GLOBAL ALLIANCE LTD ANTI-MONEY LAUNDERING AND FINANCE TERRORISM COMBATING POLICY
1. COMPANY STATEMENT ON ANTI-MONEY LAUNDERING AND COUNTER-TERRORIST FINANCING
This Anti-Money Laundering and Finance terrorism combating Policy (here and after AML Policy) is integral part of Public Offer (“Agreement”) entered by and between Global Alliance Ltd., reg. numb. 22180 IBC 2014 address Jaycee’s Building.
Corner Leeward Highway and Stoney Ground Road. Kingstown. St Vincent and the Grenadines, VC 0100, (hereinafter called the «Company») and any Client within the expressed will of a Client to adhere Company’s services under publically made proposal to open and maintain a margin trading Accounts with trading GLOBAL ALLIANCE LTD system for trading operations with CFD. And is particularly designed to ensure that Company, its senior management and all its employees are committed to complying with the requirements and obligations set out in Saint Vincent legislation, regulations and industry guidance designed to combat money laundering and the funding of terrorist activities, may decide not to provide products or services based upon decisions guided by ML/TF risk appetite and corporate social responsibility.
The Company Policy sets out the minimum standards applicable to its organisation, to include:
• Appointing a Money Laundering Reporting Officer (“MLRO”) of sufficient seniority who will have responsibility for oversight of compliance with all relevant Saint Vincent legislation, regulations and industry guidance.
• Conducting business in conformity with high ethical standards with reputable Clients involved in lawful activities.
• Establishing and implementing risk-based Client due diligence, identification, verification and “Know Your Client” procedures, including enhanced due diligence for those Clients presenting a higher risk. Company is committed to ensuring that all Clients’ identities will be verified before they are accepted as Clients of Company.
• Establishing and maintaining risk-based systems and procedures to monitor Client accounts and activity.
• Undertake and document a proportionate, risk-based assessment considering other risks with Client and delivery channels and having regard to the size of the firm.
• Providing initial and ongoing training to ensure that all relevant staff are aware of the Policy and can fulfil their legal obligations and recognise the risk of Company’s products and services being used to assist money laundering or terrorist financing. Company will regularly update all relevant employees on any changes to the law and their anti-money laundering and counter terrorist financing obligations.
• Complying with all record keeping requirements and maintaining all relevant records for at least seven  years.
• Ensuring that Company’s staff record and promptly report all suspicious activity to the MLRO and that the MLRO reports to the Saint Vincent Banking Commissioner where appropriate.
• Ensuring that senior management are provided with regular reports regarding compliance with the Policy.
• Regularly monitoring and reviewing all procedures contained in the Policy to ensure that the Company Policy is strictly adhered to and developed and updated from time to time in accordance with relevant legislation, advice from enforcement agencies and best industry practice.
• Living as essential strong internal controls within financial institutions and ensure compliance with international standards; and
• Constant assessment of internal control system operating within the Company, amending present Policy, relevant policies as the wise man would be in the same condition to guaranty any sound and proper internal control over the existing / marching risks within the company operation.
Policy system is based on:
• Legal demands of the Law in force at the market jurisdictions (SAINT VINCENT REVISED CODE 2004; Counter-Terrorism Act, 2002; BANKING (AMENDMENT) ACT, 2009; ANTI-MONEY LAUNDERING REGULATIONS, 2002)
• Legal demands of the Law in force within the Client’s, Suppliers and Employers’ jurisdictions that might differ;
• Rational steps to guaranty constant review of internal control system (annual effectiveness monitoring and assessment is not acceptable);
• Necessary operational incorporation to the senior officers day-today duty to identified, evaluated and managed existing and emerging risks;
• Empowerment of the Board of director on regular basis to significant risks consideration and assessment;
• Evaluation if there is any: failing on operational execution, law conformity, business effectiveness; weakness and potential risks to be concerned; necessary decisions are being taking to combat risks, emerging threatened weaknesses and remedies to overcome defaulted failings;
• Proper professional expertise of staff members to asses, remedy and evaluate effectiveness of Internal control system, and conclude on external audit (more extensive monitoring) internal control system shall be applied.
The Board’s assessment shall focus:
• Any changes performed after significant risks last assessment and the company’s effectiveness to reply to business market challenges;
• Methodology and reporting data of management’s internal control system ongoing risks monitoring, and, there is a chance , data of internal audit;
• Any communication to the Board or regulatory bodies due to the reported challenges and control findings outs;
• Asses significant control failings or weaknesses identified performed after significant risks last assessment, or when they could have place or where expected to have happened within any material or non-material impact over the effectiveness business;
• Provide evaluation of company’s public, license demanded and state finance-reporting process.
Risk shall have the meaning of real or potential events, which reduce the likelihood of achieving business objectives.
ML Risk: summary judgment, taking into consideration the effect of mitigating measures including regulation, supervision, and enforcement concerning predicate crimes that are associated with money laundering and t facilitates, opportunity, market features creating the possibility of money laundering.
Compliance Risk: occurrence potentiality to failure in meeting special authority demands over sphere of business defined by regulatory bodies or codes of conduct, or any other special legal decision, and its impacts.
Law violation Risk: legal opinion conclusion over the possibility to adhere existing law regulation, contractual commitments, norms and practices used over the market as a norm of law and customs, as well as evaluation of possibility to be in default within the amendments being taken by the law creating governmental bodied before such norm enters into a force.
Safe and Health risk: unified assessment of predictable facts on possibility, imparts and gravity of accidents and cases of work-related ill health due to company operation or staff operation.
Confidentiality risk: varying likelihood and severity for the rights and freedoms of individual’s damage from accidental or unlawful destruction, loss, alteration, unauthorised disclosure of, or access to personal data transmitted, stored or otherwise processed.
Inconformity with to Regulation, Proceeds of Crime Law demands the Company to have in place systems, policies and procedures to implement a strong AML/CFT/CPF framework, including procedures for:
• Client due diligence
• Implementing a risk-based approach
• Ongoing monitoring
• Complying with lists of targeted financial sanctions
• Internal reporting of suspicious activities
• Staff screening
• Staff training
• Internal controls
Company is dedicated to operating in a protected manner with the highest legal and ethical standards. To that end, Company have established strict standards of compliance with Saint Vincent and European Union (“EU”) regulations designed to assist in the detection and prevention of money laundering and terrorist financing.
This Policy is designed to help the reader understand the laws and regulations enacted to prevent financial service providers from being used as intermediaries for, or to hide the transfer or deposit of money derived from criminal activity, and to ensure that Company, its senior management and all its employees are committed to complying with the requirements and obligations set out in Saint Vincent legislation, regulations and industry guidance designed to combat money laundering and the funding of terrorist activities.
Company employees are prohibited from engaging in money laundering and from giving any advice or other assistance to Clients regarding how to violate money-laundering regulations. All Company personnel are required;
• To be alert to transactions or other Client activity that may be indicative of money laundering or other criminal activity;
• To cooperate with law enforcement authorities within the confines of applicable law; and
• To report any knowledge or suspicions of money laundering to Company’s appointed MLRO
• To be in adherence of section’s Policy made in accordance with the Saint Vincent Banking Commissioner pursuant to Section 181 of the Banking Act, 17 MIRC, Chapter 1
• To be informed respectively set out the offences for contravening the requirements of the concerning failure to comply with Proceeds of Crime Law may result in regulatory action:
(a) conduct that is not in the best economic interests, or which damages the reputation of Saint Vincent administrative or criminal responsibility; and/or
(b) further lack of fitness and propriety.
This Compliance Policy is kept under periodical review by Company and its legal advisers, and you may from time to time be notified of revisions to its terms. The date of this edition is October 2020. Please ensure that you are familiar with the terms of this Compliance Policy.
3. MONEY LAUNDERING
The term “Money Laundering” is used for several offences, under Law in force.
Company must ensure that the legal duties resulting from the regulations set out in these laws are fulfilled by their subordinated enterprises, branches, subsidiaries and affiliates in Saint Vincent and abroad. Wherever local regulations are stricter than the requirements set out in this Policy, the stricter standard is to be applied.
If any applicable laws conflict with this Policy, the relevant Company entity must consult with the local legal department and the MLRO to resolve the conflict. If the minimum requirements set out in this Compliance Policy cannot be applied in a certain country because application would be against local law or cannot be enforced due to other than legal reasons, Company must ensure that it will not, in such a country:
• Enter a business relationship;
• Continue a business relationship; or
• Carry out any transactions.
If a business relationship already exists in that country, Company must ensure that the business relationship is terminated regardless of other contractual or legal obligations.
The Policy applies to all employees, contractors, and any persons or organisations doing business with Company. The Policy applies to all aspects of Company’s business
The supporting procedures are designed to ensure that Company maintains existing exacting standards in relation to counter fraud & corruption, by instituting suitable controls in place to prevent and detect criminal activity penetrating the organisation through Money Laundering.
Company will take reasonable steps to identify potential areas that are exposed to, or at risk of, Money Laundering affecting the organisation, to minimise the risks.
The AML responsibilities of both directors and senior controlling finance management are well defined herewith. Internal control effectiveness monitoring and assessment is a vital functional part of the Board’s responsibilities, while senior management shall be accountable to the Board for developing, operating and collecting the relevant information due to facts of internal control system of and MLRO shall be liable and independent for verification, caption and investigation on every data is emerging.
The directors’ commitments relating existence of proper internal control system shall not be inflicted by MLRO powers and in case of conflict shall not prejudice neither compromise MLRO impartial, free, transparent work.
3.1.2. Internal control system effective methods:
To ensure proper implementation of AML/CTF procedures and controls, company introduced methods:
• Effective AML/CTF Board internal control system reporting assessment;
• Senior management oversight and reporting;
• Appointment of Compliance Officer / Money Laundering Reporting Officer (MLRO);
• Compliance and external finance audit function;
• Staff monitoring and training.
3.2 DEFINITION OF THE TERM “MONEY LAUNDERING”
Money Laundering is described by the Law as any process that conceals the origin or derivation of the proceeds of crime so that the proceeds appear to be derived from a legitimate source. Offences are for example, forgery of money, extortion, robbery, drug crime, prostitution, fraud, corruption, organised crime, or terrorism. Predicate offences for money laundering are defined by local law. The money laundering process consists of three stages:
1. Placement: – initial injection of the illegal funds into the financial system or carrying of cash across borders;
2. Layering: – After successfully injecting the illicit funds into the financial system, laundering them requires creating multiple layers of transactions that further separate the funds from their illegal source. The purpose of this stage is to make it more difficult to trace these funds to the illegal source; and
3. Integration: – Placing the laundered proceeds back into the economy in such a way that they reenter the financial system as legitimate funds.
