Law No. 23-01 Modifying and Complementing Law No. 05-01 on the Prevention and Fight Against Money Laundering and Terrorist Financing

6 JOURNAL OFFICIEL DE LA REPUBLIQUE ALGERIENNE N° 08 17 Rajab 1444 8 février 2023 Law No. 23-01 of 16 Rajab 1444 corresponding to 7 February 2023 modifying and complementing Law No. 05-01 of 27 Dhou El Hidja 1425 corresponding to 6 February 2005 on the prevention and fight against money laundering and terrorist financing. ———— The President of the Republic, Having regard to the Constitution, particularly its Articles 139-7°, 141 (second paragraph), 143, 144 (second paragraph), 145 and 148; Having regard to the Arab Convention on the Fight Against Terrorism, signed in Cairo on 25 Dhou El Hidja 1418 corresponding to 22 April 1998, adopted by Presidential Decree No. 98-413 of 18 Chaâbane 1419 corresponding to 7 December 1998; Having regard to the International Covenant on Economic, Social and Cultural Rights, the International Covenant on Civil and Political Rights and the Optional Protocol to the International Covenant on Civil and Political Rights, adopted by Presidential Decree No. 89-67 of 16 May 1989; Having regard to the United Nations Convention against Illicit Traffic in Narcotic Drugs and Psychotropic Substances, adopted in Vienna on 20 December 1988 and adopted with reservation by Presidential Decree No. 95-41 of 26 Chaâbane 1415 corresponding to 28 January 1995; Having regard to the Organization of African Unity Convention on the Prevention and Fight Against Terrorism, adopted by the 35th ordinary session of the Conference of Heads of State and Government of the OAU, held in Algiers from 12 to 14 July 1999 and adopted by Presidential Decree No. 2000-79 of 4 Moharram 1421 corresponding to 9 April 2000; Having regard to the International Convention for the Suppression of the Financing of Terrorism, adopted by the General Assembly of the United Nations on 9 December 1999, adopted by Presidential Decree No. 2000-445 of 27 Ramadhan 1421 corresponding to 23 December 2000; Having regard to the United Nations Convention against Transnational Organized Crime, adopted by the General Assembly of the United Nations on 15 November 2000, adopted by Presidential Decree No. 02-55 of 22 Dhou El Kaâda 1422 corresponding to 5 February 2002; Having regard to the Protocol to Prevent, Suppress and Punish Trafficking in Persons, Especially Women and Children, supplementing the United Nations Convention against Transnational Organized Crime, adopted by the General Assembly of the United Nations on 15 November 2000 and adopted by Presidential Decree No. 03-417 of 14 Ramadhan 1424 corresponding to 9 November 2003; Having regard to the Protocol against the Smuggling of Migrants by Land, Sea and Air, supplementing the United Nations Convention against Transnational Organized Crime, adopted by the General Assembly of the United Nations on 15 November 2000 and adopted by Presidential Decree No. 03-418 of 14 Ramadhan 1424 corresponding to 9 November 2003; Having regard to the International Convention for the Suppression of Acts of Nuclear Terrorism, opened for
signature at the headquarters of the United Nations in New York on 14 September 2005, adopted with reservation by Presidential Decree No. 10-270 of 26 Dhou El Kaâda 1431 corresponding to 3 November 2010; Having regard to Ordinance No. 66-155 of 8 June 1966, as amended and supplemented, establishing the Code of Criminal Procedure; Having regard to Ordinance No. 66-156 of 8 June 1966, as amended and supplemented, establishing the Penal Code; Having regard to Ordinance No. 77-03 of 19 February 1977 on solicitations; Having regard to Legislative Decree No. 93-10 of 23 May 1993, as amended and supplemented, on the stock exchange; Having regard to Ordinance No. 95-07 of 23 Chaâbane 1415 corresponding to 25 January 1995, as amended and supplemented, on insurance; Having regard to Ordinance No. 96-22 of 23 Safar 1417 corresponding to 9 July 1996, as amended and supplemented, on the repression of the offense against the legislation and regulation of exchange and capital movements to and from abroad; Having regard to Ordinance No. 03-11 of 27 Joumada Ethania 1424 corresponding to 26 August 2003, as amended and supplemented, on currency and credit; Having regard to Law No. 05-01 of 27 Dhou El Hidja 1425 corresponding to 6 February 2005, as amended and supplemented, on the prevention and fight against money laundering and terrorist financing; Having regard to Law No. 06-01 of 21 Moharram 1427 corresponding to 20 February 2006, as amended and supplemented, on the prevention and fight against corruption; Having regard to Law No. 06-02 of 21 Moharram 1427 corresponding to 20 February 2006 organizing the notary profession; Having regard to Law No. 06-03 of 21 Moharram 1427 corresponding to 20 February 2006 organizing the bailiff profession; Having regard to Law No. 08-09 of 18 Safar 1429 corresponding to 25 February 2008, as amended and supplemented, establishing the code of civil and administrative procedure;

