Chapter

Appendix VII. Legislative Examples: Civil Law Countries

Author(s):
International Monetary Fund
Published Date:
August 2003
Share
  • ShareShare
Show Summary Details

Title I. Definitions1

For the purposes of this law:

1. “Funds” and “property” means assets of every kind, whether tangible or intangible, movable or immovable, however acquired, and legal documents or instruments in any form, including electronic or digital, evidencing title to or interest in such assets, including but not limited to bank credits, traveler’s checks, bank checks, money orders, shares, securities, bonds, drafts, and letters of credit.2

2. “State or government facility” means any permanent or temporary facility or conveyance that is used or occupied by representatives of a state, members of a government, the legislature or judiciary, or by officials or employees of a state or any other public authority or entity, or by employees or officials of an intergovernmental organization in connection with their official duties.3

3. “Proceeds” means any funds derived from or obtained, directly or indirectly, through the commission of an offense set forth in Article I-2.4

4. “Convention” means the International Convention for the Suppression of the Financing of Terrorism, opened for signature on January 10, 2000.

Title II. Offenses

Article II-1. Financing of Terrorism5

1. Any person commits the offense of the financing of terrorism who by any means, directly or indirectly, [unlawfully and willfully],6 provides or collects funds, or tries to provide or collect funds [Option:, or provides or tries to provide financial or other services]7 with the intention that they should be used or in the knowledge that they are to be used, in full or in part, in order to carry out:

(a) an act which constitutes an offense within the scope of and as defined in one of the treaties listed in the annex to the Convention on the suppression of the financing of terrorism, and to which [name of the country adopting the law] is a party;

(b) any other act intended to cause death or serious bodily injury to a civilian, or to any other person not taking an active part in the hostilities in a situation of armed conflict, when the purpose of such act, by its nature or context, is to intimidate a population, or to compel a government or an international organization to do or abstain from doing any act.

2. Variant 1:8 [For an act to constitute an offense in the sense of paragraph 1, it shall not be necessary that the funds were actually used to carry out an offense referred to in paragraph 1, subparagraph (a) or (b).] Variant 2: [The offense exists independently of the eventual occurrence of an act referred to in paragraph 1, subparagraph (a) or (b)].

3. Any person also commits an offense if that person:[9]

(a) participates as an accomplice in an offense as set forth in paragraph 1 or 3 of this article;

(b) organizes or directs others to commit an offense as set forth in paragraphs 1 or 3 of this article.

(c) contributes to the commission of one or more offenses as set forth in paragraphs 1 or 3 of this article by a group of persons acting with a common purpose, when this contribution is made with full knowledge of the intention of the group to commit an offense as set forth in paragraph 1 of this article or when its aim is to facilitate the criminal activity of the group or to serve its purposes, and that activity or purpose involves the commission of an offense as set forth in paragraph 1 of this article;10

Article II-2. Justifications Not Allowed

No consideration of a political, philosophical, ideological, racial, ethnic, religious, or other similar nature may be taken into account in order to justify the commission of any of the aforementioned offenses.11

Title III. Coercive Measures [12]

Chapter 1. Punishment of Offenses

Section 1. Penalties Applicable

Article III-1. Financing of Terrorism

The penalty of imprisonment of … to … and a fine of … to … is imposed on anyone who commits a terrorism financing offense.

An attempt to commit a terrorism financing offense is punishable Option 1: [as if the offense had itself been committed] Option 2: [by a penalty reduced by a [fraction] in relation to the main penalty].

Complicity in an offense, its organization, orders given and assistance provided for its commission are punishable as if the offense had itself been committed.

Article III-2. Association or Conspiracy to Commit Terrorism Financing

The same penalties apply to participation in an association or conspiracy to commit the offenses referred to in Article I-2.

Article III-3. Penalties Applicable to Corporate Entities

When a terrorism financing offense is committed by an agent or representative under their management or control, corporate entities, other than the state, are punished by a fine equal to [a multiple—for example, five times] the fine specified for natural persons, without prejudice to the conviction of the latter as perpetrators or accomplices of the offense.

