This document is a general guide defining Anti-Money Laundering (AML), Counter Terrorist Finance (CTF), Counter Fraud Procedures, regulations, the Risk- Based approach and gives some examples of what can be deemed to be money laundering.
Why is this guide important?
This guide is important because it will help you comply with the law.
The Money Laundering Regulations in the United Kingdom:
The legislation governing money laundering and Terrorist Financing and the fight against it is contained in the following: a) Proceeds of Crime Act 2002 b) Terrorism Act 2000 c) The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017. d) Criminal Finances Act 2017.
a) Proceeds of Crime Act 2002
b) Terrorism Act 2000
c) The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017.
d) Criminal Finances Act 2017.
The following legislation applies to money transmission businesses only:
- Regulation (EU) 2015/847 on information accompanying transfers of funds (the Payments Regulation)
- Payment Service Regulations 2017
In accordance with our responsibilities, under the regulations, Shpun has appointed a Money Laundering Reporting Officer (MLRO).
Contact: 0121 328 0011
Email: firstname.lastname@example.org (subject MLRO)
Our obligations contain, but are not limited to
a) Ensuring all staff at Shpun are trained regularly in anti-money laundering
b) Ensuring that they understand their training
c) Adopting a risk-based approach to customer due diligence and enhanced due diligence including ongoing monitoring of any business relationships
Training and Awareness
Shpun will provide appropriate training to its staff about money laundering and combating terrorism financing as successful control relies on both training and awareness.
CUSTOMER DUE DILIGENCE:
Customer due diligence means:
- Identifying all customers and verifying their identity.
- Identifying all beneficial owners, where applicable, and taking adequate risk-based measures to verify their identity.
- Obtaining information on the purpose and intended nature of the business relationship.
- Conducting ongoing monitoring of the business relationship, to ensure transactions are consistent with what the business knows about the customer, and the risk assessment.
- Retain records of these checks and update them when there are changes.
Shpun customer due diligence when:
- Establishing a business relationship with a customer
- We identify and verify the customer when a money transmission transaction is of any value.
- Carrying out an occasional transaction with a customer of GBP 10000 or more.
- Money laundering or terrorist financing is suspected
- When we suspect that information obtained for due diligence checks on a customer is not reliable or adequate
Non-compliance with customer due diligence
If we find that customer is not complying while performing the customer due diligence measures,
then we do not: –
- Carry out a transaction with or for the customer
- Establish a business relationship or carry out an occasional transaction with the customer. You must: –
- Terminate any existing business relationship with the customer
- Consider making a suspicious activity report
- If no suspicious activity report is made, record the reasons why it is considered that a report is not required
Ongoing monitoring of a business relationship
Shpun always keeps the information collected for this purpose up to date. We check them periodically and expired documents are replaced with copies of newly issued documents.
As part of your customer due diligence measures, we must identify individuals. We obtain a private individual’s full name, date of birth and residential address as a minimum. You should verify these using current government issued documents with the customer’s full name and photo, with a customer’s date of birth or residential address such as:
- You should verify these using current government issued documents with the customer’s full name and photo, with a customer’s date of birth or residential address such as:
- A valid passport
- A valid photo card driving licence (full or provisional)
- A national identity card
- A firearms certificate
- An identity card issued by the Electoral Office for Northern Ireland
When verifying the identity of a customer using the above list of government issued documents, we take a copy and keep it in the customer’s file.
Where the customer does not have one of the above documents, we ask for the following: –
A government issued document (without a photo) which includes the customer’s full name and
also secondary evidence of the customer’s address, for example an old style driving licence or
recent evidence of entitlement to state or local authority funded benefit such as housing benefit,
council tax benefit, pension, tax credit.
Secondary evidence of the customer’s address not downloaded from the internet, for example a utility bill, bank, building society or credit union statement or a most recent mortgage statement.If Shpun verify the customer’s identity by documents, we must see the originals and do not accept
photocopies, nor accept downloads of bills, unless certified as described below: –
Photocopies identity documents can be accepted as evidence provided that each copy document has an original certification by an appropriate person to confirm that it is a true copy and the person is who they say they are for standard customer due diligence an appropriate person is for example a bank, financial institution, solicitor or notary, independent professional person, a family doctor, chartered accountant, civil servant, or minister of religion.
The documents must be from a reliable source not connected to the customer.
Shpun validates the documents to satisfy yourself of the customer’s identity. This may include checking:
- Photo likeness
- Whether addresses match
Where an agent, representative or any other person acts on behalf of the customer we ensure that they are authorised to do so, identify them and verify the identity using documents from a reliable and independent source.
