Directive No. 04/2007/CM/UEMOA on Combating Terrorism Financing in the Member States of UEMOA

UNION ECONOMIQUE ET MONETAIRE OUEST AFRICAINE

The Council of Ministers
DIRECTIVE No. 04/2007/CM/UEMOA
ON COMBATING TERRORISM 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), signed on 10 January 1994, particularly Articles 6, 7, 16, 21, 42, 43, 97, 98 and 113; HAVING REGARD TO the Treaty of 14 November 1973 establishing the West African Monetary Union (UMOA), particularly Article 22; HAVING REGARD to Regulation No. 14/2002/CM/UEMOA of 19 September 2002 on the freezing of funds and other financial resources in the context of combating terrorism financing in the member states of the West African Economic and Monetary Union (UEMOA); HAVING REGARD to Directive No. 07/2002/CM/UEMOA of 19 September 2002 on combating money laundering in the member states of the West African Economic and Monetary Union (UEMOA); CONSIDERING the seriousness of the threats posed by terrorism to international peace and security; CONSIDERING the urgent need for all States to firmly commit themselves to combating this global scourge, namely terrorism; EAGER to implement international recommendations on combating terrorism financing, particularly those arising from the United Nations Convention of 9 December 1999 for the suppression of terrorism financing and the Special Recommendations of the Financial Action Task Force (FATF); DESIROUS of equipping UEMOA member states with a specific legal framework to define and criminalize terrorism financing; ON the joint proposal of the UEMOA Commission and the Central Bank of West African States (BCEAO); AFTER opinion of the Statutory Committee of Experts dated 22 June 2007; ENACTS THE DIRECTIVE FOLLOWS:

TITLE I: PRELIMINARY PROVISIONS
Article 1: Definitions
For the purposes of this Directive, the terms and expressions below shall have the meanings given in Article 1 of Directive No. 07/2002/CM/UEMOA of 19 September 2002 on combating money laundering in the member states of UEMOA:
« Regional financial market actors, author, supervisory authorities, public authorities, economic beneficiary, BCEAO or Central Bank, assets, CENTIF, confiscation, member state, third country, underlying offence, UCITS, financial institutions, UEMOA, UMOA, Union ». The following are also understood as:

1. competent authorities: national bodies empowered by regulation to carry out or order the acts or measures provided for in this Directive;
2. judicial authority: the body empowered by regulation to carry out investigative or enforcement acts or to render judicial decisions;
3. prosecuting authority: the body empowered by regulation, even occasionally, to exercise the power to apply penalties;
4. money laundering: the offence as defined in Articles 2 and 3 of Directive No. 07/2002/CM/UEMOA of 19 September 2002 on combating money laundering in the member states of UEMOA;
5. occasional clients: natural or legal persons who obtain periodic services from financial institutions, in the absence of lasting business relationships that make them regular clients;
6. Convention: the United Nations Convention of 9 December 1999 for the suppression of terrorism financing;
7. funds and other financial resources: all financial assets and economic benefits of any nature, including but not limited to cash, cheques, monetary claims, bills of exchange, payment orders and other payment instruments, deposits with banks and financial institutions, account balances, claims and debt securities, negotiable securities and debt instruments, notably shares and other equity instruments, securities certificates, bonds, promissory notes, warrants, unpledged securities, derivative product contracts, interest, dividends or other income from assets or capital gains on assets, credit, right of set-off, guarantees, performance bonds or other financial commitments, letters of credit, bills of lading, sales contracts, any document evidencing ownership of fund shares or financial resources and any other export financing instrument;
8. freezing of funds and other financial resources: any action aimed at preventing any movement, transfer, alteration, use or manipulation of funds that would result in a change to their volume, amount, location, ownership, possession, nature, destination or any other modification that could enable their use, notably portfolio management;
9. 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;
10. instrument: any asset used or to be used, wholly or in part and in any manner whatsoever, to commit a criminal offence;
11. manual foreign exchange operation: the immediate exchange of banknotes or currencies denominated in different currencies, effected by transfer or delivery of cash, against settlement by another payment method denominated in a foreign currency;
12. criminal organization: any structured agreement or association aimed at committing, notably terrorism financing offences;
13. foreign financial institutions: financial institutions established outside the common territory of the member states;
14. Money Mules: persons who carry out physical cross-border transfers of cash or bearer-negotiable instruments, or who knowingly assist in carrying out such operations.
15. Politically Exposed Person (PEP): a person who exercises or has exercised important public functions in another member state or third country, notably a Head of State or Government, senior politician, high-ranking public official, diplomat, senior magistrate or military officer, executive of a public enterprise or political party leader, including close family members of the PEP in question, as well as persons known to be closely associated with them;
16. proceeds: all funds derived, directly or indirectly, from the commission of an offence as provided in Articles 4 and 5 below, or obtained, directly or indirectly, through the commission of such an offence;
17. seizure: the act by a competent authority to ensure the custody or control of assets upon decision of a Court or other competent authority;
18. electronic transfer: any electronic transaction carried out on behalf of an ordering person, natural or legal, via a financial institution to make a certain sum of money available to a beneficiary in another financial institution, the ordering person and the beneficiary possibly being the same person.

