Посты с тэгом: AFSA

Astana Financial Services Authority (‘AFSA’) has recently hosted an online workshop for banks and investment firms, registered in AIFC. The aim of the workshop was to provide an opportunity to discuss the expectations set out in the manuals for preparations of returns and build a shared understanding of what this looks like in practice.

As AFSA Director of Prudential Division Anuar Kaliyev comments: “we want to raise greater awareness and build an understanding of effective reporting of various prudential returns along with instructions for completing the regulatory forms”.

The workshop had been built around a set of guidelines and provided an opportunity for representatives of authorised banks and investment firms to learn from first-hand experience of the regulator. During the Q&A session the Prudential division had provided extra information and answered to questions from workshop attendees.

Feedback from the workshop participants has been very positive with industry welcoming the opportunity to engage directly with AFSA staff and many indicating that they wanted further similar interactions in the future.

Workshop participants noted that “the workshop for authorised banks and investments firms was well structured and gave both the financial community and the regulator an opportunity to discuss existing issues and to explore the possible ways in which the firms can fulfil their duties. One of the other main benefits of the workshop was the opportunity for participants to engage with each other and with the regulator on various issues. This is something that AFSA would like to develop with the participants of AIFC, to encourage and develop better communication between the regulator and the financial community generally”.

Astana Financial Services Authority (AFSA) hereby informs AIFC Participants that the amendments to Kazakhstan’s anti-money laundering (AML) and counter terrorist financing (CTF) law signed by the President of Kazakhstan on 13 May 2020 will also extend to AIFC Participants. AFSA identified around 50 new norms which will extend to AIFC Participants subject to AML supervision pursuant to AIFC AML Rules.

AFSA supervises and regulates AIFC Participants pursuant to AIFC AML Rules, which are made in application of the AML Law of the Republic of Kazakhstan (No 191-IV dated 28 August 2009), the Criminal Code of the Republic of Kazakhstan No 226-Vdated 3 July 2014 (the “Criminal Code”) and international conventions and treaties ratified by the Republic of Kazakhstan

The amendments relate to financial monitoring procedures, such as customer due diligence, internal control and reporting of suspicious transactions, gives the authorised body in the field of financial monitoring the authority to draw up reports on administrative offenses in relation to financial monitoring entities that do not have a state regulatory body. This category includes five subjects of financial monitoring, including independent legal consultants, lessors without a license, accounting organizations, realtors and distributors of precious metals, stones and jewelry.

The law regulates international cooperation procedures for authorized bodies in the field of combating the legalization and laundering of proceeds from crime and the financing of terrorism, including the search and return of criminal assets.

These amendments will begin to take effect from 14 November 2020.

Summary of amendments relevant AIFC Participants supervised by AFSA are as follows:

• Expansion of the scope of regulated sectors to add new categories of “financial monitoring entity” (subparagraph 19) in paragraph 1 of Article 3). It means that the appropriate requirements of the AML/CTF Law will apply to the relevant AIFC Participants. The list of relevant activities of the AIFC Participants for the purpose of AML/CTF Law will be adopted by AFSA in consultation with the Ministry of Finance of the Republic of Kazakhstan in compliance with the FATF Recommendations.
• AFSA should adopt the Requirements applicable to the Rules of Internal Control for AML/CTF purposes for the AIFC Participants (paragraph 3-2 of Article 11). This paragraph was amended and the relevant amendments to the Requirements will be adopted by AFSA in consultation with the Ministry of Finance of the Republic of Kazakhstan.
• AFSA should adopt the Requirements to Customer Due Diligence in cases when the AIFC Participants establish the non-face to face business relations with its customers (paragraph 11 of Article 5). The Requirements will be adopted by AFSA in consultation with the Ministry of Finance of the Republic of Kazakhstan.

