legal person or a legal arrangement.

3 - Terminology Elements

N - Financial Institutions The expression "Financial Institution" designates any person or entity that exercises on a commercial basis one or more of the following activities or operations on its own behalf or for the account of a client: a) acceptance of deposits and other refundable funds from the public; b) lending; c) financial leasing; d) money or value transfer services; e) issuance and management of means of payment; f) granting guarantees and commitments; g) trading in:

• money market instruments;
• foreign exchange;
• exchange, interest rate, and index instruments;
• securities;
• commodity futures markets. h) participation in securities issues;
• financial services related to insurance; i) individual and collective portfolio management; j) safekeeping and administration of securities, liquid assets, for the account of others; k) other investment, administration, or management of funds or money for the account of others; l) subscription and placement of life insurance and other investment products linked to insurance; m) foreign exchange.

O - Designated Non-Financial Businesses and Professions By "Designated Non-Financial Businesses and Professions" is meant: a) casinos (including online casinos); b) real estate agents; c) dealers in precious metals; d) dealers in precious stones; e) lawyers, notaries, and other independent legal professions and accountants. Only members of professions exercising independently, as partners, or as employees in firms are covered. Professionals exercising within other types of firms where they are employed, nor professionals working for a public agency, who may already be subject to measures against money laundering and financing of terrorism, are not covered; f) service providers to companies, namely persons and entities that do not fall under other categories mentioned in these recommendations and who, on a commercial basis, provide to third parties one of the following services:

• acting as a third-party nominee for the formation of legal persons;
• acting (or taking measures to ensure another person acts) as a director or manager of a capital company, a partner in a partnership, or a holder of a similar function for other types of legal persons;
• providing a corporate seat, a commercial address, or premises, an administrative or postal address to a capital company, a partnership, or any other legal person or legal arrangement;
• acting (or taking measures to ensure another person acts) as a shareholder acting on behalf of another person.

P - Correspondent Account The expression "correspondent account" refers to correspondent accounts that allow a third party to execute operations for their own account.

Q - Fund or Value Transfer Service The expression "fund or value transfer service" designates a financial service consisting of accepting cash, checks, or any other payment instrument or value deposit and paying an equivalent sum in cash or in any other form to a beneficiary by means of a communication, message, transfer, or clearing system to which the fund or value transmission service belongs. Operations carried out through these services may involve one or more intermediaries and a third-party recipient of the final payment, and may include any new means of payment. These services are sometimes linked to specific geographical zones and are designated by specific terms.

R - Electronic Transfer The expression "electronic transfer" designates any operation carried out electronically in the name of an order giver via a financial institution with the aim of making a certain sum of money available to a beneficiary at another financial institution, it being understood that the order giver and the beneficiary are not the same person.

4 - Procedural Provisions

5 - Controlled Delivery The expression "controlled delivery" designates the method consisting in permitting the passage through the territory of the Union of the Comores of illicit or suspected shipments, under the supervision and control of the competent authorities of this State, with a view to investigating an offense and identifying persons involved in its commission.

S - Freezing of Funds and Other Financial Resources Freezing of funds and other financial resources: any action aiming to prevent any movement, transfer, modification, use, or manipulation of funds which would have the consequence of a change in their volume, amount, location, ownership, possession, nature, destination, or any other modification that would permit their use, notably portfolio management.

5 - Repression of Offenses

T - Confiscation By "confiscation" is meant the permanent deprivation of property or funds by decision of an administrative authority or a competent jurisdiction, which transfers the ownership of these properties or funds to the State. Thus, persons are deprived of rights on confiscated properties.

TITLE II: PREVENTION OF MONEY LAUNDERING AND FINANCING OF TERRORISM

CHAPTER I: GENERAL PREVENTION PROVISIONS

Section 1 Professions Subject to Titles II and III of this Law

Article 3: Titles II and III of this Law apply to any physical or legal person who, in the course of their profession, realizes, controls, or advises financial operations involving deposits, exchanges, placements, conversions, or any other movements of capital, and notably to credit establishments and financial institutions and intermediaries.