TITLE II: GENERAL PROVISIONS
Chapter I: Subject Matter of the Directive and Criminalization of Terrorism Financing
Article 2: Subject Matter of the Directive
This Directive aims to define the legal framework for combating terrorism financing in member states, by implementing the United Nations Convention of 9 December 1999 for the suppression of terrorism financing and its nine (9) annexes, as well as the main international recommendations against terrorism financing.

Article 3: Interdependence of mechanisms for combating transnational financial crime in member states
This Directive complements and strengthens the entire framework for combating transnational financial crime currently in force in member states, particularly texts relating to money laundering.

Article 4: Definition of terrorism financing
For the purposes of this Directive, terrorism financing is defined as the offence consisting in providing, collecting or managing, or attempting to provide, collect or manage, funds, assets, financial services or other means, by any means whatsoever, directly or indirectly, deliberately, with the intention that they be used, or knowing that they will be used, in whole or in part, to commit:

1. an act constituting an offence under one of the international legal instruments listed in the annex to this Directive, regardless of whether such an act occurs;
2. 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 do or abstain from doing any act.
   The offence of terrorism financing as thus defined is constituted even if the funds have not actually been used to commit the acts referred to above.
   There is terrorism financing even if the facts giving rise to the acquisition, holding and transfer of assets destined for terrorism financing are committed in another member state or a third country.

Article 5: Association, agreement or complicity for terrorism financing
The agreement or participation in an association aimed at committing an act constituting terrorism financing, as defined in Article 4 above, the association to commit said act, assistance, inducement or advice given to a natural or legal person with a view to executing or facilitating its execution, also constitute terrorism financing offences.

Article 6: Criminalization of terrorism financing and money laundering committed in the context of terrorist activities
Member states shall take necessary measures to:

1. criminalize under their internal law the acts referred to in Articles 4 and 5 above;
2. punish these offences with appropriate penalties taking into account their seriousness.
   Each member state ensures that the offences referred to in Articles 4 and 5 above are designated as underlying offences for money laundering.

Article 7: Refusal of any justification
No consideration of a political, philosophical, ideological, racial, ethnic or religious nature, nor any analogous reason, may be invoked to justify the commission of one of the offences referred to in Articles 4 and 5 above.

Chapter II: Scope of Application of the Directive
Article 8: Persons subject to the directive
The persons subject to the provisions of Title III of this Directive are those referred to in Article 5 of Directive No. 07/2002/CM/UEMOA of 19 September 2002 on combating money laundering in the member states of UEMOA, namely:
a) the Treasury departments of member states; b) the BCEAO; c) financial institutions; d) members of independent legal professions, when they represent or assist clients outside any judicial proceedings, notably in the following activities:
. purchase and sale of goods, commercial businesses or business assets; . handling of money, securities or other assets belonging to the client; . opening or management of bank, savings or securities accounts; . formation, management or direction of companies, trusts or similar structures, execution of other financial operations; e) other regulated entities, notably:
. Business introducers to financial institutions; . Statutory auditors; . Real estate agents; . Dealers in high-value goods, such as works of art (paintings, masks notably), stones and precious metals; . Money couriers; . Managers, owners and directors of casinos and gaming establishments, including national lotteries; . Travel agencies. Non-profit organizations subject to specific vigilance obligations are also subject to the provisions of Title III of this Directive.

TITLE III: PREVENTION AND DETECTION OF TERRORISM FINANCING
Article 9: Application of the provisions of Titles II and III of Directive No. 07/2002/CM/UEMOA of 19 September 2002 on combating money laundering in the member states of UEMOA
The obligations imposed on regulated entities by the provisions of Titles II and III of Directive No. 07/2002/CM/UEMOA of 19 September 2002 on combating money laundering in the member states of UEMOA, dedicated to the prevention and detection of money laundering, apply ipso facto in combating terrorism financing.

Article 10: Obligation to file a suspicion report
Member states commit to taking appropriate measures to extend the powers of CENTIF to enable it to collect and process information on terrorism financing.
Member states ensure that the natural and legal persons referred to in Article 8 above make, without delay, suspicion reports to CENTIF, under the terms and procedures provided for in Articles 26 to 30 of Directive No. 07/2002/CM/UEMOA of 19 September 2002 on combating money laundering in the member states of UEMOA, when they suspect or have reasonable grounds to suspect that funds are linked, associated or destined to be used for terrorism financing or terrorist acts, as defined in Articles 4 and 5 above. Member states undertake to take necessary provisions to exempt organizations and other financial intermediaries from any civil or criminal liability when they have made in good faith the report provided for in the preceding paragraph.