Under the Guidance of on the Prevention and Detection of Money Laundering, Terrorist Financing and Proliferation Financing of Asia Pacific Group on Money Laundering (APG), the Money Laundering is described the process by which the direct or indirect benefit of crime is channeled through the economy/financial system to conceal the true origin and ownership of the proceeds of criminal activities. Generally, to launder criminal proceeds, a money launderer places the funds/proceeds in the financial system without arousing any suspicion, moves it in a series of complex transactions to disguise its original (criminal) source and finally, if successful, integrates it into the economy to make the funds appear to be derived legitimately.
These stages are not static and overlap broadly. Financial institutions may be misused at any point in the money laundering process of complex financial transactions. These layers are designed to hamper the audit trail, disguise the origin of funds, and provide anonymity.
Table – Stages of Money Laundering
|Placement Stage||Layering Stage||Integration Stage|
|Cash paid into an FSP (Sometimes with staff complicity or mixed with proceeds of legitimate business)||Wiring transfer abroad (often using shell companies or funds disguised as proceeds of legitimate business)||False loan repayments and forged invoices used as cover for laundered money|
Cash used to buy high value items
Cash deposited in overseas banking system
Resale of goods or assets
Complex web of transactions (both domestic and/or international) makes tracing source of funds virtually impossible
Income from property or legitimate business assets appears ‘clean’
Certain points of vulnerability have been identified in the laundering process which the money launderer finds difficult to avoid, and where his/her activities are therefore more susceptible to being recognised, such as:
• entry of cash into the financial system;
• cross-border flows of cash;
• acquisition of financial assets;
• transfers within and from the financial system;
• incorporation of companies; and
• establishment of financial vehicles (e.g. ostensible pooled investment funds, merchant and barter companies).
3.3 EXAMPLES OF MONEY LAUNDERING
• Concealing, disguising, converting, transferring or removing criminal property from Saint Vincent or European Union.
• Entering into or becoming concerned in an arrangement which the employee knows, or suspects facilitates the acquisition, retention, use or control of criminal property, by, or on behalf of, another person.
• Acquiring, using or possessing criminal property. “Criminal Property” is defined very widely within the law relating to Money Laundering and can include physical property / assets and cash or other financial instruments (e.g., cheques).
The above is the primary Money Laundering offences and are prohibited under the legislation. There are two secondary offences:
• Failure to disclose / report any of the three primary offences; and
• Tipping off: – This is where someone informs a person, or people, who are suspected of being involved in Money Laundering, in such a way as to reduce the likelihood of their being investigated or prejudicing an investigation.
3.4. EXAMPLES OF HOW COMPANY MAY BE EXPOSED
• Allowing dirty money into the Company’s finance system.
• Allowing a large transaction through the Company’s system.
• Allowing dirty money to leave the system as clean money by not properly screening and verifying users that use Company.
For the purposes of the Money Laundering and Terrorist Financing Prevention, Company has established strict standards of compliance and is committed to the eradication of money laundering as summarised in this Compliance Policy.
The purpose of this Compliance Policy is to explain in simple terms to staff how to follow the applicable law and regulations. Company can aid you via the Money Laundering Reporting Officer (“MLRO”) with complex compliance queries. Company’s MLRO is: [email protected]
3.5. TERRORIST FINANCING
Terrorist financing as to Terrorism Law is the act of providing financial support to acts of terror, terrorists or terrorist organisations to enable them to carry out terrorist acts. Unlike other criminal organizations, the primary aim of terrorist groups is non-financial.
Sources of funding for terrorism could be unlawful sources such as kidnapping, extortion, smuggling, various types of fraud (e.g. through credit cards or charities), theft and robbery, and narcotics trafficking.
As defined by Terrorism Law, Individual non-business activity included with capital, Charities or other non-profit organisations (“NPOs”) are also vulnerable and could be misused for Terrorist financing. Terrorist groups use NPOs to raise and launder funds for terrorism within this Company shall be stated with procedures to establish personal non-profitable and group non-profitable funds used for profitable or donative activity to third parties.
3.6. MONEY LAUNDERING AND TERRORIST FINANCING INTERCONNECTION
• Terrorist financing is an activity that supports future illegal acts, whereas money laundering generally occurs after the commission of illegal acts;
• Legitimately derived property is often used to support terrorism, whereas the origin of laundered money is illegitimate;
• Terrorist groups are often engaged in other forms of criminal activity which may in turn fund their activities;;
• Both money laundering and terrorist financing require the assistance of the financial sector.
3.7. REPORTING REQUIREMENTS
Company establishes herewith different source of defense methods when managing ML/TF risks:
• Staff reporting to Senior management and Board; Board taking action and reporting to MLRO and to Saint Vincent Banking Commissioner;
• Staff reporting to MLRO; MLRO taking actions and reporting to Board and Financial Services Commission, Banking Commissioner;
• External audit reporting to Board and Saint Vincent Banking Commissioner.
3.7.1. Staff members:
Employees must take reasonable care to make and keep adequate operational data evaluation and records, including accounting records, which are appropriate to the scale, nature and complexity of each Client’s business.
Records concerning Client identification and transactions must be retained for possible use as evidence in any investigation into money laundering (see below – “Record Keeping”).
Records prepared and maintained should be such that:
• The requirements of the Money Laundering and Terrorist Financing Prevention law are fully met;
• Competent third parties will be able to assess the effectiveness of Company’s observance of money laundering policies and procedures;
• Any transactions effected on behalf of any individual Client can be reconstructed;
• Any Client can be properly identified and located;
• All suspicious transaction reports received internally and those made externally can be identified; and
• The firm can satisfy within a reasonable time, any enquiries or court orders from the appropriate authorities as to disclosure of information.
In relation to the evidence of a Client’s identity, employees must make and keep a copy of the identification evidence obtained and all documents collated during the account opening process including but not limited to the account application. Employees should also maintain a record of a Client’s transactions with Company.
Employees should never establish a business relationship until all relevant parties to the relationship have been identified and the nature of the business they expect to conduct has been established. Once a business relationship has been established, any regular business undertaken for that Client should be assessed against the expected pattern of activity of the Client. Any unexplained activity can be then examined to determine whether there is a suspicion of money laundering.
Company’s personnel who deal with Clients daily will be the most familiar with their Client’s transaction profile. Once they determine a request is outside of the Client’s usual activity and either know or suspect, or have reasonable grounds for knowing or suspecting, that any Client is engaged in money laundering, they must report these suspicions immediately to the MLRO.
Any personnel found to have deliberately failed to report suspicious AML or terrorist financing activity to the MLRO may be subject to disciplinary action. As above, Company will receive ongoing training on detection of suspicious activity and internal reporting process.
3.7.2. The Board of Directors’ responsibilities:
• Promoting an organizational culture which establishes through both actions and words the expectation of compliance by all employees to observe the standards of good practices and ethical behaviors so as internal policies and procedures are adhered to;
• Monitoring and overseeing the Company report to ensure they are in accordance with the applicable laws, regulations and internal policies and procedures;
• Reviewing the AML/CTF Compliance method system to guaranty is effectiveness, adequacy and soundness;
• Ensuring that the AML/CTF Compliance control methods is effectively implemented by the Company’s management and Chief Compliance officer/MLRO;
• Ensuring that the Chief Compliance officer/MLRO has sufficient authority and resources (monetary, physical and personnel) to administer an effective AML/CTF Compliance Program based on the Company’s risk profile;
• Regularly reviewing reports presented by the MLRO/Chief Compliance Officer to ensure that the compliance program is being executed as approved and that it is, in fact, serving its intended purpose of maintaining the integrity, safety and soundness of the Company;
• Annually assessing and amending AML/CTF Compliance control system;
• Incorporating in their internal control system appropriate policies to prevent the misuse of technological developments in money laundering or terrorist financing schemes;
• Contracting the independent audits services of the Company to verify compliance (including sample testing) with these procedures, policies and controls the Company’s level of adherence to the applicable anti-money laundering and anti-terrorist laws and regulations.
• Having regular contact with the MLRO so as to ensure that the Licensee is:
• complying with all the statutory obligations and provisions regarding AML/CFT; and
• taking sufficiently robust measures to protect itself against the potential risk of being used for money laundering and terrorist financing.
3.7.3. MLRO responsibility:
• Timely verify and assess the relevance of database to Client identification data and other CDD information, transaction records, and other relevant information in order to properly evaluate internal suspicious transaction reports
• Evaluate suspicious transaction report performed by the Company to external resourses, possible unlawful method or instrument used with third party transactions;
• Monitor technical software operability, clearness data security for money collections (Client’s incoming payments); money distributions (Clients’ outgoing payments); fee remuneration (automatized taking off); assets under P&L properly safeguarded; segregated accounting for B2C and B2B operations;
• Where a MLRO validates an internal report about a transaction that has aroused suspicion, he/she has a legal obligation to make a report to the Saint Vincent Banking Commissioner;
• Reporting to the Board of Directors or a committee of the Board on any material breaches of the internal AML/CFT policy and procedures and of the AML/CFT laws, codes and standards of good practice.
• Preparing reports annually and such other periodic reports as he/she deems necessary to the Board of the Licensee or a committee of the Board dealing with:-
• the adequacy/shortcomings of internal controls and other AML/CFT procedures implemented,
• recommendations to remedy the deficiencies identified above, o the number of internal reports made by staff, o the number of reports made to the Saint Vincent Banking Commissioner.
3.7.4. Independent Auditors shall:
• Verify conformity if operational, controlling, compliance and audit functions are independent in practice;
• Make regular review of law demands and policy in action;
• Perform the auditing, identifying if company finances, data base and data processing systems had not been intentionally or unintentionally invalid in order to provide malfunctioning and erroneous transitioning;
• Identify availability of direct communication to senior management and MRLO.
3.7.5. All client introducer/partner members need for vigilance (Group-wide AML/CFT programmes):
• All should be constantly vigilant in deterring criminals from engaging in any form of ML or TF. Although the task of detecting crime falls to law enforcement agencies, they will be called upon to assist law enforcement agencies in the avoidance and detection of ML, TF and PF activities and to react in accordance with the law in the reporting of knowledge or suspicion of such.
• All shall ask their applicants/ Clients additional questions in circumstances of unusual or suspicious activity. Any failure by the applicant/Client to provide credible answers will almost always give grounds for further enquiry about his/her activities, make the reconsider the wisdom of doing business with the applicant/Client, and potentially, lead to the submission of a SAR.
