Resolution of the Board of the National Bank of the Kyrgyz Republic No. 2/15 of January 29, 2014, On Amending and Supplementing Certain Resolutions of the Board of the National Bank of the Kyrgyz Republic

NATIONAL BANK OF THE KYRGYZ REPUBLIC

RESOLUTION

of January 29, 2014 No. 2/15

On Amending and Supplementing Certain Resolutions of the Board

of the National Bank of the Kyrgyz Republic

Guided by Articles 7 and 43 of the Law of the Kyrgyz Republic "On the National Bank of the Kyrgyz Republic", the Board of the National Bank of the Kyrgyz Republic,

RESOLVES:

1. To introduce the attached amendments and supplements to the following resolutions of the Board of the National Bank of the Kyrgyz Republic:

• resolution of the Board of the National Bank of the Kyrgyz Republic of November 30, 2000 No. 42/1 "On Approval of the Regulation 'On the Procedure for Conducting Exchange Operations with Cash Foreign Currency in the Kyrgyz Republic'";

• resolution of the Board of the National Bank of the Kyrgyz Republic of June 30, 2010 No. 52/5 "On Approval of the Regulation 'On Minimum Requirements for the Organization of Internal Control in Exchange Bureaus in the Kyrgyz Republic, for the Purposes of Countering the Financing of Terrorism (Extremism) and the Legalization (Laundering) of Proceeds from Crime'".

2. This resolution enters into force upon expiry of fifteen days from the day of official publication.

3. To the Legal Department:

• to publish this resolution on the official website of the National Bank of the Kyrgyz Republic;

• after official publication, to send this resolution to the Ministry of Justice of the Kyrgyz Republic for inclusion in the State Register of Normative Legal Acts of the Kyrgyz Republic.

4. To the Supervision and Licensing Methodology Department to bring this resolution to the attention of commercial banks, the State Development Bank of the Kyrgyz Republic, exchange bureaus, regional departments of the National Bank and the Representative Office of the National Bank of the Kyrgyz Republic in Batken Oblast.

5. To assign control over the execution of this resolution to the Deputy Chairman of the National Bank of the Kyrgyz Republic Chokoev Z.L.

Chairman	Z. Asankozhoeva

	Appendix to resolution of the Board of the National Bank of the Kyrgyz Republic of "29 " January 2014 No. 2\15

Amendments and Supplements to Certain Resolutions of the Board of the National Bank of the Kyrgyz Republic

1. To introduce to resolution of the Board of the National Bank of the Kyrgyz Republic of November 30, 2000 No. 42/1 "On Approval of the Regulation 'On the Procedure for Conducting Exchange Operations with Cash Foreign Currency in the Kyrgyz Republic'" the following amendments and supplements:

to the Regulation "On the Procedure for Conducting Exchange Operations with Cash Foreign Currency in the Kyrgyz Republic", approved by the above-mentioned resolution:

• throughout the text of the Regulation, replace the abbreviation "NBKR" with the words "National Bank" in the corresponding case forms;

• in the twelfth paragraph of clause 1.3, after the words "On Countering the Financing of Terrorism and the Legalization (Laundering) of Proceeds from Crime" add the words "(hereinafter – the Law 'On CFT/AML')";

• to state the thirteenth paragraph of clause 1.3 in the following wording:

"Threshold amount – the amount of a transaction established by the Law 'On CFT/AML' in the amount of 1,000,000 soms (or the equivalent amount in foreign currency calculated at the official rate of the National Bank on the day of the operation (transaction)), upon exceeding which this operation (transaction) is subject to internal control in accordance with the Law 'On CFT/AML' and this Regulation.";

• to supplement clause 1.3 with the fourteenth paragraph of the following content:

"Registration amount – a value in the amount of 50,000 soms (or the equivalent amount in foreign currency calculated at the official rate of the National Bank on the day of the operation (transaction)) (for exchange bureaus).";

• to supplement clause 2.4 with subparagraph 7 of the following content:

"7) is obliged, if the amount of an exchange operation with cash foreign currency is equal to or exceeds the threshold amount, as well as in cases where operations fall under the signs of suspicious transactions and operations, to record in the Journal of registration of information on operations with clients (hereinafter – the Journal) the necessary information on the completed operation, including information on the client, and to submit it to the authorized state body in the sphere of countering the financing of terrorism and the legalization (laundering) of proceeds from crime, no later than the business day following the day of the operation.

The Journal must be numbered, laced, and sealed with the seal of the authorized bank (Appendix 1a). It is permitted to maintain the Journal in electronic form, provided that a security system ensuring the safety of information is installed in the exchange points. Information specified in this subparagraph shall be stored for at least five years.";

• to state subparagraphs 27-28 of clause 2.5 in the following wording:

"27) in the course of conducting exchange operations with cash foreign currency, also comply with the requirements established in the Regulation 'On Minimum Requirements for the Organization of Internal Control in Exchange Bureaus for the Purposes of Countering the Financing of Terrorism (Extremism) and the Legalization (Laundering) of Proceeds from Crime', approved by resolution of the Board of the National Bank of June 30, 2010 No. 52/5;

28) is obliged, if the amount of an exchange operation with cash foreign currency is equal to or exceeds the registration amount, as well as in cases where operations fall under the signs of suspicious transactions and operations, to record in the Journal of registration of information on operations with clients (hereinafter – the Journal) the necessary information on the completed operation, including information on the client, and to submit it to the authorized state body in the sphere of countering the financing of terrorism and the legalization (laundering) of proceeds from crime, no later than the business day following the day of the operation.