Article 11: Specific obligations of financial institutions
Member states subject financial institutions to the following specific obligations:

1. identification of their clients and, where applicable, persons on whose behalf they act, upon production of supporting documentation when establishing business relationships, and in particular, for certain financial institutions, when opening an account regardless of its nature or offering custody services;
2. identification of clients other than those referred to in the previous paragraph, for any transaction whose amount or equivalent in CFA francs reaches or exceeds five million (5,000,000) CFA francs, whether carried out in a single transaction or several linked transactions; where the total amount is not known at the time of the transaction, the concerned financial institution proceeds with identification as soon as it becomes aware that the threshold is met;
3. adoption, in case of doubt as to whether clients referred to in paragraphs 1 and 2 above act for their own account, or in case of certainty that they do not act for their own account, of reasonable measures to obtain information on the real identity of persons on whose behalf these clients act;
4. identification of clients, even if the transaction amount is below the threshold indicated in paragraph 2 above, as soon as there is suspicion of terrorism financing;
5. adoption of necessary provisions to address increased risks in terrorism financing when establishing business relationships or carrying out a transaction with a client who is not physically present for identification, namely in the context of distance operations; these provisions must in particular guarantee that the client's identity is established, notably by requesting additional supporting documents, additional verification or certification measures for provided documents, or confirmation attestations from a financial institution, or by requiring that the first payment of operations be made through an account opened in the client's name with a financial institution subject to an equivalent identification obligation;
6. thorough examination of any transaction likely, by its nature, surrounding circumstances or quality of persons involved, to be linked to terrorism financing;
7. continuous monitoring of their clients throughout any business relationship, the level of which depends on the degree of risk of clients being linked to terrorism financing.
   Member states take necessary measures to allow financial institutions to entrust, by written mandate, solely foreign financial institutions operating in the same sector and subject to an equivalent identification obligation, the execution of their identification obligations imposed by this provision; the mandate contract must guarantee, at all times, the right of access to identification documents during the period referred to in Article 12 of this Directive and the delivery of at least one copy of said documents to the principals, who remain responsible for the proper fulfillment of identification obligations. Member states ensure that financial institutions are exempt from the identification obligations provided in this article, where the client is also a financial institution established in a member state subject to an equivalent identification obligation.

Article 12: Retention of documents, records and statistical data
Member states ensure that financial institutions are obliged to retain, for the purpose of serving as evidence in any investigation relating to terrorism financing:

1. in matters of identification, the copy or references of required documents, for a period of ten (10) years from the closure of their accounts or cessation of relations with regular or occasional clients, without prejudice to longer retention periods prescribed by other existing legislative or regulatory texts;
2. for transactions, supporting documents and records consisting of original documents or copies having similar probative value under the law of each member state, for a period of ten (10) years from the fiscal year in which the operations were carried out, without prejudice to longer retention periods prescribed by other existing legislative or regulatory texts.

Article 13: Transmission of funds or securities
Member states commit to taking measures to ensure that natural or legal persons providing a fund or securities transmission service obtain authorization to operate, and are subject to the framework for combating organized crime currently in force in UEMOA member states, particularly general and specific obligations applicable to financial institutions regarding prevention and detection of operations related to money laundering and terrorism financing. Member states ensure that natural or legal persons providing the services referred to in the first paragraph illegally are subject to administrative, civil or criminal sanctions.

Article 14: Information accompanying electronic transfers
Member states take necessary measures to ensure that any cross-border electronic transfer is accompanied by accurate information relating to the ordering person. This information includes notably their account number or, in the absence of an account number, a unique reference number accompanying the transfer. Member states ensure that any national electronic transfer includes the same data as cross-border transfers, unless all information relating to the ordering person can be made available to beneficiary financial institutions and competent authorities by other means.

Article 15: Specific vigilance obligations regarding Politically Exposed Persons (PEPs)
Each member state ensures that financial institutions apply, based on their risk assessment, enhanced vigilance measures during transactions or business relationships with PEPs residing in another member state or third country, notably to prevent or detect operations related to terrorism financing. To this end, it takes appropriate measures to establish the origin of wealth or funds.

Article 16: Specific vigilance obligations regarding non-profit organizations
Member states implement, in accordance with their internal law rules, specific vigilance measures regarding non-profit organizations, notably to prevent their involvement in actions related to terrorism financing. To this end, they require any non-profit organization wishing to collect, receive or order fund transfers:

1. registration on a register established for this purpose by the competent authority of each member state. The initial registration request includes the names, first names, addresses and telephone numbers of any person responsible for managing the concerned organization, including notably the president, vice-president, secretary general, members of the Board of Directors and treasurer as applicable;
2. communication to the authority responsible for maintaining the register, of any changes in the composition of previously designated responsible persons referred to in the previous paragraph.
   Member states ensure that any donation made to a non-profit organization is recorded in the register...