Regulation on Minimum Requirements for Organizing Internal Control in Commercial Banks for the Purpose of Countering the Financing of Terrorism (Extremism) and the Legalization (Laundering) of Criminally Obtained Income

	Approved by resolution of the Board of the National Bank of the Kyrgyz Republic dated December 29, 2010 No. 96/2

REGULATION on minimum requirements for organizing internal control in commercial banks for the purpose of countering the financing of terrorism (extremism) and the legalization (laundering) of criminally obtained income

(As amended by resolutions of the Board of the National Bank of the Kyrgyz Republic dated September 29, 2011 No. 55/9, November 16, 2012 No. 43/1)

1. General provisions

2. Concepts and definitions

3. Activities of the bank in the area of AML/CFT

4. Organization of internal control and internal control policy on AML/CFT

5. Assessment of the effectiveness of internal control on AML/CFT by the bank's internal audit service

6. The official appointed for the purpose of organizing internal control on AML/CFT

7. Determination of the level of risk of a client carrying out legalization (laundering) of criminally obtained income, financing of terrorism (extremism), as well as operations having signs of suspicious operations

8. Identification of operations (transactions) subject to mandatory control

9. Recording, storage and transmission to the authorized body of information identified during the review

Annex 1. List of operations (transactions) with monetary funds or property subject to mandatory control, determined by the authorized state body, in accordance with the Law "On AML/CFT"

1. General provisions

1. This Regulation has been developed in accordance with the Law of the Kyrgyz Republic "On the National Bank of the Kyrgyz Republic", the Law of the Kyrgyz Republic "On Banks and Banking Activity in the Kyrgyz Republic", the Law of the Kyrgyz Republic "On Countering the Financing of Terrorism and the Legalization (Laundering) of Criminally Obtained Income" (hereinafter - the Law "On AML/CFT").

2. The purpose of this Regulation is to determine minimum requirements for organizing internal control in commercial banks, including those operating in accordance with Islamic principles of banking and financing, banks having an Islamic window, the State Development Bank of the Kyrgyz Republic (hereinafter - banks), for the purpose of countering the financing of terrorism (extremism), the legalization (laundering) of criminally obtained income, as well as the conduct of operations having signs of suspicious operations (hereinafter - AML/CFT).

(As amended by resolution of the Board of the National Bank of the Kyrgyz Republic dated November 16, 2012 No. 43/1)

3. The National Bank of the Kyrgyz Republic (hereinafter - the National Bank) conducts inspections of the activities of banks on issues of organizing internal control for AML/CFT purposes and sends information on its results to the authorized state body in the area of AML/CFT.

2. Concepts and definitions

4. For the purposes of this Regulation, the following concepts are used:

Beneficial owner for the purposes of this Regulation - a person possessing the right of ownership of monetary funds or property, and on whose behalf and/or at whose expense the client carries out an operation (transaction) with monetary funds or property, or a person in whose favor the operation (transaction) with monetary funds or property is ultimately carried out.

Suspicious operation (transaction) - an operation (transaction) falling under the signs of suspicious operations (transactions) in accordance with the Law "On AML/CFT", that is, operations (transactions) carried out with monetary funds or other property which do not have a clear economic or obvious lawful purpose and are not characteristic of the activity of the given legal or natural person (persons) according to the list of signs of suspicious operations approved by the authorized state body in the area of AML/CFT (hereinafter - the authorized state body).

A suspicious operation (transaction) is determined by the AML/CFT official within the framework of the Law "On AML/CFT" for operations carried out with monetary funds or other property of the client and the beneficial owner.

Internal control - a set of measures including the development and implementation of policies, procedures and the organization of activities for the identification by the bank of operations (transactions) subject to mandatory control and suspicious operations (transactions), as well as for the prevention of other operations (transactions) with monetary funds or property directly related to the financing of terrorism (extremism) and the legalization (laundering) of criminally obtained income.

The concept "Extremist activity (extremism)" corresponds to the norms of the conceptual apparatus of the Law of the Kyrgyz Republic "On Countering Extremist Activity".

Identification - the establishment by the bank of data on the basis of originals or duly certified copies of documents submitted by natural or legal persons in accordance with the Law "On AML/CFT".

