AMLCTF and Sanctions Regime Complaince Policy
The Policy establishes the main principles of the money laundering, terrorist financing and proliferation financing prevention measures, which are integrated in the Company internal control system with a purpose to ensure the ML/TF risks possessed by the Customer are under control and those changes are detected in time.
The Company provides the Services only in compliance with the AML regulation and the Sanctions regulation requirements including the Fourth and five EU Money Laundering Directive, The Money Laundering , Sixth EU Money Laundering Directive terrorist Financing and transfer of funds regulation 2017, Proceeds of Crime Act (POCA) 2002, Terrorism Act 2000, the Counter Terrorism Act 2008 and the Bribery Act 2010.
In the UK, relevant laws and regulations regarding money laundering became effective in 1994 (subsequently amended in 2003, 2007, 2017, 2019 and 2020). The Money Laundering Regulations 2007 came into force in the UK on 15/12/2007 and The Money Laundering (Amendment) Regulations 2012 extended the scope of the Regulations. However, with the progression of technology and the digital age, a more risk-based approach was needed to combat terrorist financing and financial crime.
This Policy is created also as a guidance, which makes the Customer aware of the main ML/TF and Sanctions regime breaches prevention requirements.
The Policy outlines the key elements of the following processes and issues:
- meaning of the ML/TF;
- segment of the Customers;
- the main the ML/TF prevention measures implemented in the Company business activity;
- the Sanctions regime control measures;
- the Staff competence improvement;
- storage of information, received during implementation of the above-mentioned measures.
The Company ensures annual review of the Policy, in case of necessity doing it more frequently, if the Company considers this is necessary. Therefore, all the amendments in the Acts and the applicable Law are continuously followed and implemented into the Policy by updating the processes and measures stated herein accordingly.
The amended version of the Policy is published on the Company’s website not later, than a Business day after its’ approval.
Money laundering
The main form of the ML is concealing of true origin and ownership of funds, raised through criminal activity, by turning these funds into “legal” and “clean”, but the ML may also take other forms: handling of benefits derived from criminal activity, or concealment of the true origin of funds, knowing they were raised through criminal activity, or participation or attempt to commit in the mentioned activities.
The ML methods, used by criminals, who attempt to conceal true origin and ownership of funds received in a result of criminal activity, are divided into three stages:
| 1. Placement | Money introducing into financial system. |
| 2. Layering | Money split up and shuffling around to make a layer and to create distance between money and a criminal. |
| 3. Integration | Money return to a criminal as already “legal” and “clean”. |
The TF means the financing or knowing and supporting of an act of terrorism as well as terrorism organization or a person whose activities are directed against international security. The major differences between terrorist financing/proliferation financing and money laundering are, that mostly small amounts are required to commit act of terrorism, and it can be funded from legitimately obtained funds. However, terrorist organizations have a control over funds from different sources and use advanced techniques to move them between jurisdictions.
ProliferationProliferation refers to the spreading of weapons of mass destruction 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 the Sanctions Policy located on the Compliance Depository
Offences and Penalties:• It is an offence to refuse, fail or evade compliance with a financial sanctions statutory requirement or to make funds available to a target of financial sanctions legislation;
• Failure to comply could result in the Company being liable to a fine and/or its staff being liable on conviction to a maximum of 7 years’ imprisonment and/or a fine.
Criminal offences related to assistance of money launderingThe Company commits to avoid participation in the ML/TF assisting offences, such as:
- knowingly assisting the ML/TF;
- failing to report on the Suspicious and Unusual activity (the SAR);
- tipping-of or prejudicing an investigation.
The Company has developed and integrated into its’ business process the ML/TF prevention measures, which a helps the Company to avoid committing in the ML/TF related offences and to detect the Predicate offence.
The Company the ML/TF prevention and the ML/TF risk mitigation measures have a risk-based approach.
As the Company provides such financial services, as:
- opening of the personal Accounts;
- opening of the business Accounts;
- money remittance;
- acquiring services;
- payment initiation services (PIS);
- currency exchange services,
it takes appropriate steps to assess and mitigate the ML/TF risks, the Service is subject to, by carrying out the appropriate Identification and on-going monitoring.
The Company may also provide auxiliary services to the mentioned above, provided that these additional services are technically available and allowed by the Law, and the Company can ensure appropriate the ML/TF and violation of the Sanctions regime prevention measure.
