Ordinance No. 12-02 of February 13, 2012, Amending and Completing Law No. 05-01 on the Prevention and Fight Against Money Laundering and Terrorism Financing

6 Rabie El Aouel 1433
February 15, 2012 OFFICIAL JOURNAL OF THE ALGERIAN REPUBLIC No. 08

Ordinance No. 12-02 of 20 Rabie El Aouel 1433
Corresponding to February 13, 2012, amending and completing Law No. 05-01 of 27 Dhou El Hidja 1425 corresponding to February 6, 2005, relating to the prevention and fight against money laundering and terrorism financing.

The President of the Republic,

Having regard to the Constitution, particularly its Articles 122 and 124;

Having regard to the United Nations Convention against Illicit Traffic in Narcotic Drugs and Psychotropic Substances, adopted on December 20, 1988, and ratified by Presidential Decree No. 95-41 of 26 Chaâbane 1415 corresponding to January 28, 1995;

Having regard to the Arab Convention on the Fight against Terrorism, signed in Cairo on 25 Dhou El Hidja 1418 corresponding to April 22, 1998, and ratified by Presidential Decree No. 98-413 of 18 Chaâbane 1419 corresponding to December 7, 1998;

Having regard to the Organization of African Unity (OAU) Convention on the Prevention and Fight against Terrorism, adopted during the 35th ordinary session held in Algiers from July 12 to 14, 1999, and ratified by Presidential Decree No. 2000-79 of 4 Moharram 1421 corresponding to April 9, 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 December 9, 1999, and ratified by Presidential Decree No. 2000-445 of 27 Ramadhan 1421 corresponding to December 23, 2000;

Having regard to the United Nations Convention against Transnational Organized Crime, adopted by the General Assembly of the United Nations on November 15, 2000, and ratified by Presidential Decree No. 02-55 of 22 Dhou El Kaada 1422 corresponding to February 5, 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 November 15, 2000, and ratified by Presidential Decree No. 03-417 of 14 Ramadhan 1424 corresponding to November 9, 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 November 15, 2000, and ratified by Presidential Decree No. 03-418 of 14 Ramadhan 1424 corresponding to November 9, 2003;

Having regard to Ordinance No. 66-155 of June 8, 1966, as amended and supplemented, establishing the Code of Criminal Procedure;

Having regard to Ordinance No. 66-156 of June 8, 1966, as amended and supplemented, establishing the Penal Code;

Having regard to Ordinance No. 75-58 of September 26, 1975, as amended and supplemented, establishing the Civil Code;

Having regard to Ordinance No. 75-59 of September 26, 1975, as amended and supplemented, establishing the Commercial Code;

Having regard to Law No. 79-07 of July 21, 1979, as amended and supplemented, establishing the Customs Code;

Having regard to Ordinance No. 95-07 of 23 Chaâbane 1415 corresponding to January 25, 1995, as amended and supplemented, relating to insurance;

Having regard to Law No. 2000-03 of 5 Joumada El Oula 1421 corresponding to August 5, 2000, as amended, fixing the general rules relating to posts and telecommunications;

Having regard to Ordinance No. 03-11 of 27 Joumada Ethania 1424 corresponding to August 26, 2003, as amended, relating to currency and credit;

Having regard to Law No. 05-01 of 27 Dhou El Hidja 1425 corresponding to February 6, 2005, relating to the prevention and fight against money laundering and terrorism financing;

Having regard to Law No. 06-01 of 21 Moharram 1427 corresponding to February 20, 2006, as amended and supplemented, relating to the prevention and fight against corruption;

Having regard to Law No. 06-02 of 21 Moharram 1427 corresponding to February 20, 2006, organizing the notary profession;

Having regard to Law No. 06-03 of 21 Moharram 1427 corresponding to February 20, 2006, organizing the profession of judicial bailiff;

Having regard to Law No. 10-01 of 16 Rajab 1431 corresponding to July 29, 2010, relating to the profession of chartered accountant, statutory auditor, and certified accountant;

The Council of Ministers having been heard;

Promulgates the Ordinance whose text follows:

Article 1. - This Ordinance aims to amend and complete Law No. 05-01 of 27 Dhou El Hidja 1425 corresponding to February 6, 2005, relating to the prevention and fight against money laundering and terrorism financing.