Verification for the purposes of this Regulation - measures to clarify or properly check the results of identification, carried out by the bank for the purposes of internal control, as well as the conduct of ongoing due diligence of clients, including, but not limited to, monitoring their operations from the point of view of compliance with the client's business profile and the correctness of bank records by, for example, reconciliation with primary and other documents.

Identification of operations subject to mandatory control - a stage of organizing the bank's internal control for AML/CFT purposes, which includes the determination of operations subject to mandatory control on the basis of criteria and signs established in the normative legal acts of the Kyrgyz Republic.

AML/CFT official - an employee of the bank (at the level of the head of a structural subdivision of the bank or chief specialist, in the absence of a corresponding structural subdivision in the bank), appointed for the purpose of organizing internal control on AML/CFT, having access to all information concerning identification, verification, identification, recording and transmission of data to the authorized state body.

Threshold amount - the value established by the Law "On AML/CFT", amounting to 1,000,000 som (equivalent in foreign currency) at the accounting rate of the National Bank on the day of the operation (transaction).

Foreign politically exposed persons - citizens of foreign states who have been granted or are granted significant state and political functions in a foreign state (heads of state or government, high-ranking political figures, senior officials in the government, courts, armed forces, law enforcement and fiscal bodies, leaders and figures of political parties and religious associations), including former ones.

"Islamic window", "Islamic bank", "Bank having an 'Islamic window'", "Islamic principles of banking and financing", "Sharia standards", "Sharia council" - these terms correspond to the norms of the conceptual apparatus of the Law of the Kyrgyz Republic "On Banks and Banking Activity in the Kyrgyz Republic".

All other concepts used in this sphere must not contradict the basic concepts set out in this chapter.

3. Activities of the bank in the area of AML/CFT

5. The activities of the bank in the area of AML/CFT, taking into account its subsidiaries and dependent companies, include the following components:

1) organization of internal control on AML/CFT;

2) assessment of the effectiveness of internal control on AML/CFT by the bank's internal audit service;

3) appointment of the AML/CFT official and the person who will replace the AML/CFT official in the event of his dismissal (personnel reserve);

4) training of bank employees participating in the implementation of the AML/CFT policy.

6. The Board of Directors together with the Management Board of the bank is responsible for ensuring adequate and effective activity of the bank in the area of countering the financing of terrorism (extremism) and the laundering (legalization) of criminally obtained income, as well as preventing the involvement of the bank in the conduct of operations having signs of suspicious operations.

7. The Management Board of the bank is responsible for ensuring effective internal control and the implementation of measures to comply with the requirements of the Law "On AML/CFT", including requirements concerning the opening of bank accounts (including identification and verification of clients), the conduct of operations on accounts and the termination of contracts with clients (account holders) and depositors.

The Management Board of the bank must take exhaustive measures to prevent the involvement of the bank in the conduct of operations having signs of suspicious operations.

(As amended by resolution of the Board of the National Bank of the Kyrgyz Republic dated September 29, 2011 No. 55/9)

4. Organization of internal control and internal control policy on AML/CFT

8. Internal control for AML/CFT purposes presupposes the conduct in the bank of at least the following measures:

• identification and verification of clients and operations of clients which are most exposed to the risk of being used for the purposes of financing of terrorism (extremism), legalization (laundering) of criminally obtained income, conduct of operations having signs of suspicious operations;

• identification and verification of the bank's operations for all banking products and services which are most exposed to the risk of being used for the purposes of financing of terrorism (extremism), legalization (laundering) of criminally obtained income, conduct of operations having signs of suspicious operations;

• introduction of policies, procedures and organization of activities on AML/CFT;

• introduction in the bank of information systems ensuring the prompt provision of reliable and exhaustive information on the bank's activities;

• informing the Management Board of the bank and the Board of Directors by the AML/CFT official about existing shortcomings and problems in the organization of activities on AML/CFT, measures taken to eliminate them, as well as measures taken to suppress the involvement of the bank in the conduct of operations on the financing of terrorism (extremism) and the legalization (laundering) of criminally obtained income, as well as operations having signs of suspicious operations;

• ensuring the provision by the bank of information and data to the authorized state body in accordance with the requirements established by the legislation of the Kyrgyz Republic;

• establishment of control and monitoring over the constant ensuring of the bank's compliance with the legislation of the Kyrgyz Republic on AML/CFT issues;

• establishment of control over bank employees whose activity is exposed to high risk (cashiers, loan officers, employees of operational subdivisions of the bank, etc.), reflection in the job descriptions of employees of the relevant subdivisions of the bank of the functions and duties for the implementation of the AML/CFT policy.

