GUIDELINES
for the prevention of money laundering and terrorist
financing
Date of issue: 15 September 2010
1. PURPOSE
The Prevention of Money Laundering and Terrorist Financing Act (Uradni list RS (Official
Gazette of the Republic of Slovenia), nos 60/07 and 19/10; hereinafter: the APMLFT) gives
the Securities Market Agency the power to issue, autonomously or with other supervisory
authorities, recommendations and guidelines related to the implementation of the measures
prescribed for the detection and prevention of money laundering and terrorist financing.
These guidelines are intended to help the following entities interpret and implement the
provisions of the APMLFT consistently:
1. investment funds management companies;
2. branches of investment funds management companies from third countries;
3. investment funds management companies from Member States which establish branches
in the Republic of Slovenia or which are authorised to directly perform investment funds
management services in the Republic of Slovenia;
4. other persons who may provide particular services or activities of managing investment
funds pursuant to the act governing investment fund management;
5. founders and managers of mutual pension funds;
6. brokerage companies;
7. branches of brokerage companies from third countries;
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8. brokerage companies from Member States which establish branches in the Republic of
Slovenia or are authorised to directly provide services relating to financial instruments in
the Republic of Slovenia;
9. other persons who may provide particular services related to financial instruments
pursuant to the act governing financial instrument market.
(hereinafter: organisations)
2.
GENERAL
REMARKS
ON
MONEY
LAUNDERING
AND
TERRORIST FINANCING
The APMLFT defines money laundering as an activity carried out for the purpose of
concealing the origin of money or other proceeds of crime, and includes the conversion or
transfer of money or other proceeds of crime, and the concealment or disguise of the true
nature, source, location, movement, disposal, ownership or rights of funds or other criminal
proceeds. Money laundering is a separate criminal offence through which one conceals or
disguises the illegal nature or source of proceeds obtained by committing a criminal offence
(usually tax evasion, illicit drug trafficking, illicit arms trafficking, corruption offences, fraud
etc.) for the purpose of making unlawfully obtained proceeds appear as legally acquired
funds. The ultimate objective of money laundering is to gradually integrate laundered money
or property into a business activity (existing or new) or into standard business flows which
form an integral part of a lawful business activity.
In accordance with the APMLFT, terrorist financing means the direct or indirect provision or
collection of funds or other property of legal or illegal origin, or the attempted provision or
collection of such funds or other property, with the intention that they be used in full or in part
for the performance of a terrorist act, or that they be used by a terrorist or terrorist
organisation. In contrast to money laundering, where the subject of concealment or disguise
may only be illegally gained assets – which means assets gained by a previously committed
criminal offence – terrorist financing resources that are intended for the performance of
terrorist acts or used by terrorists or terrorist organisations may be either of legal (personal
income, profit, humanitarian assets, sponsor assets, etc.) or of illegal origin (assets gained
from criminal offences, such as tax evasion, offences related to corruption, drug or weapons
trafficking, etc.), tax evasion, offences related to corruption, drug or weapons trafficking,
etc.).
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Money laundering and terrorist financing represent a serious threat to the stability and
integrity of the operation of financial institutions, harm the stability and reputation of the
domestic financial sector, put the internal market and its competitiveness at risk, and, in
particular, weaken trust in the democratic institutions of modern society in the long term. As
international experience in combating money laundering and terrorist financing has proven
that the financial instruments market is also an easy target for organised criminal activities
such as money laundering and terrorist financing, steps must be taken to ensure that
organisations consistently observe all the measures determined by APMLFT and secondary
legislation in their activities, especially those measures concerning client due diligence,
reporting requested information, record keeping, internal controls, employee training, and
similar, as well as the measures and procedures determined by the Guidelines, which help
organisations implement a consistent policy for the detection and prevention of money
laundering and terrorist financing in practice.
3. NATIONAL AND INTERNATIONAL LEGISLATION
Even before its accession to the EU, the Republic of Slovenia ensured a gradual
compatibility of its legislation with the acquis on the detection and prevention of money
laundering. By 2001, it had already adopted and, soon after, amended the Prevention of
Money Laundering Act (Uradni list RS, nos 79/01 and 59/02; hereinafter: the ZPPDen-1),
which extensively and consistently observed all the international standards established from
ratified international treaties and other international regulations which were not formally a
constituent part of the legislation of the Republic of Slovenia at the time of the adoption of the
Act. Together with the provision of Article 252 of the Penal Code (Uradni list RS, no. 95/04 –
official consolidated text; hereinafter: the KZ), which defines the criminal offence of money
laundering, and, since 2004, with the provision of Article 388.a of the KZ, which defines the
criminal offence of terrorist financing, the ZPPDen-1 constituted a conceptual framework for
identifying and preventing activities carried out for the purpose of concealing the origin of
money or other proceeds of crime.
After a series of terrorist attacks in the USA and Europe, the international community and
various international organisations decided to amend international standards in combating
money laundering and terrorist financing. These are primarily summarised in the
recommendations of the Financial Action Task Force – hereinafter: FATF), which is one of
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the key international bodies in combating money laundering and terrorist financing. As the
FATF recommendations were considerably expanded in 2003 and 2004, this led to the
preparation of the new Directive 2005/60/EC of the European Parliament and of the Council
of 26 October 2005 on the prevention of the use of the financial system for the purpose of
money laundering and terrorist financing (hereinafter: Directive 2005/60/EC); in addition,
2007 saw the adoption of Directive 2007/64/EC of the European Parliament and of the
Council of 13 November 2007 on payment services in the internal market and amending
Directives 97/7/EC, 2002/65/EC, 2005/60/EC and 2006/48/EC and repealing Directive
97/5/EC. Directive 2005/60/EC constituted an immediate basis for the adoption of the new
Prevention of Money Laundering and Terrorist Financing Act in 2007 (with the application of
which the ZPPDen-1 ceased to apply), amended in 2010, which now, together with the
provision of Article 109 of the Penal Code (Uradni list RS, nos. 55/08, 66/08 – corr. and
39/09; hereinafter: the KZ-1) on criminal offence of terrorist financing and the provision of
Article 245 of the KZ-1 on criminal offence of money laundering, constitutes the legal basis of
the Republic of Slovenia in the field of prevention of money laundering and terrorist financing.
In the field of combating terrorism, the Republic of Slovenia also adopted the Act Relating to
Restrictive Measures Introduced or Implemented by the Republic of Slovenia in Compliance
with Legal Instruments and Decisions Adopted within International Organisations (Uradni list
RS, no. 127/06). The restrictive measures currently implemented in the Republic of Slovenia
are based on the legal acts of the UN Security Council and the EU, but may also be
introduced on the basis of binding or non-binding acts of other international organisations or
associations (e.g. the OSCE). These measures may include the partial or full cessation of
economic relations, and railway, maritime, air, postal, telegraphic, radio and other means of
communication, and the severance of diplomatic ties, while the most common measure in
combating terrorism is financial sanctions, including the freezing of funds on accounts and/or
the prohibition of the disposal of property (economic resources) in general, a military
embargo, which means prohibition from arms trading with a certain country or other entities
as well as a travel embargo, which includes banning certain persons from entering a country
or transiting through its territory. Restrictive measures may be imposed against countries,
international organisations, other entities, natural persons (e.g. heads of state, high state
officials, terrorists) and other entities, especially terrorist organisations, whereas persons
subject to sanctions may also include legal persons. The lists of persons subject to sanctions
form part of legal acts which introduce sanctions.
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Together with the documents already listed, the most important international documents on
the detection and prevention of money laundering and terrorist financing may be summarised
in the following points:
a) In the field of the detection and prevention of money laundering
1. Directive 2005/60/EC of the European Parliament and of the Council of 26 October 2005
on the prevention of the use of the financial system for the purpose of money laundering
and terrorist financing;
2. Commission Directive 2006/70/EC of 1 August 2006 laying down implementing measures
for Directive 2005/60/EC of the European Parliament and of the Council as regards the
definition of “politically exposed person” and the technical criteria for simplified client due
diligence procedure and for exemption on grounds of financial activity conducted on an
occasional or very limited basis;
3. Directive 2007/64/EC of the European Parliament and of the Council of 13 November
2007 on payment services in the internal market, and amending Directives 97/7/EC,
2002/65/EC, 2005/60/EC and 2006/48/EC and repealing Directive 97/5/EC;
4. Regulation of the European Parliament and of the Council on information on the payer
accompanying transfers of funds;
5. Regulation No 1889/2005 of the European Parliament and of the Council of 26 October
2005 on controls of cash entering or leaving the Community;
6. Council of Europe Convention on Laundering, Search, Seizure and Confiscation of the
Proceeds from Crime and on the Financing of Terrorism (C 198); Warsaw, 16 May 2005;
7. Forty recommendations by the international organisation, FATF, on money laundering from
June 2003.
b) In the field of the detection and prevention of terrorist financing
1. European Convention on the Suppression of Terrorism, Strasbourg, 27 January 1977).
Slovenia signed the Convention on 28 March 2000 and ratified it on 29 November 2000. It
entered into force on 1 March 2001.
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2. Protocol amending the European Convention on the Suppression of Terrorism,
Strasbourg, 15 May 2003). Slovenia signed the Protocol on 15 July 2003 and ratified it on
11 May 2004.
3. UN Security Council Resolution 1373 of 2001.
4. International Convention for the Suppression of the Financing of Terrorism; New York, 9
December 1999. Slovenia signed the Convention on 10 November 2001 and ratified it on
15 July 2004. It entered into force on 23 October 2004.
5. Council of Europe Convention on the Prevention of Terrorism; Warsaw, 16 May 2005).
Slovenia signed the Convention on 19 May 2006.
6. Council of Europe Convention on Laundering, Search, Seizure and Confiscation of the
Proceeds from Crime and on the Financing of Terrorism; Warsaw, 16 May 2005.
7. 9 special recommendations of FATF on terrorist financing of October 2001 and October
2004 (hereinafter: Special recommendations of FATF).
4. GENERAL PRINCIPLES OF COMBATING MONEY LAUNDERING
AND TERRORIST FINANCING
Article 4 of the APMLFT determines the persons under obligation for the implementation of
measures for the detection and prevention of money laundering and terrorist financing;
particular reference is made to investment funds management companies, branches of
management companies of investment funds from third countries, investment funds
management companies from Member States which establish branches in the Republic of
Slovenia or which are authorised to directly perform investment fund management services
in the Republic of Slovenia, other persons who may provide particular services or activities of
managing investment funds pursuant to the act governing investment fund management,
founders and managers of mutual pension funds, brokerage companies, branches of
brokerage companies from third countries, brokerage companies from Member States which
establish branches in the Republic of Slovenia or are authorised to provide services relating
to financial instruments directly in the Republic of Slovenia, and other persons who may
provide particular services related to financial instruments pursuant to the act governing
financial instrument market.
