13.1.1. Who can act as Money Laundering Reporting Officer

The MLRO function must be carried out by an individual who is a Director, Partner, Principal Representative, or Senior Manager of an Authorised Person and who has responsibility for the implementation and oversight of an Authorised Person's AML policies, procedures, systems and controls.

13.1.2. Appointment of Money Laundering Reporting Officer

A Relevant Person must appoint an individual as MLRO, with responsibility for implementationand oversight of its compliance with the AML Rules, who has an appropriate level of seniority and independence to act in the role.

An Authorised Firm, other than a Representative Office, must appoint an individual to act as a deputy MLRO of the Authorised Firm to fulfil the role of the MLRO in his or her absence.

13.1.3. Residency Requirement

The MLRO must be resident in the Republic of Kazakhstan except in the case of the MLRO for a Registered Auditor.

Guidance on appointment of Money Laundering Reporting Officer

1. (a) Under GEN 2.1.2, the MLRO function is a mandatory appointment.
2. (b) A Relevant Person other than an Authorised Firm should make adequate arrangements to ensure that it remains in compliance with these Rules in the event that its MLRO is absent. Adequate arrangements would include appointing a temporary MLRO for the period of the MLRO's absence or making sure that the Relevant Person’s AML systems and controls allow it to continue to comply with these Rules when the MLRO is absent.

13.2.1. [Intentionally omitted]

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13.3.1. Obligation of co-operation

A Relevant Person’s MLRO must deal with the AFSA in an open, responsive, and co-operative manner and must disclose appropriately any information of which the AFSA would reasonably be expected to be notified.

13.4.1. Outsourcing permitted

A Relevant Person may outsource the role of MLRO to an individual outside the Relevant Person if the relevant individual under the outsourcing agreement is and remains suitable to perform the MLRO role.

13.4.2. Responsibility for compliance

Where a Relevant Person outsources specific AML tasks of its MLRO to another individual or a third-party provider, including within a corporate Group, the Relevant Person remains responsible for ensuring compliance with the responsibilities of the MLRO. The Relevant Person should satisfy itself of the suitability of anyone who acts for it.

13.5.1. Organisational standing

A Relevant Person must ensure that its MLRO has:

1. (a) direct access to its senior management;
2. (b) a level of seniority and independence within the Relevant Person to enable him to act on his own authority and to act independently in carrying out his responsibility;
3. (c) sufficient resources, including appropriate staff and technology; and
4. (d) timely and unrestricted access to information sufficient to enable him to carry out his responsibilities in AML 13.6.1.

Guidance on qualities of Money Laundering Reporting Officer

A Relevant Person will need to consider AML 13.5.1. when appointing an outsourced MLRO. Any external MLRO that is appointed will need to have the actual or effective level of seniority that the role requires.

13.6.1. Oversight responsibility

A Relevant Person must ensure that its MLRO implements and has oversight of, and is responsible for, the following matters:

1. (a) the day-to-day operations for compliance by the Relevant Person with its AML policies, procedures, systems and controls;
2. (b) acting as the point of contact to receive notifications from the Relevant Person’s employees under AML 13.7.3;
3. (c) taking appropriate action under AML 13.8.1 following the receipt of a notification from an employee;
4. (d) making STRs in accordance with applicable Kazakhstan law;
5. (e) acting as the point of contact within the Relevant Person for the AFSA, and any other competent authority regarding money laundering issues;
6. (f) responding promptly to any request for information made by the AFSA, and any other competent authority;
7. (g) receiving and acting upon any relevant findings, recommendations, guidance, directives, resolutions, sanctions, notices or other conclusions described in Chapter 12; and
8. (h) establishing and maintaining an appropriate money laundering training programme and adequate awareness arrangements under Chapter 14.

13.7.1. Defined terms

In this Chapter, a reference to a criminal offence for "money laundering" is as set out in the Kazakhstan criminal law.

13.7.2. Threshold Transactions Controls

A Relevant Person must establish and maintain policies, procedures, systems and controls to monitor and detect transactions above defined thresholds and submit threshold transactions reports (“TTRs”) to the FIU in accordance with the AML Law.