9. For AML/CFT purposes, banks must develop an internal control policy, which must be approved by the bank's Board of Directors. This policy is part of the overall policy of organizing the bank's internal control system.

9-1. Banks must develop internal control rules on AML/CFT taking into account the requirements of the authorized state body, not contradicting banking legislation and normative legal acts of the National Bank.

(As amended by resolution of the Board of the National Bank of the Kyrgyz Republic dated September 29, 2011 No. 55/9)

10. The internal control policy for AML/CFT purposes must determine that the bank establishes at least:

1) the procedure for organizing internal control, establishing the powers and responsibility of officials for decision-making, the procedure for interaction and accountability between persons and subdivisions involved in the AML/CFT process;

2) the procedure for suspending an operation (transaction) of natural and legal persons, where there is reliable information about their participation in terrorist or extremist activity (financing of terrorism or extremism);

3) the procedure for identification, verification and study by the bank of its client in accordance with the Law "On AML/CFT", normative legal acts of the National Bank, as well as other normative legal acts of the Kyrgyz Republic;

4) the procedure for identifying in the client's activity operations subject to mandatory control, and checking information about the client and/or the client's operation to confirm the validity or refute suspicions of the client carrying out financing of terrorism (extremism) and legalization (laundering) of criminally obtained income, in accordance with the Law "On AML/CFT";

5) the procedure for identifying in the client's activity operations having signs of suspicious operations, to confirm the validity or refute suspicions of the client carrying out such operations;

6) the procedure and grounds for refusing to open an account to potential clients and correspondent banks, as well as for terminating servicing of clients' accounts and correspondent relations with banks;

7) the procedure for documentary recording of information obtained during internal control, as well as the procedure for its storage and ensuring confidentiality;

8) the procedure for providing to the authorized state body information on suspicious operations (transactions), as well as operations (transactions) with monetary funds or other movable and immovable property falling under the list of criteria according to which operations (transactions) are subject to mandatory control, in accordance with the requirements established by the legislation of the Kyrgyz Republic in the area of AML/CFT.

11. The internal control policy for AML/CFT purposes must contain requirements for the mandatory request from bank clients of documents on the basis of which the operation subject to verification for compliance with the signs of a suspicious operation (transaction) is carried out.

12. The bank's internal documents must provide for the procedure for appointing the AML/CFT official and his training.

13. The bank must ensure compliance by subsidiaries and dependent companies located both on the territory of the Kyrgyz Republic and abroad with proper measures for organizing internal control for AML/CFT purposes.

5. Assessment of the effectiveness of internal control on AML/CFT by the bank's internal audit service

14. Assessment of the effectiveness of internal control for AML/CFT purposes is carried out by the bank's internal audit service at least once a year or more often, depending on the level of risk of operations and the dynamics of the bank's performance indicators.

15. The internal audit service, during the assessment of the effectiveness of internal control for AML/CFT purposes, conducts at least the following:

• assessment of the effectiveness of the organization of internal control, including policies, procedures and organization of the bank's activities on AML/CFT;

• assessment of the methodology for determining risk levels adopted by the bank;

• sample testing of the activities of the AML/CFT official, including the software used, including for compliance with the bank's policies and procedures;

• assessment of the measures applied by the bank's management, the Management Board and the Board of Directors to eliminate violations identified during previous inspections by the bank's internal audit service, external audit, the National Bank or the authorized AML/CFT body;

• review-assessment of internal control, including software, for the degree of effectiveness of identifying operations on the financing of terrorism (extremism) and the laundering (legalization) of criminally obtained income, as well as operations having signs of suspicious operations;

• verification of the adequacy of the reports of the AML/CFT official submitted to the Board of Directors in agreement with the Management Board of the bank and their compliance with the minimum requirements of the National Bank;

• verification of the adequacy of the AML/CFT official's programs for training bank employees participating in the implementation of the AML/CFT policy.

