AML – CTF Policy
ANTI-MONEY LAUNDERING (AML)
AND COUNTER-TERRORIST FINANCING (CTF) POLICY
1. Policy Scope
The Proceeds of Crime Act 2002, the Terrorism Act 2000 and Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations place obligations on ECOMMERCE TECHNOLOGIES LTD (the “Company”, “We”) and its employees to establish internal procedures to prevent the use of our Company services for money laundering (ML) and terrorist financing (TF). We also appointed a Money Laundering Reporting Officer (MLRO) to receive disclosures from employees of money laundering activity.
The Company adopted the present Anti-Money Laundering Policy and Procedures in compliance with The Money Laundering, Terrorist Financing, and Transfer of Funds (Information on the Payer) Regulations. We also adhere to FATF Recommendations «Guidance for a Risk Based Approach for combating money laundering and terrorist financing».
Money laundering and terrorist financing have been identified as major threats to the international financial services community. The industry guidance and rules adopted form the cornerstone of AML/CTF obligations for our Company and outline the offences and penalties for failing to comply.
This Policy applies to all employees of the Company and sets out the procedures which must be followed (for example the reporting of any suspicions of money laundering activity) to enable the Company to comply with its legal obligations.
Not all staff will need a detailed knowledge of the types of criminal offences covered by the legislation. However, some staff will require additional guidance to raise their awareness of the possibility of money laundering.
Failure by any member of staff to comply with these procedures may lead to disciplinary action being taken against them.
The Company aims to fully comply with the financial services industry standards for Know Your Customer (KYC), AML and CTF.
Our Company will actively prevent and take measures to guard against being used for money laundering and terrorism financing activities and any other activity that facilitates money laundering or the funding of terrorist or criminal activities.
This Policy shall regulate the principles and rules of carrying out financial monitoring for the purpose of facilitating the prevention of illicit income legalization and terrorism financing by the Company, specifically, the terms and procedure for identifying the clients and other relevant persons, and receiving, systemizing, processing and retaining the appropriate information, and reporting the suspicious activities information to the National Crime Agency (the “NCA”).
The Company is committed to the AML/CTF procedures as envisaged in the “AML Procedures for the Company” section below.
2. Legal and Regulatory Framework
Terrorist financing may not involve the proceeds of criminal conduct, but rather an attempt to conceal either the origin of the funds or their intended use, which could be for criminal purposes. Legitimate sources of funds are a key difference between terrorist financiers and traditional criminal organizations. In addition to charitable donations, legitimate sources include foreign government sponsors, business ownership and personal employment. Although the motivation differs between traditional money launderers and terrorist financiers, the actual methods used to fund terrorist operations can be the same as or similar to methods used by other criminals to launder funds. Funding for terrorist attacks does not always require large sums of money and the associated transactions may not be complex.
Our AML policies, procedures and internal controls are designed to ensure compliance with applicable regulatory and legislation framework and will be reviewed and updated on a regular basis to ensure appropriate policies, procedures and internal controls are in place to account for both changes in regulations and changes in our business.
The Company is guided by principal requirements of AML legislation, including such key regulations as follows:
1. Directive (EU) 2015/849 of 20 May 2015 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing (as amended)
2. The Money Laundering, Terrorist Financing, and Transfer of Funds (Information on the Payer) Regulations 2017 (MLR 2017) (as amended 2019)
3. The Proceeds of Crime Act 2002 (POCA)
4. Terrorism Act 2000
5. Recommendations «Guidance for a Risk Based Approach for combating money laundering and terrorist financing»
6. The Serious Organised Crime and Police Act
7. The Electronic Money Regulations (EMRs) 2011
8. The Payment Services Regulations (PSRs) 2017
3. Definitions and Abbreviations
AML – Anti-Money Laundering
CTF – Counter-Terrorist Financing
CDD – Customer/Client Due Diligence
EDD – Enhanced Customer Due Diligence
KYC – Know Your Customer
EEA – European Economic Area
FATF – Financial Action Task Force on Money Laundering
HMT – Her Majesty’s Treasury
HMRC – Her Majesty’s Revenue and Customs
MLRO – Money Laundering Reporting Officer
MLR – Money Laundering Regulations
NCA – National Crime Agency
PEPs – Politically Exposed Persons
SAR – Suspicious Activity Report to NCA
EMRs – The Electronic Money Regulations 2011
PSRs – The Payment Services Regulations 2017
4. The Concept of Money Laundering
Money Laundering is the process of moving illegally acquired cash through financial systems so that it appears to come from a legitimate source. Criminals will try to conceal the origin and true ownership of the proceeds of their activities in order to legalise the ill-gained money. It is therefore important that businesses have procedures and policies in place to identify and prevent ML within the Company.
