Resolution of the Board of the National Bank of the Kyrgyz Republic No. 41/3 of 14 October 2009 on Amending and Supplementing Certain Regulatory Legal Acts of the National Bank of the Kyrgyz Republic

NATIONAL BANK OF THE KYRGYZ REPUBLIC

RESOLUTION

of 14 October 2009 No. 41/3

On Amending and Supplementing Certain Regulatory Legal Acts of the National Bank of the Kyrgyz Republic

(As amended by Resolution of the Board of the National Bank of the Kyrgyz Republic of 20 June 2018 No. 2018-P-12/24-2, 21 August 2019 No. 2019-P-33/43-6)

In accordance with the Laws of the Kyrgyz Republic "On the National Bank of the Kyrgyz Republic", "On Banks and Banking Activities in the Kyrgyz Republic", "On Countering the Financing of Terrorism and Legalization (Laundering) of Proceeds from Crime", "On Operations in Foreign Currency" the Board of the National Bank of the Kyrgyz Republic

RESOLVES:

1. To approve the amendments and supplements to certain regulatory acts of the National Bank of the Kyrgyz Republic in accordance with the annex to this resolution.

2. This resolution enters into force upon the expiry of one month after its official publication.

3. The Legal Department shall send this resolution to the Ministry of Justice of the Kyrgyz Republic for inclusion in the State Register of Regulatory Legal Acts of the Kyrgyz Republic.

4. Control over the execution of this resolution shall be assigned to the Deputy Chairman of the National Bank of the Kyrgyz Republic Bokontaev K.K.

Chairman	M. Alapaev

	Annex to the resolution of the Board of the National Bank of the Kyrgyz Republic of 14 October 2009 No. 41/3

AMENDMENTS AND SUPPLEMENTS

to certain regulatory legal acts of the National Bank of the Kyrgyz Republic

I. To introduce into the Regulation "On Minimum Requirements for the Organization of Internal Control in Commercial Banks and Other Financial-Credit Institutions Licensed by the NBKR for the Purposes of Countering the Financing of Terrorism and Legalization (Laundering) of Proceeds from Crime", approved by resolution of the Board of the National Bank of the Kyrgyz Republic of 15 May 2007 No. 26/1 "On the Regulation 'On Minimum Requirements for the Organization of Internal Control in Commercial Banks and Other Financial-Credit Institutions Licensed by the NBKR for the Purposes of Countering the Financing of Terrorism and Legalization (Laundering) of Proceeds from Crime'", registered with the Ministry of Justice of the Kyrgyz Republic on 14 June 2007, registration number 57-07, the following amendments and supplements:

1. Throughout the text of the Regulation, the words "transaction and operation" and "transaction or operation" in various case and number forms shall be replaced by the words "operation (transaction)" in the corresponding cases and numbers.

2. Throughout the text of the Regulation, except for paragraph 1.1, after the word terrorism, supplement with the word "(extremism)".

3. In paragraph 1.2 of section 1, after the words "licensed by the National Bank of the Kyrgyz Republic", supplement with the words ", including those operating in accordance with Islamic principles of banking and financing, banks having an Islamic window" and further according to the text.

4. Supplement section 1 with paragraph 1.3 as follows:

"1.3. The National Bank of the Kyrgyz Republic conducts inspections of banks' activities on issues of organizing internal control for the purposes of CFT/AML and sends information on its results to the authorized state body in the field of CFT/AML.".

5. The second paragraph of section 2 shall be stated as follows:

"Beneficial owner - a person who has the right of ownership to monetary funds or property, and on whose behalf and/or at whose expense the client performs an operation (transaction) with monetary funds or property, or, in accordance with an agreement concluded between such person and the client, has the ability to directly or indirectly influence the client's performance of operations (transactions) with monetary funds or property.".

6. Supplement section 2 with paragraphs five through eight as follows:

"Internal control - a set of measures taken by the bank to identify operations (transactions) subject to mandatory control and suspicious operations (transactions), as well as to prevent other operations (transactions) with monetary funds or property directly related to the financing of terrorism (extremism) and legalization (laundering) of proceeds from crime.".

"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 seizing or appropriating power, at creating illegal armed formations, at carrying out terrorist activities and other illegal actions defined by the Law of the Kyrgyz Republic "On Countering Extremist Activity".".

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

"Verification - measures to clarify or properly verify the results of identification, carried out by the bank for the purposes of internal control.".

7. Paragraphs five through seven of section 2 shall be considered paragraphs nine through eleven.

8. In paragraph ten of section 2, after the words "bank employee", supplement with the words "(at the management level)", after the word "identification,", supplement with the word "verification".

9. Supplement section 2 with paragraphs eleven through thirteen as follows:

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

"Foreign politically exposed persons - citizens of foreign states who have been or are being 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 Activities in the Kyrgyz Republic".".

10. Paragraph eleven of section 2 shall be considered paragraph fourteen.

11. Supplement section 3 with paragraph 3.4 as follows:

"3.4. The bank must ensure that subsidiaries and dependent companies located both in the territory of the Kyrgyz Republic and abroad comply with appropriate measures for organizing internal control for the purposes of CFT/AML.".