Corporate entities may additionally be:

(a) banned permanently or for a maximum period of five years from directly or indirectly carrying on certain business activities;

(b) ordered to close permanently or for a maximum period of five years their premises that were used for the commission of the offense;

(c) dissolved if they were created for the purpose of committing the offense;

(d) required to publicize the judgment in the press or any other audiovisual media.

Article III-4. Aggravating Circumstances

Variant (a): The penalty imposed under Articles II-1, II-2, and II-3 may be increased to imprisonment of … to … and a fine of … to …:

Variant (b): The penalty imposed under Articles II-1, II-2, and II-3 may be increased by … [one third or other proportion determined on the basis of the general penal system in force]:

when the offense is perpetrated in the context of a criminal organization.

Article III-5. Mitigating Circumstances

The general system of mitigating circumstances provided in […provisions of the criminal code on mitigating circumstances] is applicable to the offenses provided for under Article I-2.

Section 2. Confiscation

Article III-6. Confiscation

In the event of a conviction for an offense referred to in Article I-2, an order is issued for confiscation of the funds and assets used or intended to be used to commit the offense, the funds and assets that are the subject of the offense, as well as the proceeds of the offense.

The confiscation order specifies the funds and assets concerned and contains the necessary details to identify and locate them.

When the funds and assets to be confiscated cannot be produced, confiscation may be ordered for their value.

Anyone who claims to have a right over the assets or funds that are the subject of a confiscation order may appeal to the jurisdiction that issued the order within one year of the date of that order.

Article III-7. Nullity of Certain Instruments

Any instrument executed free of charge or for a consideration inter vivos or mortis causa, the purpose of which is to safeguard property from confiscation measures as provided in this section, is void.

In the case of the nullification of a contract involving payment, the buyer is reimbursed only for the amount actually paid.

Article III-8. Disposal of Confiscated Property

Confiscated funds accrue to the state, which may allocate them to a fund for combating organized crime or terrorism, or for compensating the victims of the offenses associated with terrorism, or their families. They remain encumbered, up to their value, by any rights in rem lawfully established in favor of third parties.

In cases where confiscation is ordered under a judgment by default, the confiscated funds accrue to the state and are realized in accordance with the relevant procedures on the subject. However, if the court, ruling on an application to set aside such judgment, acquits the person prosecuted, it orders restitution of the value of the funds confiscated by the state, unless it is established that such property represents the proceeds of a crime or offense.

Chapter 2. Freezing of Funds in Application of United Nations Security Council Resolutions

Article III-9. Freezing of Funds

The [Prime Minister, Minister of Finance, Minister of Foreign Affairs, Minister of Justice] may, by administrative decision, order the freezing of funds and assets of individuals and organizations designated by the United Nations Security Council acting under Chapter VII of the United Nations Charter.13 This decision is published in the … [name of the official journal].

Article III-10. Procedure for Disputing Administrative Measures to Freeze Funds

Any individual or organization whose funds have been frozen pursuant to Article II-9 and feels that they were included on the list as the result of an error may seek to have their name removed from the list by submitting an request to this effect within thirty days of the publication of the list to the minister who ordered the freezing, indicating all factors that could demonstrate the error. The minister’s decision with respect to this request cannot be appealed.

Chapter 3. On Freezing, Provisional Measures, and Seizure in Criminal Matters

Article III-11. On Provisional Measures

[…name of the judicial authority competent to order provisional measures] may, ex officio or at the request of the public prosecutor’s office [Option: or a competent agency], order any provisional measures at state expense, including the freezing of funds and financial transactions involving assets, regardless of their nature, that can be seized or confiscated.

The lifting of these measures can be ordered at any time at the request of the public prosecutor’s office or, after notice from the latter, at the request of the competent agency or the owner.