JOURNAL OFFICIEL DE LA REPUBLIQUE ALGERIENNE N° 08 7 17 Rajab 1444 8 février 2023 Having regard to Law No. 10-01 of 16 Rajab 1431 corresponding to 29 July 2010 on the profession of chartered accountant, auditor and certified accountant; Having regard to Law No. 12-06 of 18 Safar 1433 corresponding to 12 January 2012 on associations; Having regard to Law No. 13-07 of 24 Dhou El Hidja 1434 corresponding to 29 October 2013 organizing the lawyer profession; Having regard to Law No. 16-07 of 29 Chaoual 1437 corresponding to 3 August 2016 organizing the auctioneer profession; Having regard to Law No. 18-04 of 24 Chaâbane 1439 corresponding to 10 May 2018 setting the general rules relating to the postal and electronic communications services; Having regard to Law No. 18-07 of 25 Ramadhan 1439 corresponding to 10 June 2018 on the protection of natural persons in the processing of personal data; After opinion of the Council of State, After adoption by Parliament, Promulgates the law whose text follows:

Article 1. — This law aims to modify and
complement Law No. 05-01 of 27 Dhou El Hidja 1425 corresponding to 6 February 2005, as amended and supplemented, on the prevention and fight against money laundering and terrorist financing.

Art. 2. — Articles 2 and 4 of Law No. 05-01 of 27 Dhou El Hidja 1425 corresponding to 6 February 2005 mentioned above, are modified, supplemented and drafted as follows:

« Art. 2. — First paragraph ........... (no change) ...........
The offense of money laundering is independent of the principal offense, whether the perpetrator of the principal offense is convicted or not ».

« Art. 4. — For the purposes of this law, the following terms are defined:
— funds: funds and assets of any nature, including economic resources and virtual financial assets, tangible or intangible, movable or immovable, acquired by any means whatsoever, directly or indirectly and documents or legal instruments in any form whatsoever, including but not exclusively in electronic or digital form, which attest to a right of ownership or an interest in these funds and assets, notably bank credits, checks, traveler's checks, money orders, shares, securities, bonds, bills of exchange and letters of credit and any interest, dividends and other income or values derived from such funds and assets of any nature or generated by them and all other assets that could be used to obtain funds, assets or services; — virtual assets: a digital value that can be exchanged digitally, transferred or used for payment or investment purposes; — predicate offense: any offense, even committed abroad, that enabled its perpetrators to obtain the funds and/or assets provided for by this law; — obligated entities: financial institutions and designated non-financial businesses and professions having the obligation to apply preventive measures, including the suspicious transaction report, as stipulated by this law and the regulations and directives issued by regulatory, supervisory and/or monitoring authorities; — financial institution: any natural or legal person who exercises, on a commercial basis, one or more of the following activities or operations, on behalf of or for the account of a client:

1. receipt of funds and other repayable deposits;
2. lending or credit;
3. leasing, except financial leasing relating to consumer products;
   ......................... (no change) .........................
   — designated non-financial businesses and professions:
   any natural or legal person who carries out activities other than those practiced by financial institutions, including regulated liberal professions, notably lawyers when they carry out financial transactions on behalf of their clients as well as notaries, bailiffs, auctioneers, chartered accountants, .............. (no change) ......... ; — terrorist: ................ (no change) .............. ; — terrorist organization: ....... (no change) ....... ; — terrorist act: .............. (no change) ............. ; — risk-based approach: a set of measures and procedures aimed at identifying, assessing, understanding and mitigating the risks of money laundering, terrorist financing and financing of proliferation of weapons of mass destruction; — financing of proliferation of weapons of mass destruction: the financing of the proliferation of weapons of mass destruction, notably nuclear, chemical, toxin, 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; — specialized body: ............ (no change) ........... ; — competent authorities: ........ (no change) ........ ; — freezing and/or seizure: ............... (no change) ............ ;

