General Authority for Investment and Free Zones

Transcription

1 General Authority for Investment and Free Zones Chairman of the General Authority for Investment and Free Zones Decree no for 2003 Regarding The Regulations to Be Followed by Lease Finance Companies and Companies Operating in the Field of Factoring The Chairman of the General Authority for Investment and Free Zones After having perused The constitutions; The Trade Law; Law no. 159 for 1981 promulgating the Joint-Stock Companies Law, and its Executive Regulations; Law no. 95 for 1992 promulgating the Capital Market Authority Law, and its Executive Regulations; Law no. 95 for 1995 regarding Lease Finance Companies, its Amendments, and Executive Regulations; Law no. 8 for 1997 promulgating the Investment Guarantees and Incentives Law, its Executive Regulations and their Amendments; Law no. 80 for 2002 promulgating the Anti-Money Laundering Law and its Executive Regulations; andthe Legal Consultant and Chairman of the Investment Operations Commission?s Memo

2 Decided Article (1) Companies operating in the field of lease finance shall comply with the following regulations, in accordance with the Anti-Money Laundering Law and its Executive Regulations:- Lease finance companies shall establish the systems required to obtain identification and legal status data of their registered owners (leasees) and the beneficiaries of lease contracts, whether legal or natural persons. In so doing, such companies shall verify such data through legal identification documents, in a manner that satisfies the Know Your Customer (KYC) principle, when entering into lease contracts and shall record the referred to identification data. Particular attention shall be paid to the following:- 1. Lease finance companies shall not enter into any contracts with anonymous persons or persons using fictitious names. 2. Lease finance companies shall enter into lease finance contracts on the forms prepared by the General Authority for Investment and Free Zones, provided that such companies verify the information provided therein, approve it and attach to the contract the detailed registered owner?s data ( whether natural or legal person according to the data form attached to every contract).

3 3. Lease finance companies shall examine original registered owner?s identification documents and shall keep a copy thereof for a period of five years from the expiry date of the contract. 4. Lease companies shall update information and documents relating to registered owners and leasees periodically if the lease contract period is five years or more or when there appears a need for that. 5. Lease companies shall record all data relating to the leased assets, their source of finance, the buying entity or the funding entity and the leasing one. 6. Lease companies shall prepare special registers for recording all the lease contracts they conduct. 7. Lease companies shall open separate accounts for each registered owner (leasee) showing the balance of the account and the movements on the account, and shall keep a copy of all payment documents for a period of five years after the expiry of the contract. 8. In case a lease company resigns its lease finance contract to another lease company, all the data related to the new lease company shall be reported to the Authority on the form prepared for that purpose. 9. In case a leasee resigns his contract to another leasee with the approval of the company, the authority shall be reported to by a copy of the resignation contract, to which a form containing data of the resigned to person shall be attached.

4 Article (2) Companies operating in the field of factoring shall comply with the following regulations, in accordance with the Anti-Money Laundering Law and its Executive Regulations: Companies operating in the factoring field shall establish the systems necessary for obtaining identification and legal status data, for both natural and legal persons; they also shall verify such data through legal identification methods so as to satisfy the (KYC) principle when entering into factoring contracts, and shall record such identification data. Particular attention shall be paid to the following: 1. No factoring contracts shall be entered into with anonymous persons or persons using fictitious names. 2. Factoring contracts shall be conducted in accordance with the rules set by the companies board of directors according to the known criteria and within the framework of the applicable laws and regulations. Such contracts shall be sent to the Authority after verifying the data included therein and approving it, providing that contracts be attached with detailed data on the clients, whether natural or legal person. 3. Companies operating in the factoring field shall examine original registered owner?s identification documents and shall keep a copy thereof for a period of five years from the expiry date of the contract.

5 4. Companies operating in the factoring field shall keep records for the details of their transactions (nature of the activity-leased property-value-credit maturity?method and authentication documents for dues payment.) 5. Companies operating in the factoring field shall open separate accounts for every client showing the account balance and movements and shall keep a copy of all the payment documents for a period of five years from the date the contract expires. 6. In case of a company?s resignation of its factoring contract to another company a report containing all the information relating to such resignation shall be sent to the Authority and a copy of the documents proving that shall be attached.

6 Article (3) The companies referred to in Articles (1 and 2) shall comply with the following: Reporting Transactions Suspected of Involving Money Laundering: Each Company shall assign a money laundering reporting officer and his substitute, who shall be senior employees having enough academic and practical experience, and who shall be responsible for reporting to the Money Laundering Combating Unit any transactions suspected of involving money laundering. Any changes to the money laundering reporting officer or his substitute shall be reported to the Unit. The money laundering reporting officer shall examine transactions suspected of involving money laundering reported to him via the internal systems of the company or via any of the company staff along with the reasons of suspicion it or via any other entity. If the money laundering reporting officer finds no suspicion with the transactions he examines, it shall be his own responsibility to take decisions regarding the filing of such transactions and shall point out the reasons upon which he takes such a decision. If the money laundering reporting officer suspects that the transactions reported to him involve money laundering he shall

7 report them to the Money Laundering Combating Unit on the form prepared by the Unit for this purpose and shall attach to such form all the data and copies of related documents. Reports sent to the Money Laundering Combating Unit shall contain the detailed reasons upon which the money laundering reporting officer based his suspicion. It shall be prohibited to disclose to the leasee or the client or to any entity other than the authorities competent for the enforcement of the Anti-Money Laundering Law any of the reporting measures taken with respect to contracts suspected of involving money laundering or any data relating thereto. Training Each company shall prepare and implement on-going training programs for its staff- once annually at least- especially for new staff and the contract officers and internal auditors to raise their capacity to comply with these regulations. Particular attention shall be paid to include in such programs ways of laundering money, detecting such ways and reporting to the MLCU and the way of treating suspected customers. Companies shall maintain the records relating to the training programs it conducted and the names of the trainees as well as their qualifications and the training entity inside or outside Egypt for a period of five years at least. Internal Systems:

8 Each company shall establish the appropriate internal systems necessary for the sound application of the Anti-Money Laundering Regulations, and shall review such systems periodically to find out any weaknesses therein or in the extent to which such systems are applied and shall take the appropriate measures to correct such situations. Article (4) This Decree shall be published in the Investment Paper and shall become effective as from the day of its publication. Dr. Mohamed El-Ghamrawy Dawood Chairman of the General Authority for Investment and Free Zones