13.7.3. Suspicious Activity and Transactions Controls

A Relevant Person must establish and maintain policies, procedures, systems and controls to monitor and detect suspicious activity or transactions in relation to potential money laundering.

A Relevant Person must register in the FIU reporting system for submitting TTRs before the commencement of its business activities.

13.7.4. Immunity from liability for disclosure of information relating to money laundering transactions

1. (a) The disclosure by a Relevant Person to the competent authorities of information relating to money laundering is not a contravention of any obligation of secrecy or non- disclosure or (where applicable) of any enactment by which that obligation is imposed.
2. (b) The sharing by the Authorised Persons where this is required by Chapters 9, 10 and 11 of information relating to money laundering is not a contravention of any obligation of financial institution secrecy laws or non-disclosure or (where applicable) of any enactment by which that obligation is imposed.

13.7.5. Employee reporting to Money Laundering Reporting Officer

A Relevant Person must have policies, procedures, systems and controls to ensure that whenever any employee, acting in the ordinary course of his employment, either:

1. (a) knows;
2. (b) suspects; or
3. (c) has reasonable grounds for knowing or suspecting, that a person is engaged in or attempting money laundering or terrorist financing, that employee promptly notifies the Relevant Person’s MLRO and provides the MLRO with all relevant information within the employee's knowledge.

Guidance on Suspicious Transaction Reports

1. (a) Circumstances that might give rise to suspicion or reasonable grounds for suspicion include:
2. (i) Transactions which have no apparent purpose, which make no obvious economic sense, or which are designed or structured to avoid detection;
3. (ii) Transactions requested by a person without reasonable explanation, which are out of the ordinary range of services normally requested or are outside the experience of a Relevant Person in relation to a particular customer;
4. (iii) where the size or pattern of transactions, without reasonable explanation, is out of line with any pattern that has previously emerged or are deliberately structured to avoid detection;
5. (iv) where a customer refuses to provide the information requested without reasonable explanation;
6. (v) where a customer who has newly entered into a business relationship uses the relationship for a single transaction or for only a very short period of time;
7. (vi) an extensive use of offshore accounts, companies or structures in circumstances where the customer's economic needs do not support such requirements;
8. (vii) unnecessary routing of funds through third party accounts;
9. (viii) the proffering of documents that appear fraudulent, unofficial, or are otherwise suspicious; or
10. (ix) unusual transactions without an apparently profitable motive.
11. (b) The requirement for employees to notify the Relevant Person’s MLRO should include situations when no business relationship was developed because the circumstances were suspicious.
12. (c) A Relevant Person may allow its employees to consult with their line managers before sending a report to the MLRO. Such consultation does not prevent the making of a report whenever an employee has stated that he has knowledge, suspicion or reasonable grounds for knowing or suspecting that a person may be involved in money laundering. Whether or not an employee consults with his line manager or other employees, the responsibility remains with the employee to decide for himself/herself whether a notification to the MLRO should be made.
13. (d) An employee, including the MLRO, who considers that a person is engaged in or engaging in activity that he knows or suspects to be suspicious would not be expected to know the exact nature of the criminal offence or that the particular funds were definitely those arising from the crime of money laundering.
14. (e) CDD measures form the basis for recognising suspicious activity. Sufficient guidance must therefore be given to the Relevant Person’s employees to enable them to form a suspicion or to recognise when they have reasonable grounds to suspect that money laundering is taking place. This should involve training that will enable relevant employees to seek and assess the information that is required for them to judge whether a person is involved in suspicious activity related to money laundering.
15. (f) A transaction that appears unusual is not necessarily suspicious. Even customers with a stable and predictable transaction profile may have occasional transactions that are unusual for them. Many customers will, for perfectly good reasons, have an erratic pattern of transactions or account activity. Unusual behaviour is, in the first instance, only a basis for further inquiry, which may in turn require judgement as to whether it is suspicious. A transaction or activity may not be suspicious at the time, but if suspicions are raised later, an obligation to report then arises.
16. (g) Effective CDD measures may provide the basis for recognising unusual and suspicious activity. Where there is a customer relationship, suspicious activity will often be one that is inconsistent with a customer's known legitimate activity, or with the normal business activities for that type of account or customer. Therefore, the key to recognising 'suspicious activity' is knowing enough about the customer and the customer's normal expected activities to recognise when their activity is abnormal.
17. (h) A Relevant Person should implement policies and procedures whereby disciplinary action (including, but not limited to, a requirement of further training) is taken against an employee who fails to notify the Relevant Person’s MLRO.