Article III-12. Seizure14

[…name of competent judicial authorities and officials responsible for the detection and suppression of terrorism financing offenses] may seize assets associated with the offense that is the subject of investigation, in particular funds used or intended to be used to commit the offenses referred to in

Article I-2, as well as the proceeds of these offenses, and all evidence facilitating their identification.

Title IV. Jurisdiction of the Courts of … [name of the country adopting the law]15

Article IV-1. Jurisdiction of the Courts

The criminal law of … [name of the country adopting the law] is applicable to the offenses indicated in Article I-2 when:

(a) the offense was committed in its territory;

(b) the offense was committed on board a vessel flying its flag or an aircraft registered pursuant to its laws at the time the offense was committed;

(c) the offense was committed by one of its nationals;

(d) the offense was committed outside its territory by someone now present in its territory, in all cases where […name of the country adopting the law] does not extradite such a person to a state requesting extradition for the same offense;

(e) the offense was directed to or resulted in the commission of an offense indicated in Article I-2, paragraph 1, subparagraph (a) or (b), in its territory or against one of its nationals;

(f) the offense was directed to or resulted in the commission of an offense indicated in Article I-2, paragraph 1, subparagraph (a) or (b), against a government facility of that state located outside its territory, including its diplomatic or consular premises;

(g) the offense was directed to or resulted in the commission of an offense indicated in Article I-2, paragraph 1, subparagraph (a) or (b), in an attempt to compel that state to do or abstain from doing any act;

(h) the offense was committed by a stateless person who has his or her habitual residence in the territory of that state.

(i) the offense was committed on board an aircraft operated by the government of that state.

Article IV-2. Territorial Jurisdiction

The court of [name of capital city] is competent to hear cases involving offenses committed outside the national territory.

Title V. International Cooperation

Chapter 1. General Provisions

Article V-1. General Provisions16

The authorities of […name of the country adopting the law] agree to cooperate as much as possible with those of other states for the purposes of information exchange, investigation, and proceedings, provisional measures and confiscations of instruments and proceeds associated with laundering, for purposes of extradition as well as purposes of mutual technical assistance.

Chapter 2. Measures Relating to Persons Under Investigation

Article V-2. Investigations

When the public prosecutor’s office is informed that the perpetrator or presumed perpetrator of an offense indicated in Article I-2 may be located in its territory, it takes the necessary steps to investigate the facts brought to its notice.

Article V-3. Special Measures

If the public prosecutor’s office feels that circumstances warrant, it takes appropriate steps to ensure the presence of that person for purposes of prosecution or extradition, when necessary requesting that a preliminary investigation be opened and that the person subject to investigation be placed under judicial control or in detention.

Article V-4. Right of Communication

Anyone with respect to whom the measures indicated in Article V-3 are applied is entitled to:

(a) communicate without delay with the nearest representative of the state where he or she is a citizen or with someone otherwise qualified to protect his or her rights or, in the case of a stateless person, the country where he or she customarily maintains a residence;

(b) be visited by a representative of that state;

(c) be informed of the rights afforded him or her under subparagraphs (a) and (b) of this paragraph.

When the public prosecutor’s office receives the request from a state that has established its jurisdiction over the offense in accordance with Article 7, paragraphs 1 (b) and 2 (b) of the Convention, it makes the necessary arrangements to ensure that the person detained under Article IV-3 can be visited by a representative from the International Red Cross.

Article V-5. Notification to Competent States

When the person who is the subject of the investigation indicated in Article IV-2 has been detained, the public prosecutor’s office immediately informs, directly or through the Secretary General of the United Nations, the states that have established their jurisdiction over the offense and, if deemed appropriate, any other interested states, of the detention as well as of the circumstances justifying the detention. The public prosecutor promptly informs said states of the conclusions of the investigation and indicates to them whether it intends to exercise its jurisdiction.