16. The internal auditor's report on the results of the assessment of the effectiveness of internal control for AML/CFT purposes is submitted to the Board of Directors for taking measures to eliminate identified violations and prevent them in the future.

6. The official appointed for the purpose of organizing internal control on AML/CFT

17. For the purpose of developing and implementing the internal control policy, relevant procedures, as well as other internal organizational measures on AML/CFT, the Board of Directors approves the official accountable to the Board of Directors (hereinafter - the AML/CFT official) and takes measures to ensure the effective organization of his working conditions.

18. For AML/CFT purposes, the AML/CFT official performs the following functions:

• develops and submits for approval to the Board of Directors, in agreement with the Management Board of the bank, the relevant internal control policy and brings this policy to the attention of all employees who participate in its implementation;

• ensures the implementation of the internal control policy and monitors the execution of the bank's internal normative documents on AML/CFT in accordance with this policy;

• ensures the provision of information and data to the authorized state body in accordance with the requirements established by the legislation of the Kyrgyz Republic;

• must provide information to the Management Board of the bank for making a decision on suspending an operation (transaction) of natural and legal persons, if there is reliable information about their participation in terrorist or extremist activity (financing of terrorism or extremism), for three working days from the date when the client's instruction on its execution must be fulfilled, no later than the day of suspension of the operation (transaction) must provide information about it to the authorized state body, and organizes further work in the procedure established by the legislation of the Kyrgyz Republic;

• provides information and assists authorized representatives of the NBKR during their inspections of the bank's activities on issues within his competence under this Regulation and the bank's internal documents;

• organizes training and advises bank employees who participate in the implementation of the AML/CFT policy;

• as necessary, but not less than once a quarter, submits for consideration to the Board of Directors, in agreement with the Management Board of the bank, a written report on the results of the implementation of the internal control policy on AML/CFT in the procedure determined by the bank's internal documents.

19. In carrying out his functions, the AML/CFT official has the right to:

• receive from the heads and employees of the bank's subdivisions the necessary documents, including orders and other administrative documents issued by the management of the bank and its subdivisions, accounting and monetary settlement documents;

• initiate the receipt of additional information about the client and/or the operation (transaction) to confirm the validity or refute suspicions of the client carrying out financing of terrorism (extremism) and legalization (laundering) of criminally obtained income;

• take copies of received documents, including copies of electronic documents;

• address the bank's Board of Directors if necessary;

• interact with the Sharia council(*) and address it.

(*) Applies to banks operating in accordance with Islamic principles of banking and financing.

20. In carrying out his functions, the AML/CFT official is obliged to:

• ensure the safekeeping and return of documents received from the relevant subdivisions of the bank;

• observe the confidentiality of information received in the course of carrying out his functions;

• provide information to the Management Board of the bank for making a decision on suspending an operation (transaction) of natural and legal persons if there is reliable information about their participation in terrorist or extremist activity (financing of terrorism or extremism), for three working days from the date when the client's instruction on its execution must be fulfilled, no later than the day of suspension of the operation (transaction) must provide information about it to the authorized state body, and organize further work in the procedure established by the legislation of the Kyrgyz Republic.

21. The AML/CFT official must be independent in implementing the bank's AML/CFT policy and may combine activity relating to his competence in accordance with this Regulation with the performance of other functions, except for the functions of:

• an employee of the internal audit service;

• an employee carrying out operational activity;

• an employee carrying out activity in the performance of which his independence is not ensured.

22. The following minimum qualification requirements are imposed on the AML/CFT official:

• higher economic or legal education;

• knowledge of legislation on AML/CFT issues;

• work experience in subdivisions related to the core activity of financial and credit institutions, totaling at least three years;

• a clear understanding of banking products, operations, services, client operations, and potential risks characteristic of the bank's activity on AML/CFT;

• no criminal record;

• knowledge in the area of Islamic banking and financing(*).

(*) Applies to banks operating in accordance with Islamic principles of banking and financing.