Money laundering is defined as:
● concealing, disguising, converting, transferring or removing criminal property from the United Kingdom;
● entering into or becoming concerned in an arrangement which a person knows or suspects facilitates the acquisition, retention, use or control of criminal property;
● acquiring criminal property, using criminal property; or possession of criminal property.
When a person knows or suspects that money laundering activity is taking place (or has taken place), or becomes concerned that their involvement in a matter may amount to a prohibited act under the legislation, they must report this to the MLRO and/or risk prosecution.
Offences under the Part 7 of the Proceeds of Crime Act (POCA) 2002 (ss327-329) and Money Laundering Regulations can attract penalties of unlimited fines and/or up to 14 years imprisonment as per section 334(1).
As defined in section 338(4a) of POCA, individuals are provided with a statutory defence if they make an authorised disclosure to the NCA.
5. Assessment procedures of money laundering (ML) and terrorist financing (TF)
To prevent ML/TF, our Company assesses our customers, their data, their transactions amounts and features, including but not limited to the following:
– we do not deal with obstructive or secretive clients;
– we study our customer to understand their aim of using our services and provide our services to the customers who fall within our range of activities and expertise;
– we consider the customer’s territorial location;
– we consider the logic reasons when the customer deposits funds with our Company, their source, the third parties involved in the transaction where applicable and their connection to the customer;
– we observe complex or unusually large transactions, as well as transactions with no apparent logical, economic or legal purpose;
– we assess high risk jurisdictions and do not cooperate with them;
– large payment on account of fees with instructions terminated shortly after and the client requesting the funds are returned, as the case may be.
The three main stages of ML process cover as follows:
1) Placement: The process of placing criminal property into the financial system. This might be done by breaking up large sums of cash into smaller amounts or by using a series of financial instruments (such as cheques or money orders) which are deposited at different locations. Also, after a crime has been committed, funds are paid into a bank account or used to buy an asset.
2) Layering: The process of moving money that has been placed in the financial system in order to obscure its criminal origin. This is usually achieved through multiple complex transactions often involving complicated offshore company structures and trusts.
To try and hide the source of the proceeds of crime, criminals carry out transactions, which can be complex and numerous.
3) Integration: Once the origin of the money is disguised it ultimately must reappear in the financial system as legitimate funds. This process involves investing the money in legitimate businesses or setting up trusts, in order to get the funds imported back into the financial system.
The Company fully acknowledges that being involved in any of these three stages is potentially a criminal activity that should be treated as appropriate under the applicable legislation provisions and requirements.
6. AML Procedures for the Company
6.1. The Company is committed to the AML/CTF procedures including but not limited to, as follows:
1) To identify and verify all new and existing clients to a reasonable level of certainty;
2) To take a risk-based approach to the monitoring of client transactions and business activities;
3) To report any suspicious activity and record all AML activities where applicable;
4) To make arrangements to receive and manage the concerns of staff about money laundering and their suspicion of it, to make internal enquiries and to make reports where necessary, to the NCA;
5) To give targeted training to those considered to be the most likely to encounter the ML;
6) To establish internal procedures to help forestall and prevent the ML.
6.2. Money Laundering Reporting Officer (MLRO)
The Company nominated Mr. Sachin Popat to act as the Money Laundering Reporting Officer (MLRO) to coordinate the AML policies and procedures of the Company.
Our MLRO has a working knowledge of the regulatory and legislative requirements and its implementing regulations and is qualified by experience, knowledge and training. MLRO reports to the Director of the Company. The duties of the MLRO will include monitoring the Company’s compliance with AML obligations, overseeing communication and training for employees. The MLRO will also ensure that the Company keeps and maintains all of the required AML/CFT records and will ensure that Suspicious Activity Reports (SARs) are filed with the NCA when appropriate. The MLRO is vested with full responsibility and authority to enforce the Company’s AML/CTF procedures and measures.
