ANTI-MONEY LAUNDERING POLICIES AND PROCEDURES

POLICY STATEMENT

It is the policy of this firm tat all members of staff shall actively participate in preventing the services of the firm from being exploited by criminals and terrorists for money laundering purposes. This participation has as its objectives:

  • ensuring the firm’s compliance with all applicable laws, statutory instruments of regulation, and requirements of the firm’s supervisory body
  • protecting the firm and all its staff as individuals from the risks associated with breaches of the law, regulations and supervisory requirements
  • preserving the good name of the firm against the risk of reputational damage presented by implication in money laundering and terrorist financing activities
  • making a positive contribution to the fight against crime and terrorism

 To achieve these objectives, it is the policy of this firm that: 

  • every member of staff shall meet their personal obligations as appropriate to their role and position in the firm
  • commercial considerations shall never be permitted to take precedence over the firm’s anti-money laundering commitment
  • the firm shall appoint a Money Laundering Reporting Officer (MLRO), and a deputy to cover in his or her absence, and they shall be afforded every assistance and cooperation by all members of staff in carrying out the duties of their appointments.

 Note that all sections of this regime in regards to responsible staff is divided in: service staff (handling B2C relations) and senior management (handling B2B relations). 

 

THE ASSESSMENT OF MONEY LAUNDERING RISK

POLICY

It is the policy of this firm to assess the money laundering and terrorist financing risk presented by our clients and business partners so that we can mitigate that risk by applying an appropriate level of client due diligence. Customer or business partners undergo a risk assessment according to procedures outlined and all staff are trained and recognize the risk based approach necessary.

PROCEDURE 

1. The money laundering or terrorist financing risk represented by each client will be assessed:

  • B2B, during the new client acceptance process before any work is undertaken
  • B2C, upon registration before any gameplay or transactions are undertaken (trust level)
  • whenever the firm’s process of ongoing monitoring flags up a change in the business of an established client representing a change in money laundering risk 

2. The assessment will initially be carried out by senior management in cases of B2B.  For B2C an automated system is used and if additional assessment is required, by senior management, who will judge into which of three categories the client and the business to be conducted falls:

  • the range normally dealt with by the firm, requiring the firm’s normal level of client due diligence
  • an exceptionally high level of risk requiring an enhanced level of client due diligence
  • a negligible level of risk requiring only simplified client due diligence (only applies to B2B relations)

3. In carrying out the assessment, the following factors are to be considered, and sufficient information must be obtained for it to be known whether:

  • the identity of the client can be verified by the firm’s normal procedures
  • the client is subject to sanctions or in a category automatically requiring enhanced due diligence
  • the products and services the firm is to provide and delivery channels to be used are vulnerable to money laundering risk
  • significant sums are to be introduced and whether their source of origin can be verified
  • transactions are to involve other jurisdictions, and whether those have equivalent AML regulation to the firm’s own jurisdiction

 

4. A record must be made of the assessment, confirming that all the above factors have been taken into account, and any other relevant factors considered.

 

VERIFICATION OF CLIENTS’ IDENTITY

POLICY

It is the policy of this firm to verify the identity of all clients, and to check if they are subject of sanctions or other statutory measures. 

PROCEDURE

1. Where clients are an individual person or persons acting on their own behalf, the identity of the individual(s) will be verified by members of staff authorised by the firm’s MLRO, who will ensure that staff so authorised receive appropriate training.

2. The member of staff conducting verification of identity will complete the process by checking if the client is subject of sanctions or other statutory measures, using the screening methods set out by the MLRO.

3 The MLRO is responsible for monitoring any updates on sanctions lists such as Financial Action Task Force (FATF), Office of Foreign Assets Control (OFAC) and Political Exposed Person’s (PEP). 

4. The MRLO is responsible for compiling and informing relevant staff on amendments and/or additions to sanction lists and jurisdictional regulations

5. In cases where a client cannot produce acceptable documents, the responsible service staff will make a risk-based decision on accepting the documents that are available, consulting with the MLRO if appropriate. 