Other amendments to the AML/CTF Law of Kazakhstan include the following:

• Expanded definition of implementation of the Targeted Financial Sanctions and combating the Financing of Proliferation of Weapons of Mass Destruction (as required by the FATF Recommendations).
• Financial monitoring entities are provided an opportunity to identify and detect suspicious transactions in accordance with its AML policies, controls and procedures as per the amendments in paragraph 3 of Article 4. Therefore, the signs of suspicious activity should be established in the AML policies, controls and procedures of the financial monitoring entities.
• Requirements to obtain additional information on the customer’s nature of activities and source of funds in case of Enhanced Due Diligence and describe the new cases when the measures of the Customer Due Diligence are not applicable in line with the amendments in Article 5. In addition, the amendments make new prohibitions addressing the process of the non-face to face establishing business relationships by financial monitoring entities with its customers and provide new measures for the Enhanced Due Diligence regarding persons from the countries which failed to implement or not sufficiently implemented the FATF Recommendations.
• Procedures and requirements on providing information to the Financial Intelligence Unit (FIU) by financial monitoring entities (amendments to Article 10).
• Requirements in relation to recordkeeping and AML training (amendments to paragraphs 4 and 8 of Article 11)
• Procedures for conducting the National Risk Assessment and cooperation between FIU, law enforcement authorities and supervisory state authorities (new paragraphs 3,4,5 and 6 in Article 11-1).
• Requirements in relation to the Targeted financial sanctions relating to the financing of terrorism and proliferation of weapons of mass destruction in line (new Article 12-1 and the amendments in Article 12).
• Measures to protect the charity funds and religious organisations against the financing of terrorism (new Article 12-2).

Requirements in relation to freezing of assets/transactions in case of identification of customers from the list of persons or organisations related to the financing of terrorism or proliferation of weapons of mass destruction (paragraphs 1-1 and 2 of Article 13).

On May 21, 2020, AFSA approved the Guidance (Requirements) applicable to the Rules of Internal Control for the AML/CFT purposes. It is designed for the relevant AIFC Participants supervised by AFSA in consultation with the Ministry of Finance of the Republic of Kazakhstan (the “Guidance”).

This Guidance is developed in accordance with:

• paragraph 3-2 of Article 11 of the Law of the Republic of Kazakhstan “On counteracting the legalisation (laundering) of proceeds from crime and the financing of terrorism” (AML/CFT Law);
• section 4.3.1 of the AIFC Anti-Money Laundering, Counter-Terrorist Financing and Sanctions Rules (AML Rules) and;
• paragraph 4 of the Joint Order of the Governor of the Astana International Financial Centre (dated 11 July 2018 No.65) and the Ministry of Finance of the Republic of Kazakhstan (dated 19 July 2018 No.678) “On Concerning some issues related to counteracting legalisation (laundering) of proceeds obtained through criminal means and financing of terrorism”.

The Guidance sets out requirements in relation to the programmes of risk management, customer identification, transaction monitoring and studying, employees training and awareness which should be established in AML policies, controls and procedures of the Relevant Persons.

The Guidance expands and disclose the scope of regulations of the AML/CFT legislation of Kazakhstan which include:

• establishing and maintaining of the AML policies, controls and procedures;
• identification of Money Laundering/Financing of Terrorism risks and managing the risks identified including business and customer risks;
• monitoring and assessment of customers transactions and activities including Politically Exposed Persons and Ultimate Beneficial Owner;
• producers of the Customer Due Diligence, Enhanced Due Diligence and Simplified Due Diligence;
• obtaining the relevant AML training for employees.

(Link to Guidance)

Astana Financial Services Authority (AFSA) and Bulgarian Financial Supervision Commission (FSC) have signed the Memorandum on cooperation in financial markets supervision.

The parties will exchange supervisory information and expand cooperation in the field of capital markets and insurance supervision. This will enable framework conditions for the development of the financial services between two jurisdictions. The regulators have agreed to supervise the operations of cross-border branches, representative offices and subsidiaries of financial enterprises in their respective jurisdictions.

This will ensure that head offices and head financial enterprises exercise adequate and effective control over the activities of their cross-border branches and subsidiaries. According to the signed document, AFSA and FSC will also help each other in ensuring continuous supervision of cross-border organizations on a consolidated basis.

Mukhtar Bubeyev, acting CEO of AFSA, stated: “The signed document is another important step towards expanding cooperation between our institutions. It will contribute to the development of the financial markets in both countries by improving the mechanisms for the exchange of information and regulatory experience.”

