Cape Verde ACL

NATIONAL ASSEMBLY Law No. 17/VI/2002 16 December 2002 By order of the People, the National Assembly decrees the following pursuant to article 174, paragraph (b), of the Constitution of the Republic: Chapter I General regime Section I Object, scope and punitive regime Article 1 Object The present law establishes preventive and law-enforcement measures to combat laundering of money and other assets derived from crimes indicated in article 3, supplementing existing provisions on this matter in relation to proceeds of trafficking in drugs and precursors.

Article 2 Scope of application 1. The present law shall apply to credit and parabanking institutions, insurance companies and pension fund management companies having their headquarters in the territory of Cape Verde.

2. Branches, agencies and other forms of representation of entities referred to in the preceding paragraph which are situated in the territory of Cape Verde but have their headquarters abroad shall also be covered.

3. The present law shall further apply to entities operating public postal services insofar are they provide financial services.

4. For the purposes hereof, the entities referred to in the preceding paragraphs shall be designated as financial entities.

Article 3 Laundering of money and other assets 1. Any person who, knowing that property or proceeds derive from the commission, howsoever perpetrated, of crimes of trafficking in drugs or psychotropic substances as provided for in Law No. 78/IV/93 of 12 July 1993, terrorism, abduction, trafficking in minors, sexual abuse of minors, child pornography, pimping, trafficking in firearms, extortion, corruption, embezzlement, public sector maladministration, unlawful appropriation of cooperative or public sector property or fraudulent obtaining or diversion of subsidies, grants or credits, or economic or financial crimes: V.06-59203

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(a) Performs, transfers, converts or aids or abets any operation for the conversion or transfer of such property or proceeds wholly or partly, directly or indirectly, with the aim of concealing or disguising the illicit origin thereof or assists any person involved in the commission of any such offence to evade the legal consequences of his or her actions shall be liable to imprisonment from 4 to 12 years; (b) Conceals or disguises the true nature, source, location, disposition, movement or ownership of or rights with respect to such property or proceeds shall be liable to imprisonment from 2 to 10 years; (c) Acquires or receives on any terms or possesses or uses such property or proceeds shall be liable to imprisonment from 1 to 5 years.

2. The punishment for offences indicated in the preceding paragraph shall not be below the minimum or above the maximum limits laid down for the related predicate offence.

3. The punishment for offences provided for in paragraph 1 shall be imposed even if the acts constituting the predicate offence were committed outside national territory.

Article 4 Bank of Cape Verde The Bank of Cape Verde shall, as the banking and financial supervisory body, be empowered to publish rules of good banking practice with a view to combating laundering of money and other assets and to monitoring and overseeing the application of regulations and measures for prevention of laundering in the banking and financial sector.

Section II Criminal investigation Article 5 Authority The criminal police shall have sole authority to investigate offences of laundering of money or other assets provided for herein, without prejudice to the provisions of the relevant organizational law where relating to supplementary, subsidiary and auxiliary duties of the public forces of law and order.

Article 6 Provisional measures 1. Upon an individualized and substantiated request by competent foreign judicial authorities addressed to the Central Criminal Police Directorate, all steps provided for under Cape Verdean law to ascertain whether property or proceeds derived from crimes referred to in paragraph 1 of article 3 are on national territory may be taken, the outcome being communicated to the requesting authority.

2. If property or proceeds derived from crimes referred to in the preceding paragraph are on national territory, the judicial authorities of Cape Verde shall, in addition to initiating criminal procedures in respect of the offence of laundering of money or other assets, take all necessary

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steps to prevent the disappearance or dissipation of such property or proceeds, including the freezing or seizure thereof.

3. International judicial assistance shall in all cases conform to the principles of reciprocity between States and secrecy, it being prohibited to use information furnished at the request of foreign authorities for purposes other than as indicated in the request for information.

Article 7 Forfeiture of property or proceeds connected with offences 1. Property or proceeds connected with the offence of laundering of money or other assets and income, interest, profits or other benefits derived from such property or proceeds shall be declared by the courts to be forfeited in favour of the State.

2. If rights, assets or benefits referred to in the preceding paragraph cannot be appropriated in cash, forfeiture shall be replaced by payment of the amount concerned to the State.

3. The provisions of the preceding paragraphs shall apply to rights, assets or benefits acquired through any transaction or trade involving rights, assets or benefits acquired directly by means of the offence.