The Journal must be numbered, laced, and sealed with the seal of the legal entity (Appendix 1a). It is permitted to maintain the Journal in electronic form, provided that a security system ensuring the safety of information is installed in the exchange bureaus. Information specified in this subparagraph shall be stored for at least five years.";

• to state clause 2.7 in the following wording:

"2.7. The requirements specified in subparagraphs 1-6, 8-14, 29, 30 of clause 2.5 of this Regulation apply to exchange points of authorized banks.";

• to state the first paragraph of clause 3.10 in the following wording:

"3.10. Authorized banks and their exchange points, exchange bureaus, when buying or selling foreign currency, regardless of the amount of foreign currency purchased or sold, are obliged to issue a document confirming the conduct of the operation, and also, at the client's request, are obliged to fill out through carbon paper a certificate (Appendix 4).

An exchange bureau, when conducting an operation for the purchase/sale of foreign currency, is obliged to issue a cash receipt.";

• in the first paragraph of section 4, exclude the words "and exchange point", replace the word "conduct" with the word "conducts";

• to state clauses 4.2-4.3 in the following wording:

"4.2. After calculating the amount of national currency to be issued to the client, the cashier makes a record of the purchased currency in the journal of registration of operations (if the client is a non-resident, a note is made about this in the journal), prepares a document confirming the conduct of the operation. In case of conducting an operation in an exchange bureau, a receipt is printed at the cash desk. The cashier (responsible employee) draws up a certificate in accordance with the requirements of the Regulation.

4.3. After checking the calculation made, the cashier issues to the client the corresponding amount of national currency, having checked their authenticity in his presence. Simultaneously, the client is issued a document confirming the conduct of the operation (to the client of an exchange bureau – a cash receipt), and if necessary – a certificate.";

• to state clauses 4.5-4.6 in the following wording:

"4.5. After calculating the amount of foreign currency to be issued to the client, the cashier makes a record of the sold currency in the journal of registration of operations (if the client is a non-resident, a note is made about this in the journal), prepares a document confirming the conduct of the operation. In case of conducting an operation in an exchange bureau, a receipt is printed at the cash desk. The cashier (responsible employee) draws up a certificate in accordance with the requirements of the Regulation.

4.6. After checking the calculation made, the cashier issues to the client the corresponding amount of cash foreign currency. Simultaneously, the client is issued a document confirming the conduct of the operation (to the client of an exchange bureau – a cash receipt), and if necessary – a certificate.".

2. To introduce to resolution of the Board of the National Bank of the Kyrgyz Republic of June 30, 2010 No. 52/5 "On Approval of the Regulation 'On Minimum Requirements for the Organization of Internal Control in Exchange Bureaus in the Kyrgyz Republic, for the Purposes of Countering the Financing of Terrorism (Extremism) and the Legalization (Laundering) of Proceeds from Crime'" the following amendments and supplements:

to the Regulation "On Minimum Requirements for the Organization of Internal Control in Exchange Bureaus in the Kyrgyz Republic, for the Purposes of Countering the Financing of Terrorism (Extremism) and the Legalization (Laundering) of Proceeds from Crime", approved by the above-mentioned resolution:

• to state the seventh paragraph of clause 4 in the following wording:

"Registration amount – a value in the amount of 50,000 soms (or the equivalent amount in foreign currency calculated at the official rate of the National Bank on the day of the operation (transaction)).".

• to supplement clause 4 with paragraphs of the following content:

"Threshold amount – the amount of a transaction established by the Law 'On CFT/AML' in the amount of 1,000,000 soms (or the equivalent amount in foreign currency calculated at the official rate of the National Bank on the day of the operation (transaction)), upon exceeding which this operation (transaction) is subject to mandatory internal control in accordance with the Law 'On CFT/AML' and this Regulation.

Verification – measures to clarify or properly check the results of identification, carried out by exchange bureaus, for the purposes of internal control.

Extremism – activity aimed at the violent change of the foundations of the constitutional order and violation of the integrity of the state, at undermining security and the seizure or appropriation of power, at the creation of illegal armed formations, at the carrying out of terrorist activity and other illegal actions defined by the Law of the Kyrgyz Republic "On Countering Extremist Activity".

Beneficial owner (beneficiary) – a person:

• possessing the right of ownership to monetary funds or property, and on whose behalf and/or at whose expense the client conducts an operation (transaction) with monetary funds or property, and/or;

• having the ability to directly or indirectly influence the conduct by the client of operations (transactions) with monetary funds or property, in accordance with an agreement concluded between such person and the client, and/or;

• in whose favor the operation (transaction) with monetary funds or property is ultimately conducted.";

• to state the second paragraph of subparagraph 1 of clause 5 in the following wording:

"In addition to identifying the client, the exchange bureau must conduct verification of the client and establish the identity of the beneficial owner (beneficiary), in accordance with the requirements of the legislation of the Kyrgyz Republic on CFT/AML.";

• in subparagraph 3 of clause 5, replace the words "identification of the client" with the words "identification, verification and study of the client, as well as establishment of the beneficial owner (beneficiary),";

• in subparagraph 6 of clause 5, replace the words "1,000,000 soms (equivalent in foreign currency)" with the words "threshold amount";

• in clause 7, replace the words "identification of the client" with the words "identification, verification and study of the client, as well as establishment of the beneficial owner (beneficiary),".