Anti-Money Laundering Policy
Last Revised as of August 15, 2018 (v1.1)
1. General Provisions
2. Goals and Objectives
3. Anti-Money Laundering Policy Statements
4. Anti-Money Laundering Organization
This Policy represents the basic standards of Anti-Money Laundering and Combating Terrorism Financing (hereinafter collectively referred to as AML) procedures within ChargaCard, Inc.
In response to the threat of money laundering activity, frauds, the Company has adopted this AML/CFT/KYC policy which is followed by all of its directors, officers, employees, contractors, agents. All relevant employees must be thoroughly familiar with and make use of the material contained in this Policy.
Sufficient copies of this Policy will be distributed to all branches of the company so that it will be readily available to all relevant employees.
This Policy will be kept updated by the company. When necessary, updated versions will be introduced and distributed to Company.
Money Laundering is any transaction or series of transactions undertaken to conceal or disguise the nature and source of funds that have been obtained from illegal activity. The main objective of the money launderer is to transform ‘dirty’ money into seemingly clean money or other assets in a way to leave as little trace as possible of the transformation. Examples of illegal activities that often involve money laundering are: drug trafficking; terrorism; smuggling; fraud; bribery; robbery; embezzlement; and illegal gambling. There are three recognized forms of the money laundering process:
• Placement – Physically depositing “cash” into banks and non-bank financial institutions such as currency exchanges; converting “cash” into other financial instruments such as by purchasing monetary instruments (travelers’ checks, payment orders); or using “cash” to purchase expensive items that can be resold. Launderers often seek to deposit cash into banks in less regulated countries and then transfer these funds to banks in regulated environments as “clean”. Smurfing - a form of Placement where the launderer makes many small cash deposits instead of a large one to evade local regulatory reporting requirements applicable to cash transactions.
• Layering – Separating the proceeds of criminal activity from their source through the use of layers of financial transactions (multiple transfers of funds among financial institutions, early surrender of an annuity without regard to penalties, cash collateralized loans, L/Cs with false invoices/bills of lading, etc.) to disguise the origin of the funds, disrupt any audit trail, and provide anonymity. Launderers want to move funds around, changing both the form of the funds and their location in order to make it harder for law enforcement authorities to identify “dirty” money.
• Integration – Placing the laundered proceeds back into the economy in such a way that they re-enter the financial system as apparently legitimate funds.
Goals and objectives
The main purpose of the Policy is to establish the essential standards designed to prevent the Company from being used for money laundering and terrorism financing.
In any country/jurisdiction where the requirements of applicable anti-money laundering laws and regulations establish higher standards, Companies must meet those standards. In case if any applicable laws are in conflict with this policy, the Company must consult with the Chief Compliance Officer to resolve the conflict.
Other objectives pursued by this Policy are as follows:
• Promote a “Know Your Customer” policy as a cornerstone principle for the Company business ethics and practices;
• Introduce a controlled environment where no business with a Customer is transacted until all essential information concerning the Customer has been obtained;
• Consolidate Company's AML efforts on the Company scale;
• Conduct self-assessments of compliance with AML policy and procedures.
• Determining and obtaining necessary Licensing in countries of operation;
• Compliance with local regulatory requirements;
• Establishing and maintaining a Risk Based Approach (RBA) towards assessing and managing the money laundering and terrorist financing;
• Responding to law enforcement authorities requests;
• Provision of appropriate management information and reporting to senior management of the Company in compliance with the requirements
Adherence to this policy is absolutely fundamental for ensuring that the Company, regardless of geographic location of its branch, fully comply with applicable anti-money laundering legislation.
The Company is committed to examining its anti-money laundering strategies, goals and objectives on an ongoing basis and maintaining an effective AML Policy for the Company’s business.
Anti-Money Laundering Policy Statements
The following standards and duties are considered to be minimum requirements for Company.
Maintenance of operational risks incidents database, implementation of risk mitigation measures and follow up on its results;
Not accepting cash, money orders, third party transactions, exchange houses transfers or Western Union transfers and high-risk means of payment
Customer Due Diligence and Know Your Customer
• Prior to transact any type of business Company must determine and document the true identity of customers and obtain background information on customers as well as purpose and intended nature of the business;
• Company must obtain and document any additional customer information, commensurate with the assessment of the money laundering risk posed by the customer’s background, country of origin, expected use of products and services or other applicable risk indicators;
• Company must establish whether the Customer is acting on behalf of another natural person or legal entity as trustee, nominee or professional intermediary. In such cases a necessary precondition for Customer acceptance is receipt of satisfactory evidence of the identity of any intermediaries and of the persons upon whose behalf they are acting, as well as the nature of the trust arrangements in place.