Chapter 3. Requests for Judicial Cooperation

Article V-6. Purpose of Requests for Cooperation

At the request of a foreign state, requests for cooperation relating to the offenses indicated in Article I-2 of this law are executed in accordance with the principles set forth in this title. Cooperation may specifically include:

- gathering evidence or taking depositions;

- providing assistance to make detained persons or others available to the judicial authorities of the requesting state in order to give evidence or assist in investigations;

- serving judicial documents;

- carrying out searches and seizures;

- examining objects and sites;

- providing information and evidentiary items;

- providing originals or certified copies of relevant files and documents, including bank statements, accounting documents, and records showing the operations of a company or its business activities.

Article V-7. Refusal to Execute Requests

1. A request for cooperation may be refused only:17

(a) if there are serious grounds for believing that the measures being requested or the decision being sought are directed at the person in question solely on account of that person’s race, religion, nationality, ethnic origin, political opinions;18

(b) if it was not made by a competent authority according to the legislation of the requesting country or if it was not transmitted in the proper manner;

(c) if the offense to which it relates is the subject of criminal proceedings or has already been the subject of a final judgment in the territory of … [name of the country adopting the law].

2. Bank secrecy may not be invoked as grounds for refusing to comply with the request.

3. The public prosecutor’s office may appeal a court’s decision to refuse compliance within […] days following such decision.

4. The government of [name of the country adopting the law] promptly informs the foreign government of the grounds for refusing to comply with the request.

Article V-8. Request for Investigatory Measures

Investigatory measures are undertaken in conformity with the legislation of … [name of the country adopting the law] unless the competent foreign authorities have requested that a specific procedure compatible with the legislation of … [name of the country adopting the law] be followed.

A judicial officer or public official appointed by the competent foreign authority may attend the execution of the measures, depending on whether they are carried out by a judicial officer or by a public official.

Article V-9. Request for Provisional Measures

A court that is requested by a competent foreign authority to order provisional measures orders such measures in accordance with the legislation of … [name of the country adopting the law]. It may also take a measure whose effects correspond most closely to the measures sought. If the request is worded in general terms, the court orders the most appropriate measures provided for under the legislation.

Should it refuse to comply with measures not provided for under the legislation of … [name of the country adopting the legislation], the court receiving the request to carry out the provisional measures ordered abroad may replace them with measures provided for under that legislation and whose effects correspond most closely to the measures whose execution is being sought.

The provisions relating to the lifting of provisional measures as set forth in Article II-11, paragraph 2 of this law are applicable.

Article V-10. Request for Confiscation

In the case of a request for judicial cooperation in order to issue a confiscation order, the court rules after referring the matter to the prosecuting authority. The confiscation order must apply to funds used or intended to be used to commit a terrorism financing offense or that constitute the proceeds of such an offense, and that are located in the territory of … [name of the country adopting the law].

The court receiving the request for the enforcement of a confiscation order issued abroad is bound by the findings as to facts on which the order is based and may refuse to grant the request solely on one of the grounds stated in Article IV-7.

Article V-11. Disposal of Confiscated Goods

The state … [name of the country adopting the law] has the power to dispose of funds confiscated in its territory at the request of foreign authorities.

However, the state may reach agreements with foreign states providing for the sharing, systematically or on a case-by-case basis, of funds derived from confiscations ordered upon request.

Chapter 4. Extradition

Article V-12. Requests for Extradition

In the case of a request for extradition, the provisions of the Convention, procedures and principles not contrary to the Convention and set forth in an extradition treaty in force between the requesting state and … [name of the country adopting the law] as well as the provisions of this law apply.

Article V-13. Security Measures

If it feels that the circumstances warrant, the public prosecutor’s office takes appropriate steps to ensure the presence of the person covered by the request for extradition, when necessary asking the court receiving the request for extradition to place him or her under judicial control or in detention.

Article V-14. Double Criminality

Under this law, extradition shall be carried out only if the offense giving rise to extradition or a similar offense is provided for under the legislation of the requesting state and of … [name of the country adopting the law].