In view of the above, the activities of the organisations must include the preventive measures
prescribed in order to reduce the risk of money laundering or terrorist financing. Particular
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reference should be made to those measures that directly refer to verifying the identity of a
client or the beneficial owner of a client if this is a legal entity, and those measures that help
organisations identify transactions and clients when reasonable grounds exist to suspect the
involvement of money laundering or terrorist financing. The management body of an
organisation must adopt and implement at the organisation level a risk management policy
concerning money laundering and terrorist financing and ensure the efficiency and full
conformity of the organisation's activities with prescribed standards. The adoption of
appropriate policy is the precondition for the preparation of internal procedures for the
detection and prevention of money laundering and terrorist financing. For the purpose of the
implementation of the APMLFT and these guidelines in the preparation of internal regulations
and procedures, organisations rely on the following key principles for combating money
laundering and terrorist financing:
a) identifying a client and verifying a client's identity
Before the conclusion of a business relationship or before carrying out a transaction above a
legally determined amount, or in other cases determined by the law, organisations must
obtain requested information about their clients necessary for establishing and verifying the
client's identity. Client identity may be credibly established only with the use of valid,
independent and objective sources such as official identification documents or other public
documents which attest to the true identity of the client (official personal documents, certified
extracts from court and other public registers, qualified digital certificates, etc.). In the event
that the identity of a client cannot be reliably established or verified, an organisation cannot
establish a business relationship of carry out a transaction, or must freeze or terminate any
existing business relationship.
b) respecting regulations and standards
In performing their activities, organisations must comply with the statutory and executive
provisions adopted that regulate the detection and prevention of money laundering and
terrorist financing, and ensure that the measures prescribed are appropriately integrated at all
levels so that the activity is fully implemented in compliance with the standards set by
Directives 2005/60/EC, 2006/70/EC, 2007/64/EC, and FATF recommendations.
c) cooperation with the Office and the Agency
8
As a part of their legal authorisations, organisations must ensure full cooperation with
supervisory authorities such as the Office of the Republic of Slovenia for Money Laundering
Prevention (hereinafter: the Office) and the Securities Market Agency (hereinafter: the
Agency). Mandatory cooperation between an organisation and a supervisory authorities
applies especially when reporting prescribed and requested information, information and
documentation referring to clients or transactions where reasonable grounds to suspect
money laundering or terrorist financing exist, as well as when reporting any facts or
circumstances that indicate or may indicate money laundering or terrorist financing and that
may threaten the security, stability and reputation of the financial system of the Republic of
Slovenia. Therefore, the internal procedures adopted must not, either directly or indirectly,
restrict the cooperation of an organisation with the Office and the Agency or affect the
efficiency of such cooperation in any other way.
d) adoption of appropriate policies, procedures and internal controls
Organisations must consistently adopt a uniform risk management policy concerning money
laundering and terrorist financing, and draft effective internal procedures on its basis,
especially in the field of client due diligence, risk analysis and identification of clients and
transactions in respect of which reasonable grounds to suspect money laundering or terrorist
financing exist, and ensure that all employees are familiar with these procedures, comply
with them and use them in their work. Risk management policy of organisations must include
the following: procedures of admission and treatment of clients, procedures of risk analysis
preparation, procedures of staff training, internal control and risk management mechanisms,
procedures of detection and communication of data on suspicious transactions, responsibility
of staff for the implementation of measures for the detection and prevention of money
laundering or terrorist financing etc.
e) regular employee training
Organisations must provide regular professional training and education for all organisation
employees who directly or indirectly carry out tasks for the prevention and detection of
money laundering and terrorist financing or who carry out an activity which may be
considered risky from the aspect of money laundering or terrorist financing, as well as for all
outsource service providers and agents entrusted to carry out their tasks on the basis of an
appropriate contract.
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5. RISK-BASED APPROACH
5.1
Purpose of Risk Analysis
According to the APMLFT, a risk of money laundering or terrorist financing means a risk of a
client misusing the organisation and thereby indirectly exploiting the financial system of the
Republic of Slovenia for money laundering and terrorist financing purposes or a risk of a
business relationship, transaction or financial instrument being used, directly or indirectly, for
money laundering or terrorist financing purposes. In order to prevent excessive exposure to
the negative effects of money laundering and terrorist financing, the organisation must
prepare a risk analysis in order to establish the level of risk of money laundering or terrorist
financing associated with an individual client, business relationship, financial instrument or
transaction. The preparation of a risk analysis is a prerequisite for the implementation of
prescribed client due diligence, as the placement of a client, business relationship, financial
instrument or transaction in one of the risk categories determines the type of client due
diligence the organisation will have to carry out in accordance with the APMLFT (normal due
diligence, enhanced due diligence, simplified due diligence).
5.2
Risk management policy and risk analysis
Before the preparation of the risk analysis, the organisation or its management body may
adopt an appropriate risk management policy for money laundering and terrorist financing if
this is necessary for a more efficient implementation of the APMLFT provisions and these
guidelines. The aim of adopting such a policy is to define at the organisation level the fields
of operations which are more or less at risk from the aspect of their potential misuse for
money laundering or terrorist financing, and to enable organisations to identify and define the
key risks in these fields and the measures for their elimination. In the preparation of the basis
for the adoption of risk management policy for money laundering or terrorist financing, the
organisation observes and details the following orientations:
1. aims and objectives of risk management for money laundering and terrorist financing and
their references to business objectives and strategic orientations of the organisation;
2. fields and business processes in the organisation which may be exposed to risks of
money laundering or terrorist financing;
3. risks of money laundering and terrorist financing in all key business fields in the
organisation;
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4. measures for the elimination of money laundering and terrorist financing risks;
5. role and responsibility of the organisation management in the introduction and monitoring
of risk management for money laundering and terrorist financing.
5.3
Elaboration of Risk Analysis
Risk analysis is a procedure by which the organisation defines the assessment of probability
that its activity may be misused for money laundering or terrorist financing, and criteria that
provide for a classification of every client, business relationship, financial instrument of
transaction as high or low risk with regard to money laundering or terrorist financing; it also
determines the consequences and sets out the measures to manage these risks effectively.
In the preparation of a risk analysis, the organisation observes the following orientations:
1. in determining a risk category, an organisation is obliged to consider the risk criteria
determined in chapter 5.5 of these guidelines; on this basis, it classifies a certain client,
business relationship, financial instrument or transaction in one of the risk categories
defined in chapter 5.6 of these guidelines when applying due diligence measures;
2. notwithstanding the risk criteria determined by these guidelines, an organisation may,
when determining a risk category, categorise an individual client, business relationship,
financial instrument or transaction as high-risk for money laundering or terrorist financing
in accordance with its own risk management policy, and carry out enhanced due
diligence;
3. in determining risk categories, an organisation must not, under any condition, categorise
the clients, business relationships, financial instruments or transactions determined as
high-risk by the APMLFT and these guidelines as medium- (average) or minimal risk;
similarly, it must not extend the circle of clients, business relationships, financial
instruments or transactions treated as low-risk contrary to the provisions of the APMLFT,
secondary legislation and guidelines.
5.4
5.4.1
Elaboration of risk assessment
Initial risk assessment
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On the basis of an elaborated risk analysis, an organisation must elaborate a risk
assessment of individual clients, business relationships, financial instruments or transactions
immediately before entering a business relationship or carrying out a transaction referred to
in the first paragraph of Article 8 of the APMLFT (i.e. initial risk assessment) by the following
phases:
1. establishing the client's identity by collecting the requested information on the client,
business relationship, financial instrument or transaction, and other data required by an
organisation for the preparation of risk assessment;
2. examination of data gathered from the aspect of criteria of risk for money laundering or
terrorist financing (risk identification);
3. establishing the risk assessment of the client, business relationship, financial instrument
or transaction which must be based on the previously elaborated risk analysis, by
classifying a client, business relationship, financial instrument and transaction in one of
risk categories;
4. carrying out client due diligence (standard, enhanced or simplified due diligence);
5. entering a business relationship or carrying out a transaction.
5.4.2
Subsequent risk assessment
As a part of measures of regular monitoring of client's business activities, an organisation reassesses the justification for the initial risk assessment of a certain client or business
relationship established between the organisation and the client, and prepares a new risk
assessment (i.e. subsequent risk assessment). An organisation may subsequently verify the
justification for the initial risk assessment of a certain client or business relationship:
1. in the event that the circumstances that form the basis for the risk assessment of
individual clients or business relationships have considerably changed, or in the event of
changed circumstances that have considerably affected the classification of a certain
client or business relationship in a certain risk category;
2. in the event of doubt about the accuracy of data which served as the basis for risk
assessment of individual clients or business relationships.
5.5
Criteria for determining client risk categories
12
In the risk assessment of certain clients, business relationships, financial instruments or
transactions, an organisation complies with the following guidelines and devotes particular
attention to the following four criteria:
1. type, business profile and structure of client;
2. geographic origin of client;
3. nature of business relationship, financial instrument or transaction;
4. past experience of the organisation with the client.
Besides the criteria listed in the preceding paragraph, an organisation may, in determining
the risk level of a certain client, business relationship, financial instrument or transaction,
separately observe other criteria, such as:
1. size, structure and activity of an organisation including the volume, structure and
complexity of transactions carried out by an organisation in the market;
2. status and ownership structure of a client,
3. presence/absence of a client in entering a business relationship or carrying out a
transaction,
4. origin of funds which are the subject of business relationship or transactions in clients
considered politically exposed persons under the criteria from the APMLFT;
5. purpose of entering a business relationship or carrying out a transaction;
6. client's knowledge of financial instruments and client's experience or skills in this field;
7. other information indicating that a client, business relationship, financial instrument or
transaction may be of increased risk.
5.6 Risk categories of clients
According to risk criteria, clients, business relationships, financial instruments and
transactions may be placed in four principal risk categories, namely: 1. extremely high risk,
for which transactions with a client are prohibited, 2. high risk, 3. medium (average) risk and
4. minimal risk.
