UEMOA Council of Ministers Directive No. 02/2015 on Combating Money Laundering and Terrorist Financing

UNION ECONOMIC AND MONETARY UNION OF WEST AFRICA ------------ The Council of Ministers DIRECTIVE No. 02/2015/CM/UEMOA RELATING TO THE COMBATING OF MONEY LAUNDERING AND TERRORIST FINANCING IN THE MEMBER STATES OF THE UNION ECONOMIC AND MONETARY UNION OF WEST AFRICA (UEMOA)

THE COUNCIL OF MINISTERS OF THE UNION ECONOMIC AND MONETARY UNION OF WEST AFRICA (UEMOA),

Having regard to the Treaty of the Union Economic and Monetary Union of West Africa (UEMOA), particularly Articles 6, 7, 16, 21, 42, 43, 97, 98 and 113; Having regard to the Treaty of the West African Monetary Union (UMOA), particularly Article 34; Having regard to Regulation No. 14/2002/CM/UEMOA of 19 September 2002 relating to the freezing of funds and other financial resources in the context of combating the financing of terrorism in the member states of the Union Economic and Monetary Union of West Africa; Considering that money laundering as well as the financing of terrorism and the proliferation of weapons of mass destruction pose serious threats to the stability of the financial system, peace and international security; Considering that the solidity, integrity and stability of credit institutions and other financial institutions, as well as confidence in the entire financial system, could be seriously compromised by criminal enterprises and their accomplices seeking to disguise the origin of their profits or fund terrorism through lawful or unlawful money flows; Considering the need to adopt certain coordination measures at the Union level, otherwise criminals who launder money or finance terrorism may seek to exploit, to further their activities, the free movement of capital and the free provision of financial services inherent in an integrated financial market; Considering that money laundering and terrorist financing often occur in an international context, and that the impact of measures adopted solely at the national or even Union level, without international coordination and cooperation, would be limited; Considering, therefore, that it is essential to ensure that the measures adopted by the Union in this area are consistent with any other action undertaken in other international forums; Considering, furthermore, that the use of the financial system to channel funds of criminal origin or even lawful funds destined for terrorist purposes threatens its integrity, proper functioning, reputation and stability, and that consequently, the preventive measures provided for in this Directive should cover not only the handling of funds of criminal origin, but also the collection of goods or money for terrorist purposes; Considering that the variability of money laundering and terrorist financing risks requires the application of a risk-based approach, which presupposes evidence-based decision-making, in order to better target the money laundering and terrorist financing risks threatening the Union and the actors operating within it; Considering the imperative need for all States to persistently and resolutely pursue and intensify the fight against money laundering, terrorist financing and the proliferation of weapons of mass destruction; Committed to implementing international recommendations relating to the fight against money laundering and terrorist financing, particularly those stemming from the United Nations Convention of 9 December
1999 for the Suppression of the Financing of Terrorism, the international standards on combating money laundering and terrorist financing and proliferation issued by the Financial Action Task Force (FATF), as well as regional standards and frameworks in the field of combating money laundering and terrorist financing; Committed to ensuring the harmonization of the legislation of the member states of the Union Economic and Monetary Union of West Africa with that of other member states of the Economic Community of West African States; On the joint proposal of the UEMOA Commission and the Central Bank of West African States; After opinion of the Statutory Committee of Experts, dated [blank] June 2015;

ADOPTS THE DIRECTIVE WITH THE FOLLOWING PROVISIONS:

PRELIMINARY TITLE: TERMINOLOGY

Article 1: Definitions
For the purposes of this Directive, the following shall apply:

1. terrorist act:

• an act constituting an offense under one of the international legal instruments listed in the annex to this Directive;
• any other act intended to kill or seriously injure a civilian, or any other person not directly participating in hostilities in an armed conflict situation, when, by its nature or context, such act aims to intimidate a population or to compel a Government or international organization to do or abstain from doing any act;