Article V-15. Mandatory Grounds for Refusal

Extradition is not granted:

(a) If there are serious grounds for believing that the request for extradition has been made for the purpose of prosecuting or punishing a person on account of that person’s race, religion, nationality, ethnic origin, political opinions, sex, or status, or that that person’s position may be prejudiced for any of those reasons;19

(b) If a final judgment has been rendered in … [name of the country adopting the law] in respect of the offense for which extradition was requested;

(c) if the person whose extradition is requested has, under the legislation of either country, become immune from prosecution or punishment for any reason, including lapse of time or amnesty;

(d) if the person whose extradition is requested has been or would be subjected in the requesting state to torture or cruel, inhuman, or degrading treatment or punishment or if that person has not received or would not receive the minimum guarantees in criminal proceedings, as contained in Article 14 of the International Covenant on Civil and Political Rights;

Article V-16. Optional Grounds for Refusal

Extradition may be refused:

(a) if prosecution in respect of the offense for which extradition is requested is pending in … [name of the country adopting the law] against the person whose extradition is requested;

(b) if the person whose extradition is requested has been sentenced or would be liable to be tried or sentenced in the requesting state by an extraordinary or ad hoc court or tribunal;

(c) if … [name of the country adopting the law], while also taking into account the nature of the offense and the interests of the requesting state, considers that, in the circumstances of the case, the extradition of the person in question would be incompatible with humanitarian considerations in view of the age, health, or other personal circumstances of that person.

(d) if extradition is sought to enforce a final sentence that was rendered in the absence of the person concerned, who has not been able to provide for his or her own defense for reasons beyond his or her control;

(e) if … [name of the country adopting the law] has established its jurisdiction over the offense pursuant to Article III-1 of this law;

Options:

(f) if the person whose extradition is requested is subject to the death penalty in respect of the crime of which he or she is accused in the requesting country, unless that country gives sufficient assurances that the penalty will not be carried out;

(g) if the person whose extradition is requested is a national of … [name of the country adopting the law].

Article V-17. Aut dedere aut judicare [the duty to extradite or prosecute in international law]

If … [name of the country adopting the law] refuses to extradite, it refers the matter to its competent authorities so that proceedings may be instituted against the person concerned in respect of the offense that gave rise to the request.

Article V-18. Surrender of Property

Within the limits authorized under national legislation and without prejudice to the rights of third parties, all property found in the territory of … [name of the country adopting the law] that has been acquired as a result of the offense committed or that may be required as evidence is surrendered to the requesting state if extradition is granted, if requested by that state.

The property in question may, if the requesting state so requests, be surrendered to the requesting state even if the extradition agreed to cannot be carried out.

Should that property be subject to seizure or confiscation in the territory of … [name of the country adopting the law], the state may temporarily retain it or hand it over.

Where national legislation or the rights of third parties so require, any property so surrendered is returned to … [name of the country adopting the law] free of charge, after the completion of the proceedings, if … [name of the country adopting the law] so requests.

Chapter 5. Provisions Common to Requests for Mutual Assistance and Requests for Extradition

Article V-19. Political Nature of the Offense

For the purposes of this law, the offenses indicated in Article I-2 shall not be considered offenses of a political nature, offenses connected with a political offense, offenses inspired by political motives, or fiscal offenses.

Article V-20. Transmission of Requests

Requests sent by foreign authorities with a view to establishing laundering offenses or enforcing or ordering provisional measures or confiscations, or for purposes of extradition are transmitted through diplomatic channels. In urgent cases, such requests may be sent through the International Criminal Police Organization (ICPO/Interpol) or directly by the foreign authorities to the judicial authorities of … [name of the country adopting the law], either by post or by any other more rapid means of transmission leaving a written or materially equivalent record. In such cases, in the absence of notice given through diplomatic channels, requests are not immediately executable.

Requests and their annexes shall be accompanied by a translation in a language acceptable to … [name of the country adopting the law].