5.6.1
Prohibition of conducting business with client
Because of direct and high risk of money laundering or terrorist financing, it is prohibited to
conduct business with the following clients:
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a. clients (natural or legal persons and other entities) from the list of persons subject to
restrictive measures of the UN Security Council or the EU (relevant measures include
especially the so-called financial sanctions, which include the freezing of funds on
accounts and/or the prohibition of the disposal of property (economic resources), a military
embargo, which means prohibition from trading weapons with a certain entity etc. (see
Annex 5);
b. clients whose residence or headquarters are located in an entity which is not subject to
international law or not internationally recognised as a country (such an entity offers a
possibility of fictitious registration of a legal entity, enables the issue of fictitious
identification documents etc.).
The prohibition of conducting transactions and entering business relationships also applies in
the cases of:
a. transactions aimed at persons or entities subject to restrictive measures of the UN
Security Council or the EU;
b. transactions conducted by a client on behalf and for the account of an entity subject to
restrictive measures of the UN Security Council or the EU;
c. business relationships concluded in favour of a person or entity from the list of persons
and entities subject to restrictive measures of the UN Security Council or the EU.
5.6.2
5.6.2.1
High risk of money laundering and terrorist financing
Type, business profile and structure of client
The following criteria apply in categorising clients as high-risk for money laundering or
terrorist financing:
1. in natural persons:
a. a client is a foreign politically exposed person, therefore a person who is or has been
entrusted with prominent public function in the previous year and resides in any other
country, namely:
i) heads of state, prime ministers, ministers and their deputies or assistants;
ii) elected representatives in legislative bodies;
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iii) members of supreme and constitutional courts and other high-level judicial authorities
against whose decisions there is no ordinary or extraordinary legal remedy, save in
exceptional cases;
iv) members of courts of audit and boards of governors of central banks;
v) ambassadors, chargés d'affaire and high-ranking officers of armed forces;
vi) members of the management or supervisory bodies of undertakings in majority state
ownership;
b. a client is an immediate family member of a foreign politically exposed person: spouse or
common law partner, parent, child, spouse or common law partner of a child of a foreign
politically exposed person;
c. a client is a close associate of a politically exposed person, therefore any natural person
who has a joint profit from property or business relationship or has any other close
business links;
d. a client is not physically present for the purpose of determining and verifying his or her
identity (clients are considered physically present at the organisation when they or their
legal representatives or authorised persons (when representing a legal entity) are
personally and physically present at the organisation when submitting official personal
identification on the basis of which the notary confirms the client's identity).
2. in legal entities:
a. a client is a foreign legal entity which is not or may not be engaged in trade,
manufacturing or other activity in the country of registration (a legal entity with
headquarters in a country known as an off-shore financial centre, which is subject to
certain restrictions in immediate performance of activities registered in this country);
b. a client is a fiduciary or other similar foreign law company with unknown or hidden owners
or managers (foreign law companies offering fiduciary services to third parties, or
companies established on the basis of a legal relationship between a founder and a
manager managing the entrusted property of a founder in favour of certain persons, the
so-called beneficiaries, or for other purposes – from private and profitable to general
interest or non-profitable purposes);
c. a client has an intricate status structure or a complex ownership chain (an intricate status
structure or a complex ownership chain hinders or disables the identification of the
15
beneficial owner of the client or the person who indirectly provides funds to a legal entity
and is on such grounds given the possibility of exercising control, guiding or otherwise
substantially influencing the decisions of the management or other administrative body of
the legal entity concerning financing and business operations);
d. a client is a financial organisation which does not need or is not obliged to acquire a
licence issued by a competent supervisory authority for the performance of its activities,
and/or is not a person under an obligation to apply the money laundering and terrorist
financing prevention measures under the relevant legislation, as set out by Directive
2005/60/EC;
e. a client is a non-profit organisation (an institution, society or legal or other entity
established in general interest, for charitable or other non-profit purposes, a religious
community, non-profit association) which meets one of the following conditions:
1. headquarters in a country generally known as an off-shore financial centre;
2. headquarters in a country generally known as a financial or tax haven;
3. headquarters in a country which is not a EU member state or a signatory to the
European Economic Union agreement, or in a country which, according to the rules
referred to in the fifth paragraph of Article 25 of the APMLFT, does not belong among
the equal third countries,
4. one of its members or founders is a natural or legal entity who is a resident of one of
the countries referred to in preceding points.
f. a client is a legal entity established by the issue of bearer shares;
g. a client is a foreign legal entity whose legal representative, authorised person or beneficial
owner is a foreign politically exposed person, or a close relative or close associate of a
legal representative, authorised person or beneficial owner of the legal entity is a foreign
politically exposed person.
5.6.2.2
Geographic position of a client
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Clients that pose a high-risk for money laundering or terrorist financing are clients with
permanent or temporary residence or headquarters in:
a. a country which is not a EU member state or a signatory to the European Economic Union
agreement, or in a country which, according to the rules referred to in the fifth paragraph
of Article 25 of the APMLFT, does not belong among the equal third countries,
b. a country which is known for the manufacture of drug precursors on the basis of findings
of competent international organisations (an up-to-date list of these countries may be
found
on
the
Office's
website:
http://www.uppd.gov.si/si/vsebinska_podrocja/seznam_drzav);
c. a country which is, on the basis of findings of competent international organisations,
known for a high level of organise crime, especially corruption, weapons trafficking, traffic
in human beings or human right violations (see Annex 6);
d. a country which, according to the data of Financial Action Task Force , belongs among
the so-called uncooperative countries or territories (these are countries or territories
which, according to the FATF assessment, do not have appropriate legislation in the field
of prevention and detection of money laundering or terrorist financing; the state control
over financial institutions does not exist or is inappropriate; the establishment or operation
of financial institutions is possible without an approval or registration by competent state
authorities; a country encourages the opening of anonymous accounts or other
anonymous financial instruments; the system of detection and communication of
suspicious transactions is deficient; the legislation does not include the obligation to
identify an beneficial owner; international cooperation is ineffective or non-existent. An upto-date
list
of
these
countries
may
be
found
on
the
Office's
website
-
http://www.uppd.gov.si/si/vsebinska_podrocja/seznam_drzav);
e. a country subject to restrictive measures of the UN or the EU, which include the partial or
full cessation of economic relations, and railway, naval, air, postal, telegraphic, radio and
other means of communication, the suspension of diplomatic ties, a military embargo, a
travel embargo etc. (see Annex 4);
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f. a country generally known as a financial or tax haven (the principal characteristic of such
countries is that they enable a partial or full exemption from taxes or that the tax rate is
considerably lower in comparison with other countries; such countries usually do not have
any concluded agreements on double taxation avoidance or they do not observe any such
agreements; the legislation of such countries does not enable or require a strict
observance of bank and business secrecy; fast, discreet and cheap financial services are
provided. An up-to-date list of these countries may be found on the Office's website http://www.uppd.gov.si/si/vsebinska_podrocja/seznam_drzav).
g. a country generally known as an off-shore financial centre (the principal characteristic of
such countries is that they impose restrictions in direct provision of a registered activity in
a country, enable a high level of bank and business secrecy, implement liberal control of
foreign trade operation, provide fast, discreet and favourable financial services and
services of registration of legal entities; another characteristic of such countries is that
they often have a deficient legislation in the field of prevention and detection of money
laundering and terrorist financing. An up-to-date list of these countries may be found on
the Office's website - http://www.uppd.gov.si/si/vsebinska_podrocja/seznam_drzav);
h. a country known as an origin of persons associated with terrorism and terrorist financing
(an up-to-date list of these countries may be found on the Office's website:
http://www.uppd.gov.si/si/vsebinska_podrocja/seznam_drzav);
The following international organisations are competent for the monitoring of efficiency and
conformity of the implementation of the measures prescribed for the prevention of money
laundering and terrorist financing with the established international standards of an
organisation:
a. European Central Bank (ECB),
b. Committee of the European Commission for the prevention of money laundering and
terrorist financing (MLCC),
c. International Financial Action Task Force (FATF or GAFI),
d. International Monetary Fund (IMF),
e. World Bank (WB),
f. International association of financial intelligence units focused on the detection and
prevention of money laundering and terrorist financing – Financial Intelligence Units
(Egmont Group),
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g. Committee of Experts on the Evaluation of Anti-Money Laundering Measures and the
Financing of Terrorism (MONEYVAL)
h. International organisation of securities commissions (IOSCO), and
i. Independent and autonomous Committee of European Securities Regulators (CESR).
5.6.2.3
Business relationships, financial instruments and transactions
The following criteria apply in categorising business relationships as high-risk for money
laundering or terrorist financing:
a.
business relationships which include standing or high deposits of funds from a client
account opened at a credit or financial institution in a country which is not a member of
the European Union or a signatory to the European Economic Union agreement, or in a
country which, according to the rules referred to in the fifth paragraph of Article 25 of the
APMLFT, does not belong among the equal third countries; or business relationships
which include high deposits of funds on a client account opened at a credit or financial
institution in a country which is not a member of the European Union or a signatory to
the European Economic Union agreement, or in a country which, according to the rules
referred to in the fifth paragraph of Article 25 of the APMLFT, does not belong among
the equal third countries;
b.
business relationships concluded or carried out on its own behalf and on for the account
of a client by a foreign credit, financial or other fiduciary institution whose headquarters
are in a country which is not a EU member state or a signatory to the European
Economic Union agreement, or in a country which, according to the rules referred to in
the fifth paragraph of Article 25 of the APMLFT, does not belong among the equal third
countries;
c.
business relationships concluded without a client's presence in the organisation and
without fulfilled conditions for the simplified due diligence procedure;
d.
business relationships concluded with the use of qualified digital web certificates or
other e-products.
Financial instruments considered high-risk for money laundering or terrorist financing are all
transferrable instruments issued on bearer, as well as transferrable instruments issued on
bearer or for the benefit of a fictitious beneficiary, backed without restrictions or in other
forms that allow the transfer of title on handover, and all other deficient instruments which are
signed but without an indication of the name of the payment beneficiary.
