Circular 129-1 on Preventive Measures Financial Institutions Must Take to Combat Money Laundering, Terrorism Financing, and Proliferation Financing

[Logo: Central Bank of Haiti]
Central Bank of Haiti
CIRCULAR

CIR. : BRH/IF/2026/129-1

TO FINANCIAL INSTITUTIONS

This circular establishes the preventive measures that financial institutions must take to combat money laundering, terrorism financing, and the financing of the proliferation of weapons of mass destruction, hereinafter referred to as "proliferation". It applies to:

a) banks; b) development finance companies; c) leasing companies; d) credit card companies; e) savings and credit cooperatives; f) microfinance institutions; g) investment promotion companies; h) money transfer houses; i) currency exchange offices; j) electronic payment service providers; k) other entities designated by the Central Bank of Haiti (BRH).

1. On the Prevention Program

Financial institutions must establish a prevention program for money laundering, terrorism financing, and proliferation, in accordance with Article 31 of the Decree of April 30, 2023, penalizing money laundering, terrorism financing, and the financing of the proliferation of weapons of mass destruction.

The aforementioned program must reflect the nature, scale, and complexity of the financial institutions' activities and include the following elements:

1. internal policies, procedures, and controls, including compliance monitoring mechanisms, and appropriate recruitment procedures to ensure hiring meets stringent criteria;
2. the centralization of information on the identity of clients, ordering parties, beneficial owners, beneficiaries and proxy holders, agents, and on suspicious transactions;
3. the appointment of a compliance officer and the designation of compliance officers at each branch, agency, or service point, as applicable;

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4. the institution's risk assessment regarding money laundering, terrorism financing, and proliferation, and a risk classification based on activities and client profiles;
5. the development of a continuous training program for employees and sub-agents for money transfer houses;
6. an internal control mechanism to verify compliance, observance, and the effectiveness of adopted measures;
7. the establishment of an independent compliance testing mechanism;
8. the procedure for handling suspicious transactions.

The prevention program must be approved by the institution's Board of Directors or by the foreign correspondent if the financial institution is an agent representing fund transfer activities.

1.1 Policies, Procedures, and Methods

Financial institutions are required to develop and implement a prevention program comprising written policies, procedures, and methods that enable the identification of risk factors and the assessment of money laundering, terrorism financing, or proliferation risks associated with their activities. The policies, procedures, and methods must be approved by the Board of Directors and updated regularly. They must be clearly communicated to all employees expected to interact with clients.

These policies and procedures must cover all applicable obligations regarding reporting, recordkeeping, document retention, client identification and due diligence, as well as control, assessment, and mitigation of risks. They must be integrated into the financial institution's overall risk management strategy and include appropriate steps to continuously prevent, detect, assess, monitor, manage, and mitigate money laundering and/or terrorism financing risks, particularly those related to clients, countries or geographic areas, or products, services, new technologies, operations, and distribution channels.

The policies and procedures must also cover the handling of international sanctions (United Nations list or others) and the procedures for freezing assets in the context of combating terrorism financing and proliferation.

The policies and procedures must apply to all branches, agencies, service points, and subsidiaries when referring to a group as defined in Article 13 of the Law of May 14, 2012, on banks and other financial institutions. In such cases, financial institutions are required to integrate group-wide information-sharing policies and procedures for the purpose of exercising client due diligence and managing money laundering, terrorism financing, and proliferation risks. Appropriate safeguards must be put in place to ensure the confidentiality and proper use of exchanged information.

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Financial institutions must also ensure that information regarding clients, accounts, and operations from their branches and subsidiaries is made available to compliance, audit, and/or anti-money laundering and counter-terrorism financing functions at the group level.

Furthermore, financial institutions must ensure that their foreign subsidiaries, where applicable, conducting similar activities, implement the group's prevention program, including group-wide information-sharing policies and procedures. When the host country of a subsidiary does not allow for the effective implementation of national-compliant anti-money laundering and counter-terrorism financing measures, the group is required to apply additional appropriate measures to manage these risks and inform the BRH.

Additionally, money transfer houses acting as agents must ensure that their sub-agents effectively apply their prevention program. The same applies to currency exchange offices regarding any network constituted by sub-exchange agents, where applicable.

The policies and procedures must take into account relationships with correspondent banks and cover matters related to collecting information on said correspondent banks (nature of their activities, their clientele, oversight by competent authorities, etc.) as well as the suspension and non-establishment of correspondent relationships with:

a) foreign banks that lack sufficient control procedures regarding criminal activities, or b) foreign banks that are not subject to effective oversight by competent authorities, or c) shell banks.

Financial institutions are also required to develop appropriate selection procedures ensuring employee recruitment meets stringent criteria.

1.2 Centralization of Information

Financial institutions must implement an IT system enabling the centralization of data on the identity of clients, ordering parties, beneficial owners, agents, proxy holders, and on suspicious transactions.

1.3 Appointment of a Compliance Officer

Every financial institution must appoint a compliance officer. This officer must be a senior executive of the institution, selected based on competence, experience, integrity, and professional ethics. They must understand the institution's functions and structure, and be familiar with money laundering and terrorism financing risks and vulnerabilities in their sector of activity, as well as trends and typologies characterizing these threats.

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The compliance officer must report directly to the Board of Directors on all matters related to combating money laundering, terrorism financing, and proliferation.

The compliance officer's duties include, in particular, (to):
a) ensure the application of legislation and regulations; b) enforce internal procedures and methods for combating money laundering, terrorism financing, and proliferation; c) identify weaknesses and make necessary recommendations; d) propose training programs on a periodic basis; e) serve as liaison with sub-agents (money transfer houses or currency exchange offices); f) serve as liaison with the Central Unit for Financial Intelligence (UCREF); g) prepare and submit suspicious transaction reports to the UCREF; h) ensure that transaction reports are completed and submitted to the UCREF within required deadlines; i) receive and respond to information requests from the UCREF and any other authority acting within the framework of combating money laundering, terrorism financing, and proliferation.

Financial institutions must designate, in each branch, agency, or service point, a manager responsible for enforcing anti-money laundering laws and regulations and ensuring coordination with the compliance officer. To ensure the implementation of the prevention program, the compliance officer may delegate certain functions to other employees. Under no circumstances does the designation of these managers relieve the compliance officer of their legal responsibilities.

1.4 Risk Assessment

The prevention and compliance program must include a component regarding the assessment of money laundering and terrorism financing risks.

Risk assessment is an analysis of the money laundering and terrorism financing threats and weaknesses presented by the financial institution's activities. This assessment varies notably according to the size of the financial institution, its geographic location, and the activities conducted. A risk classification must be performed based