8 JOURNAL OFFICIEL DE LA REPUBLIQUE ALGERIENNE N° 08 17 Rajab 1444 8 février 2023 — politically exposed persons: any Algerian or foreigner elected or appointed, who exercises or has exercised, in Algeria or abroad, high legislative, executive, administrative or judicial functions as well as senior officials of political parties; — politically exposed persons within international organizations: persons who exercise or have exercised important functions within or for the account of an international organization; — beneficial owner: the natural person or persons who, ultimately:

1. own or control a client, the client's agent or the beneficiaries of life insurance contracts, and/or
2. the natural person on whose behalf a transaction is conducted or a business relationship is established.
   Persons who exercise ultimate effective control over a legal person are also included; — parallel financial investigation: a financial investigation conducted in parallel with the criminal investigation into cases of money laundering, terrorist financing or financing of the proliferation of weapons of mass destruction. The parallel financial investigation aims to:
   a) determine the extent of criminal networks and/or the severity of the offense; b) identify and detect the proceeds of predicate offenses, money laundering offenses, terrorist funds and all funds and assets that may be seized or confiscated. — regulatory, supervisory and/or monitoring authorities:
   the competent authorities designated to ensure the compliance of financial institutions and designated non-financial institutions and professions with the requirements for prevention and fight against money laundering and terrorist financing and the financing of the proliferation of weapons of mass destruction; — the National Committee: the National Committee for the assessment of risks of money laundering, terrorist financing and financing of the proliferation of weapons of mass destruction, provided for by the current regulations; — the Court of Algiers: .......... (no change) ........ ».

Art. 3. — Law No. 05-01 of 27 Dhou El Hidja 1425 mentioned above, is supplemented by Articles 5 bis 1, 5 bis 2, 5 bis 3, 5 bis 4 and 5 bis 5, drafted as follows:

« Art. 5 bis 1. — The National Committee takes appropriate measures to identify, assess, understand and mitigate the risks of money laundering and terrorist financing and the proliferation of weapons of mass destruction to which the Algerian Republic is exposed and keeps this assessment up to date ».

« Art. 5 bis 2. — Obligated entities must take appropriate measures to identify and assess the risks of money laundering, terrorist financing and the proliferation of weapons of mass destruction to which they are exposed, including risks related to clients even occasional ones, countries or geographic areas and to products, services, operations and distribution channels. They must consider all relevant risk factors before determining the overall risk level and the level and type of appropriate measures to apply to mitigate these risks. These measures must be proportionate to the nature and size of the obligated entities as well as to the volume of their activities. The assessments mentioned in the first paragraph above are documented, kept up to date and made available to the competent authorities and supervisory and control bodies ».

« Art. 5 bis 3. — Supervisory and control authorities as well as obligated entities must implement practical programs and measures based on the risk-based approach, aimed at combating money laundering, terrorist financing and the proliferation of weapons of mass destruction and monitoring their implementation. This approach allows obligated entities to:
— identify, assess and understand the risks of money laundering and terrorist financing and the proliferation of weapons of mass destruction and take measures likely to mitigate them; — take enhanced measures to manage and mitigate risks identified as high; — adopt simplified procedures when identifying low risks ».

« Art. 5 bis 4. — Any association or non-profit organization that collects, receives, gives or transfers funds as part of its activity is subject to appropriate supervision by its competent control body. The supervisory and control authority establishes rules intended to guarantee that the funds of non-profit organizations are not used for money laundering, terrorist financing and the proliferation of weapons of mass destruction. That authority is in charge, in particular, of:
— implementing programs and practical measures based on the risk-based approach to combat money laundering, terrorist financing and the proliferation of weapons of mass destruction and controlling their implementation;

JOURNAL OFFICIEL DE LA REPUBLIQUE ALGERIENNE N° 08 9 17 Rajab 1444 8 février 2023 — conducting an assessment of money laundering, terrorist financing and proliferation of weapons of mass destruction risks related to associations and non-profit organizations and ensuring its regular update; — collecting information, data and statistics concerning associations and non-profit organizations ».

« Art. 5 bis 5. — Associations or non-profit organizations must adopt the following prudent management rules:
— refrain from receiving any donations or subsidies whose origin is unknown or derived from illegal acts; — refrain from receiving any donations or subsidies considered by law as a misdemeanor or crime, from natural or legal persons or organizations or bodies involved, inside or outside the territory of the Republic, in activities related to terrorist offenses; — refrain from receiving any cash without prior authorization from the competent authority, in accordance with the provisions provided by the legislation and regulations in force ».