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The following criteria apply in categorising transactions as high-risk for money laundering or
terrorist financing:
a. deposits of funds from a client account or deposits of funds on a client account different
from the account provided by the client upon the establishment of his or her identity, or
from the account usually used for business transactions (especially in the event of crossborder transactions),
b. transactions intended for persons with residence or headquarters in a country known as
a financial or tax haven,
c.
transactions intended for persons with residence or headquarters in a country known as
an off-shore financial centre,
d. transactions intended for non-profit organisations with headquarters in a country
generally known as an off-shore financial centre, a country generally known as a
financial or tax haven, or a country which is not a member of the European Union or a
signatory to the European Economic Union agreement or which, according to the rules
referred to in the fifth paragraph of Article 25 of the APMLFT, does not belong among the
equal third countries.
5.6.2.4
Past experience of the organisation with the client
The following criteria apply in categorising clients as high-risk for money laundering or
terrorist financing in view of the organisation's experience:
a.
persons whose data the organisation was obliged to submit in the last three years
according to Article 54 of the APMLFT and following an order issued by the Office,
b.
persons in respect of whom the Office issued an order on temporary suspension of
transaction in the last three years,
c.
persons in respect of whom the Office issued a request for ongoing monitoring of
financial transactions in the last three years,
d.
persons whose data were reported by the organisation to the Office in the last three
years on the basis of the third paragraph of Article 38 of the APMLFT because of
suspected money laundering or terrorist financing in respect of these persons or
transactions.
5.6.3
Medium (average) risk of money laundering
20
The organisation considers a client, business relationship, financial instrument or transaction
which cannot be categorised as high or minimal risk under the criteria of these guidelines as
medium (average) risk. In this case, an organisation acts in accordance with the provisions of
the APMLFT which govern standard due diligence.
5.6.4
Minimal risk of money laundering and terrorist financing
The following clients may be categorised as those of minimal risk for money laundering or
terrorist financing:
a. a bank, savings bank, post office, investment funds management company, founder or
manager of mutual pension funds, pension company or brokerage company with
headquarters in the Republic of Slovenia;
b. other person with headquarters in the Republic of Slovenia that may provide particular
services or activities of managing investment funds pursuant to the act governing
investment fund management;
c. other person with headquarters in the Republic of Slovenia that may provide particular
services related to financial instruments pursuant to the act governing financial instrument
market;
d. a bank, savings bank, post office, investment funds management company, founder or
manager of mutual pension funds, pension company or brokerage company with
headquarters in a member state or in an equivalent third country;
e. a bank of a member state that establishes a branch in the Republic of Slovenia, or is
authorised to directly provide banking services in the Republic of Slovenia;
f. a branch of a bank of a third country established in the Republic of Slovenia;
g. an investment funds management company from a Member State which establishes
branches in the Republic of Slovenia or is authorised to directly perform investment funds
management services in the Republic of Slovenia;
21
h. a branch of an investment funds management company of a third country established in
the Republic of Slovenia;
i. a brokerage company from a Member State which establishes a branch in the Republic of
Slovenia or is authorised to directly provide services relating to financial instruments in
the Republic of Slovenia;
j.
a branch of a brokerage company of a third country established in the Republic of
Slovenia;
k. a company whose financial instruments are admitted to trading on a regulated market in
one or more Member States in accordance with European Community legislation;
l.
a company with headquarters in a third country whose financial instruments are admitted
to trading on a regulated market in a Member States or in a third country in which the
company has headquarters, provided that its disclosure requirements are consistent with
European Community legislation;
m. a state authority: government, individual ministries, bodies affiliated to ministries,
government agencies, administrative units;
n. other body governed by public law that is not a state authority: public agency, public
institute, public fund, chamber;
o. local self-government body;
p. a public authority or other public body which carries out powers conferred by public law
on the basis of foreign legislation or international acts and meets the following criteria:
1. powers conferred by public law proceed from the Treaty on European Union,
Community Treaties or secondary Community legislation,
2. the identity of a public authority may be reliably established from publicly available
sources,
3. a public authority carries out an activity which is generally known and transparent,
4. a public authority is, according to the legislation it is subject to, obliged to carry out
regular audits of operation or make sure in other ways that its accounting procedures
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and records are transparent; or it must disclose accounting records in accordance with
the Community rules,
5. a public authority is responsible to a Community institution or to authorities of a
member state; or there are different appropriate supervision procedures to ensure
supervision of the client's activity.
Public authorities meeting the criteria under point p include: EU institutions (Council,
Parliament, Commission etc.), EU revenue authorities (European Central Bank, European
Investment Bank), decentralised EU authorities – agencies (Community agencies, agencies
for common foreign and security policy, agencies for judicial cooperation in criminal matters,
implementation agencies) and their branches if the performance of obligations from Directive
2005/60/EC has been extended to them.
q. a legal entity other than public authority or public body, which meets the following criteria:
1. a legal entity is not a credit or financial institution, auditor, accountant or tax consultant,
notary, lawyer or law firm, person offering business or fiduciary services, casino or legal
entity trading in goods and receiving payments in cash which amount to EUR 15,000 or
more, but it performs a financial activity for which there is a high probability of misuse
for money laundering or terrorist financing,
2. a legal entity is, in accordance with the national legislation in the field of detection and
prevention of money laundering and terrorist financing, subject to measures set by
Directive 2005/60/EC;
3. the identity of a legal entity may be reliably established from publicly available sources,
4. a legal entity must, in accordance with the national legislation, acquire a licence to
perform financial activities; similarly, the withdrawal of licence must be prescribed if
competent authorities establish in an appropriate procedure that persons that actually
conduct or will conduct the performance of the client's activity or persons that are
beneficial owners of the client are not appropriate,
5. a legal entity is under the supervision of competent inspection authorities,
6. a legal entity may be , in accordance with the national legislation governing the field of
detection and prevention of money laundering, subject to appropriate administrative
and minor offence proceedings.
The examples of clients meeting the criteria under point q include standard insurance
companies and reinsurance companies.
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6. CLIENT DUE DILIGENCE
6.1 Normal due diligence
6.1.1 General
Client due diligence is the key preventive element in the system for the detection and
prevention of money laundering and terrorist financing. The purpose of the implementation of
client due diligence measures is to establish and confirm the true identity of a client. Client
due diligence consists of: establishing and verifying the client's identity, determining the
beneficial owner of the client if a client is a legal entity, and obtaining data on the purpose
and intended nature of the business relationship or transaction, as well as other data
determined by the APMLFT.
The Act builds on the basic assumption that certain clients, business relationships, financial
instruments or transactions constitute a higher or lower risk from the aspect of misuse for
money laundering and terrorist financing. Therefore the APMLFT stipulates particularly strict
procedures for the identification and due diligence of clients in certain cases, or enables
simplified measures for the identification and due diligence in other cases. Besides standard
due diligence, the APMLFT introduces two versions of due diligence, namely enhanced due
diligence when there is a high risk of money laundering, and simplified due diligence
admissible when the risk of money laundering is minimal.
The organisation determines and verifies the identity of the client on the basis of authentic,
independent and objective sources (by inspecting an appropriate identity document such as
official personal identification document, original or certified copy from a court or other public
register, qualified digital certificate etc.). The organisation
determines and verifies the
identity of the client in two ways: directly in the physical presence of the client or its legal
representative or other authorised person (only when the client is a legal entity !!!) at the
organisation, or indirectly through a third party or with the use of a qualified digital certificate.
6.1.2 Obligation to carry out client due diligence
An organisation carries out client due diligence:
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a. when entering a business relationship with a client (business relationship is any
business or other contractual relationship linked with the organisation's operations,
concluded or entered into by a party within the organisation, e.g. contract on provision
of investment services, brokerage contract, contract on financial instrument
management, client's accession to the fund rules of a mutual fund of a management
company. An exception determined by the APMLFT is that the accession to the fund
rules of another mutual fund managed by the same management company is not
considered an establishment of a new business relationship. The conversion of an
investment fund to a subsidiary fund of the main fund shall not constitute a new
business relationship, either.)
b. when carrying out a transaction amounting to EUR 15,000 or more, whether the
transaction is carried out in a single operation or in several operations which are
evidently linked (the following transactions may be considered evidently linked:
ii.
two or more successive separate transactions whose total value amounts to over
EUR 15,000 and which are made by individual clients for the benefit of the same
third party for the same purpose,
iii.
two or more transactions whose total value amounts to over EUR 15,000 and
which are made by several persons related in terms of family or capital for the
benefit of the same third party for the same purpose.
c. where there are doubts concerning the veracity and adequacy of previously obtained
client or beneficial owner information;
d. where there is a suspicion of money laundering or terrorist financing in respect of a
transaction or client, irrespective of the transaction amount.
Insofar as the organisation enters an additional business relationship with a client or carries
out transactions to the amount of EUR 15,000 or more on the basis of an existing business
relationship, the organisation acquires only the missing data referred to in the first and
second paragraph of Article 21 of the APMLFT, provided that the organisation has applied
client due diligence in the manner determined by Article 7 of the APMLFT and that it has, in
the context of regular monitoring of business activities carried out by the client with the
organisation, ensured appropriate verification and update of previously acquired documents
and data about the client.
It has to be stressed at this point that transitions between subsidiary funds of the same main
fund is not considered transaction within the meaning of the APMLFT.
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6.1.3 Non-performance or omission of client due diligence obligation
When the client's identity cannot be established or when an organisation has justified doubts
about the accuracy and credibility of data or documents used by the client to demonstrate his
or her identity, as well as in the situations when the client is not willing to cooperate in the
provision of accurate and complete data required by an organisation as a part of client due
diligence, the establishment of a business relationship or the implementation of transaction is
explicitly prohibited by Article 11 of the APMLFT. In such an event an organisation cannot
establish a business relationship or carry out a transaction, or must terminate any existing
business relationships and examine the possibility to communicate the data about the client
or transaction to the Office in accordance with the third paragraph of Article 38 of the
APMLFT.
When a new client refuses the request of the organisation or fails to provide the required
missing data, the organisation is prohibited by the APMLFT to enter a new business
relationship or effect a payment to the amount of EUR 15,000 or more in the event of a single
transaction. The organisation is recommended to assess the unwillingness to provide data or
unsuccessful acquisition of legally required data and relevant documentation from the aspect
of potential reasons for suspicious transactions, and to report such cases to the Office, which
examines the case on the basis of its competences.