2. Regional Financial Market actors: central structures (Regional Securities Market – BRVM, Central Depository/Settlement Bank) and commercial participants (Management and Intermediation Companies, Wealth Management Companies, Stock Investment Advisors, Business Brokers and Sales Agents);
3. bearer shares: negotiable instruments transferred by simple delivery, representing ownership of a fraction of the share capital of a public limited company;
4. criminal activity: any criminal or delinquent act constituting a predicate offense for money laundering and terrorist financing in a member state;
5. perpetrator: any person who participates in the commission of a crime or offense;
6. competent authority: the body that, by virtue of a law or regulation, is empowered to carry out or order the acts or measures provided for in this Directive;
7. supervisory authorities: the national or community authorities of UMOA and UEMOA empowered, by virtue of a law or regulation, to supervise the natural and legal persons referred to in Articles 5 and 6 of this Directive;
8. prosecuting authority: the body that, by virtue of a law or regulation, is invested, even occasionally, with the mission of exercising public prosecution;
9. judicial authority: the body empowered, by virtue of a law or regulation, to carry out acts of prosecution or investigation or to render judicial decisions;
10. public authorities: national administrations and those of local government bodies of the Union as well as their public establishments;
11. shell bank: a bank that has been incorporated and licensed in a state where it has no physical presence and is not affiliated with a regulated financial group subject to consolidated and effective supervision. The expression physical presence refers to the presence of a management body and decision-making power in a country. The mere physical presence of a local agent or subordinate staff does not constitute a physical presence;
12. beneficial owner or economic entitlement holder: the natural person(s) who ultimately own or control a client and/or the natural person on whose behalf a transaction is being conducted. This definition also includes persons who ultimately exercise effective control over a legal entity or legal arrangement as defined in point 21 below;

• when the client of a person referred to in Article 5 of this Directive is a company, the beneficial owner of the transaction means the natural person(s) who either directly or indirectly hold more than twenty-five percent of the capital or voting rights of the company, or who exercise, by any other means, control power over the company's management, administrative or executive bodies or over its general meeting of shareholders;
• when the client of a person referred to in Article 5 of this Directive is a collective investment scheme, the beneficial owner of the transaction means the natural person(s) who either directly or indirectly hold more than twenty-five percent of the shares or units of the scheme, or who exercise control power over the administrative or executive bodies of the collective investment scheme or, where applicable, the management company or portfolio management company representing it;
• when the client of a person referred to in Article 5 of this Directive is a legal entity that is neither a company nor a collective investment scheme, or when the client acts in the context of a trust or any other comparable legal arrangement governed by foreign law, the beneficial owner of the transaction means the natural person(s) who meet one of the following conditions:
  1°) they are destined, by virtue of a legal instrument designating them for this purpose, to become holders of rights covering at least twenty-five percent of the assets of the legal entity or assets transferred to a trust patrimony or any other comparable legal arrangement governed by foreign law; 2°) they belong to a group in whose primary interest the legal entity, trust or any other comparable legal arrangement governed by foreign law was formed or produced its effects, when the natural persons who are its beneficiaries have not yet been designated; 3°) they hold rights covering at least twenty-five percent of the assets of the legal entity, trust or any other comparable legal arrangement governed by foreign law; 4°) they hold the status of settlor, trustee or beneficiary, in accordance with the applicable legislative and regulatory provisions;

13. BCEAO or Central Bank: the Central Bank of West African States;
14. assets: assets of any nature, tangible or intangible, movable or immovable, fungible or non-fungible, as well as documents or legal instruments in any form whatsoever, including electronic or digital, attesting to the ownership of such assets or rights related thereto, as well as interests in said assets, namely in particular credits, traveler's checks, checks, money orders, shares, securities, bonds, bills of exchange or letters of credit as well as any potential interest, dividends or other income or value derived from or generated by such assets;
15. money laundering: the offense defined in Article 7 of this Directive;
16. designated categories of offenses:

• participation in a criminal organization and participation in racketeering;
• terrorism, including its financing;
• human trafficking and illicit trafficking in migrants;
• sexual exploitation, including the abduction and exploitation of minors;
• illicit trafficking in narcotic drugs and psychotropic substances;
• illicit trafficking in arms;
• illicit trafficking in stolen goods and other goods;
• corruption and extortion;
• embezzlement of funds by persons holding public office;
• fraud;
• counterfeiting of currency;
• counterfeiting of goods (including currency or banknotes) and piracy of products;
• trafficking in human organs;
• environmental offenses;
• murder and serious bodily injury;
• kidnapping, hostage-taking and abduction;
• theft;
• smuggling (including regarding taxes and customs and excise duties);
• tax offenses (related to direct and indirect taxes);
• extortion;
• forgery and use of forged documents;
• piracy;
• insider dealing and market manipulation;
• any other crime or offense.

17. CENTIF: the National Financial Intelligence Unit;
18. CIMA: the Interafrican Conference on Insurance Markets;
19. occasional client: any person who approaches one of the persons subject to this Directive, within the meaning of Articles 5 and 6, with the exclusive purpose of preparing or carrying out a one-off transaction or being assisted in the preparation or carrying out of such a transaction, whether carried out in a single transaction or in several transactions appearing to be linked;
20. confiscation: the definitive deprivation of assets, by decision of a competent court or any competent authority;
21. legal arrangements: express trusts or similar legal arrangements;
22. correspondent banking: commercial relations between a credit institution established in a member state and a credit institution established in another state;
23. CRF: Financial Intelligence Units;
24. Designated Non-Financial Businesses and Professions or DNFBPs, notably:
    a) casinos, including online casinos; b) real estate agents and real estate brokers; c) persons who habitually engage in the trade or organize the sale of precious stones, precious metals, antiques and works of art; d) lawyers, notaries and other members of independent legal professions when they prepare or execute transactions for a client, in the context of the following activities:

• purchase and sale of real estate;
• management of clients' funds, securities or other assets;
• management of accounts, including securities accounts;
• organization of contributions for the creation, operation or management of companies, or creation, operation or management of legal entities or legal arrangements, and purchase and sale of commercial entities.
  e) independent accountants; f) company and trust service providers, not covered elsewhere in this Directive, who provide the following services commercially to third parties:
• acting as an agent for the formation, registration and management of legal entities, namely trusts;
• acting or making necessary arrangements for another person to act as administrator or general secretary of a capital company, partner in a partnership or holder of a similar function for other legal entities;
• providing a registered office, business address or premises, administrative or postal address to a capital company, partner in a partnership or any other legal entity or legal structure;
• acting or making necessary arrangements for another person to act as trustee of an express trust, holder of a similar function for other legal entities;
• acting or making necessary arrangements for another person to act as shareholder acting on behalf of another person.
  g) other businesses or professions that may be designated by the competent authority;

