SBS Resolution N° 3862-2016: Approves Regulation for UIF-Peru to Administratively Freeze Funds of Persons or Entities Linked to Terrorism, Terrorism Financing, and Proliferation of Weapons of Mass Destruction

Los Laureles Nº 214 - Lima 27 - Peru Tel. : (511) 6309000 Fax: (511) 6309239

Lima, July 13, 2016
S.B.S. Resolution
N° 3862 -2016
The Superintendent of Banking, Insurance and
Private Pension Fund Administrators
CONSIDERING:
That, in accordance with Laws N° 27693 and N° 29038 and their amending regulations, the Financial Intelligence Unit of Peru (UIF-Peru) is responsible for receiving, analyzing, processing, evaluating, and transmitting information for the detection of money laundering and terrorism financing, for which purpose a list of obligated entities was established to report suspicious operations to UIF-Peru; That, in accordance with the provisions of numeral 12 of article 3 of Law N° 27693, incorporated by Law N° 30437, Law that expands the powers of UIF-Peru in the fight against terrorism, it is the responsibility of UIF-Peru to order the immediate freezing of funds or assets of natural or legal persons included in: a) The lists of the United Nations Security Council drawn up in accordance with its resolutions on terrorism and terrorism financing; and, b) The lists of the United Nations Security Council drawn up in accordance with its resolutions on the financing of the proliferation of weapons of mass destruction; it being necessary to report to the Judge within twenty-four (24) hours of the measure being ordered, who, within the same period, may validate the measure or order its immediate revocation, verifying the terms established in the aforementioned regulation; That, likewise, in accordance with the provisions of numeral 11 of article 3 of Law N° 27693 and its amending regulations, UIF-Peru has the power to exceptionally order, given the urgency of the circumstances or the danger in delay and whenever necessary due to the dimension and nature of the investigation, the freezing of funds in cases linked to the crime of money laundering and terrorism financing, it being necessary to report to the Judge within twenty-four (24) hours of the measure being ordered, who, within the same period, may validate the measure or order its immediate revocation; That, Supreme Decree N° 016-2007-RE establishes the mandatory publication by the Ministry of Foreign Affairs of the Resolutions of the United Nations Security Council, as well as the lists of entities or persons that have been identified by the aforementioned Security Council or its subsidiary bodies as subject to the sanctions regime; That, Recommendations 6 and 7 of the Financial Action Task Force – FATF establish financial sanctions related to terrorism and its financing, Los Laureles Nº 214 - Lima 27 - Peru Tel. : (511) 6309000 Fax: (511) 6309239 2/11 as well as the proliferation of weapons of mass destruction and its financing, which must be implemented by countries to comply with the Resolutions of the United Nations Security Council; That, by SBS Resolution N° 395-2016, the Regulation was approved that governs the mechanisms and procedures for UIF-Peru to administratively freeze funds or other assets of persons or entities linked to terrorism financing, identified within the framework of United Nations Security Council resolutions; That, the Sole Complementary Final Provision of Law N° 30437 establishes
that the Superintendency of Banking, Insurance and Private Pension Fund Administrators (hereinafter, SBS) within a period of thirty (30) business days, counted from the publication of said Law, shall establish by resolution the necessary procedures to guarantee the application of the aforementioned Law; That, in this context, it is necessary to approve the regulation that governs the mechanisms and procedures for UIF-Peru, in the use of the powers granted, to administratively freeze funds or other assets of persons or entities linked to terrorism and terrorism financing, identified within the framework of United Nations Security Council Resolution 1267 (1999) and Resolution 1373 (2001) and resolutions that succeed, modify or replace them, as well as those linked to the proliferation of weapons of mass destruction and its financing, identified within the framework of Resolutions 1718 (2006) and 2231 (2015); and, United Nations Security Council resolutions that succeed, modify or replace them; Having the approval of the Deputy Superintendencies of the Financial Intelligence Unit of Peru and Legal Advisory; and, in accordance with the exceptional conditions set forth in numeral 3.2 of article 14 of the Regulation that establishes provisions related to Advertising, Publication of Regulatory Projects and Dissemination of General Legal Norms approved by Supreme Decree Nº 001-2009-JUS and its amending regulations; In use of the powers conferred by Law N° 26702, Law N° 27693, as well as Law N° 29038 and its amending regulations; RESOLVES:
Article 1.- To approve the Regulation that governs the mechanisms and procedures for UIF-Peru to administratively freeze funds or other assets of persons or entities linked to terrorism and terrorism financing, as well as those linked to the proliferation of weapons of mass destruction and its financing, identified within the framework of United Nations Security Council Resolutions, which is transcribed below:
REGULATION THAT GOVERNS THE MECHANISMS AND PROCEDURES FOR UIF-PERU TO ADMINISTRATIVELY FREEZE FUNDS OR OTHER ASSETS OF PERSONS OR ENTITIES LINKED TO TERRORISM AND TERRORISM FINANCING, AS WELL AS THOSE LINKED TO THE PROLIFERATION OF WEAPONS OF MASS DESTRUCTION AND ITS FINANCING, IDENTIFIED WITHIN THE FRAMEWORK OF UNITED NATIONS SECURITY COUNCIL RESOLUTIONS Los Laureles Nº 214 - Lima 27 - Peru Tel. : (511) 6309000 Fax: (511) 6309239 3/11
CHAPTER I
GENERAL PROVISIONS
Article 1.- Scope