Even in the case of an existing client for which the organisation was not able to acquire key
information, the failure to provide the required information must be examined from the aspect
of suspicious transactions and reported to the Office. Such decision on the termination or
freezing of an existing business relationship (the basis for the termination of a business
relationship is provided by Article 11 of the APMLFT, the application of which prevails as lex
specialis in relation to e.g. the ZISDU-1) constitutes a business decision of the organisation
considering the nature or circumstances of a concluded business relationship (e.g. passive
owners of investment coupons of mutual funds acquired by ownership certificates). In these
cases, the organisation is recommended to treat such a client as client of higher risk, which
requires a greater diligence in monitoring the client's business activities, or to decide in
accordance with it business policy whether a risk is still acceptable, in which case it will
continue the business relationship, or the risk is too high, in which case it will terminate or
freeze the business relationship. In these cases, the organisation keeps appropriate records
to clearly demonstrate that such assessment has been completed and that an appropriate
decision has been made.
26
The omission of client due diligence is possible only exceptionally, in cases and on
conditions determined by Article 12 of the APMLFT. Organisations must take into account
that any potential exceptions regarding the omission of client due diligence are not
admissible if reasons to suspect money laundering or terrorist financing exist in respect of
individual clients or transactions.
6.2 Enhanced due diligence
When there is a higher risk of money laundering or terrorist financing in respect of a certain
client, business relationship, financial instrument or transaction, organisations must carry out
enhanced due diligence. The APMLFT stipulates that business relationships considered
highly risky for money laundering or terrorist financing encompass all corresponding banking
relationships, business relationships concluded with a foreign politically exposed person, and
business relationships on conclusion of which a client is not physically present for the
purpose of determining and verifying its identity in the organisation or a third party referred to
in Article 25 of the APMLFT. For these cases, the act has stipulated the scope of enhanced
due diligence by determining additional measures to be taken by the organisation when
performing such due diligence.
6.2.1. Enhanced due diligence of foreign politically exposed person
As a foreign politically exposed person constitutes a client of high risk according to the
APMLFT itself, the organisation must, whenever dealing with a client or its legal
representative which may be determined as a foreign politically exposed person according to
the criteria of the APMLFT and these guidelines, perform an enhanced due diligence of such
person prior to entering a business relationship or effecting a transaction referred to in point
2 of the first paragraph of Article 8 of the APMLFT. Political exposure is established also for
the beneficial owners of a client.
Besides the measure of client due diligence according to Article 7 of the APMLFT, an
enhanced due diligence consists of the following additional measures:
1. acquisition of information on the source of funds and property that are or will be the
subject of business relationship,
27
2. compulsory acquisition of a written approval of a superior responsible person prior to
entering a business relationship with such a client,
3. particularly diligent monitoring of transactions and other business activities effected
through the organisation by a foreign politically exposed person after the conclusion of a
business relationship.
According to the APMLFT, a foreign politically exposed person is any natural person,
including his or her immediate family members and close associates, who is or has been
entrusted with prominent public function in the previous year and resides in any other
country.
The organisation obtains the information on whether a certain person is a foreign politically
exposed person or not from the signed written statement which a client, its legal
representative or authorised person completes prior to entering a business relationship or
effecting a transaction referred to in point 2 of the first paragraph of Article 8 of the APMLFT.
A written statement must be drawn up in Slovenian and English languages and the
organisation must submit it for completion to each client or its legal representative or
authorised person that resides in any other country. A written statement must include at least
the following data:
1. personal name, permanent address and date and place of birth of a client, his or her legal
representative or authorised person who concludes a business relationship or effects a
transaction, as well as the number, type and name of issuer of official personal
identification,
2. statement on whether or not a client is a foreign politically exposed person under the
APMLFT,
3. data on the type of foreign politically exposed person
I. a client is a natural person who:
a) is or has been entrusted with prominent public function in the previous year
and resides in any other country,
b) is an immediate family member of the person under I.a,
c) is a close associate of the person under I.a,
II. a client is a legal entity:
a) whose beneficial owner, legal representative or authorised person is or has
been entrusted with prominent public function in the previous year and resides
in any other country,
28
b) an immediate family member of the beneficial owner, legal representative or
authorised person is or has been entrusted with prominent public function in
the previous year and resides in any other country,
c) a close associate of the beneficial owner, legal representative or authorised
person is or has been entrusted with prominent public function in the previous
year and resides in any other country,
4. information on how long a person who is or has been entrusted with prominent public
function in the previous year in any other country has performed this function,
5. information on the type of public function performed by a person who is or has been
entrusted with prominent public function in the previous year in any other country (head of
state, prime minister, deputy etc.),
6. information on relation if a client is an immediate family member of a person who is or
has been entrusted with prominent public function in the previous year in another
member state or in a third country,
7. information on the form and manner of business cooperation if a client is a close
associate of a person who is or has been entrusted with prominent public function in the
previous year in another member state or in a third country,
8. a clause by which a client allows the organisation to autonomously acquire and process,
for the purpose of verification of the veracity of information acquired by statement, the
information on the client by inspecting public or other accessible data records or to verify
the information directly with competent authorities of any other country, consulates or
embassies in the Republic of Slovenia or with the Slovenian ministry competent for
foreign affairs,
9. a signature in manuscript of the client or his or her legal representative or authorised
person.
In the event of doubt about the veracity of information acquired by statement, the
organisation additionally verifies the information by inspecting public and other accessible
data records (the organisation autonomously assesses to what extent it
considers
commercial lists of politically exposed persons as veracious and relevant for due diligence); it
may also verify the information with competent authorities of any other country, consulates or
embassies in the Republic of Slovenia or with the Slovenian ministry competent for foreign
affairs.
29
When a client or his or her legal representative or authorised person has a permanent
address in the Republic of Slovenia, the organisation is not obliged to acquire a separate
statement on whether a client is a politically exposed person, but may, on the basis of the
information acquired about a client, assess by itself whether a client may be a politically
exposed person.
6.2.2. Absence of client
When a client or his or her legal representative is not physically present at the organisation
or a third party referred to in Article 25 of the APMLFT for the purpose of establishing and
verifying his or her identity on entering a business relationship, the organisation must perform
an enhanced due diligence.
Besides the measures referred to in the first paragraph of Article 7 of the APMLFT, an
enhanced due diligence consists of the compulsory implementation of one of the following
additional measures:
1. acquisition of documents, data or information on the basis of which the organisation
additionally verifies and confirms the veracity of identity documents and information with
the help of which it has established and confirmed the identity of a client,
2. additional verification of information acquired about a client in public and other accessible
data records,
3. acquisition of appropriate references from a credit or financial institution with which a
client has entered a certain business relationship (e.g. opened an account); it has to be
noted, however, that this applies only to those institutions that are, in accordance with the
national legislation, under the obligation to comply with laws and other relevant
regulations concerning the detection and prevention of money laundering and terrorist
financing as determined by Directive 2005/60/EC (credit or financial institution from a EU
member state or an equivalent third country),
4. additional verification of data and information about a client with competent national
authorities or other competent supervisory institutions in a country of residence or
headquarters of a client,
5. establishment of direct contact with a client by telephone, a visit of an authorised person
of the organisation at client's home or headquarters.
30
When entering a business relationship without the presence of a client on the basis of a
qualified digital certificate, the organisation must, in accordance with the APMLFT, also adopt
measures to ensure that a client, prior to effecting further transactions, effect the first
payment on the organisation's account opened on the client's behalf or by the client's legal
representative on behalf of the client or on its own behalf with one of the following credit
institutions:
1. a bank with headquarters in the Republic of Slovenia which acquired a banking
authorisation from the Bank of Slovenia,
2. a bank of a member state that establishes a branch in the Republic of Slovenia, or is
authorised to directly provide banking services in the Republic of Slovenia,
3. a branch of a bank from a third country that acquired an authorisation for the
establishment from the Bank of Slovenia, and
4. a savings bank with headquarters in the Republic of Slovenia that provides banking
services on the basis of an authorisation of the Bank of Slovenia,
and which the client provided on the statement of accession or on a brokerage contract.
The APMLFT allows for the establishment and verification of the identity of a client who is a
natural person, a sole trader or a self-employed person, also on the basis of identification by
a qualified digital certificate. Because of the possible misuse of the client's identity for money
laundering or terrorist financing, this manner of establishing and verifying the client identity
requires the maximum level of diligence, so that the identity of the owner of a qualified digital
certificate is established with certainty and veracity as determined by the APMLFT.
Before the establishment and verification of the client's identity on the basis of a qualified
digital certificate, the organisation must:
1. verify any possible restrictions in respect of the use of a qualified digital certificate of a
client,
2. examine all circumstances related to the veracity of the issued qualified digital certificate,
such as the validity of the qualified digital certificate of a client, the validity of signed
private key, the contents of the register of cancelled qualified digital certificates and the
issuer of qualified digital certificates from the aspect of whether or not the issuer is
registered,
3. require from the registered certification authority to submit, if necessary, the information
on the manner of establishing and verifying the identity of a client who owns the
certificate.
31
The organisation may establish a business relationship with a client only when it has
unambiguously established and confirmed the identity of the qualified digital certificate owner
and acquired all information required under the APMLFT.
6.2.3 Other clients of high risk
The APMLFT stipulates that the organisation applies, by analogy, measures of enhanced
client due diligence from Articles 30, 31 and 32 of this Act in other cases of high-risk clients,
business relationships, financial instruments or transactions. According to these guidelines,
the application by analogy of the prescribed legislative measures consists of the following
measures:
1. compulsory preliminary written approval to establish such a business relationship or effect
a transaction by a superior responsible person in the organisation,
2. compulsory use of one of the following measures:
a. acquisition of documents, data or information on the basis of which the organisation
additionally verifies and confirms the veracity of identity documents and information
with the help of which it has established and confirmed the identity of a client,
b. additional verification of information acquired about a client in public and other
accessible data records,
c. acquisition of appropriate references from a credit or financial institution with which a
client has entered a certain business relationship (e.g. opened an account); it has to be
noted, however, that this applies only to those institutions that are, in accordance with
the national legislation, under the obligation to comply with laws and other relevant
regulations concerning the detection and prevention of money laundering and terrorist
financing as determined by Directive 2005/60/EC (credit or financial institution from a
EU member state or an equivalent third country),
d. additional verification of data and information about a client with competent national
authorities or other competent supervisory institutions in a country of residence or
headquarters of a client,
e. establishment of direct contact with a client by telephone, a visit of an authorised
person of the organisation at client's home or headquarters,
3. compulsory monitoring of transactions and other business activities undertaken by the
client through the organisation.
6.3 Simplified due diligence
32
When the risk of money laundering or terrorist financing is minimal, when the information
about a client which is a legal entity or about its beneficial owner is transparent or publicly
accessible, or when an appropriate supervision over the operation of a client is established at
the national level, the APMLFT allows for a possibility of simplified due diligence.
