AML — CTF Policy

ANTI-MONEY LAUNDERING (AML) AND COUNTER-TERRORIST FINANCING (CTF) POLICY

 

1. Reason and Purpose of the Policy

 

ECOMMERCE TECHNOLOGIES LTD (the “Company”, “We”) adopted the present Policy for the following reason:

  • money laundering and terrorist financing are the processes of moving illegally acquired cash through financial systems so that it appears to come from a legitimate source, for the purpose to conceal the origin and true ownership of the proceeds of illegal activities and to legalise the ill-gained money. It is therefore important for the Company to have procedures and policies in place to identify and prevent ML/TF within it.
  • In accordance with the Regulation 19 of MLR 2017, the Company established and maintains this Policy in order to mitigate and manage effectively the risks of money laundering and terrorist financing identified in any risk assessment undertaken by the Company under regulation 18(1).

 

The Company’s status under money laundering regulations and laws:

  • under the Regulation 7(1)(a)(iv) of the MLRs, the Company as an electronic money institution is regulated by the FCA as its supervisory authority;
  • the Company is authorised by the FCA as an EMI that has been given permission to issue electronic money and provide payment services.

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.

MLRO reports to the Director of the Company.

 

2. Overview of the Regulatory System

 

Regulatory regime:

  • being an e-money issuer which carries on payment services in addition to issuing e- money, the Company’s activities are regulated by and subject to the EMRs 2011 and the PSRs 2017.

The Company is also committed to adherence to the UK legislation enacted to combat money laundering and to the prevention of criminals from being able to use our Company in ML/TF. UK Legislation enacted to combat money laundering is as follows: —

  • The Money Laundering, Terrorist Financing and Transfer of Funds Regulations 2017 (MLRs).
  • The Money Laundering and Terrorist Financing (Amendment) Regulations
  • The Proceeds of Crime Act 2002 (as amended by the Crime and Courts Act 2013 and the Serious Crime Act 2015).
  • The Terrorism Act 2000 (as amended by the Anti-Terrorism, Crime and Security Act 2001, the Terrorism Act 2006 and the Terrorism Act 2000 and Proceeds of Crime Act 2002 (Amendment) Regulations 2007.
  • The Criminal Finances Act

The UK courts must have regard to this approved guidance in deciding whether businesses or individuals affected by it have committed an offence under MLR 2017 or Sections 330-331 Proceeds of Crime Act (as amended).

This document is applicable to all clients taken on by this practice and applied as required throughout the business relationship and afterwards.

 

3. Definitions and the Concept of Money Laundering and Terrorist Financing

 

3.1. As per the Regulation 3 of the MLRs:

“money laundering” has the meaning given by section 340(11) of the Proceeds of Crime Act 2002, which provides as follows:

Money laundering is an act which—

  • (a) constitutes an offence under section 327, 328 or 329,
  • (b) constitutes an attempt, conspiracy or incitement to commit an offence specified in paragraph (a),
  • (c) constitutes aiding, abetting, counselling or procuring the commission of an offence specified in paragraph (a), or
  • (d) would constitute an offence specified in paragraph (a), (b) or (c) if done in the United
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“terrorist financing” means (except where the context otherwise requires) an act which constitutes an offence under—

  • (a) section 5 (fund-raising), 16 (use and possession), 17 (funding arrangements), 8 (money laundering) or 63 (terrorist finance: jurisdiction) of the Terrorism Act 2000;
  • (b) paragraph 7(2) or (3) of Schedule 3 (freezing orders: offences) to the Anti-terrorism, Crime and Security Act 2001;
  • (c) requlation 10 (contravention and circumvention of prohibitions) of the ISIL (Da’esh) and Al-Qaida (Asset-Freezing) Regulations 2011; or
  • (d) section 11 (freezing of funds and economic resources), 12 (making funds or financial services available to designated person), 3 (making funds or financial services available for benefit of designated person), 14 (making economic resources available to designated person), 15 (making economic resources available for benefit of designated person) or 8 (circumventing prohibitions etc) of the Terrorist Asset- Freezing etc Act 2010

3.2 The Concept of Money Laundering:

Considering interpretations by law, money laundering is outlined 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

Money laundering is any process whereby funds derived from criminal activity including terrorist financing are given the appearance of being legitimate by being exchanged for ‘clean’ money.

The three main stages of ML process cover as follows:

  1. Placement: The process of placing criminal property into the financial 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, the carried out transactions can be complex and numerous.
  1. 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.

3.3 The Concept of Terrorist Financing

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. Legitimate sources may include charitable donations, foreign government sponsors, business ownership, 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.

 

4. Risk Based Approach

 

Adopting a risk-based approach implies the adoption of a risk-management process for dealing with ML/ TF.