23. Training (retraining) of the AML/CFT official must be carried out on a regular basis, at least once a year.

24. Responsibility of the AML/CFT official, the Management Board of the bank and the Board of Directors arises on the grounds provided for by the legislation of the Kyrgyz Republic.

25. The written report of the AML/CFT official, agreed with the Management Board and submitted to the bank's Board of Directors, must contain at least the following information for the reporting period and, as necessary, for other periods:

1) results of monitoring the fulfillment of requirements for identification, verification and study of clients;

2) results of the analysis of bank clients' operations conducted for the purpose of identifying operations having signs of suspicious operations (transactions), including information regarding:

• significant dynamics of movement of funds on clients' accounts (existing clients' accounts, accounts of bank employees);

• operations for the largest amounts;

• purchase or sale of foreign currency to clients for an amount exceeding the threshold amount;

• operations of clients whose amounts significantly exceed the turnovers indicated in the questionnaire;

• operations with cash (cashing out of funds, exchange of assets, cash deposit to replenish a bank account through specialized peripheral devices of the bank);

• operations on issuance of loans and acceptance of deposits (time deposits);

• operations with guarantees, letters of credit and other contingent liabilities;

• transfers without opening an account through money transfer systems, as well as through the SWIFT system (or other systems acting as the main ones in banks);

• operations of clients and the bank for the purchase and sale of securities;

• movement of funds of bank clients located in other countries;

3) on the provision of data to the authorized state body in accordance with the requirements established by the legislation of the Kyrgyz Republic;

4) on the suspension of operations (transactions) with a description of the grounds for their suspension, the submission of information about them to the authorized state body and further work in accordance with the legislation;

5) on compliance with measures for organizing internal controls for the purposes of AML/CFT by subsidiary and dependent companies of the bank located on the territory of the Kyrgyz Republic and abroad;

6) on monitoring the implementation of legislation and the bank's internal regulatory documents on AML/CFT in accordance with the bank's policy, their violation and the measures taken;

7) information on the results of work to eliminate the violations noted in previous reports of the AML/CFT officer submitted to the Board of Directors;

8) the results of the work of employees participating in the implementation of the AML/CFT policy, the measures taken to organize their training and counseling;

9) analytical information regarding:

• the possible interconnection of clients;

• correspondent banks;

• operations for the trust management (trust) of property under agreements with clients;

• the introduction of new banking products and technologies and the risks associated with their introduction.

(As amended by Resolution of the Board of the National Bank of the Kyrgyz Republic of 29 September 2011 No. 55/9)

26. Based on the results of consideration of the written report of the AML/CFT officer, the Board of Directors establishes control over the activities of the AML/CFT officer and the bank's Management Board to eliminate the violations noted in the report and to take measures to prevent violations of the AML/CFT policy in the future.

7. Determining the level of risk of a client carrying out the legalization (laundering) of proceeds from crime, the financing of terrorism (extremism), as well as operations having signs of suspicious operations

27. The process of identifying and studying the bank's clients includes determining the level of risk of the client carrying out the legalization (laundering) of proceeds from crime and the financing of terrorism (extremism), taking into account the requirements established by the legislation of the Kyrgyz Republic. To determine the level of risk, it is necessary, at a minimum, to take into account the type of activity of the client and the location (origin) of the client and/or his business, as well as the operations he conducts, the services provided and the purpose of the client's payments.

28. The bank must pay adequate attention and exercise proper control in relation to clients belonging to the category of clients exposed to higher risk. The types of client activity exposed to a higher risk of carrying out the legalization (laundering) of proceeds from crime, the financing of terrorism (extremism) and the conduct of operations having signs of suspicious operations may include:

• the activity of legal entities (their separate subdivisions) that are not credit organizations engaged in the transfer of funds, payments in cash, by checks, and the collection of funds;

• the activity of legal entities (including credit organizations) registered in offshore zones, their separate subdivisions, subsidiary and dependent companies;

• the activity of non-resident clients, including foreign politically exposed persons;

• the gambling business (entrepreneurial activity that is not the sale of products (goods, works, services), connected with the extraction by a gambling establishment (casino, totalizator, bookmaker's office, hall of gaming machines and other gambling houses (places)) of income from participation in gambling in the form of winnings and payment for their conduct);

• activity connected with the sale, including on commission, of works of art and antiques;

• trade (especially export) in precious metals, precious stones, as well as jewelry containing precious metals and precious stones;

• the activity of legal entities carrying out operations predominantly in cash (large shopping complexes, restaurants, gas stations, etc.);

• the activity of individuals and legal entities acting as brokers and dealers (purchase and sale of securities, foreign currency, etc.).