Titles II and III of this Law also apply, for all their operations, to Decentralized Financial Institutions (microfinance institutions), money changers, casinos, and gaming establishments, as well as to those who realize, control, or advise real estate operations and to insurance companies covering life insurance and intermediaries in insurance matters (agents and brokers).

Titles II and III of this Law also apply to designated non-financial businesses and professions, in the following circumstances: a) Casinos - when clients carry out operations equal to or greater than the threshold designated applicable, by decree of the Minister of Finance; b) Real Estate Agents - when they carry out transactions for their clients concerning the purchase and sale of real estate; c) Dealers in Precious Metals or Stones and High-Value Objects - when they carry out transactions with a client in cash whose amount is equal to or greater than the threshold designated applicable by decree of the Minister of Finance; d) Lawyers, Notaries, Other Independent Legal Professions, and Accountants, when they prepare or carry out transactions for their clients in the framework of the following activities:

• purchase and sale of real estate;
• management of capital, securities, or other assets of the client;
• management of bank, savings, or securities accounts;
• organization of operations for the creation, operation, or management of companies;
• management, operation, or management of legal persons, legal arrangements, purchase, and sale of entities.

e) Service providers to companies and trusts, when they prepare or carry out transactions for a client in link with the following activities:

• they act as an agent for the formation of legal persons;
• they act or take measures to ensure another person acts as a director or manager of a capital company, a partner in a partnership, or a holder of a similar function for other types of legal persons;
• they provide a corporate seat, a commercial address, or premises, an administrative or postal address to a capital company, a partnership, or any other legal person or legal arrangement;
• they act (or take measures to ensure another person acts) as a shareholder acting on behalf of another person.

f) Lawyers, Notaries, Other Independent Legal Professions, and Accountants, when they carry out a financial transaction in the framework of the activities referred to in paragraph (d) above for the account of or for a client. In this case, they are required to report suspicious operations.

g) Dealers in Precious Metals or Stones and High-Value Objects, when they carry out with a client cash transactions equal to or greater than the threshold fixed by decree of the Minister of Finance. In this case, they are required to report suspicious operations.

h) Service providers to companies and trusts, when they carry out a transaction inscribed in the framework of the activities referred to in paragraph (e) above for the account of or for a client. In this case, they are required to report suspicious operations.

Lawyers, Notaries, Other Independent Legal Professions, and Accountants acting as independent legal advisors are not required to make declarations if the information they hold was obtained under circumstances falling under the judicial defense of a client.

Section 2 Limit on the Use of Cash or Bearer Checks

Article 4: Any cash payment of an amount greater than 5 million Comorian Francs is prohibited. The purchase price of an article whose total value is greater than 5 million Comorian Francs cannot be paid in cash.

However, a decree of the Minister of Finance determines the cases and circumstances in which derogation may be granted to the preceding paragraph. In this case, a report specifying the modalities of the operation and the identity of the parties, drawn up in accordance with Article 4 of this Law, must be transmitted to the Financial Intelligence Unit (FIU).

Section 3 Obligation to Carry Out Fund Transfers through a Credit Establishment or Financial Institution

Article 5: Any transfer to or from abroad of funds, bills, or securities for an amount greater than 5 million Comorian Francs must be carried out by a credit establishment or an authorized financial institution, or through its intermediary.

However, a decree of the Minister of Finance determines the cases and circumstances in which derogation may be granted to the preceding paragraph. In this case, a report specifying the modalities of the operation and the identity of the parties must be transmitted to the Financial Intelligence Unit (FIU).

Section 4 Physical Transports of Funds, Couriers

Article 6: Physical cross-border transports of cash and bearer instruments, precious metals, or precious stones of an amount greater than 5 million Comorian Francs are subject to declaration.

These information are transmitted to the Financial Intelligence Unit (FIU) by the customs authority.

In case of non-declaration or false declaration, or if there is suspicion of money laundering or financing of terrorism, or if the bearer instruments are related to underlying offenses, the customs authority seizes or immobilizes...