This
means that the organisation determines and verifies the identity of individual client only by
acquiring the information referred to in the second paragraph of Article 34 of the APMLFT,
the set of which is smaller than in normal or enhanced client due diligence procedure, and
ensures regular and diligent monitoring of activities carried out by the client through the
organisation, as determined by Article 22 of the APMLFT. The presence of the legal
representative or authorised person of the legal entity is not required for the establishment of
the identity, and determining the beneficial owner of the client is not necessary, either.
As the APMLFT allows the organisation to carry out the so-called simplified due diligence
only when the client is a person referred to in the first paragraph of Article 33, the
organisation must establish, on the basis of the information about the client and the
assessment of the client's risk for money laundering or terrorist financing, whether the client
actually meets the criteria to be treated as person referred to in the first paragraph of Article
33 or whether it may be categorised as that of minimal risk for money laundering or terrorist
financing according to these guidelines.
The organisation may not enter a business relationship or carry out a transaction prior to
establishing all facts necessary for the assessment whether a simplified due diligence is
admissible. A simplified due diligence is by no means admissible in those cases when the
grounds for money laundering or terrorist financing exist in respect of a client or a
transaction, or when a client is categorised as high-risk under a risk assessment.
6.4
Client due diligence via third parties
When entering a business relationship on conditions determined by the APMLFT, the
organisation may entrust a third party to carry out due diligence; it must, however, carry out a
preliminary examination of the third party to establish whether the third party entrusted with
due diligence meets all criteria determined by the APMLFT.
The organisation verifies whether a third party meets the criteria in one of the following
manners:
1. by inspecting public or other accessible data records,
33
2. by inspecting documents and business documentation submitted to the organisation by a
third party, or
3. by acquisition of a written statement of a third party which guarantees the organisation that
it meets the required criteria.
According to the APMLFT, third parties do not include outsourcers or representatives of
organisations entrusted by the organisation to carry out a part of its tasks on the basis of an
appropriate contract. According to the preamble of Directive 2005/60/EC, outsourcers and
representatives who cannot be categorised as independent persons under obligation to
implement the measures of detection and prevention of money laundering and terrorist
financing under Article 4 of the APMLFT are considered an integral part of the organisation.
Outsourcers or representatives of organisations, who are not under direct obligation
according to the APMLFT, implement the measures of detection and prevention of money
laundering and terrorist financing directly on the basis of a contract concluded with the
organisation, in which the organisation details the manner and scope of implementation of
these measures. The organisation which entrusts an outsourcer or a representative with the
implementation of a part of its tasks, including the implementation of measures of detection
and prevention of money laundering and terrorist financing under the APMLFT, is thus not
exempt from the responsibility to supervise the lawfulness and regularity of implemented
measures (in respect of due diligence, communication of information on suspicious
transactions, storage of information etc.) carried out by an outsourcer or a representative.
7. IMPLEMENTATION OF MEASURES FOR THE DETECTION AND
PREVENTION OF MONEY LAUNDERING AND TERRORIST
FINANCING IN OWN BRANCHES AND MAJORITY-OWNED
SUBSIDIARIES LOCATED IN THIRD COUNTRIES
The organisation must establish a system of implementation of uniform policy for the
detection and prevention of money laundering. To this end, it must ensure that the measures
of detection and prevention of money laundering and terrorist financing laid down by the
APMLFT and concerning duel diligence, communication of information on suspicious
transactions, record keeping, internal control and risk management, appointment of
authorised person, information storage and other important circumstances related to the
34
detection and prevention of money laundering and terrorist financing are carried out to the
equal or similar extent by its own branches and majority-owned subsidiaries located in third
countries.
If the implementation of the European standards of detection and prevention of money
laundering and terrorist financing in the operation of a branch or a majority-owned subsidiary
is clearly contrary to the legislation of the third country in which the headquarters of a branch
or a majority-owned subsidiary are located, the organisation must notify the Office
accordingly and adopt appropriate internal measures for the elimination of money laundering
and terrorist financing risks, such as:
1. introduction of additional internal procedures that prevent or reduce the possibility of
misuse for money laundering or terrorist financing,
2. implementation of additional internal control of the operation of the organisation in all key
fields which are most exposed to the risks of money laundering or terrorist financing,
3. establishment of internal mechanisms of risk assessment of individual clients, business
relationships, financial instruments and transactions in accordance with the guidelines,
4. implementation of a strict policy of treatment of clients in terms of their risk level, and
consistent implementation of measures adopted on this basis,
5. supplementary employee training.
The organisation management must also observe the following guidelines:
1. ensure that all branches and majority-owned subsidiaries located in third countries and all
their employees are acquainted with the policy of detection and prevention of money
laundering and terrorist financing;
2. ensure through managements of branches and subsidiaries that internal procedures of
detection and prevention of money laundering and terrorist financing adopted on the
basis of the APMLFT and the Agency guidelines are integrated in business processes of
branches or subsidiaries to the maximum extent;
3. implement constant supervision of the suitability and efficiency of implementation of
measures of detection and prevention of money laundering and terrorist financing in
branches and majority-owned subsidiaries located in third countries.
At least once a year, branches and majority-owned subsidiaries located in third countries
must notify the organisation about the measures adopted in the field of detection and
prevention of money laundering, especially in respect of due diligence, implementation of risk
assessment and analysis procedure, detection and communication of suspicious
35
transactions, protection and storage of data and documentation, keeping records on clients,
business relationships and transactions etc.
8. MONITORING OF CLIENTS' BUSINESS ACTIVITIES
8.1
Objective of monitoring clients' business activities
Regular monitoring of clients' business transactions is of key importance for ensuring the
effectiveness of the implementation of measures prescribed in the field of detection and the
prevention of money laundering and terrorist financing. The purpose of monitoring business
activity is to establish the lawfulness of a client's operation and verify whether a client's
business activities comply with the foreseen nature and purpose of the business relationship
concluded by the client with the organisation, or with its regular scope of business.
Monitoring a client's business activity generally encompasses three levels of the client's
business with the organisation:
1. monitoring and verifying the compliance of the client's business operations with the
intended purpose and nature of the business relationship;
2. monitoring and verifying the compliance of the client's business operations with his/her
regular scope of business;
3. monitoring of the validity of the client's documents and the data obtained.
8.2
Measures of monitoring clients' business activities
1. The following measures constitute the monitoring and verifying of the compliance of the
clients' business operations with the purpose and intended nature of the business relationship
established between the clients and the organisation:
a. analysis of information on the purchase and/or sale of financial instruments or other
transactions for a certain period with an intention to establish whether any circumstances
for suspected money laundering or terrorist financing exist in respect of an individual
purchase or sale of financial instruments or other transaction. The suspiciousness
assessment is based on the suspiciousness criteria from the list of indicators for the
36
identification of clients and transactions in respect of which reasonable grounds to suspect
money laundering exist, or from the list of indicators for identification of clients and
transactions in respect of which reasonable grounds to suspect terrorist financing exist.;
b. preparation of new risk assessment of a client, or update of the previous risk assessment
of a client.
2. The measures for the monitoring and verifying of the client's business operations
compliance with his/her regular scope of business are the following:
a. monitoring the value of purchases and sales of financial instruments or other transactions
above a certain amount, i.e. the organisation itself determines the amount above which it
will monitor the client's transactions; it does this individually for each client regardless of
the risk category of clients (in order to implement this measure more effectively,
organisations may establish appropriate IT support);
b. analysis of individual purchases or sales of financial instruments or other transactions from
the aspect of suspected money laundering or terrorist financing if the amount of sale or
purchase exceeds a certain value. The analysis of the suspiciousness of the purchase and
the sale of financial instruments or other transactions is based on the criteria of
suspiciousness determined by the list of indicators for the identification of clients and
transactions in respect of which reasonable grounds to suspect money laundering exist, or
by the list of indicators for the identification of clients and transactions in respect of which
reasonable grounds to suspect terrorist financing exist.
3. The monitoring of the validity of acquired documents and information about a client
consists of the following measures:
a. verification of information on the firm, address, headquarters, beneficial owner, personal
name and permanent or temporary residence of the legal representative, verification of
validity of the authorisation referred to in the third paragraph of Article 16 of the APMLFT,
and establishing whether a client has become a foreign politically exposed person during
the business relationship (if a client is a legal entity);
b. when transactions are carried out on behalf and for the account of a foreign legal entity by
its branch, the organisation must, in addition to the information referred to in point a,
acquire the information on the address and the headquarters of the branch, and on the
personal name and permanent address of the legal representative of the branch;
37
c. repeated due diligence in case of doubts about the veracity and adequacy of previously
obtained client or beneficial owner information (if the client is a legal entity);
d. verification of information about a client or its legal representative in a court or other public
register;
e. verification of acquired information directly with a client or its legal representative or
authorised person;
f. verification of the list of persons, countries and other entities subject to restrictive
measures of the UN Security Council and the European Union.
8.3
Scope of monitoring clients' business activities
The organisation is obliged to adapt the scope and frequency of monitoring clients' business
activities to the risk assessment of individual clients or to their classification in a certain risk
category; notwithstanding the above, the organisation must ensure that the documents and
information about the client are updated at least within five years of the previous client due
diligence, if the client carries out transactions with the organisation. Insofar as the client does
not carry out business activities (purchase and sale of financial instruments or other
transactions) with the organisation after entering a business relationship or in a longer
period, the organisation carries out the measures of monitoring client's business activities
upon the first following purchase or sale of financial instruments or upon other transaction.
Considering the above and the provision of Article 22 of the APMLFT, the organisation
details the appropriate scope of monitoring the business activities and the lawfulness of the
client's operations in its internal acts.
8.4
Treatment of unusual transactions
In the context of monitoring business activities undertaken by a client through the
organisation, the organisation must devote particular attention to:
-
transactions of an unusual structure;
-
complex and unusually high transactions;
-
transactions without a clearly evident economic or legally justified intention; and
-
transactions that are not in accordance or are in disparity with expected or usual
operation of the client;
38
and examine, in the aforementioned cases, the background and intention of these
transactions to the extent possible in the given circumstances, record its findings and retain
them appropriately.
When dealing with unusual transactions, the organisation is obliged under the provision of
Paragraph a of Article 22 of the APMLFT to devote particular attention to clients, business
relationships or transactions related to countries where appropriate measures for the
prevention and identification of money laundering and terrorist financing do not apply or are
not implemented to an adequate extent.