29. The states (territories) exposed to a high risk of carrying out the legalization (laundering) of proceeds from crime and the financing of terrorism (extremism) may include:

• states (territories) that do not apply or apply to an insufficient degree the FATF recommendations, the list of which is determined by the authorized state body together with the Central Bank and other supervisory bodies;

• states (territories) in which the disclosure or submission of information during financial operations is not provided for, the list of which is approved by the authorized state body in agreement with the Central Bank on the basis of lists approved by international organizations engaged in AML/CFT.

30. On the basis of all information and documents allowing the identification, verification and study of the client, the bank assesses the level of risk of the client carrying out possible financing of terrorism (extremism) and legalization (laundering) of proceeds from crime. The conclusion on this assessment is filed in the client's file.

31. The bank must pay adequate attention and exercise proper control in relation to the bank's operations exposed to a high risk of carrying out the financing of terrorism (extremism), the legalization (laundering) of proceeds from crime, and the conduct of operations having signs of suspicious operations.

32. When servicing foreign politically exposed persons, the bank must carry out the following measures:

• before establishing relations with foreign politically exposed persons, obtain written permission from the Board of Directors;

• take available measures to determine the sources of origin of the funds of foreign politically exposed persons;

• on an ongoing basis, update the information at the bank's disposal about foreign politically exposed persons;

• pay increased attention to operations (transactions) with funds or property carried out by foreign politically exposed persons, their spouses and close relatives in accordance with the Law "On AML/CFT".

33. The bank must update the information obtained as a result of the identification, verification and study of the client periodically, at least once a year in cases where the bank assesses the risk of the client carrying out the financing of terrorism (extremism) and the legalization (laundering) of proceeds from crime as high, and in other cases at least once every three years.

34. The bank must ensure compliance with all procedures developed for the purpose of exercising proper control of the risk of financing of terrorism (extremism) and legalization (laundering) of proceeds from crime associated with the use of new technologies (new banking products) involving operations without direct contact (for example, internet banking).

35. When establishing correspondent relations, the bank must establish, including by sending a request to the correspondent bank, whether it carries out AML/CFT measures, including the identification, verification and study by the correspondent bank of its clients.

8. Identification of operations (transactions) subject to mandatory control

36. The bank must define a procedure for checking the activity of clients for the presence of criteria and signs indicating the possible carrying out of the legalization (laundering) of proceeds from crime established by the regulatory legal acts of the Kyrgyz Republic. For these purposes, the bank conducts monitoring of its business relations with clients on an ongoing basis, which provides for the following measures:

• tracking operations conducted on the client's account to make sure that the client's activity corresponds to the information the bank has about the client, his business and the level of risk for that client;

• if necessary, clarifying the origin of the funds received into the client's account;

• analyzing all complex or unusually large operations that have no obvious or visible economic or lawful purpose;

• recording and documenting all information received by the bank and, if necessary, transmitting this information to the authorized state body.

37. An operation (transaction) with funds or other property is subject to mandatory control if the amount for which it is carried out is equal to or exceeds the threshold amount.

38. The list of operations (transactions) with funds or property subject to mandatory control, determined by the authorized state body, in accordance with the Law "On AML/CFT", is given in Appendix 1 to this Regulation. Operations that are not included in the list determined by the authorized state body but have signs of suspicious operations are also subject to mandatory control.

(As amended by Resolution of the Board of the National Bank of the Kyrgyz Republic of 29 September 2011 No. 55/9)

39. Before starting to carry out new types of services or operations, the bank must identify and assess all possible risks relating to that service or operation in order to prevent the financing of terrorism (extremism) and the legalization (laundering) of proceeds from crime.