The responsibilities and tasks of the Company’s MLRO include, but are not limited to, as follows:
● To act as the Money Laundering Reporting Officer (MLRO) and as a Compliance Officer of the Company in accordance with the legal and corporate requirements, as appropriate;
● To ensure conducting monitoring activities within the e-money issue and payment service provision under the respective duties;
● To conduct the Company ML / TF and sanctions risk assessments;
● To develop and present risk assessment results to the senior management;
● To manage all aspects of client on-boarding and KYC processes and maintain the client records;
● To conduct detailed reviews of high risk factors when the Company establishes business relationships with clients;
● To monitor relationships with clients in compliance with the AML procedures of the Company, including clients identification and verification;
● To analyze the information obtained through the client identification and reveal the operations subject to monitoring;
● To suggest risk mitigation strategies to the Company’s business activity and other control functions, where necessary and appropriate;
● To review AML requirements and ensure implementation of AML systems and controls in accordance with the AML policies and procedures; to develop and implement the Company’s compliance strategy to meet the regulatory requirements; to maintain and enhance detailed policies and procedures related to the AML/CTF, KYC, and risk assessment process, and ensure compliance manuals regular updates, as appropriate;
● To actively support and advise the senior management on the relevant regulatory developments and requirements;
● To assess the AML risks linked to the Company’s client portfolio and conduct the daily transaction monitoring;
● To record, systemize and file the compliance-relevant information in a documentary form;
● To assist with SAR investigations by preparing case files for review (e.g. media search results, copies of statements/checks, Watch Lists reviewing, results from internal system searches, etc.);
● To continuously improve the framework, methodology, processes and reporting related to the compliance function of the Company;
● To gain a detailed knowledge of the Company’s customer base, products, services, transactions, geographies, business initiatives, processes, strategies and associated controls;
● To ensure that the risk assessment results are tracked in accordance with compliance standards;
● To routinely communicate and report the state of AML Compliance procedures and risks;
● To make reports where necessary to the National Crime Agency (NCA);
● When necessary, to arrange the targeted training to the staff considered to be the most likely to encounter money laundering;
● To arrange the Company’s AML procedures in compliance with all the requirements under the applicable regulations, including the Proceeds of Crime Act 2002, the Terrorism Act 2000 and the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations, FATF AML/CFT standards, and any other applicable and up-to-date legislature;
● To arrange the overall internal procedures to help prevent the money laundering.
6.3. Customer Due Diligence
The Company has established Know-Your-Client (KYC) policy to ensure that the identities of all new and existing clients are checked and verified to a reasonable level of certainty. This will include all individual clients, all directors and shareholders with a stake holding of 25% or more of client companies, all partners of client partnerships, and every board member of client charities. Identities will be verified online.
The following documentation should be presented by an individual / natural person:
– a passport, or a driver’s license, or government issued document featuring a matching photograph of the individual, and a full name and date of birth matching those provided;
– an original recent utility bill, or a bank statement, or government issued document with the same and address matching those provided by the individual.
The following information shall be obtained through the standard identification process:
a) First name, last name;
c) Date of birth;
d) Place of residence;
e) Number of ID (Passport) and citizen’s personal number by ID (Passport);
f) If the natural person is registered as a sole trader – the relevant registration date, number, registering authority, identification number of taxpayer, where applicable.
The following documentation should be presented by a legal person:
The following information shall be obtained through the standard identification process:
a) Full name;
b) Business activity;
c) Legal address (in case of the branch or representation the legal address of the head office also);
d) Registering authority, date and number of registration;
e) Identification number of taxpayer;
f) Identification details of persons authorized for management and representation of the entity;
g) Identification details of the person representing a legal entity in a specific operation (transaction) subject to monitoring, where applicable.
Organizational formation provided for in the legislation not representing a legal entity:
a) Full name;
b) Legal address;
c) Legal act or other document, based on which the given organizational formation was established (is functioning);
d) Identification number of taxpayer;
e) Identification details of persons authorized for management and representation;
f) Identification details of the person representing organizational formation in a specific operation (transaction) subject to monitoring.