The information about these countries may be found on the Office's website http://www.uppd.gov.si/si/vsebinska_podrocja/seznam_drzav.
In practice, transactions considered unusual should be those transactions that meet the
criteria above but that cannot be considered suspicious under the criteria of suspiciousness
determined by the list of indicators for the identification of clients and transactions in respect
of which reasonable grounds to suspect money laundering exist, or by the list of indicators
for the identification of clients and transactions in respect of which reasonable grounds to
suspect terrorist financing exist.
9. REPORTING INFORMATION
9.1. Reporting on cash transactions
If a certain client effects through the organisation a cash transaction which that the amount of
EUR 30 000, the organisation must, in accordance with the APMLFT, notify the Office about
such transaction on a form, which is a constituent part of the Rules on the method for
reporting information to the Office of the Republic of Slovenia for Money Laundering
Prevention, immediately after the effected transaction or within three days after the effected
transaction at the latest. A cash transaction means any transaction in which the organisation
receives cash from a person, or hands over cash to a person in an amount exceeding
EUR 30 000 (in banknotes and coins), irrespective of the currency. When establishing the
cash transaction amount subject to the reporting obligation, the cash amounts received and
handed over are not to be aggregated.
39
9.2 Reporting information on suspicious transactions
9.2.1 What is a suspicious transaction?
The APMLFT does not provide a definition of a suspicious transaction. Under the APMLFT
provisions, the term 'suspicious transaction' may imply any transaction whose nature,
complexity, scope, value or relation renders it unusual, and any transaction which has no
apparent economic or visibly lawful purpose and/or is not in compliance or is out of kilter with
the usual or expected business of a client, as well as other circumstances related to the
status and other characteristics of the client. Individual transactions, clients and business
relationships may be qualified as suspicious. A customer, transaction or business
relationship is assessed based on the suspiciousness criteria from the list of indicators for
identification of customers and transactions in respect of which reasonable grounds to
suspect money laundering exist or from the list of indicators for identification of customers
and transactions in respect of which reasonable grounds to suspect terrorist financing exist.
The aforementioned lists help employees detect suspicious circumstances associated with a
customer, transaction carried out by a customer, or business relationship concluded by a
customer, therefore the employees must be acquainted with the indicators and use them
continuously in their work. A person authorised to implement activities concerning the
prevention of money laundering and terrorist financing must offer full professional support to
employees in the assessment of grounds for suspicion.
An employee of the organisation who establishes the existence of grounds to suspect money
laundering or terrorist financing must immediately notify a person authorised for the
prevention of money laundering, or his or her deputy. The organisation determines the
procedure of reporting suspicious transactions between individual organisational units and an
authorised person in accordance with the following guidelines:
1. precise determination of the method of reporting (by telephone, fax, secure electronic
means etc.)
2. determination of the type of information to be reported (information on client, reasons for
suspected money laundering)
3. determination of the manner of cooperation of organisational units with an authorised
person,
40
4. procedure of client treatment in the event of temporary suspension of transaction by the
Office,
5. determination of the role of the responsible person of the organisation in reporting
suspicious transaction,
6. prohibition to disclose whether the data, information or documentation shall be reported
to the Office,
7. measures regarding further transactions with the client (temporary suspension of
transactions, termination of business relationship, implementation of enhanced due
diligence procedure and detailed monitoring of further business activities of the client
etc.).
9.2.2 Reporting information to the Office
According to the APMLFT, the organisation furnishes the Office with the information
whenever grounds for the suspicion of money laundering or terrorist financing exist in relation
to a transaction or a client. The obligation to report suspicious transactions according to the
APMLFT does not apply only to transactions completed by the client, but also to all intended
transactions that the client attempted to carry out but suspended for a certain reason or
withdrew from without a valid reason. The obligation to report also occurs when the
organisation, when entering a business relationship or effecting a transaction, cannot identify
or verify its identity in the way determined by the APMLFT, or cannot establish an beneficial
owner of a client, or acquire the information on the intention and intended nature of the
business relationship or transaction and other information required by the APMLFT.
As a rule, a suspicious transaction must be reported to the Office before the transaction has
been effected; the communication must also include a deadline at which the transaction
which is the subject of communication should be effected. In the event of early
communication, the organisation may submit the communication to the Office by fax or
phone, but it must also be submitted in a written form on the first following working day at the
latest. Due to the nature of the transaction or because the transaction was not completed, or
due to other justified reasons, the organisation often cannot follow the described procedure,
so it furnishes the information to the Office as soon as possible or immediately after the
suspicion of money laundering or terrorist financing is raised. In the report, the organisation
explains the reasons for not acting in accordance with the described procedure.
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10.
EDUCATION AND PROFESSIONAL TRAINING
The organisation must provide regular professional training and education for all employees
carrying out tasks for the prevention and detection of money laundering and terrorist
financing, specifically for all who carry out certain tasks on jobs that are or may be directly or
indirectly exposed to risks of money laundering or terrorist financing, as well as for
outsourcers and representatives to whom the organisation has entrusted to carry out its
tasks on the basis of an appropriate contract, unless they are independent persons under
obligation to carry out measures for the detection and prevention of money laundering under
Article 4 of the APMLFT.
The organisation's service competent for personnel prepares, by the end of March at the
latest, the programme of annual professional training and education in the detection and
prevention of money laundering and terrorist financing; in doing so, it cooperates with an
authorised person.
The programme details the following:
1. the content and scope of individual education and training courses,
2. the objectives of individual education and training courses,
3. the manner of implementation of individual education and training courses (lectures,
workshops, exercises, etc.),
4. the employee categories targeted by individual education and training courses,
5. the duration of individual education and training programmes.
The education and training processes also involve all new employees in the organisation. To
this end, the organisation prepares a special professional education and training programme
on the prevention and detection of money laundering and terrorist financing. The programme
covers, at a minimum, acquaintance with the obligations of due diligence, risks for money
laundering and terrorist financing, the obligation to report the prescribed information to the
Office, indicators for the identification of clients and transactions in respect of which there are
grounds to suspect money laundering or terrorist financing, requirements concerning the
protection and retention of information, and procedures adopted by the organisation for the
implementation of the APMLFT and the Guidelines (internal rules and instructions).
42
The regular professional education and training programme within individual organisations
may be implemented by an authorised person, his or her deputy, or another person with
professional qualifications appointed by the organisation management on the proposal of an
authorised person.
11.
INTERNAL CONTROL AND RISK MANAGEMENT
The organisation establishes a regular, systematic and independent control of the regularity
and efficiency of the implementation of the measures prescribed for the detection and
prevention of money laundering and terrorist financing. The primary purpose of internal
control is to detect and remedy deficiencies in the implementation of measures prescribed for
the detection and prevention of money laundering, and to improve the system for detecting
clients or transactions that raise a suspicion of money laundering and terrorist financing. In
the implementation of internal control, the organisation complies with the following guidelines
and devotes particular attention to the following key fields:
1.
the compliance of implementation of operational procedures of the detection and
prevention of money laundering and terrorist financing with the risk management policy
for money laundering and terrorist financing,
2.
the compliance of implemented risk assessment procedures of individual clients,
business relationships, financial instruments or transactions with the risk management
policy for money laundering and terrorist financing and risk analysis,
3.
the adequacy of confidential data protection,
4.
the adequacy and comprehensiveness of education programmes on the detection and
prevention of money laundering and terrorist financing,
5.
the adequacy and frequency of use of lists of indicators for the assessment of
suspicious clients and transactions,
6.
the adequacy and efficiency of the system of reporting information on clients and
transactions in respect of which reasonable grounds to suspect money laundering or
terrorist financing exist;
7.
adequacy of measures and recommendations of the organisation implemented on the
basis of the findings of internal control.
As a part of internal control, the organisation must ensure control of the regularity and
efficiency of the implementation of the measures prescribed for the detection and prevention
43
of money laundering and terrorist financing by external contractors and representatives
entrusted with the implementation of part of the organisation's tasks on the basis of an
appropriate contract.
With the aim of independent assessment of the conformity of the operation of the system for
the detection and prevention of money laundering and terrorist financing under the provisions
of the APMLFT, secondary legislation and guidelines, the organisation authorises an internal
auditing service or another supervisory authority which shall notify the organisation
management about the findings in the form of proposed measures and recommendations for
the remedy of deficiencies. The competent authority of the organisation implements regular
and extraordinary control over the conformity and the efficiency of the implementation of the
measures prescribed for the detection and prevention of money laundering and terrorist
financing.
The organisation carries out an analysis of the impact of all major changes in its business
processes, such as the introduction of a new product, introduction of a new technology or a
change in organisation, on the organisation's exposure to the risk of money laundering or
terrorist financing. The organisation must adopt appropriate measures in order to reduce the
risk of money laundering or terrorist financing in accordance with the findings of the analysis.
12.
DATA PROTECTION
The organisation must safeguard the data acquired and managed pursuant to the APMLFT
as professional secrets or classified information in accordance with the law regulating
classified information if the information is classified as such by the Office. The duty to protect
classified information applies to all employees and other persons to whom such information
is accessible in any other way.
Notwithstanding the above, the following shall be always treated as professional secrecy or
classified information under the APMLFT (the organisation must not disclose this to a client
or third party):
1. information that grounds for suspected money laundering or terrorist financing have been
established in relation to a client or transaction and that this information has been or will
be reported to the Office;
44
2. information on temporary suspension of a transaction or on the contents of instructions
issued accordingly;
3. information on a request by the Office for the on-going monitoring of client's transactions;
4. information that an investigation has been or is likely to be launched against the client or a
third party on the grounds of money laundering or terrorist financing.
The duty to protect the aforementioned data does not apply if the data are necessary to
establish facts in criminal proceedings, if the submission of the data is required or imposed in
writing by the competent court, or if the data from the organisation are required by the Office
or the Agency for the reasons of supervising the implementation the APMLFT.
Exemption from the principle of classification also applies in the event that an organisation is
obliged to submit information to the Office pursuant to the APMLFT. The employees in an
organisation are not responsible for any damage suffered by clients or third parties if they
have acted according to APMLFT or the request of the Office.