Boyko Atanasov, Chairman of the FSC, noted: “The goal set by both parties signing the Memorandum, is to establish a procedure for cooperation between the two institutions in the regulation and exercise of control over cross-border entities in the capital markets and the insurance sector. The Financial Supervision Commission pursues a policy of international partnership and cooperation in order to share good practices and exchange information. I do believe that the signed Memorandum of Understanding with the Financial Services Authority of the Astana International Financial Centre will be a prerequisite for creating the conditions for better supervision of the relevant markets and for end users’ security.”

Astana Financial Services Authority (AFSA), National Bank of the Republic of Kazakhstan (NBK) and Agency for Regulation and Development of the Financial Market of the Republic of Kazakhstan (ARDFM) have signed the tripartite Agreement on cooperation. Astana Financial Services Authority (AFSA), National Bank of the Republic of Kazakhstan (NBK) and Agency for Regulation and Development of the Financial Market of the Republic of Kazakhstan (ARDFM) have signed the tripartite Agreement on cooperation. 

The three regulatory authorities agreed to strengthen cooperation on supervision of financial markets, maintenance of the financial stability, protection of consumers of financial services. The agreement provides a comprehensive framework for cooperation and exchange of information in areas such as authorisation, ongoing supervision, insolvency procedures, financial recovery, anti-money laundering, unfair practices in the financial market and violations of the laws. 

The signing of this Agreement formalises arrangements for cooperation and information sharing between the three regulators, facilitating the performance of their respective supervisory tasks. It underscores the shared commitment to maintaining the highest standards of supervision and the joint promotion of a stable financial services sector in the country. The document enhances the safety and soundness of institutions in their respective jurisdictions, including combating financial crime, conducting consolidated supervision and protecting consumers of financial services. 

Mukhtar Bubeyev (AFSA) stated: “The signed agreement will allow all regulators to join efforts with ultimate goal to contribute to fostering greater financial stability, market integrity and more efficient regulatory cooperation. This cooperation will help exchange of information, hold regular meetings and supervisory interaction”. 

Regulation plays a critical role in creating an enabling environment for financial service providers whilst ensuring the interest of clients are protected for financial products like insurance business.

In recognizing the importance of effective regulation and supervision to develop sustainable insurance markets in the AIFC, the Astana Financial Services Authority (AFSA) held an online-workshop for insurance firms and insurance intermediaries across the AIFC to discuss the key challenges they face in the insurance business.

This event was devoted to various topics in the prudential regulation of insurance firms and insurance intermediaries and their reporting requirements – with keynotes and insights from the AFSA.

The participants also discussed the response to COVID-19 pandemic and regulatory relief measures taken by the AFSA.

AFSA plans to conduct similar workshops for banking and investment firms and welcomes all interested parties to join the discussion. The dates of such event will be announced later.

AFSA as a supervisory authority is committed to maintaining a regime that acts as a significant deterrent to any criminal elements, including money launderers and persons wishing to assist, in any way, acts of terrorism. The AFSA administers and enforces AIFC legislation on countering anti-money laundering (AML) and counter-terrorism financing (CFT). In this connection AFSA announces Lists of predicate offences and typology research reports for better understanding of the money laundering and terrorist financing threats by AIFC Participants.

List of Predicate offences

The List of Predicate offences relating to money laundering and terrorist financing  with references to the appropriate Articles of the Criminal Code of the Republic of Kazakhstan was adopted by AFSA based on the designated categories of offences defined in the Financial Action Task Force (FATF) Recommendations (2019).

Pursuant to R.3 and R.5 of the FATF Recommendations, Money laundering and Terrorist financing offences should be criminalised on the basis of the Vienna Convention, the Palermo Convention and the Terrorist Financing Convention. Countries should apply the crime of money laundering to all serious offences, with a view to including the widest range of predicate offences.

To see the list of predicate offences please click here

The list of typology research reports

The typologies reports on money laundering (ML) and terrorist financing (TF) methods can assist all AML/CFT stakeholders to better understand the nature of existing and emerging ML and TF threats and pursue effective strategies to address those threats. The typology research reports are publicly available at web-resources of FATF and FATF-style regional bodies (FSRBs). These documents provide the samples of ML and TF methods and trends, explanation of measures on combating ML and TF and general description of typologies and case studies. These samples of typology reports will assist financial institutions and non-financial businesses and professions in identifying, assessing and understanding ML and TF risks that they are exposed to as well as to detect and combat ML and TF.