6. Where the client is not the beneficial owner of assets involved, the responsible senior management will take the necessary steps to determine who is the beneficial owner, and their identity will be verified according to this procedure in addition to that of the client.

7. Where the client is a corporate entity such as a private limited company, the responsible senior management will check that the entity is appropriately incorporated and registered, and take the necessary steps to determine who are the principal beneficial owners, and who exercises control, and their identity will be verified according to this procedure.

8. Where the client is a listed company or a regulated firm, the responsible senior management will check that the client is appropriately registered, and that the person with whom the firm is dealing is properly authorised to act on the client’s behalf, and will verify the identity of that person according to this procedure, in addition to that of the client entity.

9. In all cases where enhanced client due diligence is required, the responsible service staff or senior management will consult with the MLRO to decide on additional steps to verify the client’s identity.

10. All verification of identity processes will be recorded. This will in some cases include keeping photocopies of documents produced. 

11. Verification of identity for operators and private companies includes obtaining documentation such as; company name and number, date and country of incorporation, address registered office, memorandum and article of association, financial statements, key individuals and shareholder list presenting ultimate beneficial owners.

 

KNOWING THE CLIENT’S BUSINESS AS PART OF CDD

 

POLICY

It is the policy of this firm to obtain information enabling us to understand every client’s reason and purpose in using the services of the firm. This Know Your Client’s Business (KYCB) or Know Your Client (KYC), information will enable us to maintain our assessment of the on-going money laundering risk, and notice changes or anomalies in the client’s arrangements that could indicate money laundering.

PROCEDURE

1. The responsible service staff or senior management will obtain KYC and KYCB information from clients:

  • on acceptance of a new client (B2B)
  • on any significant change in the client’s arrangements such as the size or frequency of transactions, nature of business conducted, involvement of new parties or jurisdictions
  • as an ongoing exercise throughout the client relationship

2. KYCB / KYC information sought from clients includes:

  • the client’s reason for choosing this firm (B2B)
  • the purpose behind the services the client is asking the firm to provide (B2B)
  • the nature, size, frequency, source and destination of anticipated transactions
  • the counter-parties and jurisdictions concerned

3. Where answers given by the client are implausible, or inconsistent with other information, or where the client is unwilling to provide satisfactory answers to due diligence enquiries, the responsible service staff or senior management will consider whether the firm should withdraw from the relationship.

4. KYCB / KYC information, or the lack of it, will be taken into account when considering possible grounds to suspect money laundering.

 

ONGOING MONITORING OF CLIENTS’ ACTIVITIES

 

POLICY

It is the policy of this firm to monitor clients’ instructions and transactions to ensure that they are consistent with those anticipated, that possible grounds to suspect money laundering will be noticed and scrutinized, and that changes requiring a re-assessment of money laundering risk will be acted upon.

PROCEDURE

1. All extraordinary client instructions and transactions will receive the attention on whether they are consistent or not with those anticipated. 

2. Where a client’s instruction or transaction is not consistent with what is anticipated:

  • an explanation will be sought, if appropriate by contacting the client
  • the involvement of unexpected jurisdictions or organizations will be checked with the firm’s MLRO for possible alerts or sanctions
  • if a satisfactory explanation is found, the client file will be updated with that explanation and to reflect the change in anticipated client activities
  • if no satisfactory explanation is found, the responsible service staff or senior management will consider whether there are grounds to suspect money laundering
  • the responsible service staff or senior management will consider whether there is cause to carry out a re-assessment of money laundering risk, and if so, to carry this out

3. The responsible MLRO will supplement the training provided to support staff by giving guidance on:

  • the type of client instructions and transactions that count as ‘significant’ and so should be brought to their attention
  • noticing client instructions and transactions which, although not of a nature normally counting as ‘significant’, are in some way unusual or anomalous and should be considered with regard to possible suspicion of money laundering

4. Irrespective of whether specific incidents have caused a re-assessment of money laundering risk, every client file will be reviewed periodically to check that:

  • the information held is still adequate, correct and up to date
  • the level of client due diligence being applied is still appropriate

5. Periodic review of client files will be conducted annually. AML review is to be separately noted in the client file.

 

KEEPING RECORDS OF CLIENT DUE DILIGENCE INFORMATION

 

POLICY

It is the policy of this firm to keep records of enquiries made and information obtained while exercising client due diligence for AML purposes, and to ensure that these records are retained as required for legal and regulatory stipulations. 