Based on the risk, and to the extent reasonable and practicable, we will ensure that we have a reasonable belief that we know the true identity of our customers by using risk-based procedures to verify and document the accuracy of the information we get about our customers.
Our MLRO will analyze the information we obtain to determine whether the information is sufficient to form a reasonable belief that we know the true identity of the customer, e.g., whether the information is logical or contains inconsistencies.
We will verify customer identity through documentary means and/or non-documentary means.
We will use documents to verify customer identity when appropriate documents are available. In light of the increased instances of identity fraud, we will supplement the use of documentary evidence by using the non-documentary means described above whenever necessary.
We may also use non-documentary means, if we are still uncertain about whether we know the true identity of the customer. In verifying the information, we will consider whether the identifying information that we receive, such as the customer’s name, street address, zip code, telephone number (if provided), date of birth and National Insurance number, allow us to determine that we have a reasonable belief that we know the true identity of the customer, e.g., whether the information is logical or contains inconsistencies.
We understand that we are not required to take steps to determine whether the document that the customer has provided to us for identity verification has been validly issued and that we may rely on a government-issued identification as verification of a customer’s identity.
If, however, we note that the document shows some obvious form of fraud, we must consider that factor in determining whether we can form a reasonable belief that we know the customer’s true identity.
In cases where we will deem so necessary or appropriate, we will also use non-documentary methods of verifying identity, as follows:
● Independently verifying the customer’s identity through the comparison of information provided by the customer with information obtained from public databases and/or other sources, such as e.g. a consumer reporting agency;
● Checking references with other financial institutions; or
● Obtaining a financial statement.
We will use non-documentary methods of verification when:
(1) the customer is unable to present an unexpired government-issued identification document with a photograph or other similar safeguard;
(2) our Company is unfamiliar with the documents the customer presents for identification verification;
(3) the customer and our Company do not have face-to-face contact; and/or
(4) there are other circumstances that increase the risk that our Company will be unable to verify the true identity of the customer through documentary means.
We will verify the information within a reasonable time before and/or after the account is opened.
Depending on the nature of the account and requested transactions, we may refuse to complete a transaction before we have verified the information, or in some instances when we need more time, we may, pending verification, restrict the types of transactions or amounts of transactions. If we find suspicious information that indicates possible ML / TF activity, or other suspicious activity, we will, after internal consultation with the MLRO of our Company, file a SAR, where applicable in accordance with the laws and regulations.
We recognize that the risk that we may not know the customer’s true identity may be heightened for certain types of accounts, such as an account opened in the name of a company, partnership or trust that is created or conducts substantial business in a jurisdiction that has been designated by the government and/or competent authorities as a primary money laundering jurisdiction, a terrorist concern, or has been designated as a non-cooperative country or territory. We will identify customers that pose a heightened risk of not being properly identified.
We will also take the following additional measures that may be used to obtain information about the identity of the individuals associated with the customer when standard documentary methods prove to be insufficient:
a) Verify the existing and/or obtain additional information about the client and the beneficial owner (income, assets and activity) and to ensure, where appropriate, the immediate access to such information;
b) Update the identification data of the client (the beneficial owner) more frequently and verify the authenticity of the documents submitted by the client;
c) Verify the existing and/or obtain additional information about the purpose and intended nature of the business relationship;
d) Take reasonable measures to obtain the information about the source of funds or wealth of the client (the beneficial owner);
e) Verify the existing and/obtain additional information about the reasons and grounds for performed (intended) transactions (operations);
f) Obtain the approval of senior management to enter into and/or continue the business relationship;
g) Conduct the enhanced monitoring of the business relationship, which includes increasing the number and timing of controls applied and selecting patterns of transactions (operations) that need further examination.
Our Company will also carry out other measures and/or obtain additional information to ensure that the risk identified is effectively managed, including, by determining the expected type and size of future transactions (operations).
Lack of Verification
When we cannot form a reasonable belief that we know the true identity of a customer, we will do the following:
- not open an account;
- impose terms under which a customer may conduct transactions while we attempt to verify the customer’s identity;
- close an account after attempts to verify a customer’s identity fail; and
- determine whether it is necessary to file a SAR in accordance with applicable laws and regulations.
