AMLCTF and Sanctions Regime Compliance Policy
This AML / CTF (Anti-Money Laundering and Counter-Terrorism Financing) and Sanctions Regime Compliance Policy (The Policy) establishes the main principles of the money laundering, terrorist financing, and proliferation financing prevention measures of Paymentz Ltd (the “Company”). These principles are integrated into the Company's internal control systems with the purpose of ensuring that potential ML/TF risks that arise in connection with the Company’s business and its Customers are well managed, and any changes in regulation or the Company’s risk profile are detected in time.
The Company provides Services only in compliance with the requirements under applicable AML and Sanctions regulations, including the Proceeds of Crime Act 2002 (as amended), the Terrorism Act 2000 (as amended by the Anti-Terrorism, Crime and Security Act 2001), the Counter-Terrorism (Sanctions) (EU Exit) Regulations 2019, the Money Laundering Regulations 2017 (as amended), the Counter-Terrorism Act 2008, Schedule 7, HM Treasury Sanctions Notices, Guidance and News Releases, and the FCA Handbook.
This Policy is hereby established to articulate binding directives for the personnel of Paymentz Ltd (the “Company”) with regard to the formulation and administration of Anti-Money Laundering (AML) and Counter-Terrorism Financing (CTF) measures within the Company’s organizational framework. This Policy defines the procedures and protocols that Company staff must follow in order to effectively address and manage issues related to money laundering and the financing of terrorism. Compliance with this Policy is mandatory for all Company personnel, and any deviation from its stipulations may result in disciplinary action in accordance with applicable laws and internal regulations.
The Policy outlines the key elements of the following processes and issues:
- meaning of ML/TF;
- Sanctions regime control measures;
- Politically Exposed Persons (PEP)
- the main ML/TF prevention measures implemented in the course of the Company’s business activity;
- improvement of Staff knowledge and competence;
- the storage of information, received during implementation of the above-mentioned measures.
The Company commits to review this Policy annually, in order to assess its continued relevance and effectiveness. In circumstances deemed necessary by the Company, more frequent reviews may be undertaken to address emerging threats or changes in the regulatory landscape, or other necessary updates.
Additionally, the Company recognizes that material changes to its business may necessitate more immediate reviews and amendments to this Policy. Such changes could include significant alterations to the Company's operations, structure, or services.
Upon the implementation of any amendments to this Policy, the Company is committed to promptly notifying all relevant staff members. Communication of amendments will be conducted through appropriate channels, providing clear guidance on the nature of the revisions and any implications for roles and responsibilities.
All modifications to this Policy, along with the rationale and details of the changes made, will be documented and maintained in a secure and accessible manner, as a transparent record of the Policy's evolution and in order to facilitate internal and external audits.
MONEY LAUNDERING, TERRORIST FINANCING, AND PROLIFERATION FINANCINGMoney laundering
Money laundering is a clandestine process through which unlawfully acquired funds, generated from criminal activities, are intentionally obscured to give the false appearance of legitimate origin and ownership.
The Company faces substantial legal, regulatory, operational, financial, and reputational risks if its services are exploited by criminals or terrorists. It is crucial to maintain constant vigilance to differentiate between legitimate business activities and those potentially involved in illegal activities, especially money laundering or terrorism financing. Staying alert and being discerning helps mitigate these risks and safeguards the Company’s integrity and overall well-being.
The four ML methods most commonly used by criminals in attempting to conceal the true origin and ownership of funds received as a result of illegal activity, can be divided into stages, as follows:
| 1. Placement | Illicitly obtained funds are introduced into the financial system. |
| 2. Layering | The purpose is to obscure the trail of illicit funds, introducing layers of complexity that make it challenging to trace the origin of the funds. |
| 3. Integration | Illicitly obtained funds that now have the appearance of legal origin, are reintroduced into the legitimate economy. |
| 4. Reinvestments |
Funds, now seemingly legitimate, are reinvested or used for various activities. Machine learning techniques could be employed to manage and optimize the ongoing investment or to avoid detection by continuously adapting and varying strategies. Machine learning can play a significant role at each of these stages by analysing vast amounts of financial and other data, identifying patterns, detecting anomalies, and optimizing strategies for laundering money while minimizing the risk of detection. Law enforcement agencies and financial institutions also utilize machine learning to detect and prevent money laundering by identifying suspicious patterns and activities within financial transactions. |
Terrorist financing (TF) means the financing of, or knowing and supporting, an act of terrorism, or a terrorist organization, or a person whose activities are directed against international security. A major difference between terrorist financing/proliferation financing and money laundering is that mostly small amounts can be used effectively to commit acts of terrorism, and these amounts can be funded from legitimately obtained funds. Because terrorist organizations very often have a control over funds from different sources and use advanced techniques to move them between jurisdictions, TF can be very challenging to detect.