• Informing clients that the information they provide may be used to verify their identity;
• Determining that clients are not known or suspected terrorists by checking their names against lists of known or suspected terrorists. We may use for this purpose company`s monitoring system or we may involve our partners/contractors;
• Maintaining records of identification information;
• Ensuring clients have valid proof of identification;
• Application of anti-money laundering solution, which delivers transaction risk scoring and reporting necessary to comply with AML regulation. Company may use for this purpose company`s monitoring system or may involve our partners/contractors;
• Blocking suspicious transactions, where the Company may require its customers/clients and partners to provide additional information or documentation to fulfill its legal and compliance obligations and where it deems appropriate refuse to process any customer/client’s transaction that is suspected of being related to the criminal activity;
• Direction of funds withdrawals back to the original source of remittance, as a preventative measure.
• Not accepting cash, money orders, third party transactions, exchange houses transfers or Western Union transfers and high-risk means of payment
Additional Due Diligence measures for partners, contractors
• Company must undertake following additional due diligence measures while establishing and maintaining correspondent relationships with partners or contractors:
- Obtaining sufficient information about a respondent institution to avoid any relationships with “shell-companies”;
- Determining from publicly available sources of information the reputation of a respondent institution, including whether it has been subject to a money laundering or terrorist financing investigation or other regulatory action;
- Assessing the respondent institution’s anti-money laundering and terrorist financing controls on the periodic basis;
High Risk Indicators
• Company must define categories of Customers and types of operations that are likely to pose a higher than average AML risks using applicable high-risk indicators, inter alia:
- Customer residing in and/or having funds sourced from countries identified by credible sources as having inadequate anti-money laundering standards or representing high risk for crime and corruption;
- Customers engaged in types of business activities or sectors known to be susceptible to money laundering (i.e. gambling, jewellery etc.);
- “Politically Exposed Persons" (frequently abbreviated as "PEPs"), referring to individuals holding or having held positions of public trust, such as government officials, senior executives of government corporations, politicians, important political party officials, etc., as well as their families and close associates;
• Maintenance of operational risks incidents database, implementation of risk mitigation measures and follow up on its results;
Monitoring and reporting of suspicious transactions/activity
• All personnel must be diligent in monitoring for any unusual or suspicious transactions/activity basing on the relevant criteria applicable in the jurisdiction where the Company operates;
• The reporting of suspicious transactions/activity must comply with the laws/regulations of the respective jurisdiction;
• Chief Compliance Officer must be informed about all suspicious transaction/activity on a monthly basis;
• Establishing and maintaining risk based systems and procedures to monitor ongoing customer activity;
• Establishing procedures for reporting suspicious and/or fraudulent use of identification documents to relevant law enforcement authorities and dedicated regulators as appropriate;
• Establishing procedures for reporting suspicious activity internally and to relevant law enforcement authorities as appropriate;
• Records must be kept of all documents obtained for the purpose of identification and all transaction data as well as other information related to money laundering matters in accordance with the applicable anti-money laundering laws/regulations;
• All records must be kept for at least 5 years;
• Training on anti-money laundering must be provided to those new employees who work directly with customers and to those employees who work in other areas that may be exposed to money laundering and terrorist financing threats;
• Follow-up trainings must take place not less than once a year
• Training and awareness for all dedicated employees and contractors;
Anti-Money Laundering Organization
To ensure that the key principles of the AML/KYC Policy are fully implemented Company Management has taken the following additional actions:
• Designated Chief Compliance Officer as responsible for the creation, realization, updating and supervising of the Policy on Company scale;
• Appointed Country Compliance Officer for each geographic region in which Company has branches.
- The Company also prohibits transactions with individuals, companies and countries that are on prescribed Sanctions lists and therefore screen against UN, EU, UK Treasury and US Office of Foreign Assets Control (OFAC) sanctions lists in all jurisdictions in which Company operate.
It is the policy of the Company to prohibit and actively prevent money laundering and any activity that facilitates money laundering or the financing of terrorist or any other criminal activities. Company is committed to comply with applicable requirements and regulations. The Company’s AML/CFT/KYC Policy, relevant procedures and internal controls will be reviewed and updated on a regular basis to ensure appropriate policies, procedures and internal controls are in place to account for both changes in regulations and changes in our business.