Article 8 Defence of rights of bona fide third parties 1. If property seized from persons accused in criminal proceedings in respect of crimes relating to laundering of money or other assets includes property registered in public records in the name of third parties, the holders thereof shall be notified for the purpose of pursuing the defence of their rights and furnishing substantive proof of their good faith and such property may be returned to them immediately.

2. In the absence of such records, third parties invoking good faith in the acquisition of property or proceeds seized may pursue the defence of their rights in the proceedings.

3. The defence of rights of third parties invoking good faith may be pursued up to the declaration of forfeiture and shall be presented by means of an application to the judge, the interested party being thereupon obliged to adduce all evidence.

4. The application shall be filed as an appendix to the case documents and, following notification to the public prosecution department, which may lodge an objection, the court shall rule on the matter, taking all such steps as it deems appropriate for that purpose.

5. The judge may refer the matter to the civil courts if, by reason of its complexity or any delay arising in the normal course of the criminal proceedings, it cannot be appropriately ruled upon in those proceedings.

Article 9 Initiation of forfeiture of property or proceeds connected with offences

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1. The charges shall include details of property or proceeds connected with the offence of laundering of money or other assets and income, interest, profits or other benefits derived from such property or proceeds and the initiation of forfeiture thereof in favour of the State.

2. If upon the filing of charges it is not possible to effect settlement of income, interest, profits or other benefits derived from property or proceeds connected with the offence of laundering of money or other assets, such settlement may take place up to fifteen days prior to the date when the adjudication hearing is held.

3. The settlement may be adjusted within the period indicated in the preceding paragraph if the inaccuracy of the previously assessed value becomes known.

4. Arrangement or adjustment of the settlement as referred to in the preceding paragraphs shall be notified to the accused and to the accused’s defence counsel within a period of 48 hours.

Article 10 Defence of rights of the accused 1. The defence of the rights of persons accused in connection with property or proceeds whose forfeiture in favour of the State is initiated in criminal proceedings in respect of the offence of laundering of money or other assets shall be submitted in the plea.

2. In the event of adjustment of the settlement as referred to in paragraph 3 of article 9 hereof, the defence shall be presented within a period of 8 days from notification as referred to in paragraph 4 of that article.

Article l1 Precautionary seizure 1. At the request of the public prosecution department or injured party, the judge may order the seizure of the accused’s property in accordance with the law of civil procedure.

2. If a surety has previously been fixed and not furnished, the applicant shall be exempted from adducing proof of any well-founded risk of loss of such financial guarantee.

3. Precautionary seizure as referred to in the preceding paragraph may be ordered even in connection with commercial dealers.

4. Objections to seizure rulings shall not have suspensory effect.

5. If ownership of seized property is disputed, the judge may refer the matter to the civil courts for a decision, seizure as ordered remaining effective in the meantime.

Article 12 Amendment and termination of seizure 1. Seizure shall cease if the surety imposed is furnished or, in the case provided for in paragraph 1 of article 13, through voluntary payment of the amount concerned, within 10 days from the date when the verdict becomes final.

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2. If at any time during the proceedings it is established that the amount to be forfeited is less or greater than that originally determined, the public prosecution department shall require that the seizure be reduced or increased as appropriate.

3. The seizure or surety shall terminate upon a final decision of acquittal.

Article 13 Declaration of forfeiture 1. In the verdict of conviction the court shall specify the amount of income, interest, profits or other benefits derived from property or proceeds which pursuant to article 7 is to be declared forfeited in favour of the State.

2. If that sum is less than the value of the property seized or surety furnished, the amount thereof shall be reduced to such sum.

Article 14 Transfers of moneys and payments International transfers of national or foreign currency, means of payment abroad or bearer securities may be effected only through banking or financial institutions authorized to carry out such transactions.

Article 15 Declaration of currency imports 1. Any person entering the territory of Cape Verde shall, if carrying national or foreign currency or bearer securities of an amount exceeding one million escudos, declare such amount to the customs authorities.

2. The General Customs Directorate shall have authority to oversee compliance with the obligation referred to in the preceding paragraph but shall avoid any delay or disruption in entry into national territory.

3. Documentation received by the General Customs Directorate shall be preserved for a period of 5 years.

Section III Rules of conduct and transparency Article 16 Duty of identification 1. Financial entities shall require their regular or casual customers to identify themselves whenever business dealings are established with them, in particular the opening of deposit or savings accounts, transfers of funds, currency exchange, safety deposit services, provision of sureties, sale of insurance policies or operations involving securities of any kind.

2. Customer identification details shall be noted in writing on the printed form concerned or in the bank document evidencing the transaction carried out.

