Guidelines on Targeted Sanctions in the Fight Against Terrorism Financing and the Proliferation of Weapons of Mass Destruction

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Bank of the Republic of Haiti

GUIDELINES FOR FINANCIAL INSTITUTIONS

These guidelines on the freezing of funds and other assets are issued to assist financial institutions in implementing targeted financial sanctions related to terrorism financing or the proliferation of weapons of mass destruction, in compliance with the provisions of the Decree of April 30, 2023, sanctioning money laundering, terrorism financing, and the financing of the proliferation of weapons of mass destruction.

1. Scope

These guidelines apply to:

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

2. Definitions

For the purposes of these guidelines, the following terms are defined as follows:

a) Asset: all types of assets, whether tangible or intangible, movable or immovable, as well as legal instruments or documents evidencing ownership of such assets or rights thereto.

b) Funds and other assets: any asset, including, without limitation, financial assets, economic resources (including oil and other natural resources), property of any kind, tangible or intangible, movable or immovable, regardless of how it was acquired, as well as legal instruments or documents in any form, including electronic or digital, evidencing ownership of such funds and other assets or rights thereto, including, without limitation, bank credits, traveler’s checks, bank checks, money orders, shares, securities, bonds, bills of exchange or letters of credit, and any interest, dividends, or other income or value derived from or generated by such funds and other assets, and any other assets that could be used to obtain funds, assets, or services or interests in such funds, assets, or services.

c) Freeze: the prohibition on the transfer, conversion, disposition, or movement of all funds and economic resources owned or controlled by designated persons or entities following a measure taken by the United Nations Security Council or a competent authority or court in accordance with applicable UN Security Council resolutions, for the duration of the validity of said measure.

d) Targeted financial sanctions: the freezing of funds and prohibitions aimed at preventing the making available, directly or indirectly, of funds and other assets for the benefit of designated persons, entities, groups, or enterprises.

e) Without delay: means, ideally, within a few hours following a designation by the UN Security Council or its relevant sanctions committees (e.g., Committee 1267, Committee 1988, Sanctions Committee 1718, or Sanctions Committee 1737). For the purposes of Resolution 1373 (2001), the term without delay refers to the moment when there are reasonable grounds or reasonable basis to suspect or believe that a person or entity is a terrorist, finances terrorism, or is a terrorist organization. In both cases, the term without delay should be interpreted in light of the need to prevent the flight or dispersal of funds and other assets linked to terrorists, terrorist organizations, those who finance terrorism, and the financing of the proliferation of weapons of mass destruction, as well as the need for coordinated global action to swiftly prohibit and interrupt the flow of financing.

3. The Sanctions Regime

At the international level, sanctions are decided by the United Nations Security Council, the European Union, or by States to restrict economic and financial relations with a State, persons, entities, or ad hoc groups. These sanctions have various public interest objectives, such as combating terrorism, combating the proliferation of weapons of mass destruction, coercion in response to serious human rights violations or acts threatening peace, etc.

As a member of the United Nations (UN), Haiti ensures the implementation of all asset-freezing measures established by the Security Council in the fight against terrorism financing and the financing of the proliferation of weapons of mass destruction.

Furthermore, the Financial Action Task Force (FATF) requires the global network, through Recommendations 6 and 7, to implement targeted financial sanctions to comply with Security Council resolutions related to the prevention and repression of terrorism, terrorism financing, and the financing of the proliferation of weapons of mass destruction. As a member of the Financial Action Task Force of the Caribbean (CARIFATF), Haiti also ensures the implementation of said recommendations.

4. The Legal Framework for Financial Sanctions

Targeted financial sanctions are based on various texts, namely:

a) United Nations Security Council Resolutions

UN members have conferred upon the Security Council the primary responsibility for maintaining international peace and security. To this end, the Security Council may adopt coercive measures through resolutions.

i) Combating Terrorism and Terrorism Financing

Haiti must implement a targeted financial sanctions regime in accordance with UN Security Council resolutions that require the immediate freezing of funds and other assets and ensure that no funds or other assets are made available or made available for the benefit of:

1. any person or entity designated by the Security Council under Chapter VII of the UN Charter pursuant to Resolution 1267 (1999) and its subsequent resolutions;
2. or any person or entity designated by Haiti pursuant to Resolution 1373 (2001).