This regulation is applicable and mandatory for all obligated entities included in article 3 of Law N° 29038, Law that incorporates the Financial Intelligence Unit of Peru into the Superintendency of Banking, Insurance and Private Pension Fund Administrators.
Article 2.- Definitions and abbreviations
a) Freezing: a preventive administrative measure ordered by UIF-Peru, which prohibits the transfer, conversion, disposal or movement of funds or other assets that are owned or controlled, in whole or jointly, directly or indirectly, by designated persons or entities; as well as funds or other assets derived from or generated from funds or other assets that belong to or are controlled by designated persons or entities, and funds or other assets of persons or entities acting on their behalf or under the direction of designated persons or entities, due to their link with terrorism, terrorism financing and the proliferation of weapons of mass destruction and its financing. The administrative freezing measure does not generate the loss of ownership rights over the affected funds or other assets, and remains in effect until revoked by a decision of the Judiciary. b) UNSC: United Nations Security Council. c) Delisting: the process by which persons or entities are removed from the lists because they no longer meet the criteria for their designation, in accordance with UNSC Resolution 1267 (1999) and succeeding resolutions; UNSC Resolution 1373 (2001); UNSC Resolutions 1718 (2006) and 1737 (2006) and succeeding resolutions1. d) Terrorism Financing: crime typified in article 4-A of Legislative Decree N° 25475 and its amendments; as well as in article 297, last paragraph, of the Penal Code and its amendments2. e) Funds or other assets: any asset, including but not exclusively, financial assets, economic resources, goods of all kinds, tangible or intangible, movable and immovable, however acquired, and legal documents or instruments that evidence ownership or participation in such funds or other assets. Funds include, but are not limited to, cash, securities and financial instruments, funds in savings accounts and current accounts, deposits, interest, dividends or any other type of income generated by such funds or other assets, during the validity of the freezing; drafts, national and/or foreign fund transfers, jewelry and precious metals, among others, in custody, safe deposit boxes and their contents, non-pension contributions, contributions or deposits in savings and credit cooperatives, credit rights; investment insurance, participation units in mutual funds and/or investment funds, participation certificates in collective funds, physical or dematerialized securities by book-entry, including, without limitation, traveler's checks, bank checks, payment orders, shares, securities, bonds, bills of exchange, rights over letters of credit3. Los Laureles Nº 214 - Lima 27 - Peru Tel. : (511) 6309000 Fax: (511) 6309239 4/11 f) Basic expenses: those necessary to cover expenses for food, rent or mortgages, medicines and medical treatments, taxes, insurance premiums and water and electricity expenses, or exclusively to pay professional fees and reimbursement of expenses associated with the provision of legal services or fees or charges for maintenance services of
frozen funds or other financial assets or economic resources. Extraordinary expenses are those that do not conform to the definition of basic expenses4. g) Designated persons or entities: natural and legal persons designated by the UNSC ISIL (Daesh) and Al-Qaida Sanctions Committees 1267/1989/2253 and 1988, pursuant to Resolution 1267 (1999) and succeeding resolutions; as well as natural and legal persons designated by the country or another country pursuant to Resolution 1373 (2001), as well as those natural and legal persons designated by the UNSC Sanctions Committee 1718 and the UNSC itself, in accordance with Resolutions 1718 (2006), and 2231 (2015) and succeeding resolutions5. h) Succeeding resolutions: resolutions that succeed, modify or replace UNSC resolutions6. i) SBS: Superintendency of Banking, Insurance and Private Pension Fund Administrators7. j) Without delay: a period of time that must be interpreted in the context of the need to prevent the escape or dissipation of funds or other assets linked to terrorists, terrorist organizations, those who finance terrorism and the financing of the proliferation of weapons of mass destruction, and the need for global, concerted action to prohibit and interrupt their flow without hindrance. Therefore, obligated entities must execute the freezing within a period not exceeding 24 hours from the time the person or entity has been designated8. k) Obligated entities: public entity, legal or natural person provided for in article 3 of Law Nº29038, Law that incorporates UIF-Peru into the SBS, who are obliged to report suspicious operations to UIF-Peru, as well as those on whom the obligation to execute the freezing measure ordered by UIF-Peru falls9. l) Terrorism: crimes typified in Legislative Decree N° 25475 and its amending regulations10. m) ) UIF-Peru: Financial Intelligence Unit of Peru, a specialized unit of the SBS11.
CHAPTER II
PROCEDURE FOR THE ADMINISTRATIVE FREEZING OF FUNDS OR OTHER ASSETS OF DESIGNATED PERSONS OR ENTITIES LINKED TO TERRORISM AND TERRORISM FINANCING, IN ACCORDANCE WITH UNITED NATIONS SECURITY COUNCIL RESOLUTION 1267 (1999) AND SUCCEEDING RESOLUTIONS
Article 3.- Communication of detected operations involving designated persons or entities12
The SBS, without prejudice to the publication and updating by the Ministry of Foreign Affairs referred to in Supreme Decree N° 016-2007-RE, publishes without delay the lists of persons or entities designated by the UNSC, in accordance with Resolution 1267 (1999) and succeeding resolutions, through its website (https://www.sbs.gob.pe/prevencion-de-lavado-activos/listas-de-interes).