Currently, AFSA does not have its practical samples of ML/TF typology reports and highly recommends to use as a guidance the list of typology research reports of FATF and FSRBs.

To see the list of typology research reports please click here

AFSA, the regulator of the Astana International Financial Centre, introduced a number of targeted measures to support AIFC participants, ensure market integrity and financial stability. These measures are designed to alleviate the negative impact on regulated firms due to the exceptional circumstances caused by COVID-19.

The regulator has revised plans for the submission of mandatory reports that are not critical to market integrity in the short term. This will allow companies – market participants – to focus on customer support and their business activities in this difficult period.

One of the immediate steps that AFSA has taken was the extension of the deadlines for submitting various types of mandatory reporting for 30 calendar days after the end of the state of emergency in Kazakhstan. Details can be found on the official website of the regulator here.

It is worth emphasizing that the regulator is operating in business as usual mode and continues performing supervision over the financial markets. AFSA employees work remotely and have all the necessary digital solutions for timely and efficient processing of requests and meetings with AIFC participants and consumers of financial services.

All financial services and AIFC platforms remain open and accessible to market participants. This includes the AIX, International Exchange of AIFC, which has continued to function smoothly from the start of the pandemic.

AFSA also maintains regular contacts with national regulators, foreign peer regulators and international standard setting organisations to ensure the efficient supervision of financial markets, cross-border transactions and coordinate responses to COVID-19 impacts. AFSA actively participates in ongoing discussions of possible regulatory actions in connection with COVID-19 and consumer protection measures on margins of IOSCO, IAIS, FinCoNet and others.

At the same time, AFSA draws the attention of Authorised Person to the importance of complying with requirements for systems and controls, particularly for policies on risk management, cyber-security and business continuity, and on ensuring the financial and operational resilience.

AFSA expects that prudentially regulated firms will actively manage their liquidity and should immediately report to the AFSA if there are reasons to believe the firm will be in difficulty. AIFC capital and liquidity requirements are benchmarked to international standards of Basel III and should ensure resilience to economic stress.

All Authorised Persons should immediately inform the AFSA of any significant developments and matters that could impact their ability to meet regulatory requirements.

AFSA is firmly committed to its regulatory mission and welcomes the timely actions of the Government of Kazakhstan and the National Bank of Kazakhstan to support the economy.

As the situation with the COVID-19 pandemic develops, the regulator plans to introduce new response measures for the effective functioning of the financial markets. AFSA will report all updates as they become available.

It is worth recalling that to date, 438 companies are registered in the AIFC. Since the beginning of the year, AIFC registered 75 new participants. These companies represent 40 countries, including the companies from Kazakhstan, Russia, China, Great Britain, the USA, India, Finland, Singapore, the United Arab Emirates, the Netherlands, Turkey, Switzerland, Germany, Italy and many others.

During this challenging period of COVID-19 pandemic, the Astana Financial Services Authority (AFSA) remains focused on its regulatory objectives to foster financial stability, promote market integrity, protect consumers and support financial markets in the AIFC.

AFSA is closely working with the regulated community to assess financial and economic impacts of the pandemic on operations of financial firms. Based on feedback received the AFSA has decided to grant relief measures to Authorised Firms in several areas in order to allow them to prioritize their business and operational issues during the times of disrupted economic activities. These measures include:

• Extension of the deadlines for submission of reports by Authorised Firms.
• Suspension of the deadlines for implementing recommendations by Authorised Firms and Ancillary Service Providers, that are due to expire during the State of Emergency in the Republic of Kazakhstan. Instead, these firms will be required to report to the AFSA on implementation of the recommendations within 30 calendar days after the end of the State of Emergency in the Republic of Kazakhstan or until provision of further instructions.
• Extension of the time period required by provision 3.4.2 (a) of MAR for making market disclosure by Reporting Entities in relation to its annual financial report at the latest on 1 September 2020.
• Suspension of the requirements envisaged in section 13.7. of AML Rules to submit Annual AML Return for 2019 until 30 calendar days after the end of the State of Emergency for all Ancillary Service Providers that are subject to AML regulation.

These efforts are designed to respond to the impacts and challenges raised by COVID-19. AFSA remains open to constant engagements with the regulated community to ensure financial stability and consumer protection.

Full texts of the notices are published here (link to notices).