ProliferationProliferation refers to the spread of weapons of mass destruction and associated technology in violation of international non-proliferation agreements and conventions. Proliferation financing refers to financial transactions that facilitate such activity. Further detail on financial and economic sanctions, offences, and penalties is included in a separate policy document, 4. Sanctions Regime Control Rules, which is also located on the Company’s Compliance Depository.
Offences and PenaltiesNon-compliance with anti-money laundering (AML) measures specified in the Proceeds of Crime Act (POCA) may result in legal consequences. These offenses include:
1. Concealing criminal property: Engaging in activities meant to conceal the true nature, source, disposition, movement, or ownership of criminal property.
2. Arrangements facilitating money laundering: Participating in arrangements to facilitate the acquisition, retention, use, or control of criminal property by another person.
3. Acquisition, use, or possession of criminal property: Knowingly acquiring, using, or possessing criminal property.
4. Failure to disclose: Failing to report knowledge or suspicion of money laundering to the appropriate authorities, as required by law.
5. Tipping off: Unlawfully disclosing information likely to prejudice a suspected or ongoing money laundering investigation.
Criminal offenses related to the assistance of money launderingThe Company commits to avoid participation in activities that could lead to ML/TF offenses, such as:
- knowingly assisting ML/TF;
- failing to report on suspicious and unusual activity (the SAR);
- tipping off or prejudicing an investigation.
The Company has developed and integrated ML/TF prevention measures into its business processes in order to avoid committing any ML/TF-related offenses and to detect predicate offenses.
The Company’s ML/TF prevention and the ML/TF risk mitigation measures are based on a risk-based approach.
The Company provides financial services, primarily
- Payment Services
- Acquiring Services
and therefore, takes appropriate steps to assess and mitigate ML/TF risks that arise, by carrying out the appropriate Identification and ongoing monitoring.
The Company may also provide additional services in addition to those mentioned above, provided that these additional services are technically available and allowed by the law and applicable regulation, and also provided that the Company can ensure appropriate ML/TF and Sanctions regime measures.
Unacceptable personThe Company provides its Services to individuals and legal entities. However, the Company has defined a risk approach under which it has already identified a range of persons with whom the Company will not establish a Business relationship, and will not provide Services.
The Company designates an individual as an “Unacceptable Person” if they exhibit the following characteristics or indicators:
- a Designated person;
- a PEP;
- residents of Black-listed jurisdictions;
- residents of High-risk countries;
- entities that are suspected of ML/TF or other crimes;
- other persons who possess unacceptable risk indicators, defined by the Acts and the Company's internal procedures.
The criteria mentioned above shall be considered applicable whether they pertain to the Customer or the Ultimate Beneficial Owner (the UBO) of a legal entity. The Company has put in place a consistent and comprehensive evaluation process, to ensure that the specified criteria are applied to both Customers and UBOs in accordance with its established policies and regulatory standards.
Prohibited transactionsTo mitigate the risk of the Company’s inadvertent involvement in money laundering (ML) or terrorist financing (TF) and the potential provision of undefined assistance in offenses related to ML/TF, the Company expressly prohibits the execution of any payment transaction—whether incoming or outgoing—upon the detection of a connection with a high-risk or black-listed country. This prohibition is in place to safeguard against the elevated risk associated with jurisdictions of heightened concern and underscores the Company's commitment to maintaining a robust and compliant financial environment.
The Company also explicitly declines and prohibits all transactions related to high-risk activities, in line with our commitment to abstain from providing services that may support such business endeavours. This decision underscores our dedication to a secure and compliant operational framework.
SENIOR MANAGER AND MONEY LAUNDERING REPORTING OFFICERSenior Manager
The Senior Manager ensures that the Company’s policies, controls, and procedures are appropriately designated and implemented, and are effectively operated to manage the ML/TF risk and the Sanctions regime violation risk of the Company. The Senior Manager is committed to taking appropriate steps to assess the Company’s risks the Company is subject to in connection with Money Laundering, Terrorist Financing, and Proliferation financing.