Art. 2. - Articles 2, 3, and 4 of Law No. 05-01 of 27 Dhou El Hidja 1425 corresponding to February 6, 2005, cited above, are amended, completed, and drafted as follows:

"Art. 2. - Money laundering is considered to be:
a) The conversion or transfer of funds, knowing that they are the direct or indirect proceeds of an offense, for the purpose of concealing or disguising the illicit origin of such assets or of assisting any person involved in the principal offense, following which these assets are recovered, to escape the legal consequences of their acts; b) The concealment or disguise of the true nature, origin, location, disposition, movement, or ownership of funds or rights related thereto, knowing that they are the proceeds of an offense; c) The acquisition, possession, or use of funds by a person who knows, upon their receipt, that such assets constitute the proceeds of an offense;

(remainder unchanged)

"Art. 3. - For the purposes of this law, terrorism financing is considered to be and is punishable by the penalties provided for in Article 87 bis 4 of the Penal Code, the act by which any person or terrorist organization, by any means, directly or indirectly, illicitly and deliberately, provides or collects funds with the intention of using them personally or having them used, in whole or in part, by a terrorist or a terrorist organization, with a view to committing offenses qualified as terrorist or subversive acts, acts provided for and punished by the legislation in force. The offense is committed whether the terrorist act occurs or not, or whether the funds have been or have not been used to commit this act. Terrorism financing is a terrorist act."

"Art. 4. - For the purposes of this law, the following terms are understood as:
"Funds": funds and assets of any nature, whether tangible or intangible, including movable or immovable property, acquired by any means, directly or indirectly, and documents or legal instruments in any form, including electronic or digital form, which attest to a right of ownership or interest in such assets, including notably bank credits, checks, traveler's checks, money orders, shares, securities, bonds, bills of exchange, and letters of credit; "Predicate offense": any criminal offense, even committed abroad, which enabled its perpetrators to obtain the assets provided for by this law; "Obliged entities": financial institutions and non-financial enterprises and professions having the obligation to file a suspicious transaction report. "Financial institution": any natural or legal person who exercises one or more of the following activities or operations commercially on behalf of or for the account of a client:
1 - Receipt of funds and other refundable deposits, 2 - Lending or credit, 3 - Leasing, 4 - Transfer of money or valuables, 5 - Issuance and management of all means of payment, 6 - Granting guarantees and subscription of commitments, 7 - Negotiation and trading on:
a) Money market instruments, b) Foreign exchange market, c) Instruments on currencies, interest rates, and indices, d) Securities, e) Commodity futures markets,
8) Participation in securities issuances and provision of related financial services,
9) Individual and collective management of assets,
10) Safekeeping and administration of securities, in cash or liquid form, for the account of others,
11) Other investment, administration, or management operations of funds or money for the account of others,
12) Subscription and placement of life insurance and other investment products linked to insurance,
13) Currency exchange and foreign currency exchange;
"Non-financial enterprises and professions": any natural or legal person who exercises activities other than those practiced by financial institutions, notably regulated liberal professions and particularly lawyers when they conduct financial transactions on behalf of their clients, notaries, bailiffs, auctioneers, chartered accountants, statutory auditors, certified accountants, brokers, customs brokers, stock exchange intermediaries, real estate agents, corporate service providers, automobile dealers, betting and gaming, dealers in precious stones and metals, antiques and works of art, as well as natural and legal persons who, notably within the framework of their profession, advise and/or carry out operations involving deposits, exchanges, placements, conversions, or any other movement of funds; "Terrorist": any person who:

• commits or attempts to commit terrorist acts by any means, directly or indirectly, illegally and deliberately;
• participates as an accomplice in terrorist acts;
• organizes terrorist acts or instructs others to commit them;
• contributes to the commission of terrorist acts by a group of persons acting with a common purpose when this contribution is intentional and aims to realize the terrorist act or is provided with knowledge of the group's intention to commit a terrorist act;
  "Terrorist organization": any group of terrorists who:
• commits or attempts to commit terrorist acts by any means, directly or indirectly, illegally and deliberately;
• participates as an accomplice in terrorist acts;
• organizes terrorist acts or instructs others to commit them;
• contributes to the commission of terrorist acts by a group of persons acting with a common purpose when this contribution is deliberate and aims to facilitate the terrorist act or is provided with knowledge of the group's intention to commit a terrorist act.