25. member state: the State party to the Treaty of the West African Monetary Union and the Treaty of the Union Economic and Monetary Union of West Africa;
26. third state: any state other than a member state;
27. Trust: the operation by which one or more settlors transfer assets, rights or securities, or a set of assets, rights or securities, present or future, to one or more trustees who, holding them separate from their own estate, act for a determined purpose for the benefit of one or more beneficiaries;
28. proliferation financing: the financing of the proliferation of weapons of mass destruction, namely in particular nuclear, chemical, bacteriological or biological weapons, through acts proscribed by Resolution 1540 (2004) and successive resolutions of the United Nations Security Council relating to the prevention, suppression and interruption of the proliferation of weapons of mass destruction and its financing;
29. terrorist financing: the offense defined in Article 8 of this Directive;
30. funds and other financial resources: all financial assets and economic benefits of any nature whatsoever, including but not limited to cash, checks, monetary claims, bills of exchange, payment orders and other payment instruments, deposits with financial institutions, account balances, claims and debt instruments, traded securities and debt instruments, in particular shares and other equity instruments, share certificates, bonds, promissory notes, warrants, unencumbered securities, contracts on derivative products, interest, dividends or other income from assets or capital gains received on assets, credit, right of set-off, guarantees, including performance guarantees or other financial commitments, letters of credit, bills of lading, sales contracts, any document attesting to the holding of shares in a fund or financial resources and any other export financing instrument;
31. freezing:
    a) in the context of confiscation and provisional measures, the prohibition on transferring, converting, disposing of or moving any asset, equipment or instrument following a measure taken by a competent authority or court within a freezing mechanism, for the duration of the validity of said measure, or until a confiscation decision is taken by a competent authority; b) for the purposes of implementing targeted financial sanctions recommendations, the prohibition on transferring, converting, disposing of or moving all funds and other assets held or controlled by designated persons or entities following a measure taken by the United Nations Security Council or a competent authority or court, in accordance with applicable Security Council resolutions, for the duration of the validity of said measure.
32. serious offense: an act constituting an offense punishable by a term of imprisonment whose minimum must not be less than three years;
33. predicate offense: any offense, even committed on the territory of another member state or a third state, that generates proceeds from criminal activity;
34. government or public installation: any installation or means of transport, permanent or temporary, that is used or occupied by representatives of a State, members of the Government, Parliament or judiciary, or agents or personnel of a State or any other authority or public entity, or by agents or personnel of an intergovernmental organization, in the course of their official duties;
35. financial institution: any person or entity that commercially exercises one or more of the following activities or operations on behalf and for the account of a client:
    a) acceptance of deposits and other refundable funds from the public; b) lending, including consumer credit, mortgage credit, factoring with or without recourse, trade transaction financing; c) financial leasing, except financial leasing relating to consumer products; d) money or value transfers; e) issuance and management of payment instruments; f) granting guarantees and underwriting commitments; g) dealing in:

• money market instruments;
• foreign exchange;
• foreign exchange, interest rate and index instruments;
• securities;
• commodity futures markets.
  h) participation in securities issues and provision of related financial services; i) individual and collective wealth management; j) safekeeping and administration of securities, cash or liquid assets for others; k) other investment, administration or fund or money management operations for others; l) subscription and placement of life and non-life insurance products and other insurance-linked investment products; m) over-the-counter foreign exchange; n) any other activities or operations determined by the competent authority. The following are designated as financial institutions:
• credit institutions;
• postal financial services, as well as deposit and consignment funds or bodies that serve as such, in member states;
• insurance and reinsurance companies, insurance and reinsurance brokers and general insurance agents;
• decentralized financial systems;
• central structures of the Regional Financial Market (BRVM, Central Depository/Settlement Bank) as well as Management and Intermediation Companies, Wealth Management Companies and all other commercial participants having the status of financial institution, within the meaning of the texts governing the Regional Financial Market;
• Collective Investment Schemes in Securities;
• Fixed Capital Investment Companies;
• Licensed Over-the-Counter Foreign Exchange Dealers;
• Electronic Money Institutions;
• any other structure determined by the competent authority.

36. foreign financial institutions: financial institutions established in a third state;
37. instrument: any asset used or to be used, wholly or in part and in any manner whatsoever, to commit a criminal offense;
38. bearer negotiable instruments: all monetary bearer instruments such as:

• traveler's checks;
• negotiable instruments (in particular checks, promissory notes and money orders) that are either bearer, freely endorsable, made out to a fictitious payee, or in any other form allowing transfer upon simple delivery;
• incomplete instruments (in particular checks, promissory notes and money orders) signed, but on which the name of the payee has been omitted;

39. over-the-counter foreign exchange transaction: the immediate exchange of banknotes or currencies denominated in different currencies, carried out by transfer or delivery of cash, against settlement by another payment method denominated in another currency;
40. criminal organization: any understanding or structured association formed with the aim of committing, in particular, money laundering, terrorist financing or proliferation of weapons of mass destruction offenses;
41. non-profit organization or entity: any association, foundation, non-governmental organization constituted in accordance with the applicable legislative and regulatory provisions, whose main purpose is the collection or distribution of funds for charitable, religious, cultural, educational, social or fraternal purposes, or for other types of charitable works;
42. terrorist organization: any group of ter