On the Prevention of Money Laundering and Terrorism Financing – 5

Refraining from Executing a Transaction and the Suspension of a Transaction

Section 32. Refraining from Executing a Transaction

(۱) The subject of this Law shall take a decision regarding refraining from executing one transaction or several mutually linked transactions or from a definite type of debit operations in the customer’s account (hereinafter – from executing a transaction), if the transaction is related or there are substantiated suspicions that it is related to money laundering or terrorism financing.

(۲) Pursuant to the requirements specified in Section 31 of this Law, the subject of the Law shall notify the Control Service without delay, not later than on the following working day, regarding refraining from executing a transaction.

(۲^۱) The Control Service shall, not later than within five working days following the receipt of the report submitted by the subject of the Law on refraining from executing a transaction, assess whether the subject of the Law has taken the decision provided for in Paragraph one of this Section in compliance with the provisions of this Law and whether the restriction of rights determined for the particular person is commensurate, and shall issue an order to continue or discontinue refraining from executing a transaction. An order of the Control Service, in accordance with which the subject of the Law discontinues refraining from executing a transaction, shall be substantiated.

(۳) Not later than within 40 days following the receipt of the report on refraining from executing a transaction, but in the case of an exception – within the additional time period determined by the Prosecutor-General or his or her specially authorised prosecutor not exceeding 40 days, which is necessary for the receipt of the essential information requested, including from foreign states, the Control Service shall carry out one of the following activities:

۱) issue an order to suspend the transaction or a definite type of debit operations in the customer’s account, if:

a) money or other funds are considered proceeds of crime pursuant to Section 4, Paragraph three of this Law. In such a case, the transaction or a definite type of debit operations in the customer’s account shall be suspended for the time period specified in the order but which does not exceed six months, or

b) on the basis of the information at the disposal of the Control Service there is a suspicion that a criminal offence is being committed, including money laundering or an attempt to money laundering. In such a case, the transaction or a definite type of debit operations in the customer’s account shall be suspended for the time period specified in the order, but which does not exceed 45 days;

۲) provide a written notification to the subject of this Law that the further refraining from executing the transaction is to be discontinued, since the issue of the order referred to in Paragraph three, Clause one of this Section is not substantiated; or

۳) not later than on the 40th day following the day of the receipt of the order regarding refraining from executing the transaction, provide a written notification to the subject of the Law regarding an additional time period specified by the Prosecutor-General or his or her specially authorised prosecutor provided for in Paragraph three of this Section.

(۴) Upon receipt of the order referred to in Paragraph three, Clause one of this Section, the subject of the Law shall suspend the transaction or a definite type of debit operations in the customer’s account for the time period specified in the order, notifying the customer thereof in writing, as well as sending the customer a copy of the order, in which the procedure for appealing the order is explained.

(۵) The Control Service shall revoke the order issued pursuant to Paragraph three, Clause 1 of this Section regarding suspension of the transaction or a definite type of debit operations in the customer’s account, if the customer has provided substantiated information on the lawfulness of the origin of money or other funds. The abovementioned information shall be submitted by the customer to the subject of the Law, which shall forward it to the Control Service without delay.

(۶) The Control Service has the right to revoke with its order the suspension of a transaction or a definite type of a debit operation in the customer’s account prior to the term specified.

(۷) If the order is not revoked, the Control Service shall, within a time period of 10 working days following the issue thereof, provide information to pre-trial investigative institutions or the Prosecutor’s Office pursuant to the procedure specified in Section 55 of this Law.

(۸) The subject of the Law shall discontinue suspension of executing a transaction, if the subject of the Law:

۱) within the time period specified in Paragraph three of this Section, has not received an order of the Control Service regarding suspension of a transaction or a definite type of debit operations in the customer’s account, as well as if the subject of the Law has not received a written notification regarding an additional time period determined by the Prosecutor-General or his or her specially authorised prosecutor;

۲) has received the written notification referred to in Paragraph three, Clause 2 of this Section;

۳) within the time period referred to in Paragraph three, Clause 1, Sub-clause „a” or „b” of this Section, has not received an adjudication or order issued by pre-trial investigative institutions, the Prosecutor’s Office or a court provided for in other regulatory enactments which are the basis for suspension of a transaction or a definite type of debit operations in the customer’s account; or

۴) has received the order of the Control Service regarding discontinuation of refraining from executing transactions referred to in Paragraph 2¹ of this Section.

[۲۸ May 2009; 10 December 2009; see Clause 8 of the Transitional Provisions; 7 June 2012]

Section 33. Order Issued to the State Information System Manager

(۱) In the cases provided for in Section 32, Paragraph three, Clause 1 of this Law the Control Service may issue an order to the State information system manager to implement the relevant measures within the competence thereof, in order not to permit re-registration of the property during the time period specified in the order.

(۲) The State information system manager shall execute the order without delay and shall notify the Control Service regarding the way of execution and the outcome.