The Senior Manager has the authority to make and implement decisions that affect the Company’s exposure to ML / TF risks. The Senior Manager appoints the MLRO and their Deputy and monitors their activities by means of the MLRO’s regular reporting.
The Senior manager also makes ongoing decisions about changes in Staff and in the ICSR based on recommendations of the MLRO.
MLROThe MLRO is a Company employee, appointed by the Senior Manager.
The MLRO is responsible for all aspects of the Company's compliance with applicable Money Laundering, Terrorist Financing, and Proliferation financing prevention regimes. Additionally, the Company has entrusted the MLRO with responsibility for ensuring the Company’s compliance with Sanctions regimes.
Under FCA rules, the FCA must approve any individual invited to perform the role of the MLRO and associated functions, before commencement of the role. The MLRO has independent authority in executing their responsibilities and has direct access to the FCA, the UKFIU, the OFSI, and relevant law enforcement agencies, including the NCA.
In the event of a temporary absence of the MLRO, their obligations shall be delegated to their Deputy. The Deputy may be appointed by the Senior Manager case by case, provided that the Deputy has the requisite knowledge and experience with AML / CTF and Sanctions controls and in the ABC, allowing the Deputy to fulfil all the duties completely and competently. The total duration for substituting the MLRO with their Deputy will not exceed 12 weeks within 12-month period, otherwise FCA approval of the Deputy is required.
MONEY LAUNDERING, TERRORIST FINANCING, AND PROLIFERATION FINANCING PREVENTION MEASURESCustomer onboarding
Customer onboarding is a key business process, performed with the purpose of making decisions concerning the establishment of Business relationships and the provision of the Services. To make the relevant decisions, the Company will ensure that it fully understands the nature of any Business relationship with a Customer, the nature of the Customer’s business activity, and the reasons for the Customer is seeking to use the Company’s Services. The Company will also ensure that it fully understands the Customer’s organisational structure, has identified the UBO, and that all evidencing information is obtained.
Therefore, the Company performs a number of activities related to obtaining the above-mentioned information:
- verification of the identity of the Customer’s representatives;
- identification of the UBO;
- ascertaining whether any Customer representatives are PEPs or Designated persons;
- a ML/TF risk assessment, which ascertains whether a person possesses the characteristics of an Unacceptable person;
- identification of the origin of wealth and source of funds of the Customer;
- gathering of other information, which might give reasonable grounds to refuse establishment of the Business relationship.
Identity verification of individuals
The Company gathers information on an individual’s full name, date and place of birth, whether they are an Ultimate Beneficial Owner (UBO) or legal representative (where applicable), country of tax residence, telephone, email, details of relations with the USA, and the source of income.
The Customer, whether an individual or their legal representative, is required to provide documentary evidence which includes a passport, international identity card, or a UK driving license. For identity verification and document authentication purposes, the Company makes use of the SumSub Ltd. KYC/AML solution (https://sumsub.com/about/.)
Other information is provided to the Company through the online submission process on the Company's website, where the prospective Customer completes the appropriate Application form and attaches the requested documents.
Identity verification of legal entities
The Company gathers information on the name and registration number of the legal entity, showing the date of registration, legal/registered address, type of business activity, license and license number if the entity’s activity is subject to licensing, tax number, business activity location address, ownership and control structure, the UBO, any legal representative, telephone, e-mail, relations with USA, documents and financial statements confirming sources of income.
The Customer, being a legal entity, has to provide the documentary evidence of its legal existence, which for purposes of this Policy, consists of:
- registry card, registration certificate, or equivalent document of the relevant commercial or other register;
- documentation certifying the legal/registered address;
- Memorandum and/or Articles of Association or similar documents;
- document that certifies the management and board structures;
- document showing/describing the legal entity’s ownership structure;
- relevant documentary equivalent of the aforementioned documents, which contains necessary identification data (for example, a company register statement) that could replace above-mentioned documents;
- document confirming the establishment and scope of the representation rights of the representative;
- the representative's identification document and documents showing proof of residential address;
- the UBO’s identification document and proof of residential address documents.
If the legal representative of the Customer is a legal entity, it must pass its own identity verification procedure in the above-mentioned order, the same as prescribed for an individual.
Other information is submitted online, via the Company website, by completing the appropriate Application form and attaching requested documents.
