Instruction No. 006/2007-CSBF Annex 3 Glossary

COMMISSION DE SUPERVISION BANCAIRE ET FINANCIERE ___________________ 1
Annex 3 to Instruction No. 006/2007-CSBF
GLOSSARY

---

Terms	Definition
Beneficial Owner (art. 27, 28)	Beneficial owner
Money Laundering	- The conversion or transfer of funds or any other assets, with the aim of concealing or disguising the illicit origin of the assets or of assisting any person who is involved in the commission of the principal offence to evade the legal consequences of his acts;

• The concealment or disguise of the true nature, source, location, disposition, movement, rights with respect to, or ownership of, funds or any other assets;
• The acquisition, possession or use of funds or any other assets, by a person who knows that such funds or assets constitute the proceeds of crime. |
  | Short period of time (art. 26) | It is for the covered institutions to determine this period taking into account the nature and importance of the money laundering risk incurred, the clients' backgrounds, their country of origin or residence, the origin of their funds, the links between accounts, the types of transactions they carry out on their bank accounts or their professional activities. |
  | --- | --- |
  | Rigorous criteria (Annex 2, point VII - 10) | Adequate selection procedures during recruitment, which include, among other things, a background check to ensure that the new recruit has not been convicted of a crime, an offence under corruption legislation, an offence under drug legislation, money laundering, terrorist financing and usury, or for attempt or complicity in all these offences. |
  | Ordering Customer (art. 30, 34, 35, 36, 41) | The account holder, or in the absence of an account, the person (natural or legal) who instructs the financial institution to carry out a banking transaction (electronic transfer, etc.). |
  | SUS (art. 3, 4, 6, 24, 45) | Suspicious Transaction Report. |
  | FATF (art. 7, 23, 32) | Its purpose is the protection of the global financial system against money laundering. Its publications are accessible at the following internet address: www.fatf-gafi.org. |

Terms	Definition
Predicate Offence (art. 44)	Any criminal offence as cited below, even if committed abroad, which enabled its perpetrator to obtain proceeds:

• Participation in an organized criminal group and racketeering;
• Terrorism, including its financing;
• Trafficking in human beings and illicit trafficking in migrants;
• Sexual exploitation, including that of children;
• Illicit trafficking in narcotic drugs and psychotropic substances;
• Trafficking in arms;
• Illicit trafficking in stolen goods and other goods;
• Corruption;
• Fraud and swindling;
• Counterfeiting of currency;
• Counterfeiting and piracy of products;
• Crimes against the environment;
• Murder and grievous bodily injury;
• Abduction, kidnapping and hostage-taking;
• Theft;
• Smuggling;
• Extortion;
• Forgery;
• Piracy;
• Insider dealing and market manipulation. |
  | Reasonable measures (art. 22) | Measures that will elicit relevant information from the client, the use of information available from other entities such as BIANCO on politically exposed persons. |
  | --- | --- |
  | Suspicious Transactions (art. 2, 3, 27) | - Transactions involving funds or assets that may originate from a crime or offence or be part of a process of money laundering or terrorist financing; |
• Funds or any other assets that are in their possession when they may be linked to a crime or offence or be part of a process of money laundering or terrorist financing;
• Transactions where the identity of the ordering customer or the beneficiary remains doubtful despite the diligence carried out in accordance with the provisions in force regarding customer identification;
• Transactions carried out for own account or for the account of third parties with legal entities including their subsidiaries or branches, acting in the form of or for the account of trust funds or any other asset management instrument of a specific purpose whose identity of the settlors or beneficiaries is not known. |

Terms	Definition
Executive Body (art. 9, 15)	The body comprising the persons covered by banking legislation, called upon to ensure the effective determination of the direction of the establishment's activity. This body is responsible for the day-to-day management of the establishment as a business owner and represents it vis-à-vis third parties.
Assets (art. 22, 41)	The totality of family assets, assets inherited from father and mother:

• Assets:
  • Real estate,
  • Business assets,
  • Industrial, agricultural, forestry, or fishing enterprises or operations,
  • Vehicles,
  • Boats,
  • Shares in companies, stocks, bonds,
  • Assets located abroad or escaping Malagasy jurisdiction,
  • Assets held by third parties on behalf of or for the account of the spouse,
• Liabilities. |
  | Politically Exposed Person (PEP) (art. 21) | A person who exercises or has exercised important public functions such as:
• Head of State,
• Head of Government,
• Senior politicians,
• Senior officials within public powers:
  • Ministers,
  • Senators,
  • Members of Parliament,
  • Heads of institutions,
  • Regional Chiefs,
  • Mayors,
  • General Secretaries of Ministries,
  • Civil servants occupying posts of high responsibility at a level equal to or higher than that of Ministry Director,
  • Inspectors of Land, Treasury, Customs, Taxes and Finance,
  • Inspectors of the General State Inspection,
• Magistrates of the judicial, administrative and financial order,
• Senior military personnel:
  • General officers of the army, police and gendarmerie,
  • Inspectors of the General Army Inspection and the General Gendarmerie Inspection,
• Managers of a public company,
• Political party leader,
• Any natural or legal persons who are clearly linked to the aforementioned persons.
  Link: Spouse and children
  Seniority: 5 years after cessation of function |

Terms	Definition
Risk higher than average (art. 20)	It is for the covered institutions to determine the threshold of risk higher than average taking into account the nature and importance of the money laundering risk incurred, the clients' backgrounds, their country of origin or residence, the origin of their funds, the links between accounts, the types of transactions they carry out on their bank accounts or their professional activities.
Sampana Malagasy Iadiana amin’ny Famotsiam-bola ou SAMIFIN (art. 3, 4, 5, 6, 7, 8, 13, 16, 24, 30, 33, 38, 41, 42, 43, 45)	Financial Intelligence Unit authorized to receive SUS.
Third Party (art 11)	All institutions, subject to regulation and supervision in the field of combating money laundering and terrorist financing, able to provide information or intelligence on the transaction.
Electronic Transfer (Chapter 5)	Any transaction carried out electronically on behalf of an ordering customer (whether a natural or legal person) via a financial institution with a view to making a certain sum of money available to a beneficiary in another financial institution. The ordering customer and the beneficiary may be the same person.
National Transfer (art. 36)	Any transfer where the ordering customer's financial institution and the beneficiary's are located in the same country. This concerns any chain of electronic transfers that is entirely executed within the borders of the same country, even if the system used to carry out an electronic transfer is located in another country.
Cross-border Transfer (art. 35)	Any transfer where the ordering customer's institution and the beneficiary's are located in different countries. This term also refers to any chain of electronic transfers comprising at least one cross-border element.