Unacceptable personThe Company provides the Services to individuals and legal entities, but according to the defined risk appetite, it has detected a range of persons, with whom the Company avoids to establish the Business relationship and provide the Service.
The Company considers a person, which possesses the following signs, as the Unacceptable person:
- the Designated person;
- the PEPs;
- residents of the Black-listed jurisdictions;
- the High-risk countries;
- suspicions of the ML/TF or other crimes;
- and other persons which possess unacceptable risk indicators, defined by the Acts and the Company internal procedures.
The above-mentioned criteria shall be taken into account either they relate to the Customer, or to the UBO.
Prohibited transactionsTo avoid elevation of the Company risk to be involved in the ML/TF and its’ possible undefined assistance in offence related to the ML/TF, the Company has defined that proceeding of any Transaction, whether it is incoming, outgoing transactions, where connection with the High-risk/Black-listed country have been detected, is prohibited. These kinds of the Transactions are rejected.
The Company also rejects all the Transactions connected with the High-risk activity, due the Company does not provide the Services, which might support this kind of business activity.
SENIOR MANAGER AND MONEY LAUNDERING REPORTING OFFICERSenior Manager
The Senior Manager ensures that the Company 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 takes appropriate steps to assess self-risk of the Money Laundering, Terrorist financing and Proliferation financing the Company is subject to.
The Senior Manager has the authority to make decisions that affect business’s exposure of Company to the ML / TF risk. It appoints the MLRO and its Deputy and controls their activities by considering the MLRO’s regular internal reports.
Based on the MLRO’s initiatives the Senior manager takes decisions on changes in the Staff and in the ICSR.
MLRO
The MLRO is the Company employee, appointed by the Senior Manager.
The MLRO is responsible for all aspects of the Company compliance with the Money Laundering, Terrorist financing and Proliferation financing prevention regime. Additionally, the Company has entrusted the MLRO responsibilities to ensure compliance with the Sanctions regime.
The role of the MLRO has been designated by the FCA, therefore any person invited to perform respective functions, before starting to perform them shall be the FCA approved.
The MLRO has authority to act independently in carrying out its’ responsibilities and it has direct access to the FCA, the UKFIU, the OFSI and appropriate law enforcement agencies, including the NCA.
In the event of temporary absence of the MLRO its obligations shall be delegated to its Deputy. The Deputy may be appointed by the Senior Manager case by case, provided that the Deputy has the highest knowledge in AML / CTF and Sanctions control and in the ABC, which allows to fulfil all the duties with the best quality, and the total term for the MLRO’s substitution with the Deputy does not exceed 12 weeks within 12-month period, otherwise an approval of the Deputy by the FCA is mandatory.
MONEY LAUNDERING, TERRORIST FINANCING AND PROLIFERATION FINANCING PREVENTION MEASURESCustomer on-boarding
The Customer on-boarding is a process, performed with a purpose to make a decision concerning establishment of the Business relationship and provision of the Services. To make the relevant decision the Company must ensure it fully understands the nature of the Business relationship with the Customer and reasons the Customer is seeking for them, the nature of the Customer business activity. The Company also ensures that it fully understands the Customer structure, has identified the UBO and all evidencing information is obtained.
Therefore, the Company performs a number of activities related to obtaining the above-mentioned information:
- identity verification;
- identification of the UBO;
- ascertaining whether the Customer is the PEP or Designated person;
- the ML/TF risk assessment, ascertaining whether a person possesses the Unacceptable person signs;
- identification of origin of wealth and source of funds;
- gathering of other information, which might give reasonable grounds to refuse establishment of the Business relationship.
Identity verification of an individual
The Company gathers information on the full name and a photography of an individual, either on its’ date and place of birth, the UBO and legal representative, where applicable, the country of tax residence, telephone, e-mail, information on relations with USA, source of income.
The Customer, being an individual or its’ legal representative, has to provide documentary evidence, which, on a purpose of this Policy, is a passport, an identity card or a UK driving license. The identity verification is made using photo session performed by verification service providing partner (SumSub), during which the Customer is asked to use a camera, show and make photos of its face and its identification document in accordance with the partner’s, who perform the verification, requirements and instructions.
Other information is submitted on-line, via the Company website, by filling up the Identification form and attaching requested documents.