PROCEDURE

1. When information is being collected for AML client due diligence, the responsible service staff or senior management will:

  • keep records in the client file
  • record instances where information requested has not been forthcoming, or explanations provided have not been satisfactory
  • ensure that all records are kept in a consistent manner so that they are accessible by and comprehensible to other authorized members of staff, including the MLRO

2. Transaction records must be kept for five years from the date of the transaction.

3. Customer records must be kept for five years from the date of the end of the business relationship with the customer.

4. For clients who have been subject of a suspicion report, relevant records will be retained separately and not destroyed, even after the five-year period has elapsed, without confirmation from the MLRO that they are no longer required as part of an enquiry.

 

INTERNAL SUSPICION REPORTING

 

POLICY

  • It is the policy of this firm that every member of staff shall remain alert for the possibility of money laundering, and shall report any and every suspicion for which they believe there are reasonable grounds, following the firm’s procedure.
  • The expectation placed on each individual member of staff in responding to possible suspicions shall be appropriate to their position in the firm. No-one is expected to have a greater knowledge and understanding than is appropriate to their role. 

PROCEDURE

1. Every member of staff must be alert for the possibility that the firm’s services could be used for money laundering purposes, or that in the course of their work they could become aware of criminal or terrorist property.

2. Alertness to the possibility of money laundering must be combined with an appropriate knowledge of clients’ normal arrangements so that members of staff become aware of possible causes of suspicion.

3. A member of staff becoming aware of a possible suspicion shall gather relevant information that is routinely available to them and decide whether there are reasonable grounds to suspect money laundering. Any additional CDD information acquired, in particular any explanations for unusual instructions or transactions, should be recorded on the client file in the routine manner, but there must be no mention of money laundering.

4. The requirement to gather relevant information does not extend to undertaking research or investigation, beyond using information sources readily available within the firm. Clients may be asked for relevant information, but only in the context of routine client contact relevant to the business in hand.

5. If, after gathering and considering routinely available information, the member of staff is entirely satisfied that there are no grounds for suspicion, no further action should be taken. 

6. A member of staff who on consideration decides that there may be grounds for suspicion shall in normal circumstances raise the matter with the responsible MLRO. If after discussion they both agree that there are no grounds for suspicion, no further action should be taken.

7. No member of staff is obliged to discuss a suspicion of money laundering with senior management. They may, if they prefer, contact the MLRO directly.

8. If following the raising of a possible suspicion by a member of staff, he or she must submit a suspicion report to the MLRO, in the format specified by the MLRO for that purpose.

9. An internal suspicion report does not breach client confidentiality/professional privilege, and no member of staff shall fail to make an internal report on those grounds.

10. If a suspicious report results from a matter raised by a member of staff, the responsible MLRO must advise them in writing that a report has been submitted. This by reference to the matter discussed on the given date, without including the name of the person(s) suspected. This confirms to the member of staff who raised the matter that their legal obligation to report has been fulfilled.

11. In the circumstance where any member of staff forms a suspicion of money laundering but senior management does not agree that there are reasonable grounds for suspicion, the member of staff forming the suspicion must fulfil their legal obligation by submitting a money laundering suspicion report (STRs) to the MLRO, in the format specified by the MLRO for that purpose. Senior management must recognise this legal requirement and assist the staff member in fulfilling it.