Obligated entities must permanently review the publication of the lists on the UNSC or SBS website and cross-reference this with their operation records and database of their clients, users, and suppliers, as the case may be, in order to identify any type of fund or other assets or any operation involving persons or entities designated by the UNSC, in which case they must communicate it without delay to UIF-Peru.
The sending of such communications by obligated entities is carried out through the means established by the SBS.
UIF-Peru reviews the publication of the lists; and, in case any update is registered (inclusion, exclusion or modification of names), it communicates it to the compliance officers of the obligated entities, which does not exempt them from the obligation indicated in the second paragraph of this article.

Article 4.- Administrative freezing of funds or other assets, ordered by UIF-Peru13

UIF-Peru, once the communication from the obligated entities is received, orders without delay the administrative freezing of the detected funds or other assets of the designated persons or entities; and communicates the decision:

1. To the obligated entities, by official letter, ordering them to proceed with the execution of the ordered freezing, without prejudice to initiating the corresponding financial analysis and investigation. Said official letter is sent to the email registered with UIF-Peru by the obligated entity or by physical means, as the case may be, and/or,
2. To the National Superintendency of Public Registries (SUNARP).
   Article 5.- Execution of the administrative freezing of funds or other assets, by obligated entities
   Obligated entities must proceed without delay to execute the administrative freezing of funds or other assets once the official letter from UIF-Peru is received; and, likewise, they must communicate by email and by physical means to UIF-Peru, the execution of the ordered freezing. This measure remains in effect until its validation or revocation by the judicial authority.
   Article 6.- Judicial validation or revocation of the administrative freezing of funds or other assets
   UIF-Peru, within twenty-four (24) hours of the administrative freezing measure of funds or other assets being ordered, reports to the judge, who within the same period may validate or revoke said measure. Likewise, UIF-Peru, after being notified of the judicial decision, communicates the adopted measure to the Public Ministry and the Public Prosecutor's Office Specialized in Terrorism Crimes, so that they act within the framework of their competencies. In case the judge validates the freezing measure, UIF-Peru communicates the ordered freezing to the Ministry of Foreign Affairs, so that it acts within the framework of its competencies before the UNSC. Persons or entities affected by the administrative freezing of funds or other assets, or the relatives of deceased persons, in cases of homonymy with the names of designated persons or entities, may appeal to the judge who validated the administrative freezing measure of funds or other assets, requesting that said decision be revoked. In case the Judge deems the request appropriate and annuls the freezing measure, notifying UIF-Peru of said judicial decision, the latter proceeds to inform the obligated entity without delay so that it immediately proceeds with the cessation of the freezing.
   Article 7.- Proposal for inclusion and exclusion of designated persons or entities14
   UIF-Peru requests, quarterly, from the National Intelligence Directorate, the General Intelligence Directorate of the Ministry of Interior, the Intelligence Directorate of the National Police of Peru, the Public Ministry, the National Superior Court of Specialized Criminal Justice of the Judiciary, the Public Prosecutor's Office Specialized in Terrorism Crimes, the Public Prosecutor's Office Specialized in Illicit Drug Trafficking Crimes or other competent authority, information they manage within the scope of their competencies, about persons or entities allegedly linked to terrorism and terrorism financing. In case new information on the matter is available, the aforementioned authorities have the obligation to communicate updated information to UIF-Peru, immediately. Upon receiving the information, UIF-Peru proceeds to analyze it, and if it has reasonable grounds or bases to determine that a person or entity meets the designation criteria stipulated by Resolution 1267 (1999) and succeeding resolutions, it communicates this without delay to the Ministry of Foreign Affairs, so that it acts within the framework of its competencies before the UNSC. Any person or entity, national or resident in the country, included in the lists or the relatives, nationals or residents in the country, of deceased persons who are included in the lists, may request their delisting before the Focal Point or the Ombudsman's Office of the UNSC, or before the Ministry of Foreign Affairs, who will act within the framework of its competencies before the UNSC. In case this request is submitted to UIF-Peru, it transfers the request to the Ministry of Foreign Affairs, so that it acts within the framework of its competencies before the UNSC. Once the Ministry of Foreign Affairs receives the communication from the UNSC regarding the delisting of the person or entity, it proceeds to inform the interested party and UIF-Peru, who in turn must communicate said information without delay to the Court that validated the freezing measure, requesting that said decision be revoked.