4. MINIMUM REQUIREMENTS
4.1. MINIMAL ASSESSMENT OF INTERNAL WEAKNESSES
Company defines its place over the International financial market dealing as intermediary with third parties money and enquiring bank institutions, being a proper introducer and money transaction facilitator as intermediary for general public of international Clients, accepting information for payments, processing information for payment, obtaining enumeration for services, and data keeping of Client transaction, and states the weakness potentially used for ML and TF within operational functions risks:
4.1.1. Client money data collection for further transitioning
• Client might be unauthorized to perform any legal actions within the money sending (Unestablished identity, minors, excluded from any business payments due the law in the region or court decision)
• Client’s collections could be lost within data transaction or misappropriated.
• Client’s collections might be data recorded improperly, with error, or allocated to other Client or third party;
• Client’s collections cannot be wired and transacted to the bank and recorded timely due to force major within the region FATFA restriction.
4.1.2. Client money data transitioning for designated recipient
• transitioning could be unauthorized due failure of recipient information, international sanctions, FATF bank prohibition
• transaction had been made to wrong designator (Unestablished identity, other Client or third party)
• transaction could be used for payment of prohibited products, has no connection to real business or existing item with no acceptance buy the designated recipient
• Client’s outgoing transaction might be data recorded improperly, at the same time performed properly;
• Payment for designated receiver might be made for delayed delivery services or items never received.
4.1.3. Segregation and safety of Assets
• Bank balances may be inaccurate due to failure to reconcile bank accounts.
• Company P&L within different bank statement might be compromised and may be inaccurate due to failure to reconcile bank accounts or errors.
• Capital, assets or credit lines can be over missed, Client’s and company’s capital might be inaccurately reported and erroneously transacted.
• Credited funds could be spent for unauthorized transactions or unallowable items creating deficit in budget and or client’s fund deficit.
4.2. MINIMAL ASSESSMENT OF OPERATIONAL THREATENS
• Risk Assessment: Company must take steps to undertake its own specific risk assessment regarding the risk associated with Clients, countries or geographic areas, products and services, transactions and delivery channels taking proper records over the data system and guarantying back up data recovery, inviolability of data by unauthorized party and personal data transaction clearness.
The assessment should be proportionate to size; be documented and kept up to date and made recorded, safeguarded and available to the and other registered bodies upon request.
• Ascertainment of Client identity
• When entering a lasting business relationship;
• In cases of one-off transactions or a series of occasional transactions where the total amount of the transactions which is payable by or to the applicant for business is above €10 000 (or currency equivalent) or an equivalent amount in foreign currency;
• Before accepting any values worth €1,000 (or currency equivalent) outside existing business relationship, also when performing several smaller payments adding up to this amount (smurfing);
• When performing transfer of funds outside an existing business relationship value worth €1.000 (or currency equivalent);
• When the Client changes or enters new markets or territories.
• Establishment of purpose of business relationship: When entering a lasting business relationship, Company must obtain information on the purpose of the business relationship, if this is not clear from the relationship itself.
• Identification of Beneficial Owner (if applicable): Whenever Company is required to identify a Client, it must establish and verify the identity of the Beneficial Owner.
The Beneficial Owners are the individuals behind the Client who ultimately own or control the Client, or on whose behalf a transaction is being conducted, or who controls a legal entity through direct or indirect ownership or control over more than twenty-five  % of shares or voting right in that legal entity.
Company is required to find out who has ownership of or control over the funds and / or forms the controlling management of the entity involved in the transaction. This should take account of the number of individuals, the nature and distribution of their interests in the entity, and the nature and extent of any business, contractual or familial relationship between them.
• Client account monitoring: A permanent monitoring of Clients’ accounts will be implemented to detect unusual / suspicious transactions. Monitoring will be effected for applicable business areas using adequate processes and systems.
• Reporting obligations: to Saint Vincent Banking Commissioner must be promptly forwarded any information relating to suspicious transactions, or suspicious one-off arrangements.
Any such report must be unfiltered and made at the time at which the transaction is brought, unless a relevant exception applies whereby a report would likely frustrate the efforts to pursue the beneficiaries of the money laundering process.
The responsible MLRO must be informed about all suspicious events, if not explicitly prohibited by local law. Company will report all Suspicious Activity Reports (“SARs”) or Suspicious Transaction Reports (“STRs”) to Saint Vincent Banking Commissioner.
• Identifying Source of funds/property: pre-requisite for Company to understand the origin or provenance of funds or property underlying a business relationship with a Client. Therefore understanding the Client’s source of funds/property and the Client’s source of wealth. The “source of funds” is the activity or transaction which generates the funds for a Client while the “source of wealth” refers to the activities which have generated the total net worth of the
Client. therefore, use a risk based approach and by taking appropriate measures establish the source of funds for each applicant for business and when third party funding is involved. ensure that there is consistency between the information they hold on the applicant for business and the nature of transactions or proposed transactions. Where there is any indication of abnormal or potentially suspicious activity within the context of the product or service being provided, the Licensee must take additional measures to verify the information obtained.
• Staff evaluation: Company performs due diligence on employees verifying any information supplied, properness and accountability to law adherence and morality, occasional spot checks on work done by staff at all levels. Usually, these checks are undertaken by senior management to ensure that Company policies and procedures are being followed and everything is in the correct order. Company has a “Zero Tolerance” policy regarding intentional violation of applicable laws prohibiting money laundering, terrorist financing and related financial crimes. Company will require the immediate discharge of an employee who commits such violations, and will refer such cases to the appropriate regulatory bodies. If an employee is suspected of engaging in any type of unusual or questionable activity, this must be brought to the attention of both Senior Management and the Compliance officer immediately. Senior Management and/or the Compliance officer will jointly investigate the actions of the employee in the most discreet manner. All actions taken to conduct the investigation must be documented. Senior Management determines that the employee’s activity was prejudicial to the interests of the Company, it will determine whether disciplinary action is necessary. Senior Management may seek advice from legal counsel in such action. The decision to file a STR is independent of any disciplinary action (e.g., termination, suspension, etc.) that may be taken against the employee.
• Record keeping: Company will keep records for five years however, for records obtained in third party countries, the records will be held to the standards of that country where they exceed five years. Company will keep evidence and records of Client due diligence checks and information held on Clients and transactions. The records that must be kept are:
(a) all records obtained through CDD measures, including account files, business correspondence and copies of all documents evidencing the identity of Clients and beneficial owners, and records and the results of any analysis/assessment undertaken in accordance with the Saint Vincent Banking Commissioner, all of which shall be maintained for a period of not less than 7 years after the business relationship has ended.
(b) records on transactions, both domestic and international, that are sufficient to permit reconstruction of each individual transaction for both account holders and non-account holders, which shall be maintained for a period of 7 years after the completion of the transaction; and
(c) copies of all suspicious transaction reports made pursuant to section 14 or other reports made to Saint Vincent Banking Commissioner in accordance with the Saint
Vincent Banking Commissioner, including any accompanying documentation, which shall be maintained for a period of at least 7 years from the date the report was made.
Transaction and business relationship records (e.g., account files, business correspondence, receipts etc.) should be maintained in a form from which a satisfactory audit trail may be compiled, and which may establish a financial profile of any suspect account or Client.
Evidence of a Client’s identity will be kept for five years beginning on the date on which the occasional transaction is completed, or the business relationship ends.
Records of transactions will also be kept for five years beginning on the date on which the transaction is completed.
The following information should be kept for every transaction carried out in the course of a business relationship or one-off transaction:
(a) the name and address of the Client;
(b) if a monetary transaction, the kind of currency and the amount;
(c) if the transaction involves a Client’s account, the number, name or other identifier for the account;
(d) the date of the transaction;
(e) details of the counterparty, including account details;
(f) the nature of the transaction; and
(g) details of the transaction.
Client transaction records must provide a clear and complete transaction history of incoming and outgoing funds or assets Company keeps sufficient records to demonstrate that their CDD measures are appropriate in view of the risk of money laundering and terrorist financing and are required to demonstrate that records of Client identification and verification can be retrieved quickly and without delay in line with the relevant legislative framework.
Company maintains records of all transactions undertaken on behalf of the Client during the course of a business relationship, either in the form of original documents or copies. Where copies of the original identification documents (passports, national ID, drivers license or any acceptable form of identification) are maintained, these copies should be duly certified in accordance with the CDD measures in place.
• AML controls: The responsible MLRO must ensure, by adequate Client and business-related controls, that all applicable AML requirements are being adhered to and security measures are properly functioning.
• AML training: All employees (including trainees and temporary personnel) handling Client onboarding and transaction handling must undergo AML Training. Initial training must be attended within three months after an employee has joined Company and subsequently every year. Minimum content training requirements defined by the MLRO must be adhered to. Under Guidance Notes on the Prevention and Detection of Money Laundering, Terrorist Financing and Proliferation Financing in the Asia Pacific Group on Money Laundering (APG), Company is to implement programmes for screening procedures so that high standards are maintained when hiring employees. Furthermore, Guidance Notes on the Prevention and Detection of Money Laundering, Terrorist Financing and Proliferation Financing in the Asia Pacific Group on Money Laundering (APG) states that programmes against money laundering and terrorism financing should also be in place to include ongoing training programme for the directors, officers and employees of the financial institution, to maintain awareness of the laws and regulations relating to money laundering and terrorism financing to
• (i) assist them in recognising transactions and actions that may be linked to money laundering or terrorism financing; and
• (ii) instruct them in the procedures to be followed where any links
have been identified under sub subparagraph (i).
• AML Risk Analysis: Company’s MLRO assess the level of risk exposure considering product and Client risk and derive appropriate security measures from this analysis on an ongoing basis.
5. CLIENT DUE DILIGENCE BASED APPROACH (CDD)
5.1 CLIENT’S IDENTITY
The first requirement of knowing your Client for money laundering purposes is to be satisfied that a prospective Client is who they claim to be under Section 3 Anti-Money Laundering Regulations, 2002.
As much information as possible should be obtained from new and regular Clients, such as the nature of business, nature of transactions, source of funds and proofs of identity.
Company’s MLRO will conduct a review of all new Clients, and no transactions may be carried out on behalf of any new Client without MLRO approval.
Each employee is responsible for obtaining the necessary information and proofs of identity for their relevant Clients and must submit completed applications to the MLRO. The MLRO will conduct an application review and any incomplete applications will be sent back to the relevant employee to be finalised.
If necessary, submit a report of your suspicions to the MLRO (using the Suspicious Transaction Reporting website reference in 3.5) and refrain from conducting any more transactions for the Client. In these circumstances you should make contemporaneous notes of any conversations with Clients and if the Client in question is a regular Client, place these notes on their file.
Verification of the identity of the natural person -following types of identity documentation can be relied upon:
• National Identity cards
• Current valid passports
• Current valid driving licences
Verification of the address of the natural person
The following identity documentation can be relied upon to verify the address of the applicant for business if he/she is a natural person:
• A recent utility bill issued;
• A recent bank or credit card statement dated; or
• A recent bank reference.