Identification of the UBO
The Company identifies a UBO on the basis of information including the UBO’s full name, identification code, or, where not applicable, the date and place of birth and the place of residence, and by ascertaining and confirming the UBO status. Therefore, the prospective Customer must provide the Company with documentary evidence with respect to the above-mentioned information, which comprises a copy of the UBO’s identity document, and information with documentation demonstrating the UBO’s ownership or control (including public records, partnership agreement, will or letter of wishes, trust deed, etc).
The information is submitted to the Company online, via the Company website, by completing the Identification form and attaching the requested documents.
Ascertaining of PEP and Designated person status
During the process of verification, the respective person will be automatically screened in several databases, such as Sanction lists, PEP databases, and other databases, and the results of the Verification and these checks are made available to the Company.
In cases where an individual ceases to be deemed a Politically Exposed Person (PEP), they are still regarded as a PEP for a period of twelve (12) months after notification of such. After the expiration of this 12-month period, the individual will no longer be considered as a PEP, subject to verification.
Assessment of ML/TF risk
The Company assesses the following ML/TF risk factors inherent to a Customer:
- Customer risk factors;
- geographical risk factors;
- risk factors associated with the Customer’s business activity;
- delivery channel risk factors.
The combination of Money Laundering/Terrorist Financing (ML/TF) risk factors associated with a Customer become part of the assessment of the assigned ML/TF risk level, which subsequently determines whether the Business relationship will progress, and impacts the implementation of ML/TF mitigation measures. In instances where the prospective Customer exhibits signs of being an Unacceptable person, it is deemed as such and will not be accepted as a Customer under any circumstances. The Business relationship, including Account opening, is consequently rejected.
When the Customer demonstrates the characteristics of an Unacceptable person, it is considered to be an Unacceptable person and is not accepted as a Customer under any circumstances, and the Business relationship with them is rejected.
The Company has also implemented measures that prohibit the processing of Transactions connected with High-risk/Black-listed countries and High-risk activity.
Identification of sources of wealth and origin of funds
The Company must verify the legality of the origin of the Customer’s wealth and sources of income. Therefore, the Company gathers information to give certainty that Customer funds have not been raised or acquired through criminal activity.
The Company can obtain the above-mentioned information from the Official databases, including for example, extracts from land registers, extracts of registers of assets, declarations of economic interests, etc., or can alternatively request them directly from the Customer.
If the Customer refuses to disclose information about the sources of their funds, or if the provided information is not sufficient to get certainty on their legal origin, a Business relationship with such Customer shall not be established and the Company’s Services cannot be provided. In addition, the Company decides whether this type of refusal of information by the prospective Customer might result in a Reporting obligation.
On-going monitoring
The Company continuously follows the nature of and activity within the Business relationship, and tracks whether the Transactions carried out correspond with the Company’s knowledge of the Customer, especially, its business activity and the ML/TF risks the Company has determined. Therefore, a Customer’s activity is continuously monitored to ensure that it conforms to the Company’s knowledge about the Customer, as received during the process of onboarding and further Due diligence.
To ensure the implementation of appropriate monitoring measures, the Company uses a combination of two methods that have been integrated into its business processes. An automatic monitoring methodology is integrated into the Company’s System, which performs a continuous review of the Transactions and monitors the Due diligence indicators. Further manual reviews of questionable activity detected by the System are performed by the trained Staff responsible for transaction monitoring.
Reporting obligation
The Company has established a procedure for notifying the Authorities of Customer Transactions and other activities that appear to be unusual and may be indicative of Predicate offenses or offenses that can be related to Money Laundering/Terrorist Financing (ML/TF). Recognizing the critical importance of fulfilling its Reporting obligation, the Company prioritizes the submission of Suspicious Activity Reports (SAR) as a fundamental part of its compliance with the applicable Anti-Money Laundering/Counter-Terrorist Financing (AML/CTF) regulations.
As part of its ongoing monitoring of Customer activities, the Company diligently observes indicators of Unusual or Suspicious activity in order to identify and therefore prevent ML/TF and potential Predicate offenses. The Reporting obligation extends to every employee of the Company and mandates prompt notification to the Money Laundering Reporting Officer (MLRO) in the event of any suspicion or knowledge of potential ML/TF, such notification being made by means of the provision of an internal SAR.
The MLRO has responsibility for executing the Company’s Reporting obligations directly, by submitting external SARs to the Authorities. This comprehensive approach underscores the Company's commitment to maintaining a robust AML/CTF framework and proactively contributing to the prevention of financial crime.