This encompasses:

  • recognising the existence of the risks
  • undertaking an assessment of the risks
  • developing control strategies to mitigate and monitor the identified risks

Our procedures are based on assessed risk, with higher risk areas subject to enhanced control procedures.

The ML/TF risk assessment for our Company is available separately and this document takes into account the risks identified in relation to our Company.

 

5. Client Acceptance Criteria

 

Our Company adheres to the client acceptance criteria to takes on clients that are in accordance with our risk assessment:

  • 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, products/services, forecasted transactions, delivery channels;
  • we consider the logic reasons when the customer deposits funds with our Company, their source, the third parties involved in the transaction (if/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, as declared by the customer during the onboarding process.
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6. Client Due Diligence (“CDD”) and Enhanced Due Diligence (“EDD”)

 

Pursuant to Regulation 27(8) of the MLRs, our Company applies customer due diligence measures and in higher risk cases, as provided by the MLRs, performs EDD measures.

As part of the due diligence procedure, we check the client(s), including controlling/managing individuals (ultimate beneficial owner(s) of business clients, shareholders, directors (all members of the board of directors/managing body, senior managers), representatives of the client) against the sanctions lists, as provided in the section “Sanctions Lists” of the “AML/CTF CONTROLS AND PROCEDURES”.

As part of the CDD process we are aware of the need to identify and study any activity or situation which we regard as particularly likely by its nature to be related to ML/TF.

We take additional CDD/EDD monitoring measures, where appropriate, to prevent the use for ML/TF of products and transactions which might favour anonymity. We do not accept any anonymous factors. All staff employed must bring to the attention of the MLRO details which they come across of transactions or arrangements of the pattern outlined or any new ML/TF risks they identify in the business.

 

7. Risk Management

 

Our Company assesses ML/TF risk in relation to each client at the time the client is taken on and noted on the new client take on form. We conduct the practice risk assessment, taking into account procedures of the client risk assessment, inherent risk assessment, enterprise- wide risk assessment.

 

8. Ongoing Monitoring

 

Pursuant to Regulation 28(11) of the MLRs 2017, the Company must conduct ongoing monitoring of a business relationship, including:

  • (a) scrutiny of transactions undertaken throughout the course of the relationship (including, where necessary, the source of funds) to ensure that the transactions are consistent with the Company’s knowledge of the customer, the customer’s business and risk profile;
  • (b) undertaking reviews of existing records and keeping the documents or information obtained for the purpose of applying customer due diligence measures up-to-date.

We conduct CDD, periodic reviews and risk assessments on an ongoing basis and deal with any additional information identified, as well as obtain further information from clients, as appropriate.

 

9. Record-Keeping

 

Pursuant to Regulation 40 of the MLRs, we carry out the record-keeping.

Records of CDD/EDD are kept on individual client files of the Company. Records can be identified for destruction after the statutory period.

Record retention is provided by our Privacy policy.

Our Company does not enter into reliance agreements with other firms on CDD procedures.

More detailed about record-keeping is provided in the section “Record-Keeping” of our “AML/CTF CONTROLS AND PROCEDURES”.

 

10.  Reporting

 

It is a requirement that where the Company’s MLRO knows or suspects, or has reasonable grounds for knowing or suspecting, that a person is engaged in ML/TF as a result of information received in the course of the business or otherwise through carrying on that business then he/she must comply with:

  1. Part 3 of the Terrorism Act 2000(a); or
  2. Part 7 of the Proceeds of Crime Act 2002(b); and make a Suspicious Activity Report.

This is considered by the Company’s MLRO.

Reports should be made to the NCA online and the relevant link on the SAR online system is: https://www.ukciu.qov.uk/(pti1v145322otv55ufu1b43u)/SARonIine.aspx

All relevant staff must report, every instance where they have knowledge or suspicion of

ML/TF to report this matter, to the MLRO without delay. This should be done by using the Internal Money Laundering Report Form available to all relevant staff.

Under no circumstances should the client or any of their representatives be advised that a report has been considered internally or that a suspicious activity report (SAR) has been made by the MLRO.

 

More detailed about reporting is provided in the section “Suspicious Activity Reporting” of our “AML/CTF CONTROLS AND PROCEDURES”.

 

11. Training

 

Pursuant to Regulation 24 of MLRs, the Company is required to undertake regular AML/CTF training and maintain a written record of the training delivered.

Training shall be conducted at least annually, but also to each employee who is a new member of the AML-relevant staff.

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.

All affected employees are provided with training that explains the MLRs, the Proceeds of Crime Act 2002, Terrorism Act 2000 (in perticular, ss18, 21A), other applicable requirements and how these should be abided by the Company’s employees and clients.

 

12.  Approval

 

Director and MLRO of the Company has approved this document 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 it. This approval is indicated by signatures below, with the last updated version on 22.01.2021.

Date: 22.01.2021