Alternatively, verification may be achieved by:
• Obtaining a reference from a professional person who knows the natural person. The reference must include the permanent residential address of the individual;
• Checking a current register of electors;
• Utilising an address verification service; or
• Visit the individual at his/her current residential address.
• A letter or other written confirmation of the individual’s status from the public body in question and or any enhanced CDD;
• a letter or other written confirmation of employment.
5.2 BENEFICIAL OWNER
Beneficial owners (Section 3C Anti money Laundering Regulations) are the individual(s) behind the Client who ultimately own or control the Client or on whose behalf a transaction or activity is being conducted. In deciding who the beneficial owner is in relation to a Client who is not a private individual (e.g., a company or trust) employees should aim to find out who has ownership of or control over the funds and / or forms the controlling management of the entity involved in the transaction or relationship. This should take account of the number of individuals, the nature and distribution of their interests in the entity, and the nature and extent of any business, contractual or family relationship between them.
As part of the standard KYC procedure, Company must know the names of all individual beneficial owners who own or control more than ten  % of the assets or voting rights, or who otherwise exert control, even where these interests are held indirectly.
Following the assessment of the money laundering and terrorist financing risks presented by the Client, the employee must also decide what information should be obtained and verified for some of the individuals behind or connected to the Client, for being satisfied that it knows who the ‘beneficial owners’ of the entity are. If an employee is unsure of the information required, they should contact the MLRO for assistance.
Under 3C.5 Anti money Laundering Regulations Company uses a risk-based approach to decide when it is appropriate to rely on information provided by their Clients and when they need to obtain or verify information from another source. Accounts determined to represent a higher level of risk require written verification of the identity of parties with greater than ten  % beneficial ownership.
Where there are difficulties in verifying information provided on beneficial owners, e.g., where the Client is from a jurisdiction where there is no requirement to file information about the persons who own or control a company, employees should review the information provided by the Client and seek further evidence, where considered necessary. A decision should then be made, based on the information provided on the beneficial owner(s), the rationale for the transactions and the risks involved, as to whether the evidence of identity of the beneficial owner is satisfactory to enable the business relationship to be established or the occasional transaction to be carried out. Company retains all information used to make such a determination in all cases.
The beneficial owners of partnerships are the individuals who are entitled to or control more than a ten  % share of the capital or profits of the partnership or more than ten  % of the voting rights.
5.2.2 Limited Companies and Limited Liability Partnerships
The beneficial owners of companies are the individuals who:
• Ultimately own or control (whether through direct or indirect ownership or control, including through bearer shareholdings (being shares that are the property of whoever is in possession of the share certificate and no formal record of ownership is kept by the issuing company)) more than ten  % of the shares or voting rights in the company. For the avoidance of doubt this test is not used for companies whose shares are listed on a regulated market.
• Otherwise exercise control over the management of the company.
As well as companies incorporated under the Companies Act 1985 and Companies Act 2006, limited liability partnerships (LLPs), industrial & provident societies and some charities (often companies limited by guarantee or incorporated by Act of Parliament or Royal Charter) are bodies corporate and the beneficial owners (i.e., the Clients who control over ten  % share of the LLP) must similarly be identified.
In the case of trusts, beneficial owners are;
• The Settlor;
• The Trustee(s);
• The Protector, if any;
• The Benefactors, or where the individuals benefiting from the legal arrangements or entity have yet to be determined, the class of persons in whose main interest the legal arrangement; entity is setup; and
• Any other natural person exercising ultimate control over the trust by means of direct or indirect ownership, or by other means.
5.3 POLITICALLY EXPOSED PERSONS (“PEPS”)
Politically Exposed Persons (also known as Senior Political Figures) are defined as:
• A current or former (at any time in the preceding year) senior official in the executive, legislative, administrative, military, or judicial branches of a government (for example, heads of state, ministers, Clients of parliaments, ambassadors, high-level judges and high-ranking officers in the armed forces). In addition, this also includes any corporation, business, or other entity that has been formed by, or for the benefit of, a senior political figure;
• May be elected or not;
• Includes an immediate family Client (spouse or civil partner, parent, sibling, children, spouse’s parent or sibling) and known close associates, and
• Includes known close associate of a PEP which is an individual known to have joint beneficial ownership of a legal entity or a legal arrangement or any other close relations with a PEP or an individual who has sole beneficial ownership of a legal entity or a legal arrangement which is known to have been set up for the benefit of a PEP.
Businesses must take additional care when dealing with a PEP and must take adequate steps to establish the source of wealth and funds involved in the transaction. Enhanced scrutiny of accounts and transactions involving senior foreign political figures, their families and associates are required by law to guard against laundering the proceeds of foreign corruption. Company will obtain the identity of the owners of each new account and compare those names to the PEPs list which is held by the MLRO.
Company may refuse an account for persons on that list or will perform enhanced due diligence to become comfortable with the nature and expected activity of the account. Any employee dealing with a PEP must inform the MLRO immediately on becoming aware of the Client’s PEP status. Employees must obtain the approval of the MLRO before opening an account for any Client who is a PEP.
If a Client is a PEP, Company employees will put in place the following enhanced due diligence measures:
• Obtain MLRO approval before establishing a business relationship with that person;
• Take adequate steps to establish the source of wealth and source of funds that are involved in the proposed business relationship; and
• Conduct enhanced ongoing monitoring where you’ve entered a business relationship.
Company while doing business with corrupt or PEP’s can be exposed to significant reputational risk, which could result in adverse monetary impact. Furthermore Company’s directors, officers and employees can be exposed to criminal charges if they did know or should have known that such funds stemmed from corruption or serious crimes.
The risks associated with PEPs differ according to the particular countries concerned. The risk of corruption in certain countries is higher than it is in others. Company takes note of the Transparency International Corruption Perceptions Index at www.transparency.org and take appropriate measures to manage the increased risks of conducting business with PEPs.
5.4 WEAKNESS RISK CLIENT IDENTIFICATION CASES
The CDD and record-keeping requirements set out in Recommendations 10, 11, 12, 15, and 17 shall be made to designated non-financial businesses and professions (DNFBPs) acting on third parties interest under POA in cases they are related to any activity within:
• Casinos representatives of beneficiaries engaged in financial transactions equal to or above the
• applicable designated threshold.
• Real estate agents involved in transactions for their client concerning the buying and selling of real estate.
• Dealers in precious metals and dealers in precious stones engaged in any transaction with a Client equal to or above the applicable designated threshold.
• Lawyers, notaries, investment dealers, other independent legal professionals and accountants carrying out transactions for their client concerning the following activities:
• buying and selling of real estate;
• managing of client money, securities or other assets;
• management of bank, savings or securities accounts;
• organisation of contributions for the creation, operation or management of companies;
• creation, operation or management of legal persons or arrangements, and buying and selling of business entities.
• Trust and investment company service providers staff members carrying out transactions for a client concerning the following activities:
• acting as a formation agent of legal persons;
• acting as (or arranging for another person to act as) a director or secretary of a company, a partner of a partnership, or a similar position in relation to other legal persons;
• providing a registered office, business address or accommodation, correspondence or administrative address for a company, a partnership or any other legal person or arrangement;
• acting as (or arranging for another person to act as) a trustee of an express trust or performing the equivalent function for another form of legal arrangement;
• acting as (or arranging for another person to act as) a nominee shareholder for another person.
6. NEW ACCOUNTS
As due to Section 3G, Anti money Laundering Regulation, before Company begins a relationship with a Client and / or business, it is imperative that the identity of the Client is determined. It is also imperative that proper documentation on the business is obtained. Doing so will assist Company in developing a “Client profile” which will allow Company to understand all facets of the Client’s intended relationship with Company and remain in compliance with the Money Laundering and Terrorist Financing Prevention Act.
A relationship with an individual or business will not be established until the identity of the potential Client / business is satisfactorily determined. If the potential Client refuses to provide any of the requested information, the relationship will not be established.
You must always obtain complete Client information. Please do not use shortcut phrases or accept junk data. Examples of junk or incomplete data include the following: “Address is P.O. Box”, “Does not have last name”, “Company”, “Address: Street, London UK”, or “Unknown”. This practice increases the risk of penalties for violations of the Regulations.
Some exceptions may be made to the procedures below for the following types of businesses: Banks (except for shell banks in keeping with Company’s policy prohibiting such accounts);
• Gatekeepers such as Notaries, Accountants, Auditors, Solicitors;
• Government entities; and
• Quasi-governmental entities.
These exceptions must be approved by the MLRO.
7. IDENTIFICATION OF NEW CLIENTS
All Clients must provide identification to establish accounts as described below. It should be kept in mind that identifying documents may be presented by persons not entitled to them. Therefore, they must be carefully examined for authenticity and accuracy of description. It is the responsibility of each employee to ensure that the appropriate identity documents are obtained for their Clients. Failure to do so will delay the accreditation of the Client account by the MLRO.
The Regulations state that Client due diligence must be carried out when entering into a business relationship with a Client OR carrying out an occasional one-off transaction (or series of linked transactions) which amounts to €1,000 or more. Company requires identification of all Clients, no matter what level of transaction they conduct.
7.1 STEPS TO ESTABLISH RELATIONSHIPS
• Make available to the Client the required Account Application (e.g., Retail, Per Se Professional etc. The “Application”);
• Ask Client(s) to fully complete applicable sections of the relevant Application;
• Obtain acceptable identification from the Client(s);
• Obtain required documentation for type of business for each Client;
• Prepare an account file;
• Submit account file to the MLRO; and
• Obtain approval from the MLRO.
7.2 ACCOUNTS FILES
An account file must be prepared for each account established. The file must include the following:
• Compliance checklist;
• Documentary Evidence of source of wealth and/or source of funds;
• Education and experience of beneficiary and, for legal entities, education and experience of management;
• Documentary Evidence of Address:
• Recent utility bill or a certificate from a supplier of utilities confirming the arrangement to pay for the services on pre-payment terms; or
• Bank or Building society statement or pass book containing current address.
• Copy of sole trader / partners / Clients / directors and shareholders identification (as appropriate);
• Verification that the individual, business or the businesses beneficial owners do not appear on government lists of known or suspected terrorists;
• All other documentation depending on the type of business established; and
• Any record of reviews made and / or decisions taken.
7.3 BUSINESS OWNERSHIP AND REQUIREMENTS
The types of ownership explained in this section include:
• Sole trader;
• Limited liability partnership (LLP); and
• Limited company.
Each one is explained in detail below.
7.3.1 Sole Trader / Sole Proprietor
A sole trader (or sole proprietor) is a business owned by one person. The owner operates the business under their name or a trade name and has complete control over the business.
The following documentation is required to establish a relationship with a Sole Trader.