(۳) The Control Service shall, within a time period of 10 working days following the issue of the order, if it has not revoked the order, provide information to pre-trial investigative institutions or the Prosecutor’s Office pursuant to the procedure specified in Section 55 of this Law.

Section 33¹. Objects to Which Orders of the Control Service Are Applicable

(۱) Orders issued by the Control Service pursuant to Section 32, Paragraph three, Clause 1 and Section 33, Paragraph one of this Law shall be applicable to proceeds of crime, including property that has originated by converting proceeds of crime into other valuables.

(۲) If proceeds of crime have been fully or partially added to the funds acquired from lawful sources, orders of the Control Service shall be applied to the total amount of the proceeds of crime and funds acquired from lawful sources, not exceeding the value of the proceeds of crime.

(۳) If from the funds, to which orders of the Control Service shall be applied pursuant to Paragraphs one and two of this Section, fruits are being received, then the orders of the Control Service shall also apply to the fruits received or a part thereof corresponding to the value of the fruits received from the proceeds of crime.

[۱۰ December 2009]

Section 33². Order Regarding the Monitoring of Transactions

The Control Service shall issue an order, with approval of the Prosecutor-General or his or her specially authorised prosecutor, to the subject of the Law regarding the monitoring of transactions in its customer’s account for the period not exceeding one month, if the Control Service, on the basis of information at the disposal thereof or information received from the subject of the Law or by way of information exchange with the institutions and authorities specified in Section 62 of this Law, has substantiated suspicions that a criminal offence has occurred or is occurring, including money laundering , terrorism financing or an attempt to carry out such actions. If necessary, this term may be extended for the time period not exceeding one month by the Prosecutor-General or his or her specially authorised prosecutor.

[۱۰ December 2009]

Section 33³. Notification of an Order to the Land Register Office

(۱) The Land Register office shall be notified of an order issued by the Control Service pursuant to Section 32, Paragraph three, Clause 1 of this Law, if it contains an issue that is within the competence of the Land Register. If until the receipt of an order or within the time period specified in the order the Land Register receives a request for corroboration regarding the voluntary corroboration of rights in respect of the immovable property specified in the order issued by the Control Service, a judge of the Land Register shall take a decision on suspension of the request examination for the time period specified in the order. The Land Register office shall send the Control Service the decision taken.

(۲) Following the receipt of the order issued by the Control Service specified in Section 32, Paragraph three, Clause 1 of this Law, the Land Register office shall provide a written notification to the person subject to the order by sending the person a copy of the order in which the procedure for appealing the order is explained.

[۱۰ December 2009]

Section 34. Procedure for Appealing an Order of the Control Service

(۱) The persons, whose transaction or definite type of debit operations in the account thereof is suspended, or who are subject to the restriction in relation to the re-registration of funds owned by them imposed on the State information system manager or on the Land Register office, or the authorised representatives of such persons may appeal the orders, issued by the Control Service in the cases and pursuant to the procedure specified in this Law, to a specially authorised prosecutor within the time period specified in this Law.

(۱^۱) The persons, in relation to whose transactions or definite type of debit operations the refraining is to be continued, or the authorised representatives of such persons, as well as the subjects of this Law, may appeal the decisions, issued by the Control Service pursuant to Section 32, Paragraph 2¹ of this Law, to a specially authorised prosecutor within the time period specified in this Law.

(۲) The decision of a specially authorised prosecutor may be appealed by the persons referred to in Paragraphs one and 1¹ of this Section to the Prosecutor-General, whose decision shall be final.

[۱۰ December 2009; see Clause 8 of the Transitional Provisions]

Section 35. Deadline for the Submission of Complaints

A complaint regarding an order of the Control Service may be submitted by the persons specified in Section 34, Paragraph one of this Law within the time period of 30 days following the receipt of the copy of the order.

Section 36. Exemption in Relation to Refraining from Executing a Suspicious Transaction

(۱) If it is impossible for the subject of the Law to refrain from executing such a transaction in relation to which there are substantiated suspicions that it is associated with money laundering or terrorism financing, or if refraining from such a transaction may serve as information that would assist the persons involved in money laundering or terrorism financing in avoiding liability, the subject of this Law has the right to execute the transaction, reporting it to Control Service pursuant to Section 31 of this Law after the execution of the transaction.

(۲) Paragraph one of this Section shall not be applied to the transactions executed by the persons regarding whom financial restrictions have been specified by the United Nations Security Council or the European Union.

(۳) In the cases provided for in the European Union legislation, credit institutions have the right to carry out payments from the accounts of such persons who are suspected of committing a criminal offence related to terrorism or money laundering or of participating in such an offence, if in respect of these accounts a credit institution has taken a decision on refraining from a definite type of debit operations, or if an order of the Control Service regarding refraining from a definite type of debit operations has been received.