12. Paragraph 3.4 of section 3 shall be considered paragraph 3.5.

13. Supplement paragraph 4.3 of section 4 with a new paragraph as follows:

"- interact with and apply to the Sharia council(*)".

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

14. Supplement paragraph 4.6 of section 4 with a new paragraph as follows:

"- knowledge in the field of Islamic banking and financing(*)".

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

15. Supplement paragraph 5.2 of section 5 with the fourth paragraph and state it as follows:

"- activity of non-resident clients, including foreign politically exposed persons;".

16. Paragraphs four through six of paragraph 5.2 of section 5 shall be considered paragraphs five through seven.

17. In paragraph 5.4 of section 5, supplement the word "identify" with the word ", verify".

18. Supplement section 5 with a new paragraph 5.6 as follows:

"5.6. 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 responsible member of the bank's Board;

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

• on an ongoing basis update the information available about foreign politically exposed persons;

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

19. Paragraphs 5.6-5.8 of section 5 shall be considered paragraphs 5.7-5.9.

20. In paragraph 5.7 of section 5, after the word "identification", supplement with the word ", verification".

21. In paragraph 5.9 of section 5, after the word "identification", supplement with the word ", verification".

22. Paragraph 6.1 of section 6 shall be stated as follows:

"6.1. The bank must determine the procedure for checking clients' activities for the presence of criteria and signs indicating the possible commission of legalization (laundering) of proceeds from crime, established by 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 carried out on the client's account to ensure that the client's activity corresponds to the information the bank has about the client, its business and the risk level for this client;

• if necessary, clarifying the origin of monetary 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.".

23. In paragraph 6.2 of section 6:

• exclude the words "(or several interrelated transactions or operations performed within fourteen days), listed in clause 6.3 of this Regulation";

• replace the word "are subject" with the word "is subject";

• replace the words "1,000,000 som (equivalent in foreign currency)" with the words "threshold amount".

24. The first paragraph of paragraph 6.3 of section 6 shall be stated as follows:

"6.3. In accordance with the list of criteria determined by the authorized state body in agreement with the NBKR, operations (transactions) with monetary funds or other property subject to mandatory control include:".

25. The second paragraph of paragraph 6.3 of section 6 shall be stated as follows:

"- 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".

II. To introduce into the Regulation on the procedure for conducting exchange operations with cash foreign currency in the Kyrgyz Republic, approved by resolution of the Board of the National Bank of the Kyrgyz Republic of 30 November 2000 No. 42/1 "On approval of the Regulation on the procedure for conducting exchange operations with cash foreign currency in the Kyrgyz Republic", registered with the Ministry of Justice of the Kyrgyz Republic on 15 December 2000, registration number 201, the following amendments and supplements:

1. In the last paragraph of paragraph 1.3 of section 1, replace the words "transaction and operation" and "transactions and operations" with the words "operation (transaction)" and "operations (transactions)" respectively.

2. Supplement paragraph 1.3 of section 1 with a new definition as follows:

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

3. In subparagraph 27 of paragraph 2.5 of section 2, replace the words "1,000,000 som" with the words "threshold amount".

4. In subparagraph 27 of paragraph 2.5 of section 2, after the words "(annex 1a)." supplement with the words "Maintaining the Journal in electronic form is allowed, provided that exchange offices have a security system ensuring the preservation of information".

5. Paragraphs five and six of paragraph 3.1 of section 3 shall be stated as follows:

"- the Regulation on the use of cash registers for monetary settlements with the population, approved by resolution of the Legislative Assembly of the Jogorku Kenesh of the Kyrgyz Republic of 25 June 2004 No. 1689-II;";

"- the Instruction on working with suspicious banknotes of the national currency, approved by resolution of the Board of the NBKR of 20 March 2001 No. 6/9, registered with the Ministry of Justice of the Kyrgyz Republic on 9 April 2001, registration number 59;".

6. In paragraph 3.16 of section 3, replace the words "Instruction on the procedure for interaction in combating counterfeiting in the Kyrgyz Republic" with the words "Instruction on working with suspicious banknotes of the national currency".

7. In the first paragraph of section 4, replace the word "Law" with the word "Regulation".

8. In paragraph 4.1 of section 4, after the words "identity document (with photograph)", supplement with the words ", if the amount of purchase of foreign currency is equal to or exceeds the threshold amount".

9. In paragraph 4.4 of section 4, after the words "identity document (with photograph)", supplement with the words ", if the amount of sale of foreign currency is equal to or exceeds the threshold amount".

10. In paragraph 4.13 of section 4, replace the word "is performed" with the word "to be performed".

11. In column 5 of Annex 1a, replace the word "passport" with the words "insanдыk kuboluktun", replace the word "passport" with the word "identity document".

III. (Repealed in accordance with resolution of the Board of the National Bank of the Kyrgyz Republic of 21 August 2019 No. 2019-P-33/43-6-(NFCU) resolution)*

IV. (Repealed in accordance with resolution of the Board of the National Bank of the Kyrgyz Republic of 20 June 2018 No. 2018-P-12/24-2)