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3. Customers’ identity shall be verified by production of their identity card or any other official identification document bearing their photograph.

Article 17 Third-party transactions 1. Whenever the details or nature of a banking transaction to be performed reveal or constitute circumstantial evidence that the beneficiary of the transaction is other than the person who made direct contact with the institution, the latter shall require identification of the party represented or the beneficiary of the transaction together with supporting proof, which may be presented as a copy or by electronic means.

2. Where, in the case of transactions effected internationally and with no personal contact with the beneficiary, doubts exist as to the beneficiary’s identity and if the amount or nature of the transaction so warrants, the beneficiary of the transaction may be requested to arrange for proof of identification and the nature of the transaction to be furnished by a financial institution of recognized competence.

Article 18 Refusal of transactions In the absence of identification of the customer or party represented or the beneficiary of the transaction in the cases provided for in article 16, the financial institution shall refuse to undertake the requested transaction.

Article 19 Duty of enhanced diligence 1. Financial entities shall pay particular attention to identification of customers and the nature of transactions which, by reason of their frequency, unusual volume, complex structure or irregular character, arouse suspicions of being connected with the commission of offences provided for in article 3.

2. In the cases provided for in the preceding paragraph, financial entities shall, in addition to identification measures, ascertain the origin and destination of the funds and the true nature of the transaction and may not disclose their suspicions to the customer.

Article 20 Duty of preservation of documents Financial entities shall preserve copies, in any medium, of documents relating to customers’ identification and the recording of completed transactions for a period of 5 years following cessation of the relationship with the customer.

Article 21 Internal anti-laundering unit

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1. Financial entities shall train and update their personnel in regard to the prevention of laundering of money and other assets derived from criminal activities, paying particular attention to staff assigned to counter duty or engaged in foreign dealings.

2. Financial entities shall also set up an internal unit with responsibility for observance of regulations for prevention of laundering of money and other assets derived from criminal activities, which shall be entrusted with conducting annual assessments of cases reported to the judicial authorities, drawing up rules of procedure to increase the efficiency of their activities and providing any assistance requested of them by the Bank of Cape Verde as the authority in such matters.

Article 22 Reporting duty 1. Financial entities shall furnish the judge or public prosecution department, whenever so required by them, with information, documents or any other items in their possession which are necessary for the institution of proceedings in respect of offences of laundering of money or other assets that are derived from criminal activities or are to be seized, and the obligation of bank secrecy shall be lifted.

2. Information furnished pursuant to the preceding paragraph may be used only for the investigation and punishment of offences provided for in article 3 hereof and may not be employed for other purposes, nor may the identity of the person furnishing it be revealed.

3. With the aim of preventing disclosure of the identity of employees or managers of financial entities furnishing information as referred to in the preceding paragraphs, only the copy of the banking information shall be kept with the procedural documents, in all cases identifying the transmitting institution without bearing the signature of the person who transmitted the information, and the original shall be filed in secrecy with the criminal police.

4. The accused may, during the trial and adjudication hearing, request verification of conformity between the original and copy of the information transmitted.

5. Financial entities furnishing information required by the competent judicial authorities in connection with investigative proceedings may not disclose such fact to customers or third parties or the fact that criminal investigations are in progress.

Article 23 Special duty of assistance 1. Financial entities shall immediately inform the criminal police, in particular by facsimile or electronic mail, if they become aware or have a well-founded suspicion that funds or assets received by them or recorded in their books are derived from offences provided for in article 3 or whenever they have knowledge of any facts that may constitute circumstantial evidence of the commission of such offences.

2. Financial entities shall refrain from carrying out any transactions which they reasonably suspect of being connected with the commission of offences provided for in article 3 hereof and shall report the request for such transactions to the Prosecutor-General of the Republic or to the

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judicial officer of the public prosecution department designated by him, who may order the suspension of the operation concerned.

3. Financial entities may carry out the transactions if the suspension order is not ratified by a judicial ruling within 24 hours from the communication made pursuant to the preceding paragraph, such period being extended to 48 hours in exceptional circumstances and with respect to transactions whose amount exceeds the sum of one million escudos.

Article 24 Notifications by the supervisory authority 1. The Bank of Cape Verde shall also inform the Central Criminal Police Directorate whenever it becomes aware during its inspection activities or otherwise of facts that constitute circumstantial evidence of the commission of offences provided for in article 3.

2. The provisions of paragraphs 2 and 5 of article 22 shall apply to information furnished pursuant to the preceding paragraph.