• Business Account Application signed by sole trader;
• Photographic ID of sole trader – Current passport or photo- card driving license;
• Current address verification (bank statement or utility bill) of business address, generally no more than three  months old;
• Copy of Registration of sole trader with HMRC as self-employed – Self Assessment letter or VAT certificate issued when trading commenced; and
• VAT number if applicable,
In a partnership, two or more people share the risks, costs, and responsibilities of being in business. Each partner is self-employed and takes a share of the profits. Unlike a limited company, a partnership has no legal existence distinct from the partners themselves.
The following documentation is required to establish a relationship with a Partnership.
• Business Account Application signed by a partner;
• Photographic ID for all partners – current passport or photo-card driving license;
• Current address verification (bank statement or utility bill) of both personal and business addresses, no more than three  months old;
• Copy of Registration of each partner with the HMRC as self-employed – Self Assessment letter or VAT certificate issued when trading commenced;
• Partnership Agreement (if available); and
• VAT number if applicable.
7.3.3 Limited Liability Partnership (LLP)
A Limited Liability Partnership (LLP) is a mixture of an ordinary partnership and a limited company. It is an alternative corporate business vehicle that gives the benefits of limited liability but allows its owners the flexibility of organising their internal structure as a traditional partnership. The LLP is a separate legal entity and, while the LLP itself will be liable for the full extent of its assets, the liability of the owners will be limited.
The following documentation is required to establish a relationship with a Limited Liability Partnership (LLP).
• Business Account Application signed by a Client: Someone who has the authority to bind the partnership;
• Copy of LLP certificate registered with Companies House;
• Current address verification (bank statement or utility bill) of personal and business addresses, no more than three  months old;
• VAT number if applicable; and
• Identification of at least two designated owners, and identification any further owners who hold a beneficial interest in the company of greater than twenty-five  %.
7.3.4 Limited Company
Limited companies exist, distinct from the shareholders who own them. This means their finances are clearly separate from the personal finances of their owners. Shareholders may be individuals or other companies. They are not responsible for the company’s debts (unless they have personally guaranteed a bank loan, for example) however, they may lose the money they have invested in the company if it fails. The main types are:
• Private Limited Companies – Can have one or more shareholders and cannot offer shares to the public;
• Public Limited Companies (Plc) – Must have at least two shareholders and can offer shares to the public; and
• Private Unlimited Companies – Are rare and usually created for specific reasons.
The following documentation and identification is required to establish a relationship with a Limited Company.
• Corporate Account Application signed by a Shareholder or Director of the company or any other person who has the authority to bind the company;
• Registered office address, registered number and principal place of business;
• Board of directors;
• Senior persons responsible for its operations;
• Identification of at least one Director and identification for any shareholder who holds a beneficial interest in the company of greater than twenty-five  %.
• Certificate of incorporation (if a Client is a foreign company, a certified copy of an equivalent document from a lawyer of the home country);
• Current address verification (bank statement or utility bill) of business address, no more than three  months old; and
• VAT number if applicable.
The following documentation is required to establish a relationship with a trust.
• Full name of the trust;
• The date when the trust was set up;
• A statement of account for the trust, describing the trust assets and identifying the value of each category of the trust assets at the date of which the information is first provided;
• The country where the trust is resident for tax purposes;
• The place where the trust is administered;
• A contact address for the trustees;
• It will name any address who are being paid to provide legal, or advice to the trustees in relation to the trust.
7.3.6 Money Service Businesses (“MSBs”)
MSBs can exist as any of the entities listed above, and Company has a specific application form and documentary requirement for this type of business.
In addition to the standard documentation required dependent on the business entity, the following documentation is required for Company to establish a relationship with an MSB.
• Certificate of Registration;
• Copy of current Anti-Money Laundering Policies and Procedures; and
• Furthermore, Company must be comfortable with the compliance policies and procedures put in place by the applicant.
Under no circumstances should any Company employee provide Clients with any advice as to the way reporting, or identification requirements can be avoided or assist them in any way to avoid these requirements.
7.3.7. Non-profit organizations
AML focused shall be by aim, Staff members, partners and Financial trans active institution’s AML or supervisor. Company should apply focused and proportionate measures, in line with the risk based approach, to such non-profit organisations to protect them from terrorist financing abuse, including:
(a) by terrorist organisations posing as legitimate entities;
(b) by exploiting legitimate entities as conduits for terrorist financing, including for the purpose of escaping asset-freezing measures; and
(c) by concealing or obscuring the clandestine diversion of funds intended for legitimate purposes to terrorist organisations.
Within this Company shall identify each founder, senior manager, controller, financial supervisors, financial institution AML related within the transactions and final causa nobele aim that shall be shared, reflected and have exclusive connection to all stake holders.
Non-profit organizations shall be recognized and proved by state jurisdiction of registration within the Annual Report (Financial Report) being supplied or publically available.
8. RECORD – KEEPING
8.1 THE OBLIGATION TO MAINTAIN RECORDS
Company as due to Section 3H and Section 4. Anti-money Laundering Regulations retains for at least five years records of every transaction undertaken. The objective is to ensure, insofar as is practicable, that in any subsequent investigation we will be able to provide the authorities with its section of the audit trail. All transactions undertaken on behalf of an existing Client should be recorded within the Client’s records.
Records shall be retained for five years beginning on the date that the transaction with the Client is complete, for records relating to an occasional transaction; or where the business relationship has come to an end or records relating to any transaction which occurs as part of a business relationship or Client due diligence measures taken in connection with that relationship.
Once the period of five years has expired any pursuant data must be deleted unless;
• Personal data is required to be retained by any law or enactment or court proceeding; or
• Consent has been given by the Client to the retention of the personal data; or
• Reasonable grounds exist that the records containing the personal data need to be retained for legal proceedings.
Transaction records need to be maintained in a form from which the investigating agencies can compile a satisfactory audit trail for suspected criminal money and establish a financial profile of any suspect account. Each employee will be trained on the filing and record keeping system used by Company.
8.2 CONTENT REQUIREMENT
8.2.1 Deposits / Withdrawals
Before an employee can accept a deposit or action a withdrawal from or for a Client, they must be entered on the system as an “account” and the employee must have a complete file for them. Company obtains and retains the original form of all receipts and payments, including the following:
• The name and address of the originator / sender;
• The amount of the deposit or withdrawal;
• The execution date;
• Any payment instructions received from the originator; and
• The identity of the beneficiary’s bank.
In addition, we will retain as many of the following items received with the order:
• The name and address of the beneficiary or recipient;
• The account number of the beneficiary or recipient; and
• Any other specific identifier of the beneficiary or recipient.
8.2.2 MLRO recording keeping responsibilities
The MLRO will maintain a file for each account, which includes information about the source of funds used by the Client to conduct their transactions. Company employees that manage Client relationships have a responsibility to obtain and know this information.
The MLRO will maintain a file note for each suspicious transaction.
The MLRO will produce an annual report on behalf of the director of Company on the operation and effectiveness of Company’s systems and controls to combat money laundering. The MLRO shall produce such other reports as may be required by Company to fulfil its obligations under the Regulations.
8.3 ADDITIONAL OBLIGATIONS FOR COMPANY
Company intends to work in compliance with Regulation (EU) 2015/847 on information on the payer accompanying transfers of funds.
This means Company will commit to:
• Obtaining complete information on the payer for all Clients wanting to transmit money;
• Verifying the complete information on the payer based on documents data or information from a reliable independent source where the transaction is over €1,000;
• Sending the complete information on the payer to the payment service provider for the payee if the payment service provider for the payee is situated outside the EU;
• Sending the account number or unique identifier that allows the transaction to be traced back to the payer if the payment service provider for the payee is in the EU; and
• If the payer doesn’t have an account number, allocate the transaction a unique identifier, which allows the transaction to be traced back to the payer.
Complete information on the payer consists of:
• The payers name;
• The payers full postal address including post code; and
• Payer’s account number or where the payer doesn’t have an account number a unique identifier that allows tracing of the transaction back to the payer.
As an alternative to the address one of the following may be substituted:
• The payer’s date and place of birth;
• The payer’s Client identification number; or
• The payer’s national identity number (for example a passport number).
The Client’s identification number is a number that the service provider allocates to the payer. It must can provide a link to the transaction and to any verification made.
Company manages its back up systems and audit reports, relevant records within 7 years of date.
9. RISK-BASED APPROACH
The Section 3.; Section 3K; Section 3L; Regulations require Company to adopt a risk-based approach to the application of measures to prevent money laundering and terrorist financing.
Additionally, Company and its employees must monitor each Client and ascertain the risk posed by each Client. The tables below highlight some indicators that employees may use to determine the risk posed by a Client. The table is not exhaustive, and employees must liaise with the MLRO if they are concerned about any Client.
Company shall take will take into consideration a number of factors, including but not limited to the following:
• The nature and type of Client (Nature of relationship, Political exposure, Client segment, International sanctions).
• The commercial rationale for the relationship (Profitable interest, Nature of product / service; Risk of use for ML; New product; New technologies; digital information storage including cloud computing; Digital or electronic documentation storage; Electronic verification of documentation; FSC AML/CFT Handbook;Data and transaction screening systems; or the use of virtual or digital currencies).
• The geographical location of the Client’s residence (High level of corruption; Organised crime; AML/CFT deficiencies; Sanctions & Embargoes).
• The geographical location of the Client’s business interests and/or assets (Location of product / service; Risk of use for ML).
• The nature and value of the assets concerned in the relationship (Compliance & Regulatory findings on the market and products).
• The Client’s source of funds and where necessary the source of wealth.
• The role of any introducer and the introducer’s regulated or professional status.
9.1 ASSESSING RISK
9.1.1. Client’s geography with residence or clients destination in / or connection with high-risk jurisdictions:
• identified by the FATF as jurisdictions with strategic AML/CTF deficiencies;
• subject to sanctions, embargoes or similar measures issued by, for example, the United Nations;
• vulnerable to corruption and nature disasters;
• believed to have strong links to terrorist activities
9.1.2. Commercial rationale product / service high risk
• services provided with more anonymity;
• ability to pool underlying Clients/funds;
• Small every 10-30 days automatique charged services;
9.1.3. Geographical location of the Client’s business interests of high risk:
• Non-residents identified within non face to face technique.
• Clients with links to offshore tax havens.
• High-net worth Clients with no clearly identifiable source of income.
• Legal persons or arrangements that are personal asset holding for mortgages, vehicles and landowners in different jurisdictions to where are registered and operating.
• High-net worth Clients with no clearly identifiable source of income and source of wealth.