Once the judge annuls the freezing measure and notifies UIF-Peru of said judicial decision, the latter proceeds to inform the obligated entity without delay so that it immediately proceeds with the cessation of the freezing.
The procedure for requesting delisting before the Focal Point or the Ombudsman's Office is available on the SBS website (https://www.sbs.gob.pe/prevencion-de-lavado-activos/listas-de-interes).
CHAPTER III
PROCEDURE FOR THE ADMINISTRATIVE FREEZING OF FUNDS OR OTHER ASSETS OF PERSONS OR ENTITIES, IN ACCORDANCE WITH UNITED NATIONS SECURITY COUNCIL RESOLUTION 1373 (2001)
Article 8.- Freezing of funds or other assets ordered by UIF-Peru15
UIF-Peru, in accordance with numeral 11 of article 3 of Law N° 27693, quarterly requests from the Anti-Terrorism Directorate of the National Police of Peru, the Public Ministry, the National Superior Court of Specialized Criminal Justice of the Judiciary, the Public Prosecutor's Office Specialized in Terrorism Crimes, the Public Prosecutor's Office Specialized in Illicit Drug Trafficking Crimes or other competent authority, information they manage within the scope of their competence, about persons or entities allegedly linked to terrorism financing to analyze it and, if appropriate, orders without delay the administrative freezing of funds or other assets, provided that any of the following assumptions are met:

1. That they are subject to a fiscal investigation or criminal proceeding in progress, in the country or abroad, as an author, participant, or facilitator of the alleged crime of terrorism financing.
2. That they have been subject to a judicial resolution issued in the country or abroad, which identifies them as an author, participant in, or facilitator of the crime of terrorism financing.
   In case new information on the matter is available, the aforementioned authorities have the obligation to communicate updated information to UIF-Peru immediately.

Without prejudice to the foregoing, in case there is an ongoing investigation that meets the requirements established in numeral 11 of article 3 of Law N° 27693 in relation to persons or entities allegedly linked to terrorism financing, UIF-Peru orders without delay the administrative freezing of funds or other assets.
Article 9.- Communication to entities and procedure for the administrative freezing of funds or other assets
UIF-Peru, once the administrative freezing of funds or other assets has been ordered, communicates it by official letter to the obligated entities, instructing them to proceed with its execution without delay. Said official letter is sent to the email registered with UIF-Peru by the obligated entity or by physical means, as the case may be.
After receiving the communication, obligated entities must without delay review their operation records and database of their clients, users, and suppliers, as the case may be, in order to identify any type of fund or other assets or any operation involving the persons or entities for whom the administrative freezing was ordered.
Article 10.- Execution of the administrative freezing of funds or other assets and judicial validation or revocation