1.1. Overview of the AML Rules

1. (a) The Anti-Money Laundering Rules (the "AML Rules") are made in recognition of the application of the Law of the Republic of Kazakhstan No 191-IV dated 28 August 2009 on counteracting legalisation (laundering) of proceeds obtained through criminal means and financing of terrorism (the "AML Law"), the Criminal Code of the Republic of Kazakhstan No 226-V dated 3 July 2014 (the "Criminal Code") and international conventions and treaties ratified by the Republic of Kazakhstan.
2. (b) In these Rules, a reference to ‘money laundering’ also includes a reference to terrorist financing and financing the proliferation of weapons of mass destruction.

1.2. Purpose of AML Rules

1. (a) The AML Rules have been designed to provide a single reference point for all persons and entities (collectively called Relevant Persons) who are supervised by the AFSA for anti-money laundering ("AML"), countering the financing of terrorism ("CFT"), and sanctions compliance. This means that they apply to Authorised Firms, Authorised Market Institutions, Designated Non-Financial Businesses and Professions ("DNFBPs"), and Registered Auditors.
2. (b) The AML Rules must not be read in isolation. Relevant Persons must also be aware of the provisions of the Kazakhstan criminal law referred to in Chapter 3 and developments in international policy and best practice. This is particularly relevant when considering United Nations Security Council ("UNSC") resolutions and unilateral sanctions imposed by other jurisdictions which may apply to a Relevant Person depending on the Relevant Person's jurisdiction of origin, its business and/or customer base.

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1.4. Financial Action Task Force

1. (a) The FATF means the Financial Action Task Force, the inter-governmental body that sets standards, develops and promotes policies, to combat money laundering, and includes any successor entity.
2. (b) The AFSA has had regard to the FATF Recommendations in making these Rules. A Relevant Person is referred to the FATF Recommendations and interpretive notes to assist it in complying with these Rules. However, if a FATF Recommendation or interpretive note conflicts with a Rule, the relevant Rule takes precedence.
3. (c) A Relevant Person may also wish to refer to the FATF typology reports which provide information on money laundering methods. These can be found on the FATF website www.fatf-gafi.org. Some international groupings, official or informal, publish material that may be useful as context and background in informing the approach adopted by Relevant Persons to AML and CFT. These groupings include Transparency International (www.transparency.org.uk) and the Wolfsberg Group (www.wolfsbergprinciples.com).
4. (d) The Republic of Kazakhstan, as a member of the United Nations, is required to comply with sanctions issued and passed by the UNSC. These Rules contain specific obligations requiring Relevant Persons to establish and maintain effective systems and controls to comply with UNSC resolutions and sanctions (See Chapter 12).
5. (e) The FATF has issued guidance on a number of specific UNSC resolutions and sanctions regarding the countering of the proliferation of weapons of mass destruction. Such guidance has been issued to assist in implementing the targeted financial sanctions and activity based financial prohibitions. This guidance can be found on the FATF website www.fatf-gafi.org.
6. (f) In relation to unilateral sanctions imposed in specific jurisdictions such as the European Union, the United Kingdom (HM Treasury) and the United States of America (Office of Foreign Assets Control of the Department of the Treasury), a Relevant Person must consider and take positive steps to ensure compliance where required or appropriate.

1.5. Structure of the AML Rules

(a) Chapter 2 sets out the application of the AML Rules.

(b) Chapter 3 sets out guidance on relevant Kazakhstan criminal law.

(c) Chapter 4 explains the meaning of the risk-based approach ("RBA"), which must be applied when complying with these Rules.

(d) Chapter 5 explains the concept of customer risk assessments.

(e) Chapter 6 establishes the Rules for Customer Due Diligence ("CDD") and Chapters 7 and 8 set out the different measures that may be appropriate for higher and lower risk customers - Enhanced Due Diligence ("EDD") and Simplified Due Diligence ("SDD").

(f) Chapter 9 sets out when and how a Relevant Person may rely on a third party to undertake all or some of its CDD obligations. Reliance on a third-party CDD reduces the need to duplicate CDD already performed in respect of a customer. Alternatively, a Relevant Person may outsource some or all of its CDD obligations to a service provider.

(g) Chapter 10 sets out certain obligations in relation to correspondent banking and Chapter 11 sets out obligations relating to wire transfers.

(h) Chapter 12 sets out a Relevant Person's obligations in relation to UNSC resolutions and sanctions, and government, regulatory and international findings in relation to AML, CFT, and the financing of weapons of mass destruction.

(i) Chapter 13 sets out the obligation for a Relevant Person to appoint a Money Laundering Reporting Officer ("MLRO") and the responsibilities of this role. It also sets out requirements regarding Suspicious Transaction Reports ("STRs") that are required to be made under the AML Law and explains the concept of "tipping off".

(j) Chapter 14 sets out general obligations, including requirements for AML training, policies, and recordkeeping.

1.6. Interpretation

Words and expressions used in these Rules that require defining are set out in the AIFC Glossary.