9.2 RISK CARDS
9.2.1. What risk is posed by Clients?
|Higher Risk||Medium Risk||Lower Risk|
|Brand new Clients carrying out large one-off transactions.||Long standing Clients who make frequent transactions.||Client is regulated in a jurisdiction recognised as having adequate Anti-Money Laundering standards.|
|Clients that are not local to the business.||Medium value transactions or transactions involving medium levels of assets (from 1 000 euro to 10 000 euro).||Low value transactions or transactions involving low levels of assets (up to 1 000 euro).|
|Clients engaged in a business which involves significant amounts of cash for example, MSBs, casinos and betting shops.||Uncharacteristic transactions which are not in keeping with the Client’s known activities.||Publicly owned companies traded on a recognised exchange and their wholly owned subsidiaries.|
|Complex business ownership structures with the potential to conceal underlying beneficiaries.|
|A Client or group of Clients making frequent transactions to the same individual / group of individuals.|
|A sudden increase in existing Client business.|
|An individual holding a public position and / or situated in a location which carries a risk of exposure to the possibility of corruption.|
|Clients based in a high-risk jurisdiction (Countries identified by FATF (Appendix 2)).|
|Transactions that do not make commercial sense.|
|Clients who are armament manufacturers, dealers and intermediaries.|
|Clients who are unregulated charities and other unregulated “not for profit” organisations (especially those operating on a cross-border basis).|
|Clients who are dealers in high value or precious goods (for example, jewel, gem and precious metals dealers, art and antique dealers and auction houses, estate agents and real estate brokers).|
|Transactions involving unusually high-levels of assets or unusually large transactions to what might reasonably be expected of Clients with a similar profile.|
9.2.2. Is a risk posed by the Client’s behavior?
|Higher Risk||Medium Risk||Lower Risk|
|An unwillingness to produce evidence of ID or the production of unsatisfactory evidence of ID.||Client co-operates throughout transaction but it takes time (up to 3 days) to produce evidences||Client co-operates throughout transaction and produce evidence of ID immediately.|
|Where the Client is acting on behalf of another person, an unwillingness to give the name of the person they represent.||Client cannot proceed with face-to-face identification|
|A willingness to bear very high or non-commercial penalties or charges.|
|Situations where the source of funds cannot be easily verified.|
|The use of intermediate corporate vehicles or other structures that have no clear commercial or other rationale or that unnecessarily increase the complexity or otherwise result in a lack of transparency for the final institution.|
9.2.3. How does the way the Client comes to the business affect the risk?
|Higher Risk||Medium Risk||Lower Risk|
|Systematic transactions as opposed to business relationships.||Occasional or one-off transactions as opposed to business relationships.||Frequent transactions.|
Non-face to face transactions.
Electronic currency ability
|Data processing system on Personal data without electronic money detils||Client comes to the business after extensive market research from account executives.|
9.2.4. What risk is posed by the country of origin of the Client?
|Higher Risk||Lower Risk|
|Countries subject to sanctions, embargoes or similar measures issued by the UN or any other international body.||Countries appearing in the White List in Appendix 1.|
|Countries identified by the FATF (see Appendix 2).|
|Countries identified by credible sources (e.g., the World Bank or the IMF) as providing funding or support for terrorist activities.|
|Countries identified by credible sources (for example, Transparency International) as having significant levels of corruption or other criminal activity.|
Countries identified on EU Sanctions list,
If an employee deems a Client to be a high-risk of money laundering or terrorist financing, they must inform the MLRO immediately. The MLRO may direct the employee to carry out extensive due diligence on the Client to acquire additional evidence regarding their identity or the source of the funds involved in the transaction. The transactions and activity of any high-risk Clients should be carefully monitored on an ongoing basis.
Identifying a Client or transaction as being of a higher risk does not mean that the Client is involved in money laundering or terrorist financing. Furthermore, if a Client is deemed to be a lower risk, it does not mean that the Client is not involved in money laundering or terrorist financing. Employees must be vigilant always and report any suspicions to the MLRO.
9.3. ADDITIONAL RISK RELATIONSHIP MEASURES
Where MLRO assessed that the business relationship or occasional transaction is a high risk relationship, based on the Client’s individual risk status, that is, the nature of the Client, the business relationship, its location, or any other specificity of the business relationship, it must ensure additional measures had been proven to support an assessment results. The remoted or third party services presented shall be assessed as high risk until a certification or reliance is not presented by authoritative body or verified introducer by following:
9.3.1. No face-to-face business relationships
The business conducted Company may also be conducted on a non-face to face basis with Clients. Often, it is either impossible or impractical for Company to have or to obtain original documentary evidence of identity. However in such cases, Company should apply the following CDD procedures when dealing with non-faceto-face applicants for business:
(a) the certification of documents presented;
(b) the requisition of additional documents to complement those which are required for face- to-face applicant for business; and
(c) the initiation of an independent contact with the Client.
9.3.2. Third-party reliance ‘introducers
MLRO should subject third-party introducers to the full identification and verification CDD measures for identification and verification as provided under Regulations Section 3F of the Anti-Money Laundering Regulations Act, 2002.
Compliance officers should at the time of establishing the introducer relationship should carry out a risk analysis of this relationship and monitor the introducer relationship.
In line with the third-party reliance obligations, when individual applicants, or applicants which are body corporate, are introduced to a Company by an introducer, Compliance officer is obliged:
(a) obtain and maintain documentary evidence that the introducer is regulated for the purposes of preventing money laundering and terrorist financing; and
(b) be satisfied that the procedures laid down by the introducer meet the requirements specified in the FIAMLA and Anti-Money Laundering Regulations Act, 2002.
MLRO should at all times bear in mind that the ultimate responsibility to ensure the completion of satisfactory CDD measures rests with them and not with the introducer.
9.4. ONGOING RISK ASSESSMENT
9.4.1. Company would imply taking additional steps in relation to identification and verification:
• obtaining further Client due diligence information (identification and relationship information) from either the Client or independent sources (such as the internet, public or commercially available databases);
• verifying additional aspects of the Client due diligence information obtained; (iii)obtaining additional information required to understand the purpose and intended nature of such a business relationship;
• taking appropriate and reasonable measures to establish the source of the funds and the wealth of the Client, any beneficial owner and underlying principal; and
• carrying out more frequent and more extensive ongoing monitoring on such business relationships with setting lower monitoring thresholds for transactions connected with such business relationships.
9.4.2. Should the Client’s risk be considered high or should there be reasons to consider the risk of commercial relations high, a higher-level control method of client identification should be used, by requesting the client to provide additional information and documents that can rule out the risk. Information is also to be provided to the financial inspection of Saint Vincent to get more instructions. Aside from the high-risk level that was given under the risk analysis following the provisions of part 5 of this Document, additional reasons to consider the transaction to be high risk are the following:
• unusual circumstances for the transactions;
• the client operates with high volumes of cash;
• a legal person client has hidden owners or recipient type shares;
• the structure of the legal person is too complex and confusing;
• new or unknown goods are the subject of the transaction and transaction specifics are unusual;
• the transaction is made for anonymity purposes;
• unknown third parties make payments following the transaction;
• other circumstances mentioned in article 37 of the Money Laundering and Terrorist Financing Prevention Act.
• The transaction involves currency exchange or purchase of precious metals;
• The transaction involves a private bank;
• The transaction involves alternative payment methods;
• The transaction involves gambling;
• The transaction involves rarities or exclusive goods;
• The transaction involves innovations;
• The transaction involves commercials;
• The transaction involves company establishment or management
9.4.3. The risk evaluation is performed by giving each risk group a status on a three-point scale:
• Risk is considered low if no category has a risk factor and the transaction is clear;
• Risk is considered medium if there are risk factors, but the transaction itself is clear, though there are suspicions that all of the risk factors together may indicate money laundering or finance of terrorism;
• Risk is considered high if there are multiple risk factors and the transaction itself is not clear.
10. REPORTING AND MONITORING SUSPICIOUS TRANSACTIONS
10.1 RECOGNITION OF SUSPICIOUS TRANSACTIONS
There is Section 5. Anti-money-Laundering-Regulations a statutory and regulatory obligation on all employees to disclose information to MLRO in circumstances where they:
• Know or suspect, or
• Have reasonable grounds for knowing or suspecting,
that another person is engaged in money laundering or terrorist financing. The MLRO will then determine whether to submit a report to the National Crime Agency (“NCA”).
Employees must disclose not only when they have actual knowledge or suspicion of money laundering but also if, in the circumstances, they should have reached that conclusion and failed to do so. Any knowledge or suspicion must be reported to the MLRO as soon as possible. Employees must not delay any disclosures unnecessarily.
The following are examples of common risk indicators in relation to transactions:
• Are just below the threshold for due diligence checks;
• Appear to have no obvious economic or financial basis benefit;
• Route through third countries or third parties;
• Regularly go to or from tax haven countries; and
• Information accompanying the payment appears false or contradictory.
Knowledge for these purposes may mean either:
• Actual knowledge, if an employee is aware of a money laundering activity carried on by a Client; or
• ‘Turning a blind eye’, where it should be obvious to the employee that a money laundering activity may be in process.
Failure to report a suspicious transaction can be interpreted as assisting in the criminal act of money laundering and could be the basis of criminal charges against the employee as well as Company.
If an employee deliberately fails to make enquiries of a Client regarding facts or knowledge of circumstances, which would raise suspicion in an honest or reasonable person, that employee may be held to have knowledge of money laundering.
Under the FIAMLA, a suspicious transaction has been defined as a transaction which:
(a) gives rise to a reasonable suspicion that it may involve –
• the laundering of money or the proceeds of any crime; or
• funds linked or related to, or to be used for, terrorist financing or by proscribed organisations, whether or not the funds represent the proceeds of a crime;
(b) is made in circumstances of unusual or unjustified complexity;
(c) appears to have no economic justification or lawful objective;
(d) is made by or on behalf of a person whose identity has not been established to the
satisfaction of the person with whom the transaction is made; or
(e) gives rise to suspicion for any other reason.
A transaction includes:
(a) opening an account, issuing a passbook, renting a safe deposit box, entering into a fiduciary relationship or establishing any other business relationship, whether electronically or otherwise; and
(b) a proposed transaction or an attempted transaction.
A suspicion is objective but falls short of proof based on firm evidence however, suspicion should be beyond mere speculation and based on some foundation, even if it is merely a feeling or hunch. Consider however, the following possibilities:
(A) Structured / linked transactions
The expression “structured transaction” is used in this case to refer to circumstances where Clients break down amounts above a legal threshold into lesser amounts and intermittently place transactions for these lesser amounts, hoping thereby to evade the requirements for identification and transaction reporting, or otherwise disguise the true nature and purpose of the transaction.
Structuring is the illegal practice of conducting such transactions. Structuring is not limited to transactions conducted on the same day. In principle, it includes situations where a series of transactions are conducted over a period of days or even months when done to evade the above requirements.