Article V-21. Content of Requests

Requests shall specify:

1. the authority requesting the measure;

2. the requested authority;

3. the purpose of the request and any relevant contextual remarks;

4. the facts in support of the request;

5. any known details that may facilitate identification of the persons concerned, in particular marital status, nationality, address, and occupation;

6. any information necessary to identify and locate the persons, instrumentalities, proceeds, or property in question;

7. the text of the statutory provision establishing the offense or, where applicable, a statement of the law applicable to the offense and an indication of the penalty incurred for the offense.

In addition, requests shall include the following particulars in certain specific cases:

(1) in the case of requests for the taking of provisional measures, a description of the measures sought;

(2) in the case of requests for the making of a confiscation order, a statement of the relevant facts and arguments to enable the judicial authorities to order the confiscation under domestic law;

(3) in the case of requests for the enforcement of orders relating to provisional measures or confiscations:

(a) a certified true copy of the order, and a statement of the grounds on the basis of which the order was made if they are not indicated in the order itself;

(b) a document certifying that the order is enforceable and not subject to ordinary means of appeal;

(c) an indication of the extent to which the order is to be enforced and, where applicable, the amount of the sum to be recovered on the item or items of property;

(d) where necessary and if possible, any information concerning third-party rights of claim on instrumentalities, proceeds, property, or other things in question.

(4) in the case of requests for extradition, if the person has been convicted of an offense: the original or a certified true copy of the judgment or any other document setting out the conviction and the sentence imposed, the fact that the sentence is enforceable and the extent to which the sentence remains to be served.

Article V-22. Handling of Requests

The Minister of Justice of … [name of the country adopting the law], after verifying that the request has been made in the proper manner, forwards it to the public prosecutor’s office at the place where the investigations are to be conducted or where the proceeds or property in question are situated or where the person whose extradition is being requested is located.

The public prosecutor’s office refers the matter to the officials competent to deal with requests for investigation or to the court competent to deal with requests relating to provisional measures, confiscations, or extradition.

A magistrate or public official appointed by the competent foreign authority may attend the execution of the measures, depending on whether they are carried out by a magistrate or by a public official.

Article V-23. Additional Information

The Ministry of Justice or the public prosecutor’s office may, ex officio or at the request of the court to which the matter is referred, request, through diplomatic channels or directly, that the competent foreign authority provide all additional information necessary for complying with the request or facilitating compliance therewith.

Article V-24. Requirement of Confidentiality

Where a request requires that its existence and substance be kept confidential, such requirement shall be observed except to the extent necessary to give effect to the request. If that is not possible, the requesting authorities shall be promptly informed to that effect.

Article V-25. Postponement

The public prosecutor’s office may postpone referring the matter to the police authorities or to the court only if the measures or order sought could interfere with ongoing investigations or proceedings. It shall immediately inform the requesting authority accordingly through diplomatic channels or directly.

Article V-26. Simplified Extradition Procedure

With regard to the offenses provided for under this law, … [name of the country adopting the law] may grant extradition after receipt of a request for provisional arrest, provided that the person whose extradition is requested explicitly consents thereto.

Article V-27. Restriction on the Use of Evidence for Other Purposes

The communication or use, for investigations or proceedings other than those specified in the foreign request, of evidentiary facts contained therein is prohibited on pain of invalidation of such investigations or proceedings, except with the prior consent of the foreign government.

Article V-28. Allocation of Costs

Costs incurred in complying with requests provided for under this title are borne by the state of … [name of the country adopting the law] unless otherwise agreed with the requesting country.

Title VI. Miscellaneous Measures

Chapter 1. Nonprofit Associations and Organizations

Article VI-1. Registration Procedure

Any nonprofit association or organization that wishes to collect or receive, grant or transfer funds must be entered in the registry [of associations] [of nonprofit organizations] in accordance with methods defined by decree.

The initial application for registration includes the names, surnames, addresses and telephone numbers of all persons given responsibility for the operations of the association, particularly the President, Vice-President, General Secretary, Members of the Board of Directors, and Treasurer, as applicable. Any change in the identity of those responsible must be reported to the authority charged with maintaining the registry.

