UEMOA Council of Ministers Directive No. 02/2015 on Combating Money Laundering and Terrorist Financing

UNION ECONOMIQUE ET MONETAIRE OUEST AFRICAINE

The Council of Ministers
DIRECTIVE No. 02/2015/CM/UEMOA ON COMBATING MONEY LAUNDERING AND TERRORIST FINANCING IN THE MEMBER STATES OF THE WEST AFRICAN ECONOMIC AND MONETARY UNION (UEMOA)

THE COUNCIL OF MINISTERS OF THE WEST AFRICAN ECONOMIC AND MONETARY UNION (UEMOA) Having regard to the Treaty of the West African Economic and Monetary Union (UEMOA), particularly Articles 6, 7, 16, 21, 42, 43, 97, 98 and 113; Having regard to the Treaty of the West African Monetary Union (UMOA), particularly Article 34; Having regard to Regulation No. 14/2002/CM/UEMOA of September 19, 2002, on the freezing of funds and other financial resources in the context of combating terrorist financing in the member states of the West African Economic and Monetary Union; Considering that money laundering, as well as terrorist financing and the proliferation of weapons of mass destruction, pose serious threats to the stability of the financial system, peace and international security; Considering that the soundness, integrity and stability of credit institutions and other financial entities, as well as confidence in the overall financial system, could be seriously compromised by criminal enterprises and their accomplices seeking to conceal the origin of their profits or fund terrorism through lawful or unlawful financial flows; Considering the need to establish certain coordination measures at the Union level, otherwise criminals who launder money or finance terrorism may seek to take advantage of the free movement of capital and the free provision of financial services inherent in an integrated financial market; Considering that money laundering and terrorist financing often occur within an international context, and that the impact of measures adopted solely at the national or Union level, without international coordination and cooperation, would be limited; Considering, therefore, that it is essential to ensure the adequacy of measures adopted by the Union in this area with any other action undertaken in other international forums; Considering, furthermore, that the use of the financial system to channel funds of criminal origin or even lawful funds destined for terrorist purposes threatens its integrity, sound operation, reputation and stability, and that consequently, the preventive measures provided for in this Directive should cover not only the handling of funds of criminal origin, but also the collection of goods or money for terrorist purposes; Considering that the variability of money laundering and terrorist financing risk requires the application of a risk-based approach, which presupposes evidence-based decision-making to better target money laundering and terrorist financing risks threatening the Union and its operating actors; Considering the imperative need for all States to pursue and intensify resolutely the fight against money laundering, terrorist financing and weapons of mass destruction proliferation; Eager to implement international recommendations on combating money laundering and terrorist financing, particularly those arising from the United Nations Convention of December 9, 1999 for the suppression of terrorist financing,
international standards on combating money laundering and terrorist financing and proliferation by the Financial Action Task Force (FATF), as well as regional standards and frameworks on combating money laundering and terrorist financing; Eager to ensure the harmonization of the legislation of the member States of the West African Economic and Monetary Union with that of other member States of the Economic Community of West African States; On the joint proposal of the UEMOA Commission and the Central Bank of West African States; After opinion of the Statutory Experts Committee, dated June [......], 2015; ADOPTS THE DIRECTIVE CONTAINING THE FOLLOWING:

PRELIMINARY TITLE: TERMINOLOGY
Article 1: Definitions
For the purposes of this Directive, the following terms shall apply:

1. terrorist act:
   • an act constituting an offense under one of the international legal instruments listed in the annex to this Directive;
   • any other act intended to kill or seriously injure a civilian, or any other person not directly participating in hostilities during an armed conflict, when, by its nature or context, such act aims to intimidate a population or compel a Government or international organization to perform or abstain from performing any act;
2. Regional Financial Market actors: central structures (Regional Securities Exchange – BRVM, Central Depository/Settlement Bank) and commercial participants (Management and Intermediation Companies, Wealth Management Companies, Stock Investment Advisors, Business Introducers and Brokers);
3. bearer shares: negotiable instruments transferred by simple delivery, representing ownership of a fraction of the share capital of a public limited company;
4. criminal activity: any criminal or delictual act constituting an underlying offense for money laundering and terrorist financing in a member State;
5. author: any person who participates in the commission of a crime or offense;
6. competent authority: the body that, by virtue of a law or regulation, is authorized to perform or order the acts or measures provided for in this Directive;
7. supervisory authorities: national or community authorities of the UMOA and UEMOA authorized, by virtue of a law or regulation, to supervise natural and legal persons referred to in Articles 5 and 6 of this Directive;
8. prosecution authority: the body that, by virtue of a law or regulation, is invested, even occasionally, with the mission of exercising public action;
9. judicial authority: the body authorized, by virtue of a law or regulation, to perform acts of prosecution or investigation or to render judicial decisions;
10. public authorities: national administrations and those of local government bodies within the Union, as well as their public institutions;
11. shell bank: a bank that has been incorporated and approved in a State where it does not have a physical presence and is not affiliated to a regulated financial group subject to consolidated and effective supervision. The expression physical presence refers to the presence of management and decision-making power in a country. The simple physical presence of a local agent or subordinate staff does not constitute a physical presence;
12. beneficial owner or economic right holder: the natural person(s) who ultimately own or control a client and/or the natural person on whose behalf an operation is carried out. This definition also includes persons who ultimately exercise effective control over a legal entity or legal arrangement as defined in point 21 below;

• when the client of one of the persons referred to in Article 5 of this Directive is a company, beneficial owner of the operation means the natural person(s) who either directly or indirectly hold more than twenty-five percent (25%) of the capital or voting rights of the company, or exercise through any other means control over the management, administrative or directing bodies of the company or its general meeting of shareholders;
• when the client of one of the persons referred to in Article 5 of this Directive is a collective investment undertaking, beneficial owner of the operation means the natural person(s) who either directly or indirectly hold more than twenty-five percent (25%) of the shares or units of the undertaking, or exercise control over the administrative or directing bodies of the collective investment undertaking or, where applicable, the management company or portfolio management company representing it;
• when the client of one of the persons referred to in Article 5 of this Directive is a legal entity that is neither a company nor a collective investment undertaking, or when the client acts within the framework of a trust or any other comparable legal arrangement under foreign law, beneficial owner of the operation means the natural person(s) meeting one of the following conditions:
  1°) they are destined, by virtue of a legal act designating them as such, to become holders of rights covering at least twenty-five percent (25%) of the assets of the legal entity or assets transferred to a trust patrimony or any other comparable legal arrangement under foreign law; 2°) they belong to a group in whose main interest the legal entity, trust or other comparable legal arrangement under foreign law was constituted or produced its effects, when the natural persons who are beneficiaries have not yet been designated; 3°) they hold rights covering at least twenty-five percent (25%) of the assets of the legal entity, trust or other comparable legal arrangement under foreign law; 4°) they hold the status of settlor, trustee or beneficiary, in accordance with current legislative and regulatory provisions;

13. BCEAO or Central Bank: the Central Bank of West African States;
14. assets/goods: property of any nature, corporeal or incorporeal, movable or immovable, tangible or intangible, fungible or non-fungible, as well as documents or legal instruments in any form whatsoever, including electronic or digital, attesting ownership of such property or related rights, as well as interests on said assets, namely credits, traveler's checks, checks, money orders, shares, securities, bonds, bills of exchange or letters of credit, as well as any interest, dividends or other revenues or value derived from or generated by such assets;
15. money laundering: the offense defined in Article 7 of this Directive;
16. designated categories of offenses:

• participation in an organized criminal group and participation in racketeering;
• terrorism, including its financing;
• human trafficking and illicit traffic of migrants;
• sexual exploitation, including the diversion and exploitation of minors;
• illicit traffic in narcotic drugs and psychotropic substances;
• illicit traffic in arms;
• illicit traffic in stolen goods and other property;
• corruption and extortion;
• misappropriation of funds by persons holding public office;
• fraud;
• counterfeiting currency;
• counterfeiting of goods (including money or banknotes) and product piracy;
• trafficking in organs;
• environmental offenses;
• murder and serious bodily injury;
• kidnapping, hostage-taking and detention;
• theft;
• smuggling (including regarding taxes and customs and excise duties);
• fiscal offenses (related to direct and indirect taxes);
• extortion;
• forgery and use of forged documents;
• piracy;
• insider dealing and market manipulation;
• any other crime or offense.

17. CENTIF: the National Financial Intelligence Unit;
18. CIMA: the Interafrican Conference of Insurance Markets;
19. occasional client: any person who approaches one of the persons subject to this Directive, as per Articles 5 and 6, with the exclusive purpose of preparing or carrying out a single transaction or being assisted in such preparation or execution, whether carried out in a single operation or in several operations appearing linked;
20. confiscation: the definitive deprivation of assets, by decision of a competent court or any competent authority;
21. legal arrangements: express trusts or similar legal constructions;
22. banking correspondence: commercial relations between a credit institution established in a member State and a credit institution established in another State;
23. CRF: Financial Intelligence Units;
24. Designated Non-Financial Businesses and Professions (DNFBPs), including:
    a) casinos, including online casinos; b) real estate agents and property brokers; c) persons who habitually trade or organize the sale of precious stones, precious metals, antiques and works of art; d) lawyers, notaries and other independent legal professionals when they prepare or effect transactions for a client, within the framework of the following activities:
    • purchase and sale of real estate;
    • management of client capital, securities or other assets;
    • account management, including securities accounts;
    • organization of contributions for the creation, operation or management of companies, or creation, operation or management of legal entities or legal arrangements, and purchase and sale of commercial entities.
      e) independent accountants; f) corporate service providers and trust companies, not covered elsewhere in this Directive, which provide the following services commercially to third parties:
    • acting as agents for the formation, registration and management of legal entities, namely trusts;
    • acting or making necessary arrangements for another person to act as administrator or company secretary of a capital company, partner in a partnership or holder of a similar function for other legal entities;
    • providing a registered office, business address or premises, administrative or postal address to a capital company, partnership or any other legal entity or legal structure;
    • acting or making necessary arrangements for another person to act as trustee of an express trust, holder of a similar function for other legal entities;
    • acting or making necessary arrangements for another person to act as shareholder acting on behalf of another person.
      g) other businesses or professions that may be designated by the competent authority;
25. member State: the State party to the Treaty of the West African Monetary Union and the Treaty of the West African Economic and Monetary Union;
26. third State: any State other than a member State;
27. Trust: the operation by which one or more settlors transfer assets, rights or securities, or a set of present or future assets, rights or securities, to one or more trustees who, holding them separate from their own estate, act for a determined purpose in the interest of one or more beneficiaries;
28. financing of proliferation: the financing of the proliferation of weapons of mass destruction, namely nuclear, chemical, bacteriological or biological weapons, by acts proscribed by Resolution 1540 (2004) and successive resolutions of the United Nations Security Council relating to the prevention, suppression and interruption of the proliferation of weapons of mass destruction and its financing;
29. terrorist financing: the offense defined in Article 8 of this Directive;
30. funds and other financial resources: all financial assets and economic benefits of any nature whatsoever, including but not limited to cash, checks, monetary claims, bills of exchange, payment orders and other payment instruments, deposits with financial institutions, account balances, claims and debt securities, traded securities and debt instruments, notably shares and other equity instruments, share certificates, bonds, promissory notes, warrants, unpledged securities, contracts on derivative products, interest, dividends or other revenues or capital gains received on assets, credit, right to set-off, guarantees, including performance bonds or other financial commitments, letters of credit, bills of lading, sales contracts, any document attesting ownership of shares in a fund or financial resources and any other export financing instrument;
31. freezing:
    a) in the context of confiscation and provisional measures, the prohibition on transfer, conversion, disposal or movement of any asset, equipment or instrument following a measure taken by a competent authority or court within the framework of a freezing mechanism, for the duration of validity of said measure, or until a confiscation decision is taken by a competent authority; b) for the purposes of implementing targeted financial sanctions recommendations, the prohibition on transfer, conversion, disposal or movement of all funds and other assets owned or controlled by designated persons or entities following a measure taken by the United Nations Security Council, a competent authority or court, in accordance with applicable Security Council resolutions, for the duration of validity of said measure.
32. serious offense: an act constituting an offense punishable by imprisonment with a minimum term of not less than three years;
33. underlying offense: any offense, even committed in the territory of another member State or a third State, which generates proceeds from criminal activity;
34. government or public facility: any installation or means of transport, permanent or temporary, used or occupied by representatives of a State, members of the Government, Parliament or judiciary, or agents or personnel of a State or any other authority or public entity, or by agents or personnel of an intergovernmental organization, in the course of their official functions;
35. financial institution: any person or entity that exercises, commercially, one or more of the following activities or operations on behalf and for the account of a client:
    a) acceptance of deposits and other refundable funds from the public; b) lending, including consumer credit, mortgage credit, factoring with or without recourse, trade transaction financing; c) financial leasing, excluding consumer product leases; d) money or value transfer; e) issuance and management of payment instruments; f) granting guarantees and underwriting commitments; g) trading in:
    • money market instruments;
    • foreign exchange market;
    • foreign exchange, interest rate and index instruments;
    • securities;
    • commodity futures markets.
      h) participation in securities issuances and provision of related financial services; i) individual and collective wealth management; j) safekeeping and administration of securities, in cash or liquid form, for the account of others; k) other investment, administration or fund/money management operations for the account of others; l) subscription and placement of life and non-life insurance products and other investment products linked to insurance; m) manual foreign exchange; n) any other activities or operations determined by the competent authority. Designated as financial institutions:

• credit institutions;
• postal financial services, as well as deposit and consignment funds or organizations acting in their place, of member States;
• insurance and reinsurance companies, insurance and reinsurance brokers and general insurance agents;
• decentralized financial systems;
• central structures of the Regional Financial Market (BRVM, Central Depository/Settlement Bank) as well as Management and Intermediation Companies, Wealth Management Companies and all other commercial participants with the status of financial institution, as per texts governing the Regional Financial Market;
• Collective Investment Schemes in Securities (SICAVs);
• Fixed Capital Investment Companies;
• Authorized manual foreign exchange dealers;
• Electronic Money Institutions;
• any other structure determined by the competent authority.

36. foreign financial institutions: financial institutions established in a third State;
37. instrument: any asset used or to be used wholly or in part and in any manner whatsoever to commit a criminal offense;
38. bearer instruments: all monetary bearer instruments such as:

• traveler's checks;
• negotiable instruments (notably checks, promissory notes and money orders) that are either to bearer, freely endorsable, or made out to a fictitious beneficiary, or in any other form allowing transfer by simple delivery;
• incomplete instruments (notably checks, promissory notes and money orders) signed, but on which the name of the beneficiary has been omitted;

39. manual foreign exchange operation: the immediate exchange of banknotes or currencies denominated in different foreign currencies, carried out by transfer or delivery of cash, against settlement by another payment method denominated in another currency;
40. criminal organization: any structured agreement or association aimed at committing, notably money laundering, terrorist financing or weapons of mass destruction proliferation offenses;
41. non-profit organization: any association, foundation, or non-governmental organization constituted in accordance with current legislative and regulatory provisions, whose main purpose is the collection or distribution of funds for charitable, religious, cultural, educational, social or fraternal purposes, or for other types of public benefit;
42. terrorist organization: any group of ter