6.4. Customer Due Diligence Measures
The Company will apply customer due diligence measures:
– when a business relationship with a customer is being established;
– when ML or TF is suspected, regardless of any derogation, exemption or threshold;
– when any doubts about a customer’s identification information obtained previously arise;
– when it’s necessary for existing customers, e.g. their circumstances change;
– when an “occasional transaction” worth EUR 15,000 or more is carried out in a low value transaction;
– as a high value dealer, when the following is carried out:
○ a payment to a supplier worth EUR 10,000 or more, whether the transaction is carried out in a single operation or in several operations which appear to be linked
○ an “occasional transaction” worth EUR 10,000 or more
6.5. Sanctions Lists
A sanctions search is part of our Knowing Your Customer requirements.
There is a separate but related sanctions regime that imposes restrictions on our ability to do business with those persons and entities on HM Treasury’s sanctions list.
Some entries on the list are specific to a particular person or entity and others are general financial sanctions on all persons and entities in a particular jurisdiction.
Breaching the sanctions regimes would have serious consequences for the Company.
So, the analysis of sanctions risk must be an integral part of the due diligence we undertake at the outset of any payment transaction.
Before opening an account, and on an ongoing basis, the MLRO will check to ensure that a customer does not appear on any sanctions list or is not engaging in transactions that are prohibited by the economic or financial sanctions and embargoes administered and enforced by the competent authorities.
The MLRO will also review existing accounts against the persons under sanctions and listings of current sanctions and embargoes when they are updated and, where applicable, he will document the review including the customer accounts and transactions.
If we determine that a customer is on the sanction(s) list or is engaging in transactions that are prohibited by the economic or financial sanctions and embargoes administered and enforced by the competent authorities, we will reject the transaction and/or block the customer’s assets and file a blocked assets and/or rejected transaction form with NCA without delay within the reasonable timeframe.
The Company will use the sanctions and high-risk jurisdictions lists for check-up procedures:
● Selected sanctions lists:
- UK: HM Treasury’s consolidated list – https://www.gov.uk/government/publications/financial-sanctions-consolidated-list-of-targets;
- EU sanctions list: European Union External Action (Consolidated list of persons, groups and entities subject to EU financial sanctions) – https://eeas.europa.eu/headquarters/headquarters-homepage_en/8442/Consolidated%20list%20of%20sanctions ;
- EU regimes sanctions list – http://ec.europa.eu/dgs/fpi/what-we-do/sanctions_en.htm, https://www.sanctionsmap.eu/#/main;
- UN sanctions lists (e.g., https://scsanctions.un.org/search/ )
- US sanctions (e.g., OFAC – https://www.treasury.gov/resource-center/sanctions/Pages/default.aspx ),
● High-risk jurisdictions lists:
- Global – https://www.transparency.org/country;
- FATF high risk and non-cooperative jurisdictions list – http://www.fatf-gafi.org/countries/
Our Company will conduct ongoing monitoring of business relationships with customers, to ensure that the documents, data or information held evidencing the customer’s identity are kept up to date.
The following are examples of changes in a client’s situation that may be considered suspicious:
● A sudden increase in business from an existing customer;
● Uncharacteristic transactions which are not in keeping with the customer’s known activities;
● Peaks of activity at particular locations or at particular times;
● Unfamiliar or untypical types of customer or transaction.
Whenever there is cause for suspicion, the client will be asked to identify and verify the source or destination of the transactions, whether they be individuals or company beneficial owners.
Other forms of identity confirmation, such as evidence of a long standing relationship with the client, or a letter of assurance from independent and reliable persons or organisations, who have dealt with the client for some time, may also provide a reasonable level of certainty.
Customers Who Refuse to Provide Information
If a potential or existing customer either refuses to provide the information described above when requested, or appears to have intentionally provided misleading information, our Company will not open a new account and, after considering the risks involved, consider closing any existing account. In either case, our MLRO will be notified so that we can determine whether we should report the situation to NCA on a SAR.
6.6. Identification and Verification of Beneficial Owners
At the time of opening an account for a legal entity customer, we will identify any individual that is a beneficial owner of the legal entity customer by identifying any individuals who directly or indirectly own 25% or more of the equity interests of the legal entity customer, and any individual with significant responsibility to control, manage, or direct a legal entity customer. The following information will be collected for each beneficial owner:
(1) the name;
(2) date of birth (for an individual);
(3) an address, which will be a residential or business street address (for an individual), or a post office box number, or residential or business street address of next of kin or another contact individual (for an individual who does not have a residential or business street address); and
(4) an identification number, which will be a National Insurance number and/or one or more of the following: a passport number and country of issuance, or other similar identification number, such as an alien identification card number, or number and country of issuance of any other government-issued document evidencing nationality or residence and bearing a photograph or other similar safeguard.