Article VI-2. Donations

Any donation made to an association or organization indicated in the preceding article in an amount equal to or greater than an amount established by decree is recorded in a record maintained for the purpose by the association or organization, containing the full details on the donor, the date, the nature, and the amount of the donation. The record is kept for a period of […] years and is submitted at the request of any authority responsible for the oversight of nonprofit organizations and, when requested, to judicial police officials responsible for a criminal investigation.

[When the donor of an amount in excess of that amount wishes to remain anonymous, the record may omit the identification but the association or organization is required to disclose his or her identity at the request of judicial police officials responsible for a criminal investigation.]

Article VI-3. Compulsory Statements

Any cash donation in an amount equal to or greater than a sum established by decree is the subject of a statement filed with the [financial investigation unit] following procedures defined by decree.

Any donation is also subject to a statement filed with the [financial investigation unit] when the funds are suspected of being related to a terrorist operation or the financing of terrorism.

Article VI-4. Accounting and Bank Accounts

Nonprofit associations or organizations are required to keep accounts in accordance with provisions in effect and to submit their financial statements for the preceding year to the authorities designated for this purpose within […] months following the close of their financial year.

Nonprofit associations or organizations are required to deposit in a bank account at an authorized banking institution all sums of money that are submitted to them as donations or in the context of the transactions they are called upon to carry out.

Article VI-5. Banned Associations

Notwithstanding the conduct of criminal proceedings, the minister of […] may, by administrative ruling, order a temporary ban on or the dissolution of nonprofit associations or organizations that, with full knowledge of the facts, encourage, promote, organize, or commit the offenses indicated in Article I-2 of this law.

A decree establishes the conditions for application of these provisions.

Article VI-6. Penalties

Any violation of the provisions of this chapter is punishable by one of the following penalties:

(a) a fine of no more than […];

(b) a temporary ban on the activities of the association or organization of no more than […];

(c) the dissolution of the association or organization.

Chapter 2. Alternative Funds Transfer Systems

Article VI-7. Option 1: [Authorization to operate] Option 2: [Entry in the registry]20

1. Any individual or corporate entity not authorized as a financial institution in the sense of the law … [banking law and laws on other financial institutions] or any other applicable law that carries out, on behalf of or in the name of another individual or corporate entity, operations to transfer funds or assets in the sense of the following paragraph as a principal or essential activity, regularly or periodically or in addition to another activity, must Option 1: [be authorized to do so by … [name of the authority designated for this purpose]] Option 2: [be entered in a registry opened for this purpose by … [name of the authority designated for this purpose]].

2. A funds or asset transfer system consists of a financial service that accepts cash, checks, or any other instruments of payment or stores of value at a given location and pays an equivalent sum in cash or any other form to a beneficiary located in another geographic area by means of a method of communication, a message, transfer, or compensation (clearing) system to which the funds or asset transfer system belongs. Transactions carried out through these services may involve one or more intermediaries and a third party who receives the final payment.21

3. The following provisions of the law … [reference to the law on money laundering] are applicable to the transfer services indicated in paragraphs 1 and 2:22

  • article … [provisions on client identification];

  • article … [provisions on suspicious transaction reports]; and

  • article … [provisions on retaining documents]

  • article … [other provisions]

4. The methods for applying this article are established by decree.

Article VI-8. Penalties

1. The penalty of imprisonment of … to … and a fine of … to … is imposed on those who carry out fund transfers in the sense of paragraphs 1 and 2 without Option 1: [having been authorized to do so in advance] Option 2: [being entered in the registry indicated in paragraph 1].23

2. The attempt to commit an offense referred to in the preceding paragraph is punished as if the crime itself had been committed [variant: is punished with a penalty reduced by [fraction] with respect to the principal penalty.