"Politically exposed person": any foreigner appointed or elected, who exercises or has exercised in Algeria or abroad, important legislative, executive, administrative, or judicial functions; "Specialized body": designates the financial intelligence processing unit provided for by the regulations in force; "Competent authorities": the administrative authorities and the authorities responsible for enforcing the law, and those responsible for fighting money laundering and terrorism financing, including supervisory authorities; "Freezing and/or seizure": temporary prohibition of the transfer, conversion, disposition, or movement of assets, or the act of temporarily ensuring the custody or control of assets by judicial decision; "Beneficial owner": the natural person or persons who, in the final analysis, own or exercise control over the client and/or the person for whom a transaction is carried out. It also includes persons who exercise ultimate effective control over a legal person."

Art. 3. - Law No. 05-01 of 27 Dhou El Hidja 1425 corresponding to February 6, 2005, cited above, is completed by Articles 4 bis and 4 bis 1, drafted as follows:

"Art. 4 bis. - The specialized body is an independent administrative authority, enjoying legal personality and financial autonomy, placed under the Minister in charge of finance.
The missions of the specialized body, its organization, and its functioning are fixed by regulatory means."

"Art. 4 bis 1. - Members of the specialized body who have not taken an oath in the context of the exercise of their missions and personnel authorized to access confidential information take an oath, before their installation, before the Court, using the following formula:
'I swear by God, the Almighty, the Great, to perform my duties to the best of my ability, to be loyal in their execution, to keep their secrets, and to conduct myself honorably in all circumstances.'"

Art. 4. - Article 7 of Law No. 05-01 of 27 Dhou El Hidja 1425 corresponding to February 6, 2005, cited above, is amended, completed, and drafted as follows:

"Art. 7. - Obliged entities must ensure the purpose and nature of the activity, the identity, and the addresses of their clients, each insofar as it concerns them, before opening an account or passbook, holding securities, values, or bonds, assigning a safe deposit box, or carrying out any other operations or business relations.

(remainder unchanged)"

Art. 5. - Law No. 05-01 of 27 Dhou El Hidja 1425 corresponding to February 6, 2005, cited above, is completed by Article 7 bis, drafted as follows:

"Art. 7 bis. - Obliged entities are required to have an adequate risk management system to determine if a potential client, a client, or the beneficial owner is a politically exposed person, to take all measures enabling the identification of the origin of funds, and to ensure enhanced and permanent monitoring of the business relationship."

Art. 6 - Articles 9 and 10 of Law No. 05-01 of 27 Dhou El Hidja 1425 corresponding to February 6, 2005, cited above, are amended, completed, and drafted as follows:

"Art. 9 - In cases where it is not certain that the client is acting for their own account, obliged entities must inquire, by any lawful means, about the identity of the beneficial owner, or the true principal."

"Art. 10. - When an operation is carried out under conditions of unusual complexity or without justification, or appears to have no economic or lawful purpose, or in cases where the amount of the operation exceeds a threshold fixed by regulatory means, obliged entities are required to pay particular attention, to inquire about the origin and destination of funds, as well as the purpose of the operation and the identity of the economic participants.

(remainder unchanged)"

Art. 7. - Law No. 05-01 of 27 Dhou El Hidja 1425 corresponding to February 6, 2005, cited above, is completed by Articles 10 bis, 10 bis 1, 10 bis 2, 10 bis 3, and 10 bis 4, drafted as follows:

"Art. 10 bis. - Authorities with regulatory, control, and/or supervisory powers over obliged entities are responsible for regulating matters concerning the prevention and fight against money laundering and terrorism financing and for assisting obliged entities in respecting the obligations set forth in this law. The conditions and modalities for the application of this article are fixed by regulatory means."

"Art. 10 bis 1. - Obliged entities must, within the framework of the prevention of money laundering and terrorism financing, develop and implement programs ensuring internal control and continuous training of their personnel.
The modalities for the application of this article are fixed by regulatory means."

"Art. 10 bis 2. - Within the framework of the prevention and fight against money laundering and terrorism financing, the authorities provided for in Article 10 bis above:
a) ensure that obliged entities have adequate programs to detect and prevent money laundering and terrorism financing operations; b) monitor the compliance by obliged entities with the obligations provided for by this law, including through on-site inspections; c) take any appropriate disciplinary measures and communicate them to the specialized body; d) cooperate and exchange information with competent authorities and provide assistance in investigations or prosecutions; e) ensure that financial institutions, their branches, and subsidiaries abroad adopt and apply measures consistent with this law, to the extent permitted by the laws and regulations of the host country; f) promptly communicate to the specialized body any information relating to suspicious operations or facts that could be linked to money laundering or terrorism financing; g) keep statistics concerning the measures adopted and disciplinary sanctions imposed in the context of the application of this law."