6.7. Due Diligence Requirements for Political Senior Officers and
Politically Exposed Persons (PEPs).
We will identify whether a customer or his / her beneficial owner, or a relative of such a customer, belongs to the category of PEPs.
Our Company does not establish business relationships with PEPs under on-boarding procedures. However, existing clients sometimes become PEPs after they enter a business relationship, so we will monitor non-PEP accounts for a change in the PEP status, customer profile or account activity and update customer information. Under the on-boarding procedure we will notify our customers about non-cooperation with PEPs.
We will use monitoring procedures based on which we ensure obtaining respective information from the customer, as well as from public sources and respective electronic databases for the purpose of ascertaining and verifying Politically Exposed Persons.
The databases we will use are as follows:
6.8. Understanding the Nature and Purpose of Customer Relationships
We will understand the nature and purpose of customer relationships for the purpose of developing a customer risk profile, which depending on the facts and circumstances, may include such information as:
● The type of customer;
● The account or service being offered;
● The customer’s income;
● The customer’s net worth;
● The customer’s domicile;
● The customer’s principal occupation or business; and
● In the case of existing customers, the customer’s history of activity.
7. Risk Factors.
7.1. Risk factors that signal possible money laundering (ML) or terrorist financing (TF) include, but are not limited to:
Customers – Insufficient or Suspicious Information
• Provides unusual or suspicious identification documents that cannot be readily verified.
• Reluctant to provide complete information about nature and purpose of business, prior banking relationships, anticipated account activity, officers and directors or business location.
• Refuses to identify a legitimate source for funds or information is false, misleading or substantially incorrect.
• Background is questionable or differs from expectations based on business activities.
• Customer with no discernable reason for using the company’s service.
Efforts to Avoid Reporting and Recordkeeping
•Reluctant to provide information needed to file reports or fails to proceed with transaction.
• Tries to persuade an employee not to file required reports or not to maintain required records.
• “Structures” deposits, withdrawals or purchase of monetary instruments below a certain amount to avoid reporting or recordkeeping requirements.
• Unusual concern with the company’s compliance with government reporting requirements and company’s AML policies.
Certain Funds Transfer Activities
• Wire transfers to/from financial secrecy havens or high-risk geographic location without an apparent business reason.
• Many small, incoming wire transfers or deposits through money orders. Almost immediately withdrawn or wired out in manner inconsistent with customer’s business or history. May indicate a Ponzi scheme.
• Wire activity that is unexplained, repetitive, unusually large or shows unusual patterns or with no apparent business purpose.
Activity Inconsistent With Business
•Transactions patterns show a sudden change inconsistent with normal activities.
•Unusual transfers of funds among accounts without any apparent business purpose.
•Maintains multiple accounts, or maintains accounts in the names of family members or corporate entities with no apparent business or other purpose.
• Appears to be acting as an agent for an undisclosed principal, but is reluctant to provide information.
Transactions Involving Securities
• Customer engages in prearranged or other non-competitive trading, including wash or cross trades of illiquid securities.
• Two or more accounts trade an illiquid stock suddenly and simultaneously.
• Customer journals securities between unrelated accounts for no apparent business reason.
• Customer has opened multiple accounts with the same beneficial owners or controlling parties for no apparent business reason.
• Customer transactions include a pattern of receiving stock in physical form or the incoming transfer of shares, selling the position and wiring out proceeds.
• Customer’s trading patterns suggest that he or she may have inside information.
Transactions Involving Insurance Products
• Cancels an insurance contract and directs funds to a third party.
• Cancels annuity products within the free look period which, although could be legitimate, may signal a method of laundering funds if accompanied with other suspicious indicia.
• Opens and closes accounts with one insurance company then reopens a new account shortly thereafter with the same insurance company, each time with new ownership information.
• Purchases an insurance product with no concern for investment objective or performance.