COMPLIANCE WITH SANCTIONS REGIMEThe Company is fully compliant with applicable Sanctions regimes and therefore follows all behaviors, circumstances, and facts that might indicate a violation of the Sanctions regime.
Countering terrorist financing
Customers and their activities are monitored and evaluated with regard to any potential involvement or support for acts of terrorism, encompassing the preparation, promotion, or encouragement of terrorism, as well as any suspicions related to terrorism. Any evidence or suspicion arising based on the factors mentioned above are deemed to be indicators of potential violations within the Sanctions regime.
Financial sanctions and asset freezing
The Company continuously follows the Consolidated list handled by the OFSI. When it concludes that the financial Sanctions and asset freezing regime apply to the Customer, it applies the following prohibitions related to a Customer’s assets:
- prohibition to move, transfer, alter, use, allow access to, or deal with Funds belonging to or owned, held, or controlled by the Designated person, in any way that would result in any change in the frozen Funds volume, amount, location, ownership, possession, character, destination, or any other change that would enable the Funds to be used;
- prohibition on making Funds or Economic resources services available, directly or indirectly, to or for the benefit of the Designated person.
The Consolidated list is a public document; therefore, the Company is not obliged to advise the Customer that its Account has been frozen. However, the Company will inform the Customer subject to the Sanctions list about its assets being frozen, explaining that this step is the result of the restrictions applied based on information in the OFSI.
The Company reports on detected breaches of the Sanctions regime to the OFSI, providing it with appropriate reports.
STAFF AWARENESS AND TRAININGThe Company understands that one of the most important control measures to ensure compliance with the ML/TF prevention and Sanctions regimes is to educate and train the Company’s Staff to be alert to MLTF risks and potential violations of the Sanctions regime.
The Company ensures that all Staff are well trained in the identification of Suspicious and Unusual activity, and organizes regular AML/CTF training when Staff join the Company, and on a regular basis to provide refresher training.
The Company’s approach to the organization and execution of training programs is built around ensuring that they are commensurate with the Company’s business activity and the Services, and the specific responsibilities of each member of the Staff.
The Company ensures that training covers the main issues described in the ICSR, the applicable Law, and also ensures that Staff know how to deal with potential or real breaches of the ML/TF or the Sanctions regimes.
One main focus of training is on those Staff members who directly handle Customer onboarding, Customer activity, and Transaction monitoring or other instructions involving Customer.
In any event the Company has detected the minimum issues and topics that will be covered by organized training:
- explanation on the Company ICSR procedures and related processes;
- guidance on the main requirements of applicable Law;
- description of the Services;
- Customer onboarding procedures;
- guidance on the System's automatic monitoring process;
- guidance on the manual monitoring of Customer activity;
- ML / TF issues, including the typical nature of relevant offenses, and how they might take a place in the course of the Company’s business activity, during the provision of Services;
- guidance on how to identify Suspicious and Unusual activity.
After each training session, every participant employee is tested to ensure that they understand the materials, the subject matter, and the key ML/CT issues.
The Company also makes all Staff aware of their personal responsibilities, as well as the responsibilities of the Company, at the start of their employment.
RECORD KEEPINGThe Company ensures the safekeeping of information in accordance with the requirements of the AML regulation and the Personal Data Protection Regulation.
All information is kept in electronic form within the System. If any transaction or any information is obtained or executed in the form of paper or electronic documents, electronic scanned copies of such documents shall be made and added to electronic files within the System.
The Company retains the following records with respect to the Business relationship with the Customer and its activity:
- information about the Customer, including the results of onboarding and the associated Due Diligence;
- details of Transactions;
- details of communication with the customer, along with complaints;
- compliance reports and decisions made by the MLRO;
- internal and external SARs and related information;
- reports to the OFSA and related information;
- details of communication with the Authorities;
- information on training and the effectiveness of training.
The term for safekeeping information is 5 years from the moment of closing the Account of the Customer unless the Law requires a longer term.
After the expiry of the above-mentioned time period, the Company ensures the deletion of all information on the Customer, with the exception that it retains the name of the ex-Customer, along with the dates the Business relationship was established and terminated, as well as the date the information was deleted.
GLOSSARYThe Terms used in this Policy and not listed above shall be defined in accordance with definitions provided by the AML regulation.
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