Identity verification of a legal entity
The Company gathers information on the name and registration number of a legal entity, either on date of registration, legal/registered address, type of business activity, license, license number, if the activity is subject to licensing, tax number, business activity location address, ownership and control structure, the UBO, legal representative, telephone, e-mail, relations with USA, source of income.
The Customer, being a legal entity, has to provide the documentary evidence of its’ legal existence, which on purpose of this Policy, is:
- registry card, registration certificate or equivalent document of the relevant register;
- document, certifying the legal/registered address;
- Memorandum and Articles of Association or similar documents;
- document, certifying management board structure;
- document, showing/describing the company ownership structure;
- relevant document equivalent with aforementioned documents, which contains necessary identification data (company register statement) and replaces above mentioned documents;
- document confirming the fact and scope of representation rights of representative;
- the UBO’s identification document.
Legal representative of the Customer being a legal entity has to pass its’ identity verification procedure in the above-mentioned order, as it prescribed for an individual.
Other information is submitted on-line, via the Company website, by filling up the Identification form and attaching requested documents.
Identification of the UBO
The Company identifies the UBO on a basis of information on its’ full name, identification code, or, where not applicable, the date and place of birth and the place of residence and ascertaining the UBO status. Therefore, the Customer has to provide the Company with documentary evidence of the above-mentioned information, which on purpose of this Policy, is a copy of the UBO’s identity document, and information and document which provides certainty, that the UBO is ascertained (partnership agreement, letter of wishes, trust deed etc).
The information is submitted on-line, via the Company website, by filling up the Identification form and attaching requested documents.
Ascertaining of the PEP and Designated person status
During the process of verification, the respective person will be automatically screened in several databases, such as the Sanction lists, the PEP databases and other, and the results of the Verification and these checks will be made available to the Company.
A person that is not screened by the Verification service is screened manually by the Company in the Official databases.
Where a person no longer performs the PEP functions, it is still considered as the PEP for Twelve (12) months after the relevant resignation. After an expiry of the 12-month-period, the person can be considered as non-PEP.
Assessment of the ML/TF risk
The Company assesses the following ML/TF risk factors inherent to the Customer:
- the Customer risk factors;
- geographical risks factors;
- the Customer business activity risk factors;
- delivery channel risk factors.
The complex of the ML/TF risk factors inherent to the Customer impacts the ML/TF risk level assigned to the Customer, and it affects following process of the Business relationship and the ML/TF mitigation measures applied to the Customer.
When the Customer possesses the Unacceptable person signs, it is considered as the Unacceptable person and is not accepted for the Services under any circumstances, and the Business relationship with it, including the Account opening, is rejected.
The Company also implements restrictive measures related to processing of the Transactions connected with the High-risk/Black-listed country and the High-risk activity.
Identification of source of wealth and origin of funds
The Company must ensure in legal origin of the Customer wealth and source of incomes. Therefore, the Company gathers information, which gives certainty that the Customer funds are not raised through criminal activity.
The Company can retrieve the above-mentioned information as from the Official databases, for example, extracts from land registers, extracts of registers of assets, declaration of economic interests etc., either to request them directly from the Customer.
If the Customer refuses to disclose information on the source of its’ funds or the provided information is not sufficient to get certainty on its’ legal origin the Business relationship with such Customer shall not be established and the Service cannot be provided. In addition, the Company decides on, whether such activity of the Customer is subject to performing of the Reporting obligation.
On-going monitoring
The Company continuously follows the nature of the Business relationship and the Transactions carried out correspond with the Company’s knowledge of the Customer, especially, its business activity and the detected ML/TF risk features. Therefore, the activity of the Customer is continuously monitored to ensure its compliance with the Company’s knowledge about the Customer, received during the process of on-boarding and the further Due diligence.
To ensure implementation of the appropriate monitoring measures, the combination of two methods has been developed by the Company and integrated into the business processes. The automatic monitoring method is integrated in the System, which performs previously review of the Transactions and monitors the Due diligence terms and indicators. Further manual review of the System detected activity is implemented manually by the responsible Staff.
Reporting obligation
The Company has executed the procedure of making the Authorities aware of the Transactions and other activity of the Customer, that seems out to be ordinary, that might be the Predicate offence or a criminal offence related to the ML/TF.