Other Suspicious Customer Activity
•Unexplained high level of accountactivity with very low levels of transactions.
• Funds deposits for purchase of a long-term investment followed shortly by a request to liquidate the position and transfer the proceeds out of the account.
• Law enforcement subpoenas.
• Large numbers of transactions across a number of jurisdictions.
• Money transfers in and out with no purpose or in unusual circumstances.
• Payment by third-party involvement or money transfer without an apparent connection to the customer.
• Payments to third-party without apparent connection to the customer.
• No concern regarding the cost of transactions or fees (i.e., surrender fees, higher than necessary commissions, etc.).
7.2. Responding to Risk Factors and Suspicious Activity
When an employee of the Company detects any risk factor, or other activity that may be suspicious, he/she will notify NCA / competent authorities of suspicious activity, as appropriate.
Under the direction of the MLRO, the Company will determine whether or not and how to further investigate the matter. This may include gathering additional information internally or from third-party sources, contacting the authorities, freezing the account and/or filing a SAR.
8. Risk Assessment and Ongoing Monitoring
The Company shall take a risk-based approach in monitoring the financial activities of its customers. This will be carried out whilst preparing the accounts or tax returns, or conducting any other business with the client.
The Company will not accept those high-risk clients that are identified as follows:
● Clients with businesses that handle large amount of cash (i.e. involving EUR 15,000 or more, or the sterling equivalent) or complex unusually large transactions.
● Clients with larger one-off transactions, or a number of transactions carried out by the same customer within a short space of time.
● Clients with complex business ownership structures with the potential to conceal beneficial owners or persons with significant control (PSC).
● Clients based in or conducting business in or through, a high-risk jurisdiction, or a jurisdiction with known higher levels of corruption, organised crime or drug production/distribution.
● Situations where the source of funds cannot be easily verified.
● Unusual patterns of transactions that have no apparent economic or visible lawful purpose.
● Money sent to or received from areas known to have high levels of criminality or terrorist activity.
9. Monitoring and Managing Compliance
The MLRO will regularly monitor the following procedures to ensure they are being carried out in accordance with the AML policies and procedures of the Company:
● client identity verification;
● reporting suspicious transactions;
● record keeping.
The MLRO will also monitor any developments in the MLR and the requirements of the MLR supervisory body. Changes will be made to the AML policies and procedures of the Company when appropriate to ensure compliance.
10. Financial/Payment Institution and Correspondent Relationship
The Company will cooperate with other financial/payment institutions, including those from third country (but not from the high-risk third country).
When the customer is, or has links to, the financial/payment institution, the Company associates that with higher ML/TF risk and thus defines and handles that as a High-Risk customer. Therefore, in accordance with Regulation 33(c) and, where applicable, Regulation 34(1) of The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations, our Company must and will apply enhanced customer due diligence measures and enhanced ongoing monitoring.
Alongside, the Company will not enter into, or continue, any relationship with any shell bank, as well as take appropriate enhanced measures to ensure that the Company does not enter into, or continue, such business/correspondent relationship with a financial/payment institution which is known to allow its accounts to be used by a shell bank.
11. Suspicious Activity Reporting
Pursuant to the applicable law requirements, we will file SAR with NCA for any transactions, including money transfers and deposits, conducted or attempted by, at or through our Company, where we know, suspect or have reason to suspect:
- the transaction involves funds derived from illegal activity or is intended or conducted in order to hide or disguise funds or assets derived from illegal activity as part of a plan to violate or evade applicable law or regulation or to avoid any transaction reporting requirement under law or regulation;
- the transaction is designed, whether through structuring or otherwise, to evade any requirements of the applicable regulations;
- the transaction has no business or apparent lawful purpose or is not the sort in which the customer would normally be expected to engage, and after examining the background, possible purpose of the transaction and other facts, we know of no reasonable explanation for the transaction; or
- the transaction involves the use of the Company to facilitate criminal activity; or
- the appropriate law enforcement authority in situations involving violations require immediate attention, such as ML / TF schemes.
A Suspicious Activity Report will be filed to the NCA as soon as the knowledge or suspicion that criminal proceeds exist arises.
The MLRO will be responsible for deciding whether or not the suspicion of illegal activity is great enough to justify the submission of a SAR.