(B) Other circumstances
Other types of conduct and circumstances are suspicious by nature and should alert an employee to the potential for illegal Client activity. Some examples include the following:
• Insufficient comments or suspicious information provided by the Client when such information is requested;
• Client’s reluctance to proceed with a transaction on being informed that identification will be required, or withholding information necessary to complete the appropriate legal requirement;
• A prospective account that calls you without any prior contact. A prospect that calls should be asked how he heard about Company. and what company he used before;
• The Client wants to expedite a first transaction on the day they open an account;
• A large first transaction where a Client is eager to get the order processed and does not seek information about the company or Client does not query the price on a first transaction, especially if it is a large amount;
• Large transactions for which the Client does not have a reasonable explanation or basis;
• Potentially, finding that your Client is over-inquisitive about the money laundering regulations reporting requirement;
• Insufficient, false, or suspicious information provided by Client;
• Structuring of transactions to evade record-keeping and / or reporting
• Client is reluctant to provide any information requested for proper identification;
• Client who experiences materially increased transaction activity;
• Several Clients’ complete transactions in a single day, and there is no apparent business reason for such transactions;
• Unusual or suspicious identification documents that cannot be readily verified;
• Changes in the Client’s habits. This may indicate the Client is having financial difficulty;
• The Client’s deposits to the Firm begin to take longer than usual or you call about an actual or promised deposit and the Client dodges your calls or offers excuses;
• A Client transacts a few small transactions before unexpectedly placing a very large transaction; or
• A person placing a transaction is not the usual Client contact.
(C) Terrorist Financing
In looking out for possible terrorist financing, keep in mind that at times terrorist financing and money laundering differ in certain respects. Money laundering of funds generated through illicit means always involves a criminal act as the source of the funds.
Even though terrorist groups have generated funds from criminal activities, such as drug trafficking and arms smuggling, they have also raised money through legal means, such as charities, donations, or legitimate businesses.
While the source of funds may be legitimate in some instances, the intended use of the funds is not. Laundering of criminal proceeds as a rule, involves large sums of money, which must be introduced into the legitimate financial system somehow.
This is to a lesser extent the case with terrorist financing, which may more readily involve lower amounts. Nonetheless, one thing the two types of illegal activity have in common is the goal of remaining undetected.
Therefore, you should be on the lookout for Client conduct or activity that appears designed to avoid detection or a paper trail.
(D) Unusual activity includes, but not limited to, any activity or information relating to a business relationship, occasional transaction or an attempted transaction where there is no apparent economic or lawful purpose, including transactions that are –
(ii) both large and unusual; or
(iii) of an unusual pattern.
(E) Inter Alia situations that are likely to appear unusual:
(a) transactions or instructions which have no apparent legitimate purpose and appear not to have a commercial rationale;
(b) transactions, instructions or activity that involve apparent unnecessary complexity;
(c) where the transaction being requested by the Client is out of the ordinary range;
(d) where the size or pattern of transactions is out of line with expectations for that Client;
(e) where the Client is not forthcoming with information about their activities, reason for a transaction, source of funds, CDD documentation etc.;
(f) where the Client who has entered into a business relationship uses the relationship for a single transaction or for only a very short period of time where that was not expected;
(g) the extensive use of offshore structures where the Client’s needs are inconsistent with the use of such services;
(h) transfers to or from high risk jurisdictions which are not consistent with the Client’s expected activity;
(i) unnecessary routing of funds through third party accounts;
(j) unusual investment transactions with no discernible purpose; and
(k) extreme urgency in requests from the Client, particularly where they are not concerned by large transfer fees, early repayment fees etc.
(F) Exemption registry. A record of each exemption granted under this section and the reason therefore must be kept by a financial institution and cash dealer in an exemptionregistry.
(1) For an exempted transaction between a financial institution or cash dealer and a government agency of the Saint Vincent under subsection (g)(1) and (2), the exemption registry should include the reason for the exemption and the names and addresses of the financial institution or cash dealer and/or government agencies involved in the transaction.
(2) For exempted transactions between a financial institution and cash dealer and a Client, as defined in (g) (3) and (4), the exemption registry must include the following information:
(i) the reason for exemption;
(ii) the Client’s name, business or residential address, and his/her occupation, business or principal activity; (Rev. 05/13/2010)
(iii) a statement whether the exemption covers deposits, withdrawals or both;
(iv) a signed statement by the Client that states the following:
(A) the party believes that the transaction is eligible for exemption under financial institution or cash dealer and a government agency, and
(B) the information provided by the party to the institution in relation to the transaction is, to the best of his or knowledge and belief, true and correct;
(v) the name and title of the person making the decision to grant the exemption; and
(vi) any other information mandated by the Banking Commission.
(3) Class transactions. An exemption can apply to a class of transactions
between a financial institution and cash dealer and eligible parties designated under financial institution or cash dealer and a government agency. For class transactions, the exemption registry must also include in, addition to the requirements of financial institution or cash dealer and a government agency, the following:
(i) the range of the amounts of currency involved in the class of transactions;
(ii) the range amount of the class of transactions;
(iii) the period during which the class of transactions is to be exempt; and
(iv) any other information mandated by the Banking Commission.
(4) Financial institution or cash dealer must monitor the exemptions they have granted on a continual basis. A change in circumstances may warrant removal from the registry or require amending the exemption record in the registry. In addition to monitoring, each financial institution or cash dealer must commission an annual review of its exemption registry. A financial institution or cash dealer must contact each Client who has an exemption to determine whether there is a change in the Client’s situation since the last date of review.
(5) The Banking Commission has the right to review the exemption registry at any time. The Bank Commission may, by appropriate order, direct the deletion of any.
10.2 INTERNAL REPORTING PROCEDURES
10.2.1 What to do and when
As mentioned above, if an employee determines that a Client’s transaction is suspicious or constitutes structuring, you must at once make a report of this knowledge or suspicion to the MLRO.
All suspicions reported to the MLRO should be properly documented (in urgent cases this may follow an initial discussion by telephone). If reports are made by telephone, it is important that the MLRO or his staff provides a documentary report and provides for the full name of the Client of staff, and the internal address within the firm, to be recorded. The MLRO will acknowledge any such report promptly upon it being made to them.
If the Client asks for their money back before they are accredited by the MLRO, seek advice from the MLRO urgently. If an employee becomes suspicious after the transaction has taken place, they must make an internal report to the MLRO as soon as possible.
10.2.2 What NOT to do
NEVER inform a Client that a report is being made concerning them or their activities. In other words, never “tip-off” any Client. Any employee making a report should be reminded of this when the MLRO acknowledges the report he has received. All internal enquiries made in relation to the report, and the reason behind whether to submit the report to the authorities (see below), should be documented.
This information may be required to supplement the initial report or as evidence of good practice and best endeavours if, at some future date, there is an investigation and the suspicions are confirmed however, never divulge any of this to a Client, or discuss it in such a way as is likely to come to that Client’s attention.
Never assume that the suspicions will be attended to without you reporting your own suspicions. Turning a blind eye may implicate you personally in the completion of a potentially illegal act.
10.2.3. The reporting procedures
Must apply to prospective Clients and transactions that were attempted but that did not take place. The MLRO should then consider the internal disclosure to assess whether an external disclosure need to be made to the Saint Vincent Banking Commissioner.
Compliance offices shall provide reporting procedures in place that will:
(a) enable senior managers to report to directors; staff members to report to senior management and MLRO on any knowledge or suspicion of ML/TF activity;
(b) ensure that there is a clear reporting chain to the MLRO;
(c) require reports to be made to the MLRO (“internal disclosures”) of any information or other matters that come to the attention of the person handling that business and which in that person’s opinion gives rise to any knowledge or suspicion that another person is engaged in ML/TF activity;
(d) require the MLRO to then consider these reports in the light of all other relevant information available to determine whether or not it gives rise to any knowledge or suspicion of ML/TF activity;
(e) ensure that the MLRO has full access to any other available information that may be of assistance; and
(f) enable the information or other matters contained in a report (“external disclosure”) to be provided as soon as is practicable the Saint Vincent Banking Commissioner if the MLRO knows or suspects that another is engaged in ML/TF activity.
10.2.4 Potential Red Flags
The following is a non-exhaustive list of possible ML and TF red flags that the Company’s staff members should be mindful of when dealing with a business relationship or occasional transaction:
(a) The deposit or withdrawal of unusually large amounts of cash from an account;
(b) Unwillingness to provide CDD documentation on beneficial owners/ controllers;
(c) Deposits or withdrawals at a frequency that is inconsistent with the financial institution’s understanding of that Client and their circumstances.
(d) Transactions involving the unexplained movement of funds, either as cash or wire transfers.
(e) Payments received from, or requests to make payments to, unknown or un-associated third parties;
(f) Personal and business related money flows that are difficult to distinguish from each other.
(g) Financial activity which is inconsistent with the legitimate or expected activity of the Client.
(h) An account or business relationship becomes active after a period of dormancy.
(i) The Client is unable or reluctant to provide details or credible explanations for establishing a business relationship, opening an account or conducting a transaction.
(j) The Client holds multiple accounts for no apparent commercial or other reason.
(k) Bank drafts cashed in for foreign currency.
(l) Early surrender of an insurance policy incurring substantial loss.
(m) Frequent early repayment of loans.
(n) Frequent transfers indicated as loans sent from relatives.
(o) Funds transferred to a charity or NPO with suspected links to a terrorist organisation.
(p) High level of funds placed on store value cards.
(q) Insurance policy being closed with a request for the payment to be made to a third party.
(r) Large amounts of cash from unexplained sources.
(s) Obtained loan and repaid balance in cash.
(t) Purchase of high value assets followed by immediate resale with payment requested via cheque.
10.2.5. MRLO evaluation and reporting
The above list is not exhaustive and its content is purely provided to reflect examples of possible red flags. The existence of one or more red flag does not automatically indicate suspicion and there may be a legitimate reason why a Client has acted in the manner identified.
Where suspicious activity is identified, an internal disclosure must be made to the MLRO in accordance with Section 2 of the Anti-Money Laundering Regulations Act, 2002. It is the responsibility of the MLRO (or if appropriate, the Deputy MLRO) to consider all internal disclosures he/she receives in the light of full access to all relevant documentation, this may include reviewing CDD, transaction patterns and other connected accounts / relationships. The evaluation process should be fully documented. All relevant persons must ensure that the MLRO receives full cooperation from all staff and full access to all relevant documentation so that he/she is in a position to decide whether there are reasonable grounds to suspect money laundering or terrorist financing. The predicate offence need not be known or suspected, reasonable grounds to suspect should suffice.