Article 25 Exemption from liability The furnishing of information or assistance reasonably and in good faith pursuant to articles 22 and 23 shall not constitute infringement of the duty of bank secrecy or entail criminal, civil, disciplinary or administrative liability for the person who furnished it or for the institution involved.

Section IV Non-financial businesses Article 26 General obligations 1. Individuals or corporations engaged in the operation of gaming establishments or real estate brokerage or property buying for resale or dealing in precious stones or metals, antiques, works of art or motor vehicles shall be subject to the principles and obligations imposed on financial entities hereunder, except as provided for in article 20, mutatis mutandis.

2. Non-fulfilment, including through negligence, of the aforementioned obligations shall be punished by imposition of fines as provided for herein.

3. The government department responsible for matters of finance shall have authority to regulate the application of this law to persons referred to in paragraph 1 of this article and to oversee compliance with these provisions.

CHAPTER II Administrative offences Section I General provisions Article 27

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Subsidiary law The general legal regime governing administrative offences shall be applicable on a subsidiary level to offences provided for in this chapter.

Article 28 Negligence Negligence in connection with administrative offences provided for herein shall be punishable.

Article 29 Compliance with obligations Whenever an administrative offence results from breach of an obligation, the imposition of penalties and the payment of fines shall not release the offender from compliance therewith where still possible.

Article 30 Liability 1. Financial entities shall be liable for the commission of administrative offences involving non-observance of their rules of conduct insofar as their managers, employees or representatives have acted within the scope of their duties, even if unlawfully, or in the name and on behalf of those institutions.

2. The provisions of the preceding paragraph shall not suspend the disciplinary liability of managers, employees or officials of financial entities, where arising, or the right of recourse for loss caused to financial institutions by their managers, employees or representatives.

3. Any avoidance or ineffectiveness of transactions carried out between the institution and the customer shall not bar the liability of the financial entity.

Article 31 Disposal of fines Proceeds of fines shall accrue to the State.

Article 32 Time-bar 1. Procedures in respect of administrative offences provided for in this chapter shall be timebarred after 5 years from the commission thereof.

2. Fines and ancillary penalties shall be time-barred after 5 years from the date when the penalty is imposed or the appeal verdict becomes final.

Article 33 Authority to institute proceedings and impose penalties

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1. The investigation of administrative offences provided for herein and institution of corresponding proceedings shall be entrusted to the entity having authority to supervise or oversee the business sector concerned.

2. The Minister of Finance shall have authority to impose sanctions provided for herein with powers of delegation.

Article 34 Competent court The District Court of Praia shall have jurisdiction with regard to the determination of judicial appeals against rulings imposing fines provided for herein and the review or enforcement thereof.

Section II Specific provisions relating to administrative offences Article 35 Administrative offences The following shall constitute administrative offences punishable by a fine from 250,000 to 25,000,000 escudos: (a) Breach of the identification obligations as provided for in articles 16 and 17; (b) Breach of the duty of preservation of documents as provided for in paragraph 3 of article 15 and in article 20; (c) Infringement of the obligations referred to in article 14 and in paragraph 1 of article 15.

Article 36 Particularly serious administrative offences The following shall constitute administrative offences punishable by a fine from 500,000 to 50,000,000 escudos: (a) Breach of the special duty of assistance as provided for in paragraph 1 of article 23; (b) Infringement of the duty to refrain from acting as provided for in paragraph 2 of article 23; (c) Disclosure of the identity of persons transmitting requested information pursuant to article 22 to the competent authority; (d) Infringement of the provisions of paragraph 5 of article 22; (e) Infringement of the duty of enhanced diligence as provided for in article 19.

Article 37 Amount of fines In cases of negligence, the amount of the fine may not exceed one half of the maximum sum laid down for the administrative offence concerned.

Article 38 Ancillary penalties The following ancillary penalties may be imposed on offenders in addition to the fines provided for in articles 35 and 36:

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(a) Disqualification from discharging the corporate positions and duties of administrator, director, manager or head of financial entities for a period of 1 to 10 years if the persons accused are members of corporate organs of financial entities, hold the position of director, head or manager or serve as legal or voluntary representatives thereof; (b) Publication of the verdict by the Bank of Cape Verde at the expense of the offender.

Article 39 Entry into force The present law shall enter into force on the day following its date of publication.

Approved on 31 October 2002 The President of the National Assembly, Aristides Raimundo Lima Promulgated on To be published The President of the Republic, Pedro Verona Rodrigues Pires Signed on Published in Gazette No. 36 of the same date The President of the National Assembly, Aristides Raimundo Lima