Access to information classified as business or professional secrecy must be limited. The
organisation specifies by means of an internal act the conditions and manner of access to
these data, taking into consideration the following guidelines:
1. Data and documentation are kept by an organisation in the manner and form that
prevents unauthorised persons access to and any acquaintance with its content (in
suitable physically or technically safeguarded premises for data storage, in locked
fireproof cabinets, etc.).
2. Only members of the management and supervisory body of the organisation, persons
authorised for the prevention of money laundering and terrorist financing and their
deputies, heads of management units of the organisation and other persons designated
by the management body of the organisation have the right to inspect data on the clients
and transactions in respect of whom or which there are grounds for suspicion of money
laundering or terrorist financing, or to become acquainted with their content.
3. Without the prior written approval of the responsible person, documentation containing
the aforementioned data may not be photocopied, copied, processed, published or
reproduced in any other way.
4. In the event of documentation being photocopied, the organisation arranges that a
photocopy clearly indicates from which documentation or part of the documentation the
photocopy originates, with a clearly visible indication that this is a photocopy, the number
45
and date of photocopies taken, and the signature of a person who has taken the
photocopy.
5. Employees of the organisation are obliged to consistently carry out the procedure of
logging on and logging off using their personal password at the beginning or conclusion
of computer data processing, or prevent unauthorised persons from accessing these
documents by means of a password.
6. The access to data and documentation or their processing must be traceable.
7. Any submission of data is permitted only in the form preventing unauthorised persons to
become acquainted with the data,
either through internal network by courier or in a
sealed envelope – registered letter with the notice of receipt, etc., or, if sending
electronically, by the use of system for safe electronic operation (encrypted and coded
messages, etc.).
8. Employees of the organisation are obliged to consistently comply with the regulations
governing classified information and the protection of personal data.
13. AUTHORISED PERSON FOR THE PREVENTION OF MONEY
LAUNDERING AND TERRORIST FINANCING
Organisations must appoint an authorised person and one or more deputies for the specific
tasks of the detection and prevention of money laundering and terrorist financing, as
stipulated by the APMLFT and the ensuing regulations. The organisation must ensure that
the authorised person who performs the tasks under the APMLFT also observes the
following guidelines:
1. offers professional assistance to employees in the operational implementation of measures
for the detection and prevention of money laundering and terrorist financing;
2. advises the management of the organisation on the money laundering and terrorist
financing risk management policy;
3. updates the management of the organisation on activities relating to the detection and
prevention of money laundering and terrorist financing;
4. cooperates with other organisations in formulating a consistent policy for the detection and
prevention of money laundering and terrorist financing.
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14.
LEGAL NATURE AND VALIDITY OF GUIDELINES
These guidelines are issued on the basis of Article 90 of the APMLFT and are binding on all
organisations defined in Chapter I of these guidelines. On the basis of Article 85 of the
APMLFT, the Agency may check with the organisations themselves as to the compliance of
internal procedures of the detection and prevention of money laundering and terrorist
financing with prescribed orientations, and impose appropriate measures for the elimination
of irregularities and deficiencies in the event of non-compliance.
The organisations must adapt their internal acts and harmonise their operation with the
contents of these guidelines by 1 November 2010 at the latest.
These guidelines shall enter into force on 15 September 2010 and apply from 1 November
2010.
On the day of the entry into force of these guidelines, the Guidelines for the prevention of
money laundering and terrorist financing of 19 March 2008 shall cease to apply.
15.
ANNEXES
ANNEX 1 – List of indicators for identification of clients and transactions
in respect of which reasonable grounds to suspect money laundering
1. TRANSACTION-RELATED INDICATORS
1.1
a transaction is economically or legally illogical;
1.2
unusual nature of transaction or unusual circumstances accompanying the transaction,
1.3
transaction has characteristics of economic and other criminal acts;
1.4
offer of disproportionally high commission or other unusual conditions for the conduct
of transaction;
1.5
dispersion of amounts for which the establishment of client's identity is required;
1.6
sudden increase in volume of client's transactions without a valid reason and in
disparity with the normal operation of a client.
47
2. PERSON-RELATED INDICATORS
2.1
use of forged or other person's identity documents;
2.2
a person does not want to identify him/herself with all required data, or provides false
data;
2.3
a person cancels a transaction or does not enter a business relationship when learning
about the duty to identify;
2.4
a person acts unnaturally (visible tension, etc.);
2.5
a person is escorted to the organisation by persons behaving in a suspicious manner;
2.6
a person was sentenced for or charged of criminal acts (which is generally known from
the media or Office's notices);
2.7
a person comes from a country known for drug manufacture or distribution, or performs
transactions with such a country;
(http://www.uppd.gov.si/si/vsebinska_podrocja/seznam_drzav/)
2.8
a person comes from a country known as a country not observing international
standards from the field of prevention of money laundering, or carries out transactions
with such a country (http://www.uppd.gov.si/si/vsebinska_podrocja/seznam_drzav/).
3. INVESTMENT-RELATED INDICATORS
3.1
purchases of securities whose quantities and amounts do not match the financial
situation of the client;
3.2
purchases or sales of securities on unusually high or low prices;
3.3
requests for issuing unusual certificates or certificates not issued by the organisation;
3.4
orders for asset management and purchase or sale of securities are usually issued by
an authorised person.
4. INDICATORS RELATING TO ORGANISATION EMPLOYEES
4.1 employees act strangely or suspiciously when carrying out individual orders relating to a
certain client or clients;
4.2
employees act strangely or suspiciously when dealing with individual transactions,
orders or clients, or provide incomplete data on purpose;
4.3 employees consciously violate internal rules of the organisation.
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ANNEX 2 – List of indicators for identification of clients and transactions
in respect of which reasonable grounds to suspect terrorist financing
exist
1. ACCOUNT-RELATED INDICATORS
1.1
Several persons, who are not evidently related, are authorised for transactions from an
account.
1.2
An account is open for a legal entity with the same address as another legal entity, with
the same natural person authorised for transactions.
1.3
A natural person opens several accounts on which he or she receives small deposits.
1.4
An account is opened by a natural person or legal entity involved in the activities of an
organisation or a foundation supporting the objectives and demands of a terrorist
organisation.
1.5
An account is opened by a natural person or legal entity which might be linked to a
terrorist organisation.
2. INDICATORS RELATED TO AN ESTABLISHMENT OF A BUSINESS RELATIONSHIP
2.1
A business relationship is established for a legal entity with an address identical to that
of another legal entity and the same natural person is authorised to conduct their
respective businesses.
2.2
A natural person establishes several business relationships on the basis of which a
number of minor business deals are concluded.
2.3
A business relationship is established by a natural person or legal entity involved in the
activities of an organisation or a foundation supporting the objectives and demands of a
terrorist organisation.
2.4
A business relationship is established by a natural person or legal entity which might be
linked to a terrorist organisation.
3. CLIENT-RELATED INDICATORS
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3.1
A client wants to enter a business relationship which is not consistent with his or her
objectives.
3.2 There is no logical connection between the effected transactions and the client’s activity.
3.3 Statements and data in the process of identification are inconsistent (false indication of
residence, citizenship, surname, date of birth, name of company, headquarters of
company, activity).
3.4
A high number of persons authorised to effect transactions on behalf of a legal entity or
a non-profit organisation.
3.5
A client comes from (has permanent or temporary residence) a country or region that
supports terrorism of terrorist financing.
3.6
A client is subject to the sanction of assets freeze imposed by the United Nations
Security Council or the European Union and appears on their respective lists.
4.
4.1
TRANSACTION-RELATED INDICATORS
One person carries out several transactions in the same branch office with a clear
intention to use several cashiers' desks.
4.2
A deposit of uncounted cash, i.e. after the money is counted, the deposit is made into
an account in the amounts not subject to the identification or reporting requirement.
4.3
A financial instrument subject to a high commission is used.
4.4
A client uses financial instruments bearing informal inscriptions, initials or signs in
transactions.
5.
INDICATORS RELATING TO NON-PROFIT ORGANISATIONS (NPO)
5.1
A non-profit organisation fails to submit annual reports to the competent state
authorities or a supervisory body.
5.2
High and unclear use of funds to cover expenses not related to the non-profit
organisation's activity.
5.3
A non-profit organisation has no programme regarding money raising or donations or
use of funds.
5.4
A non-profit organisation has no documentation on general administrative matters,
decisions adopted or operational policy.
5.5
A non-profit organisation has no mechanisms in place to verify whether a donation
reaches its intended beneficiary or is used for its intended purpose.
5.6
A non-profit organisation records a high share of donations from or to foreign countries.
50
5.7
Large amounts donated to a non-profit organisation by a certain individual.
5.8
A non-profit organisation donation is only given to a narrow group of individuals.
5.9
The financial activities of a non-profit organisation are inconsistent with its founding
objectives and purposes.
5.10 A non-profit organisation transfers funds to countries or regions known to support
terrorism or terrorist financing.
5.11 A non-profit organisation carries out most of its transactions in cash.
5.12 A non-profit organisation's financial assets are deposited in the accounts of natural
persons.
ANNEX 3 – List of equivalent third countries that prescribe and comply
with the standards concerning the detection and prevention of money
laundering and terrorist financing:
1. The Argentine Republic,
2. the Commonwealth of Australia,
3. Federative Republic of Brazil,
4. Canada,
5. Hong Kong - separate administrative region of the People's Republic of China,
6. Japan,
7. United Mexican States,
8. New Zealand,
51
9. Russian Federation,
10. the Republic of Singapore,
11. the Swiss Confederation,
12. Republic of South Africa,
13. the United States of America,
14. the Netherlands Antilles (Kingdom of the Netherlands),
15. Aruba (Kingdom of the Netherlands).
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ANNEX 4: List of countries subject to restrictive measures
Links to valid lists:
1. http://ec.europa.eu/external_relations/cfsp/sanctions/list/consol-list.htm
2. http://www.un.org/sc/committees/
3. http://www.mzz.gov.si/fileadmin/pageuploads/Zunanja_politika/omejevalni_ukrepi_drzave1.doc
ANNEX 5: List of other entities subject to restrictive measures
Links to valid lists:
1. http://ec.europa.eu/external_relations/cfsp/sanctions/list/consol-list.htm
2. http://www.un.org/sc/committees/,
3. http://www.mzz.gov.si/fileadmin/pageuploads/Zunanja_politika/omejevalni_ukrepi_subjekti.doc
ANNEX 6: List of countries known for high level of corruption
Transparency International – Corruption Perception Index,
http://www.transparency.org/policy_research/surveys_indices/cpi
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