"Art. 10 bis 3. - Regulations issued by the Council of Money and Credit regarding the prevention and fight against money laundering and terrorism financing apply to banks, financial institutions, and the financial services of Algeria Post, which are subject to the control of the Banking Commission."

"Art. 10 bis 4. - Obliged entities are required to exercise vigilance throughout the business relationship and precisely monitor operations carried out to ensure their conformity with the information they hold about their clients."

Art. 8. - Articles 11, 12, 14, and 15 of Law No. 05-01 of 27 Dhou El Hidja 1425 corresponding to February 6, 2005, cited above, are amended, completed, and drafted as follows:

"Art. 11. - Inspectors of the Bank of Algeria mandated by the Banking Commission, acting both within the framework of on-site inspections within banks and financial institutions and their subsidiaries and participations, as well as within the financial services of Algeria Post, and within the framework of document control, immediately transmit a confidential report to the specialized body as soon as they detect an operation presenting the characteristics cited in Article 10 above."

"Art. 12. - The Banking Commission opens, insofar as it is concerned, a disciplinary procedure, in accordance with the law, against the bank or financial institution whose failure of its internal control procedures in matters of prevention and fight against money laundering and terrorism financing has been established. It may inquire into the existence of the report referred to in Article 10 above and request its communication. In the case of the financial services of Algeria Post, a report is made to the supervisory authority."

"Art. 14. - Obliged entities are required to preserve and keep available to competent authorities:

(remainder unchanged)"

"Art. 15. - The specialized body analyzes and exploits the information received from competent authorities and obliged entities to determine the origin of funds and their destination.
Furthermore, it may request, within the framework of any suspicious transaction report or confidential report received, from competent authorities or obliged entities, any additional information it deems necessary for the exercise of its missions.

(remainder unchanged)"

Art. 9. - Law No. 05-01 of 27 Dhou El Hidja 1425 corresponding to February 6, 2005, cited above, is completed by Articles 15 bis, 15 bis 1, and 18 bis, drafted as follows:

"Art. 15 bis. - The specialized body communicates financial information to security and judicial authorities when there are grounds to suspect money laundering or terrorism financing operations."

"Art. 15 bis 1. - The specialized body and competent authorities cooperate and coordinate their actions for the development and execution of strategies and actions for the prevention and fight against money laundering and terrorism financing. The modalities for the application of this article are fixed, if necessary, by regulatory means."

"Art. 18 bis. - The President of the Court of Algiers may order the freezing and/or seizure, for a duration of one month renewable, of all or part of the funds as well as their proceeds, belonging to or intended for terrorists or a terrorist organization, upon request of the specialized body, the Public Prosecutor at the Court of Algiers, or competent international bodies. This order is subject to challenge before the same instance, within two (2) days of its notification. It is executed in accordance with the provisions of paragraph 4 of Article 18 above."

Art. 10. - Articles 19, 20, 21, 25, 30, 31, 32, 33, and 34 of Law No. 05-01 of 27 Dhou El Hidja 1425 corresponding to February 6, 2005, cited above, are amended, completed, and drafted as follows:

"Art. 19. - Obliged entities are subject to the obligation to file a suspicious transaction report, in accordance with the provisions fixed by Article 20 below."

"Art. 20. - Without prejudice to the provisions of Article 32 of the Code of Criminal Procedure, obliged entities are required to declare to the specialized body any operation when it involves funds appearing to originate from an offense or seem destined for money laundering and/or terrorism financing.

(remainder unchanged)"

"Art. 21. - The General Inspection of Finance, the services of taxes, customs, and domains, the Public Treasury, and the Bank of Algeria immediately transmit a confidential report to the specialized body as soon as they discover, during their verification and control missions, the existence of funds or operations appearing to originate from an offense or seeming destined for money laundering and/or terrorism financing. The modalities for the application of this article are fixed by regulatory means."

"Art. 25. - The specialized body may communicate to bodies in other States exercising similar missions the information it holds on operations that appear to have the purpose of money laundering or terrorism financing, subject to reciprocity and not using them for purposes other than those provided for by this law. It may, furthermore, obtain information from obliged entities and competent authorities after receiving requests emanating from institutions in other States exercising similar missions."

"Art. 30. - Judicial cooperation may cover requests for investigation, international letters rogatory, extradition of wanted persons in accordance with the law, as well as the search, freezing, seizure, and confiscation of laundered funds or funds intended to be laundered and their proceeds, as well as funds used or intended to be used..."