13.8.1. Activity upon notification

A Relevant Person must ensure that where the Relevant Person's MLRO receives a notification under AML 13.7.3,the MLRO, without delay:

(a) enquires into and documents the circumstances in relation to which the notification made under AML 13.7.3 was made;

(b) determines whether in accordance with the AML Law a STR must be made to the FIU and documents such determination; and

(c) if required, submits a STR to the FIU and promptly notifies the AFSA of such a submission.

13.8.2. Recording reasons for not making a Suspicious Transaction Report

Where, following a notification to the MLRO under AML 13.7.3, no STR is made, a Relevant Person must record the reasons for not making a STR.

13.8.3. Independence of Money Laundering Reporting Officer decision

(a) A Relevan tPerson must ensure that whether the MLRO decides to make or not to make a STR, his/her decision is made independently and is not subject to the consent or approval of any other person.

(b) Where a Relevant Person’s MLRO has a suspicion of money laundering, and reasonably believes that performing the CDD process will tip-off the customer, he/she must not pursue the CDD process, and must submit a STR to the FIU.

Guidance on making Suspicious Transaction Reports

1. (a) In most cases, before deciding to make a report, the MLRO is likely to need access to the relevant business information. A Relevant Person must therefore take reasonable steps to give its MLRO access to such information. Relevant business information may include details of:
2. (i) the financial circumstances of a customer or beneficial owner, or any person on whose behalf the customer has been or is acting;
3. (ii) the features of the transactions, including, where appropriate, the jurisdiction in which the transaction took place; and
4. (iii) the underlying CDD information, and copies of the actual source documentation in respect of the customer.
5. (b) In addition, the MLRO may wish:
6. (i) to consider the level of identity information held on the customer, and any information on his personal circumstances that might be available to the firm; and
7. (ii) to review other transaction patterns and volumes through the account or accounts in the same name, the length of the business relationship and identification records held.
8. (c) Relevant Persons are reminded that the failure to report suspicions of money laundering may constitute a criminal offence.
9. (c-a) The AFSA may provide guidance and recommendations as it considers appropriate in assisting Relevant Persons in the detection and reporting of suspicious transactions to the FIU, in support of the FIU’s objectives under the AML Law.
10. (d) STRs should be sent to the FIU in accordance with these Rules and AML Law. In the preparation of a STR, if a Relevant Person knows or assumes that the funds which form the subject of the report do not belong to a customer but to a third party, this fact and the details of the Relevant Person’s proposed course of further action in relation to the case should be included in the report.
11. (e) If a Relevant Person has reported a suspicion to the FIU, the FIU may instruct the Relevant Person on how to continue its business relationship, including effecting any transaction with a person. If the customer in question expresses his wish to move the funds before the Relevant Person receives instruction from the FIU on how to proceed, the Relevant Person should immediately contact the FIU for further instructions.

Guidance on tipping-off

1. (a) Relevant Persons are reminded that in accordance with the AML Law, Relevant Persons or any of their employees must not tip-off any person, that is, inform any person that he/she is being scrutinised for possible involvement in suspicious activity related to money laundering, or that any other competent authority is investigating his/her possible involvement in suspicious activity relating to money laundering. In addition, the Relevant Persons must not disclose information contained in a STR or the fact that a STR may be or has been filed with the FIU or a suspicious transaction is being investigated.
2. (b) If a Relevant Person reasonably believes that conducting CDD measures will tip-off a customer or potential customer, it may choose not to pursue that process and should file a STR. Relevant Persons should ensure that their employees are aware of and sensitive to these issues when considering CDD measures.