Article 4. – Articles 7, 7 bis, 8, 10 bis, 10 bis 1, 10 bis 2, 10 bis 3, 10 bis 4 and 10 bis 5 of Law No. 05-01 of
27 Dhou El Hidja 1425 corresponding to 6 February 2005 mentioned above, are modified, supplemented and drafted as follows:

« Art. 7. — Obligated entities must ensure the identity of their clients, each insofar as it concerns them, when:

1. they establish business relationships;
2. they carry out an occasional transaction exceeding the threshold set by regulatory means, including in situations where the transaction is executed in a single or multiple operations between which there seems to be a link;
3. they carry out an occasional transaction in the form of electronic transfer above the threshold set by regulatory means or multiple transactions that seem linked and whose total amount exceeds the set threshold;
4. there is a suspicion of money laundering or terrorist financing or proliferation of weapons of mass destruction, regardless of the threshold provided by regulatory means;
5. they doubt the accuracy or relevance of previously obtained client identification data.
   Obligated entities must identify the client, whether permanent or occasional, whether a natural or legal person, and verify their identity by means of documents, data or information from reliable and independent sources. Identity data as well as the verification of this data must be updated annually, upon each modification as well as in situations 4 and 5 cited in the first paragraph. For agents and any person acting on behalf of others, obligated entities must also verify that these persons are authorized to carry out the missions entrusted to them and identify and verify the identity of these persons. Obligated entities must also identify the beneficial owner and take reasonable measures to verify their identity using relevant information or data obtained from a reliable source, so that the obligated entity ensures the identity of the beneficial owner. Obligated entities must understand the intended purpose and nature of the business relationship and, where applicable, obtain related information ».

« Art. 7 bis. — Obligated entities are required to have an adequate risk management system to determine if a potential client, an existing client or the beneficial owner is a politically exposed person, to take all reasonable measures to identify the origin of funds and to ensure enhanced and permanent monitoring of the business relationship. However, obligated entities must obtain the authorization of the decision-making body of the legal person before entering into or continuing a business relationship with it ».

« Art. 8. — A public register of beneficial owners of legal persons of Algerian law is created at the National Center of the Commercial Register.
The implementation modalities of this Article are fixed by regulatory means ».

« Art. 10 bis. — Authorities with the power of regulation, control and/or supervision under which obligated entities fall, are charged with establishing regulations and controlling their compliance by obligated entities in matters of prevention and fight against money laundering, terrorist financing and proliferation of weapons of mass destruction and to help them respect the obligations set forth in this law, the regulations and implementing directives related thereto. The conditions and modalities of application of this Article are fixed, where applicable, by regulatory means ».

« Art. 10 bis 1. — Obligated entities must, in the framework of prevention against money laundering, terrorist financing and proliferation of weapons of mass destruction, develop and implement programs ensuring internal control, which take into account the resulting risks, the size of the commercial activity and the continuous training of their personnel. The implementation modalities of this Article are fixed by regulatory means ».

10 JOURNAL OFFICIEL DE LA REPUBLIQUE ALGERIENNE N° 08 17 Rajab 1444 8 février 2023 « Art. 10 bis 2. — In the framework of prevention and fight against money laundering, terrorist financing and proliferation of weapons of mass destruction, the authorities provided for in Article 10 bis:
a) develop programs and practical measures based on the risk-based approach to combat money laundering, terrorist financing and financing of the proliferation of weapons of mass destruction and monitor their implementation. These programs and practical measures must, in particular, include:
— a system for detecting suspicious operations and transactions, including the designation of those among their managers and employees who are responsible for carrying out the reporting obligation; — internal audit rules to ensure the efficiency of the established system. b) monitor the compliance by obligated entities with the obligations provided for by this law and its implementing texts, including through on-site controls. The frequency and scope of these monitoring and control activities must be determined based on:
— money laundering, terrorist financing and proliferation of weapons of mass destruction risks and the internal policies, controls and procedures of the obligated entity or group of obligated entities, as identified within the framework of the risk profile assessment carried out by the control authority; — money laundering, terrorist financing or proliferation of weapons of mass destruction risks and the characteristics of obligated entities and financial groups, notably the diversity and number of obligated entities and the degree of discretion granted to them under the risk-based approach. c) take any appropriate disciplinary measure and/or sanction and communicate it to the specialized body; d) cooperate and exchange information with competent authorities and provide assistance to investigations or prosecutions; e) ......................... (no change) ....................... ; f) without delay, communicate to the specialized body any information relating to suspicious operations or facts that could be linked to money laundering or terrorist financing or financing of the proliferation of weapons of mass destruction or non-compliance ».