ii) Proliferation of Weapons of Mass Destruction

Haiti must implement targeted financial sanctions in accordance with UN Security Council resolutions related to the prevention, repression, and interruption of the proliferation of weapons of mass destruction and its financing. These resolutions require the country to immediately freeze the funds and other assets of any person or entity designated by the UN Security Council or under its authority under Chapter VII of the UN Charter and to ensure that no funds or other assets are made, directly or indirectly, available or made available for the benefit of such person or entity. Notable resolutions include 1718 (2006), 1874 (2009), 2087 (2013), 2094 (2013), 2270 (2016), 2321 (2016), and 2356 (2017).

b) Provisions of the 2023 Decree

The Decree of April 30, 2023, specifies in Articles 97 to 115 the targeted financial sanctions regime by establishing, among other things, the obligations of the Ministry of Justice and Public Security (MJSP), those of financial institutions, and the effects of asset freezes.

c) Measures Adopted by Haitian Authorities

Articles 97, 101, and 102 of the 2023 Decree authorize the MJSP to:

• transpose, by ministerial order, the list of designated persons and entities established by the UN Security Council Sanctions Committee;
• identify and propose the designation of persons and entities in accordance with Resolutions 1267 (1999), 1373 (2001), and any subsequent resolution;
• transpose sanction lists established by other international bodies and designate persons and entities suspected of being linked to terrorism or terrorism financing;
• disseminate the list of designated entities to financial institutions immediately upon their listing as designated entities;
• order the freezing of funds and other assets of persons or entities identified as perpetrators of terrorism financing;
• order the immediate freezing of assets, funds, and other assets of persons designated under UN Security Council resolutions related to the prevention, repression, and interruption of the proliferation of weapons of mass destruction.

5. Implementation of Targeted Financial Sanctions

The implementation of targeted financial sanctions requires the freezing of funds and assets of potentially designated clients on the one hand, and the prohibition on making funds, other assets, or services available to them on the other. It is understood that asset freezing is only one category of measures and falls within the framework of economic or financial sanctions regimes.

The implementation procedure is identical whether it concerns terrorism financing or the financing of the proliferation of weapons of mass destruction.

It should be noted that the freezing obligation applies to all funds and other assets belonging to, owned or controlled by, the designated person or entity, including:

a) funds or economic resources belonging to the designated person or entity or held by it jointly with other parties; b) funds or economic resources owned or held directly or indirectly by the designated person or entity; c) funds or economic resources held by a person acting on behalf of or at the direction of the designated person or entity.

The freezing and prohibition measures have no time limit. They remain in force until the person or entity is removed from the national list or the Security Council list.

5.1. Freezing of Funds or Other Assets

Financial institutions that hold or receive funds or other assets on behalf of a client must:

• apply, without delay and without prior notice, freezing measures and prohibitions on making available or using them as provided by law;
• immediately report to the Central Unit for Financial Intelligence (UCREF) all frozen assets and measures taken in accordance with Security Council resolutions and taking into account the list of persons or entities designated by the Security Council;
• immediately report to the UCREF all attempted transactions by the designated client.

5.2. Prohibition on Making Funds, Other Assets, or Services Available

Financial institutions are prohibited from making, directly or indirectly, the funds or other assets subject to the freezing procedure available to the natural or legal person, entity, or body designated by a ministerial order of the MJSP, or from using them for their benefit.

Financial institutions are prohibited from providing or continuing to provide services to any natural or legal person, entity, or body designated by a ministerial order of the MJSP.

Financial institutions are prohibited from carrying out or participating in transactions intended or having the effect of circumventing, directly or indirectly, current laws or regulations.

5.3. Concrete Cases of Freezing Funds or Other Assets

Accounts

Financial institutions must not open accounts for designated persons or entities. They must not provide financial services to these persons. Debit transactions on frozen accounts must be suspended. However, frozen accounts may be credited, provided that these additional funds are also frozen and the transaction is reported to the UCREF.

Funds and other assets due under contracts, agreements, or obligations concluded or arising prior to the entry into force of the asset freezing decision shall be debited from frozen accounts. Income generated by the funds, instruments, and resources, as well as accrued interest, shall be credited to said accounts, provided that such income and interest are frozen.