3. Complicity is punished like the offense itself.

4. Corporate entities may additionally be:

(a) banned permanently or for a maximum period of five years from directly or indirectly engaging in certain professional activities;

(b) ordered to close permanently or for a maximum period of five years their premises that were used for the commission of the offense;

(c) dissolved if they were created for the purpose of committing the offense;

(d) ordered to pay a maximum fine of […]

5. A fine of … to … is imposed on those who carry out fund transfers in the sense of paragraphs 1 and 2 above without complying with the provisions of paragraph 3. Corporate entities may also receive a maximum fine of … to … and, in the case of a repeated offense, the penalties indicated in paragraph 4.

Chapter 3. Information Accompanying Wire Transfers

Article VI-9. Information Accompanying Wire Transfers24

1. All cross-border wire transfers must be accompanied by precise information on the person ordering the transfer, particularly his or her name, and as applicable, account number. In the absence of an account number, a unique reference number accompanies the transfer.

2. All domestic wire transfers must include the same information as in the case of cross-border transfers, unless all information concerning the person ordering the transfer can be made available to the financial institutions of the beneficiary and the competent authorities in some other way.

3. The methods for implementing this article are established by decree.

The structure of the law, as well as some of its provisions, particularly Title IV on international cooperation, are adapted from the Model Legislation on Laundering, Confiscation, and International Cooperation in Relation to the Proceeds of Crime (1999) established by the United Nations Office on Drugs and Crime. The drafter will find other provisions in that model legislation that can be included in this law.

Article 1, paragraph 1 of the Convention.

Article 1, paragraph 2 of the Convention.

Article 1, paragraph 3 of the Convention.

Article 2 of the Convention.

These terms appear in the text of the Convention but seem redundant. An offense is necessarily unlawful and there does not seem to be any case where the financing of terrorism could be lawful. As for the willful nature of the crime, this refers to the intention to commit the offense, which is covered in the definition of the offense itself.

This options extends the definition of the financing of terrorism under the Convention to include the requirement stipulated under Article 1(d) of Security Council Resolution 1373 (2001).

The first variant repeats the language of Article 2 of the Convention. The second variant is a simpler formulation, borrowed from Article 421-2-2 of the French penal code.

Article 2, paragraph 5 of the Convention.

Article 2, paragraph 5 of the Convention.

Article 6 of the Convention.

The structure of this title and the next is borrowed from the Model Legislation on Laundering, Confiscation, and International Cooperation in Relation to the Proceeds of Crime (1999) developed by the United Nations Office on Drugs and Crime. The drafter will find other provisions in this model legislation that can be included in this law.

Security Council Resolutions 1267 (1999), 1333 (2000), and 1390 (2002). According to the FATF definition, freezing (also called block or restraint) occurs when a competent government or judicial authority takes control of the funds involved and prevents their original owner from accessing or transferring them. However, the funds remain the property of the original owner and may continue to be administered by the financial institution or other management arrangement designated by the owner.

According to the FATF definition, seizure occurs when the competent government or judicial authority takes control of the funds in question. The funds remain the property of their original owner, although the competent authority may still keep possession of them and provide for their administration or management.

Adapted from Article 7 of the Convention. To the extent that the general legal provisions of the country adopting the law include within the competence of that country’s criminal law any of the cases listed here, such cases may be omitted from the special law. The Convention makes jurisdiction compulsory in the cases indicated in subparagraphs (a) through (d). It is optional in cases (e) through (i).

Article 12 of the Convention.

Only the case indicated in paragraph (a) is specified in the Convention. The other cases are mentioned as examples. The drafter will find other topics in the model legislation mentioned above.

Article 15 of the Convention (which also covers extradition).

Article 15 of the Convention (which also covers judicial cooperation).

The standard set by FATF Special Recommendation VI consists of the alternative of a system of prior authorization or entry in a registry.

The definition is taken from the FATF Guidance Notes.

The Interpretative Note to Recommendation VI notes that all FATF recommendations on money laundering, particularly recommendations 10 through 21 and 26 through 29 should be extended to include alternative fund transfer systems.

The option used shall be the same as in Article V-7.

These provisions are based on the Interpretative Note to FATF Special Recommendation VII.

    Other Resources Citing This Publication