12. A member of staff who forms or is aware of a suspicion of money laundering is allowed,  to discuss the matter internally with staff directly involved, or by approval from the MLRO. Discussions externally are not permitted and are considered tipping off. 

13. No member of staff shall at any time disclose a money laundering suspicion to the person suspected. If circumstances arise that may cause difficulties with client contact, the member of staff must seek and follow the instructions of the MLRO.

14. No copies or records of money laundering suspicion reports are to be made, except by the MLRO who will keep such records secure, and separate from the firm’s client files and other repositories of information.

 

FORMAL DISCLOSURES TO THE AUTHORITIES

 

POLICY

It is the policy of this firm that the Money Laundering Reporting Officer (or if absent, the deputy MLRO) shall receive and evaluate internal suspicion reports, and decide whether a formal disclosure is to be made to the authorities. If so deciding, the MLRO will make the formal disclosure on behalf of the firm, using the appropriate mechanism.

 

PROCEDURE

1. On receipt of a money laundering suspicion report from a member of staff, the MLRO shall acknowledge its receipt in writing, referring to the report by its date and unique file number, without including the name of the person(s) suspected. This confirms to the member of staff that their legal obligation to report has been fulfilled.

2. The MLRO shall open and maintain a log of the progress of the report. This log shall be held securely and shall not form part of the client file.

3. Following receipt of a report, the MLRO shall gather all appropriate information held within the firm, and make all appropriate enquiries of members of staff anywhere in the firm, in order properly to evaluate the report. The MLRO shall then decide whether they personally suspect, and reach a decision on the firm’s obligation to make a formal disclosure to the authorities.

4. All members of staff, anywhere in the firm, shall respond in full to all enquiries made by the MLRO for the purposes of evaluating a suspicion report. Information provided to the MLRO in response to such enquiries do not breach client confidentiality/professional privilege, and no member of staff shall withhold information on those grounds.

5. If deciding that a formal disclosure to the authorities is required, the MLRO shall make such disclosure by the appropriate means.

6. The MLRO shall document in the report log the reasons for deciding to make or not to make a formal disclosure

7. The MLRO shall where appropriate inform the originator of the internal report whether or not a formal disclosure has been made.

8. Following a formal disclosure, the MLRO shall take such actions as required by the authorities in connection with the disclosure.

 

STOPPING/CONTINUING WORK FOLLOWING A SUSPICION REPORT

 

POLICY

It is the policy of this firm that from the moment a suspicion of money laundering arises; no further work will be carried out on the matter that gave rise to the suspicion. Neither commercial considerations nor the difficulty in responding to the client’s enquiries on the matter shall be permitted to take precedence over the firm’s legal obligations in this regard.

In such circumstances the MLRO shall act with all possible speed to enable work to continue, and assist staff in any communications with the client affected.

PROCEDURE

1. As soon as a member of staff forms or becomes aware of a suspicion of money laundering, the clients account is locked and no further transaction is to be executed.

2. If there is any likelihood of the client becoming aware that work has stopped, for example because an anticipated transaction has not gone through, the member of staff concerned must contact the MLRO for instructions on how to handle the matter with the client.

3. On receipt of a suspicion report, the MLRO shall:

  • instruct the originator of the report and any other staff involved that the account is locked due to investigation.
  • decide in the shortest possible time whether the reason for suspicion is grounded or not, and advise relevant staff accordingly
  • assist all affected staff in handling the matter with the client so that no tipping off offence is committed

4. When work for a client has been stopped, the MLRO shall carry out the evaluation of the suspicion report as quickly as possible to decide whether a disclosure must be made to the authorities.

5. If the MLRO decides that there are not reasonable grounds to suspect money laundering, he or she will give consent for work to continue on his/her own authority.

6. If the MLRO decides that a disclosure must be made, he will do so and if required request consent to continue from the proper authorities (Financial Intelligence Units within each jurisdiction), as quickly as possible.

7. On giving consent to continue, either on his own authority or on receipt of notice of consent or implied consent from authorities, the MLRO will confirm this in writing to affected staff.