40. The bank is obliged to take the necessary measures to verify the presence of information about the client's or beneficiary's participation in terrorist activity. The said information is contained in the List of organizations and individuals in respect of whom there is information about their participation in terrorist activity (financing of terrorism (extremism)), established by the authorized state body.

41. Employees of the bank's structural subdivisions who carry out the identification of clients and the identification of operations having signs of suspicious operations, in accordance with the procedure defined by the bank's policy and procedures, must inform the AML/CFT officer of all cases of identified operations having signs of suspicious operations.

42. If the suspicions are justified, the AML/CFT officer submits to the Management Board for consideration information about the client and the operation (transaction) with recommendations on further actions. The bank's Management Board is responsible for the timely implementation of further actions, including the suspension of the operation (transaction) and/or termination of business relations with the client in accordance with the Law "On AML/CFT".

9. Recording, storage and transmission to the authorized body of information identified during the check

43. Information about the client's operations (transactions) obtained during the check is subject to mandatory documentary recording in volumes sufficient to confirm or refute suspicions of the client carrying out the financing of terrorism (extremism) and/or the legalization (laundering) of proceeds from crime.

44. If suspicions are confirmed in determining the client's operation as an operation subject to mandatory control, the bank's Management Board makes the final decision to recognize the client's operation as suspicious and to submit information about it to the authorized state body in accordance with the procedure for transmitting information approved by the authorized state body.

45. The decision of the bank's Management Board not to recognize the client's operation as suspicious and not to send information about it to the authorized state body must be justified and recorded in the minutes. The AML/CFT officer must maintain a register of such decisions of the Management Board, including a brief description of the operations and information about the client.

46. The bank is not entitled to inform clients about the transmission of information to the authorized state body in accordance with the Law "On AML/CFT".

47. Information and documents containing information about the client, including business correspondence, as well as about the client's operations (transactions), obtained during the check in accordance with this Regulation, must be stored for at least five years after the termination of relations between the bank and the client.

	Appendix 1 to the Regulation on minimum requirements for organizing internal controls in commercial banks for the purpose of countering the financing of terrorism (extremism) and the legalization (laundering) of proceeds from crime

LIST of operations (transactions) with funds or property subject to mandatory control, determined by the authorized state body, in accordance with the Law "On AML/CFT"

(As amended by Resolution of the Board of the National Bank of the Kyrgyz Republic of 29 September 2011 No. 55/9)

1) all internal or external operations (transactions), except for operations (transactions) the list of which is determined by the authorized state body in agreement with the National Bank of the Kyrgyz Republic;

2) the purchase or sale of cash foreign currency;

3) the acquisition by an individual of securities for cash;

4) the exchange of banknotes of one denomination for banknotes of another denomination;

5) the movement of funds of charitable, public organizations and institutions, and funds;

6) the placement of securities, precious metals, precious stones or other valuables in a pawnshop;

7) the payment by an individual of an insurance contribution or the receipt from him of an insurance premium for life insurance and other types of accumulative insurance and pension provision;

8) a transaction with immovable property if the amount for which it is carried out is equal to or exceeds 4,500,000 soms;

9) a transaction with movable property;

10) the receipt or provision of property under a financial lease (leasing) agreement;

11) the payment of funds in the form of winnings received from playing the lottery, a totalizator (mutual betting) or other risk-based games;

12) the transfer of funds carried out by non-financial and credit organizations on the instruction of a client;

13) the transfer of funds through systems allowing such operations to be carried out without opening an account, and their receipt;

14) the contribution by an individual of funds in cash to the charter capital of an organization;

15) operations (transactions) in the case where at least one of the parties is an individual or legal entity having, respectively, registration, place of residence or location in a state (territory) in which the disclosure or submission of information during financial operations is not provided for, or one of the parties is a person who is the owner of an account in a bank registered in the said state (in the said territory);

16) operations (transactions) with funds or property in the case where at least one of the parties participating in these operations (transactions) is an individual or legal entity in respect of whom there is information about participation in terrorist or extremist activity (financing of terrorism or extremism), obtained in the manner established by the laws or international treaties of the Kyrgyz Republic;

17) suspicious operations (transactions).