Failure by the MLRO to diligently consider all relevant material may lead to vital information being overlooked and the suspicious transaction or activity not being externally disclosed to the Saint Vincent Banking Commissioner in accordance with the requirements of the legislation. As a result, the MLRO must document internal disclosures made by employees to record the results of the assessment of each disclosure.
All suspicions reported to the MLRO must be documented (in urgent cases this may follow an initial discussion by telephone). The report must include the full details of the Client and as full a statement as possible of the information giving rise to the suspicion.
Under Section 3I: of the Anti-Money Laundering Regulations Act, 2002 as soon as practicable but not later than 15 working days from the day on which it becomes aware of a transaction if the MLRO-
(a) knows; or
(b) has reasonable grounds to believe, that an internal disclosure may be suspicious.
Under Anti-Money Laundering Regulations Act, 2002 s the Board of Directors is require to establish and maintain a register of all ML/TF internal disclosures made to the MLRO or Deputy MLRO. The register must include details of:
• the date the report was made;
• the person who made the report;
• whether the report was made to the MLRO or Deputy MLRO; and;
• information to allow the papers and relevant documentation to be located.
Under Section 3I: of the Anti-Money Laundering Regulations Act, 2002 requires the relevant person to establish and maintain a register of all ML/TF external disclosures made to the Saint Vincent Banking Commissioner. The register must include details of:
• the date of the disclosure;
• the person making the disclosure; and
• information to allow the papers relevant to the disclosures to be located.
Under Regulation 30(2) of the Anti-Money Laundering Regulations Act, 2002 states that the registers of internal and external disclosures may be contained in a single document if the details included in the registers can be presented separately for internal and external disclosures upon request by a competent authority.
10.2.6. Unusual Activity-Conducting “appropriate scrutiny” of unusual activity
Under Section 5. of the Anti-Money Laundering Regulations Act, 2002 requires the relevant person to conduct ‘appropriate scrutiny’ of any unusual activity and to obtain EDD. The activity should be looked at in detail in conjunction with additional information such as the Client’s CDD, expected activity, an explanation of the activity from the Client, supporting documentary evidence or information from independent data sources. CDD provides the basis for recognising unusual activity therefore it is imperative that CDD is satisfactory on all Clients and that business relationships are monitored appropriately.
The nature and scale of the scrutiny required will vary greatly depending on the type of activity, the risk factors involved and the size and scope of the activity. Regardless of the methods adopted, it is essential that the investigation and outcome are clearly documented in a prompt and timely manner.
The following are likely to cause suspicion after conducting appropriate scrutiny:
(a) the Client is unable or refuses to provide a reasonable explanation for the activity and this is perceived as being an attempt to conceal criminal conduct rather than the Client being awkward, unhelpful or secretive for personal reasons;
(b) the explanation does not “sit right” or does not make economic sense. For example a bank’s Client sending repeat small amounts on a regular basis overseas despite transfer fees incurred with no reasonable explanation;
(c) documentation supplied appears to be fraudulent, incomplete or doctored;
(d) independent data sources reveal negative information on the Client or related parties such as allegations of corruption; or
(e) activity appears consistent with known ML/TF typologies.
The following tips should be borne in mind when conducting ‘appropriate scrutiny’:
(a) Investigate until you feel comfortable with the activity or have sufficient information to submit a disclosure.
(b) Consider using a broad range of data sources – e.g. companies registers, address verification sites, social networks, news.
(c) Obtain an understanding of the relationships between the Client and any related parties.
(d) Find out if the Client is or was acting on behalf of another person. If so, who and why?
(e) Compare the Client’s explanation with publicly available information. For example, if a large credit supposedly relates to the sale of a house, consider checking the address and average prices in that area.
(f) Consider the information held against known typologies and high risk indicators – transaction type, Client background, location and currency.
(g) By checking the Client’s historic activity you may be able to detect a pattern. For example a local business may always see a surge in cash deposits in June due to tourism.
(h) If requesting information or documentation from a Client, allow a reasonable timeframe for them to respond and communicate by phone, email, online messaging and fax wherever possible to expedite the process. It should be noted that further CDD should not be pursued if it may tip off the client.
(i) If appropriate, use this as an opportunity to gain a better understanding of what activity to expect going forward.
Whether or not to terminate a business relationship is a commercial decision, except where required by law, for example, where the compliance officer niter MLRO cannot obtain the required CDD information and EDD as applicable 3M of the Anti-Money Laundering Regulations Act, 2002. The Company should in these cases consider the following points when interacting with its Client:
(a) it will become apparent to criminals that elements of their criminal activity is known to the Company, if it begins to ask probing questions regarding certain activities or if it seeks to terminate the relationship or decline entering into a business relationship without a meaningful pretext. The Company is therefore encouraged to carefully consider the wording of any statements made to Clients explaining their decision; and
(b) the more information is included in the STR, the more valuable it will be to the Saint Vincent Banking Commissioner.
11. LIST OF PROHIBITED PARTIES TO COMPANY TRANSACTIONS
Company operates in various jurisdictions, and is subject to laws of other countries, in addition to the Marshall Islands. Of note is the U.S. Office of Foreign Assets Control (“OFAC”) which administers the various laws that prohibit the conduct of business with hostile nations and blocked persons. Severe civil and criminal penalties exist for violations of these laws. OFAC provides financial institutions with a comprehensive master list of blocked persons and entities (“Blocked Persons”). Company is prohibited from engaging in transactions involving entities on this list, or other entities subject to international sanctions under OFAC.
OFAC makes public the embargoed nations and alphabetical master lists of Blocked Persons (“OFAC lists”). The OFAC lists are amended from time to time and are available in OFAC’s website at http://www.treas.gov/offices/enforcement/ofac.
Each time a Client attempts to conduct a transaction, Company’s processes compares the name of the prospect against the OFAC list, in addition to similar lists maintained by the United Nations, Australia, Canada, the European Union, Saint Vincent and other countries.
If there is a match or a partial match, the MLRO is responsible for viewing all matched or partially matched items and releasing obvious “false positives”. In cases where it is impossible to determine whether the match is true or false, more information will be requested of the originator of the transaction, and occasionally of the beneficiary as well.
Transactions involving a true match must be reported to the regulatory entity responsible for placing that party on the respective list. In some cases, the law may require any funds to be submitted to the government entity responsible for the respective sanctions, while in others Company may simply hold funds until further instructions are provided by the regulatory entity. Usually prior to releasing a transaction, Company will need to obtain additional Client information to assist in the evaluation process.
12. OTHER INTERNAL CONTROLS AND PROCEDURES
12.1. ADVICE TO CLIENTS
Employees are of course expected to be helpful to Clients who wish to open an account. Employees should be prepared to:
• Help Clients’ complete forms;
• Explain clearly and carefully what sort of data or materials are needed to verify Client identity; and
• Advise on matters connected with the process of transactions, e.g. system logins and usage etc.
HOWEVER, you must never give any advice or other assistance to Clients regarding how to structure transactions to evade a legal requirement. Any such advice given to a Client could be interpreted as assisting in the act of money laundering and could be the basis of criminal charges against Company and / or the relevant employee.
12.2. AWARENESS AND TRAINING
The effectiveness of the Saint Vincent anti-money laundering strategy must depend on the extent to which staff in financial sector businesses appreciates the serious nature of the background against which the Regulations have been issued. Employees can be personally liable for failure to report information in accordance with internal procedures and that as well as criminal sanctions, disciplinary proceedings can also arise.
All employees are made aware of the enforcement of the “Know Your Client” requirement for money laundering prevention purposes. The awareness raising and training in this respect should cover not only the need to know the identity of the Client, but also, where a business relationship is being established, the need to know enough about the type of business activities expected in relation to that Client at the outset to know what might constitute suspicious activity at a future date.
Each employee should be ready to deal with the risks posed by their role. Their training will keep their knowledge and skills up-to-date and will cover:
• The staff Client’s duties;
• The risks posed to the business;
• The business’s policies and procedures;
• How to do Client due diligence and check Clients’ documents;
• How to spot and deal with suspicious Clients and activity;
• How to make internal reports and / or disclosures of suspicious activity;
• Record keeping; and
• Money Laundering and Terrorist Financing Prevention Act
Training may include:
• Face-to-face training;
• Online training sessions;
• Going to conferences;
• Taking part in special meetings to discuss the business’s procedures;
• Reading publications; and
• Meetings to review the issues and risks.
Company is committed to providing yearly training for its employees on the Regulations and money laundering.
Training will be provided at the following intervals:
• New hire orientation;
• Ongoing training to all employees; and
• Refresher training as needed and when / if new rules or regulations are issued.
When considering who to train, Company shall include staff that deal with Clients, transactions or aid the Compliance process.
Nominated officers, senior managers and anyone involved in monitoring business relationships and internal controls must also be fully familiar with the requirements of their role and understand how to meet those requirements.
Company will keep evidence of the training that has been provided and will retain records including a copy of the training materials, a list of staff who have completed training and a training schedule.
13. THE MONEY LAUNDERING REPORTING OFFICER:
• The Money Laundering Reporting Officer (“MLRO”) for Company is [email protected] The MLRO will provide regular updates on matters relating to the Compliance Policy at both the Executive and Board level.
• The MLRO is responsible for receiving disclosures regarding suspected Money Laundering activity, evaluating the information provided, and determining when to report suspicions of Money Laundering.
14. APPENDIX 1 – EQUIVALENT LISTED COUNTRIES
You are entitled to accept evidence of the identity of a Client provided by a financial institution in any of these countries and may not carry out further checks, on the basis that these countries are known to operate money laundering controls of an acceptably high standard.
• Czech Republic;
• Hong Kong;
• New Zealand;
• Slovak Republic;
• South Africa;
• South Korea;
• Turkey; and
• United States.
15. APPENDIX 2 – THE CURRENT LIST OF JURISDICTIONS WITH STRATEGIC DEFICIENCIES
As of 19th October 2018, there are high-risk and Non-Cooperative Countries and Territories. The current lists are available on the FATF website at: http://www.fatf-gafi.org/publications/high-riskandnon-cooperativejurisdictions/documents/public-statement-october-2018.html and http://www.fatf-gafi.org/publications/high-riskandnon-cooperativejurisdictions/documents/fatf-compliance-october-2018.html.
16. APPENDIX 3 – FATF’S FORTY  RECOMMENDATIONS (AML)
A document containing FATF’s Forty Recommendations for combatting Money Laundering can be found here:
17. APPENDIX 4 – FATF’S NINE  SPECIAL RECOMMENDATIONS (CTF)
A transcript of FATF’s Nine Special Recommendations for Countering Terrorist Financing can be found here:
18. APPENDIX 5 – TEMPLATE CLIENT ONBOARDING CHECKLISTS
These are available from your MLRO. Please contact the MLRO directly if in any doubt over which documents will adequately satisfy the onboarding process for each type of client.