8. If consent is refused by authorities, the MLRO will take advice from the Financial Intelligence Units and consult with senior management and/or Directors on the firm’s continuation of or withdrawal from the client relationship.

 

AML TRAINING

 

POLICY

It is the policy of this firm that all staff who have client contact, or access to information about clients’ affairs, shall receive anti-money laundering training to ensure that their knowledge and understanding is at an appropriate level, and ongoing training at least annually to maintain awareness and ensure that the firm’s legal obligations are met.

The MLRO shall, ensure that training is made available to staff according to their exposure to money laundering risk, and that steps are taken to check and record that training has been undertaken and that staff have achieved an appropriate level of knowledge and understanding. 

In the light of the seriousness of the obligations placed on each individual by the law and the regulations, and the possible penalties, the MLRO shall ensure that information about these personal obligations is available to all members of staff at all times.

PROCEDURE 

1. The MLRO will evaluate alternative AML training methods, products and services in order to make suitable training activities available to all members of staff who have client contact, or access to information about clients’ affairs. 

2. Suitable training will take into account:

  • the need to achieve a level of knowledge and understanding appropriate to the individual’s role in the firm
  • the need to maintain that level through ongoing refresher training
  • the practicality of assigning different programs to staff with different roles on a  risk-sensitive basis
  • the cost-effectiveness of the alternative methods and media available

3. The training programs will include means of confirming that each individual has achieved an appropriate level of knowledge and understanding, whether through formal testing, assessment via informal discussion, or other means 

4. Special consideration will be given to the training needs of senior management, and of the compliance team.

5. The MLRO will:

  • inform every member of staff of the training programs that they are required to undertake, and the timetable for completion
  • check that every member of staff has completed the training programs assigned to them, issuing reminders to any who have not completed to timetable
  • refer to senior management in any cases where members of staff fail to respond to reminders and have not completed their assigned training
  • keep records of training completed, including the results of tests or other evaluations demonstrating that each individual has achieved an appropriate level of competence.

6. On completion of a training cycle, the MLRO will ensure the continuity of ongoing training while giving consideration to:

  • the effectiveness of the programs completed
  • the possible benefits of varying the methods and media used against the benefits of familiarity using the same approach
  • the need to keep training information up to date with changes in laws, regulations, guidance and practice.

7. The MLRO will determine the training needs of his/her own role, and ensure that he/she obtains appropriate knowledge and understanding such as are required to fulfil his/her obligations.

 

MONITORING AND MANAGEMENT OF COMPLIANCE

 

POLICY

It is the policy of this firm to monitor our compliance with legal and regulatory AML requirements and conduct an annual AML compliance audit, the findings of which are to be reported to Directors with appropriate recommendations for action.

The firm’s Directors shall provide the necessary authority and resources for the ongoing implementation of a compliant AML regime. 

PROCEDURE 

1. The MLRO will monitor continuously all aspects of the firm’s AML policies and procedures.

2. Any deficiencies in AML compliance requiring urgent rectification will be dealt with immediately by the MLRO, who will report such incidents to Directors when appropriate and request any support that may be required.

3. The MLRO will conduct an annual audit of the firm’s AML compliance, and report its findings to Directors. This report will include:

  • a summary of the firm’s money laundering risk profile and vulnerabilities, together with information on ways in which these are changing and evolving
  • a summary of any changes in the regulatory environment(s) in which the firm operates
  • a summary of AML activities within the firm, including the number of internal suspicion reports received by the MLRO and the number of disclosures made to the authorities
  • details of any compliance deficiencies on which action has already been taken, together with reports of the outcomes
  • details of any compliance deficiencies on which action needs to be taken, together with recommended actions including suggested timeframe and management support required 
  • an outline of plans for the continuous development of the AML regime, including ongoing training and awareness raising activities for all relevant staff.

4. Where management action is indicated, the Directors will respond to the report with details of appropriate action to be taken.