Payments by payment cards or checks must be blocked.

Loans

Financial institutions cannot grant loans to a designated person or entity. Furthermore, these persons cannot provide collateral, security, or guarantees.

If a loan was granted before the freezing measures and the borrowed funds have not yet been made available to the designated person or entity, financial institutions cannot disburse the funds after the freezing measures enter into force.

Transfers

Financial institutions must, when processing payments or fund transfers, apply freezing measures and not conduct transactions with persons and entities designated in accordance with resolutions related to the prevention and repression of terrorism and terrorism financing, and the prevention, suppression, and interruption of the proliferation of weapons of mass destruction and its financing.

Financial institutions that receive a fund transfer order either in favor of a person or entity subject to a freezing measure, or from a person or entity subject to a freezing measure, must suspend the execution of said order and, without delay, inform the UCREF. The funds subject to the suspended transfer order are frozen.

6. Obligations of Financial Institutions

Financial institutions must identify, assess, monitor, manage, and mitigate risks related to targeted financial sanctions.

Financial institutions must continuously conduct database screening to ensure that existing clients, agents, and beneficial owners are not subject to targeted financial sanctions. Screening is particularly required:

• upon each update of the national list issued by the MJSP and the UN list (see: https://www.un.org/securitycouncil/fr/content/un-sc-consolidated-list)
• prior to the onboarding process;
• during customer profile reviews.

Financial institutions must develop policies and procedures on targeted financial sanctions in accordance with the requirements of the 2023 Decree. They must ensure that staff are trained on obligations related to targeted financial sanctions.

Financial institutions must report to the UCREF any implementation of a freezing measure in accordance with its directives.

7. Unfreezing of Frozen Funds

Pursuant to Article 109 of the Decree of April 30, 2023, the Minister of Justice and Public Security may authorize, under conditions deemed appropriate, access to funds and other assets by the designated person or entity, provided they are for essential or extraordinary expenses.

Essential expenses are basic expenditures for subsistence, rent, mortgage repayments, medication and medical expenses, taxes, insurance premiums, reasonable professional fee payments, reimbursement of expenses corresponding to legal services, or fees or commissions related to the custody or management of frozen funds or other assets.

Pursuant to Article 107 of the Decree of April 30, 2023, the MJSP communicates de-listing or unfreezing decisions for funds and other assets to financial institutions immediately upon such a decision being made and must provide directives to financial institutions on this matter.

8. Sanctions

In the event that a financial institution violates the obligations to freeze funds and other assets and to refrain from making funds and other assets available, the BRH reserves the right to initiate any appropriate procedure and/or take any administrative measures in accordance with the law and current regulations.

Sanctions may include:

a) fines: five hundred thousand gourdes (500,000.00 HTG) per violation found, b) administrative sanctions (warning, suspension of activity, withdrawal of license, or permanent prohibition in the most serious cases) without prejudice to those provided by law, and those resulting from the civil or criminal liability of the financial institution, which may be pursued due to the commission of the offense.

The BRH may require a financial institution to make necessary corrections regarding violations of current laws and regulations. Failure to comply with the corrective actions required by the BRH subjects the financial institution to a penalty of three hundred thousand gourdes (300,000.00 HTG) per day of violation, starting from the date the violation is notified by the BRH, not exceeding thirty (30) days.

Any penalty will be deducted from the balance of the offending institution's account at the BRH.

9. Freezing Measures Adopted Pursuant to Resolution 2653 (2022)

The asset freezing measures established under Resolution 2653 (2022) and subsequent resolutions require Member States to immediately freeze all funds, other financial assets, and economic resources located within their territory that are in the possession or under the direct or indirect control of persons or entities designated by the Sanctions Committee, or of any person or entity acting on their behalf or at their direction, or of any entity in their possession or under their control. These funds, financial assets, or economic resources must not be made available, directly or indirectly, to designated persons or entities.

Financial institutions are required to apply said freezing measures to designated persons or entities and implement the procedure outlined within these guidelines.

10. Entry into Force

These guidelines enter into force on March 2, 2026.

Port-au-Prince, February 11, 2026

[Signature] Ronald Gabriel Governor