Further details on NCA and SARs can be found at the NCA website https://www.nationalcrimeagency.gov.uk
12. Tipping off
In most jurisdictions it is an offence for someone to tip off (inform) a person suspected of ML that a Suspicious Activity Report (SAR) has been made or there is a ML investigation taking place. There are a number of defences and exceptions that apply, but in general a tipping off offence would occur when the action is likely to prejudice an investigation that’s taking place.
Records of all identity checks will be maintained for up to 5 years after the termination of the business relationship or 5 years from the date when the transaction was completed. The business will ensure that all documents, data or information held in evidence of customer identity are kept up to date.
Copies of any SAR, together with any supporting documentation filed will be maintained for 5 years from the date of tiling the SAR.
All records will be handled in confidence, stored securely, and will be capable of being retrieved without undue delay.
We will document our verification, including all identifying information provided by a customer, the methods used and results of verification, and the resolution of any discrepancies identified in the verification process.
We will keep records containing a description of any document that we relied on to verify a customer’s identity, noting the type of document, any identification number contained in the document, the place of issuance, and if any, the date of issuance and expiration date.
With respect to non-documentary verification, we will retain documents that describe the methods and the results of any measures we took to verify the identity of a customer.
We will also keep records containing a description of the resolution of each substantive discrepancy discovered when verifying the identifying information obtained.
We will retain records of all identification information for 5 years after the account has been closed, as well as records made about verification of the customer’s identity for 5 years after the record is made.
All affected employees are provided with training that explains The Money Laundering, Terrorist Financing, and Transfer of Funds (Information on the Payer) Regulations, The Proceeds of Crime Act 2002, and sections 18 and 21A Terrorism Act 2000, and these affect the Company, its clients and its employees.
All affected employees are trained on their responsibilities in relation to ML legislation, and are aware of how to identify and deal with transactions that may involve ML.
We will develop ongoing employee training under the leadership of the MLRO and Senior Management. Our training will occur on at least an annual basis. It will be based on our Company’s size, its customer base, and its resources and be updated as necessary to reflect any new developments in the law.
Our training will include, at a minimum:
(1) how to identify risk factors and signs of ML that arise during the course of the employees’ duties;
(2) what to do once the risk is identified, including how, when and to whom to escalate unusual customer activity or other risk factors for analysis and, where appropriate, the filing of SARs;
(3) what employees’ roles are in the Company’s compliance efforts and how to perform them;
(4) the Company’s record retention policy;
(5) the disciplinary consequences (including civil and criminal penalties) for non-compliance with the applicable law regulations.
We will develop training in our company, or contract for it. Delivery of the training may include educational pamphlets, videos, intranet systems, in-person lectures and explanatory memos.
We will maintain records to show the persons trained, the dates of training and the subject matter of their training.
We will review our operations to see if certain employees, such as those in compliance, require specialized additional training. Our written procedures will be updated to reflect any such changes.
15. Program to Independently Test AML Program
The testing of our AML program will be performed annually on a calendar year basis. Where an independent third party is involved for training, we will evaluate the qualifications of such independent third party to ensure they have a working knowledge of applicable requirements under the applicable law and its implementing regulations. Independent testing will be performed more frequently if circumstances warrant.
15.2. Evaluation and Reporting
After we have completed the independent testing, staff will report its findings to the senior management, or to an internal audit committee, whichever applicable. We will promptly address each of the resulting recommendations and keep a record of how each noted deficiency, if any, was resolved.
16. Monitoring Employee Conduct and Accounts
We will subject employee accounts to the same AML procedures as customer accounts, under the supervision of the MLRO. We will also review the AML performance of supervisors, as part of their annual performance review. The MLRO’s accounts will be reviewed by a Director of the Company, or a designated member of senior management, whichever applicable.
17. Confidential Reporting of AML Non-Compliance
Employees will promptly report any potential violations of the Company’s AML/CTF policy to the MLRO, unless the violations implicate the MLRO, in which case the employee shall report to the Director of the Company / senior management of the Company. Such reports will be confidential, and the employee will suffer no retaliation for making them.
18. Management Approval
Director of the Company has approved this AML/CTF policy in writing as reasonably designed to achieve and monitor our Company’s ongoing compliance with the requirements of the applicable law and the implementing regulations under ii.