The Company understands importance of performance of the Reporting obligation, therefore filing the SAR is a priority during the process of compliance with the AML/CTF regime.
During the process of the Customer’s activity on-going monitoring, the Company follows possible the Unusual or Suspicious activity indicators, to detect the ML/TF and to prevent the Predicate offence.
The Reporting obligation is binding to every employee of the Company, which is obliged to give a notice to the MLRO if any suspicions or knowledge on the ML/TF occurs, by providing it with the internal SAR.
The MLRO is the one, who is responsible for performance of the direct Reporting obligation and submission of the external SAR to the Authorities.
COMPLIANCE WITH SANCTIONS REGIMEThe Company is fully complaint with the Sanctions regime therefore, it follows all circumstances and facts, which might indicate violation of the Sanctions regime.
Countering terrorist financing
The Customer and its’ activity are assessed in the light of the Customer possible commitment or participation in the acts of terrorism, including preparing, promotion or encouraging for terrorism or other suspicions of terrorism. Any compliance or suspicions of compliance with these factors are considered as the Sanctions regime violation indicators.
Financial sanctions and asset freezing
The Company continuously follows the Consolidated list handled by the OFSI and when it concludes the financial Sanctions and assets freezing regime are applicable to the Customer, it applies the following prohibitions related to the Customer assets:
- prohibition to move, transfer, alter, use, allow access to or deal with the 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, ownerships, possession, character, destination, or any other change that would enable the Funds to be used;
- prohibition on making Funds or Economic resources services unavailable, 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 informs the Customer, being a subject to the Sanctions list on its assets freeze, explaining the effect of the applied restrictions and the OFSI contacts.
The Company reports on detected breaches of the Sanctions regime to the OFSI, providing it with an appropriate report.
STAFF AWARENESS AND TRAININGThe Company understands, that one of the most important control measures over the compliance with the ML/TF prevention regime and the Sanctions regime is to have the Staff, who are alert to the risks of the ML/TF and violation of the Sanctions regime.
The Company ensures the Staff are well trained in identifications of the Suspicious and Unusual activity, organizing regular the AML/CTF training, when they join the Company, and on regular basis receiving refresher training.
The Company’s approach to the organization of training programs is built around ensuring that they are commensurate with the Company business activity and its’ provided Services, and the specific responsibilities of each member of the Staff.
The Company ensures that given training covers the main issues described in the ICSR, and the applicable Law, and the way how to deal, in the event of any potential or real breaches of the ML/TF prevention regime or the Sanctions regime.
The main focus is made on training of the Staff, who directly handles the Identification, the Customer activity and Transaction monitoring or other the Customer instructions.
Anyway, the Company has detected the minimum issues, which shall be observed in organized training:
- explanation on the Company ICSR procedures and related processes;
- guidance on main requirements of the applicable Law;
- description of the Services;
- procedures of the Customer on-boarding;
- guidance of the System automatic monitoring process;
- guidance on the Customer’s manual monitoring;
- the ML / TF issues, including relevant offences organization and the way how they might take a place in through the Company’s business activity, during provision of Services;
- guidance on how to identify the Suspicious and Unusual activity.
After each training session every employee participated in provided studies, is tested with a purpose to ensure that it understands the given materials and observed issues.
The Company makes the Staff aware also of its’ personal responsibilities and the responsibilities of the Company at the start of their employment.
RECORD KEEPINGThe Company ensures safekeeping of information in accordance with the requirements of the AML regulation and the Personal data protection regulation.
All information shall be kept in electronic form within the System. If any information is obtained or executed in a paper form, electronic scanned copies of such documents shall be made and added to electronic files within the System.
The Company retains following records concerning the Business relationship with the Customer and its activity:
- information about the Customer, including the results of on-boarding and the following Due diligence;
- details of the Transactions;
- compliance reports and decisions made by the MLRO;
- the internal and external SARs and related information;
- reports to the OFSA and related information;
- details of communication with the Authorities;
- information on training and on 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 the longer term.
After expiry of the above-mentioned period the Company ensures deletion of all information on the Customer, except the name of the ex-Customer, accompanied with the Business relationship establishment and termination dates, and information deletion date is retained by the Company.
GLOSSARYThe Terms used in this Policy and not listed above shall be defined in accordance with definitions provided the AML regulation.
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