Shpun’s Enhanced Due Diligence (EDD) policy is designed to obtain as much information as possible in order to ensure the validity of the transaction and that Shpun complies with ML Regulation (2017), POCA (2002), Terrorism Act (2000), Criminal Finances Act 2017 and the EU Money Laundering Directives. The checking is meant to be thorough in its nature to ensure that we record enough information that will help us form a true picture of the client. As follows:
- 1 form of photographic ID
- 1 form of proof of address
- Disclaimer/questionnaire for the origin of funds not being derived from the proceeds of crime
- Source of funds verification in the form of a recent Bank statement showing the movement of funds.
- If funds have been generated/received via a 3rd party (i.e. solicitor for a house sale). Then additional correspondence or documentation is to be collected and put on file.
- If unusual documents are found, please consult with MLRO and External Consultant for further verification.
If enhanced due diligence is appropriate, then we do more to verify identity and scrutinise the
background and nature of the transactions than for standard customer due diligence, for
example at least:
- obtain additional information or evidence to establish the identity
- take additional measures to verify the documents supplied, or require certification by a bank, financial institution, solicitor or notary
- ensure the first payment is made through a bank account in the name of the customer
- take more steps to understand the history, ownership, and financial situation of the parties to the transaction
- establish the source of wealth and source of funds
- carry out more scrutiny of the business relationship and satisfy ourselves that it is consistent with the stated purpose
A certified document should have:
- a statement that the document is “Certified to be a true copy of the original seen by me’, and where appropriate, “This is a true likeness of the person”
- an official stamp of the person certifying
- Signed and dated with a printed name
- occupation, address and telephone number
The UK financial sanctions regime plays an important part in delivering the Government’s foreign policy objectives.
The government to prevent and suppress the financing of terrorism and terrorist acts also uses it.
a) Any client found on a sanctions list will be declined and no transactions will be carried out.
b) Our E-Remit software automatically identifies sanctioned entities.
Sanctions List and Politically Exposed Persons (PEPs)
A consolidated list of targets listed by the United Nations, European Union and United Kingdom under legislation relating to current financial sanctions regimes will be integrated to our remittance front-end IT system. Our system will automatically detect if both the client’s name and receiver’s name matches with the names in the sanctions list.
A unique ID number will be assigned to each client. Clients are encouraged to use their ID number in all communications with us for security purposes. The outcome is that we can assure that we only deal with the right person and prevent usage of client’s account by others.
Client must give the unique ID number every time he/she does a transaction. Identity checks should be done by asking security questions such as date of birth, postcode, and contact numbers.
These checks are strictly implemented before proceeding with the transaction.
AUTOMATED SYSTEM AND CONTROLS
The following AML set of rules will trigger the system to hold the transaction:
- Initial limit of GBP 1 for incomplete KYC requirements
- Quarterly limit of GBP 5000 for the Sender requires declaration document to be completed
- Sender added more than 5 active beneficiaries
- Both sender and beneficiary names match with those names in the Sanctions List.
NFORMATION ABOUT OUR SERVICES TO POTENTIAL CLIENTS
Shpun staff are not expected to carry out customer due diligence or enhanced due diligence procedures with a client where the meeting is merely to provide information to a prospective client about our services or is a first interview/discussion prior to a relationship being established.
Shpun offers a standard service for all commercial and corporate clients. Our services are tailored to best suit the needs for those firms who require specialist support and wish to maximize their profitability and protect their bottom line against adverse currency fluctuation.
Once we have the clients signed documents and ID back, the business manager will either accept or reject the facility request. Subject to all documents being in place and business relationship approved, our relationship will commence, and we will be obliged to offer services and support in line with our customer service standards. In turn, business customers will be expected to maintain their business and transactions according to our policies and procedures.
The points below are to be noted:
- In adopting a risk-based approach staff should ensure they understand the company’s legal form structure and ownership.
- The following information/documents must be obtained/completed in respect of corporate clients:
- Account opening documents
- Full corporate name
- Corporate registered number
- Corporate registered office
- Corporate trading address
- Additionally, in respect of private companies Shpun requires the names of all directors and the names of beneficial owners holding over 25%.
- Verification of ownership shall be by an online search of Companies House or other electronic search engine for companies.
- The identity of all Directors, beneficial owners and all authorized signatories will be verified.
- It is important that Shpun is satisfied that a person acting on behalf of a corporate client has authority to do so. Evidence of such authority is required on the account opening document
- Corporate and Legal Entities provide an attractive vehicle for money laundering. The use of “brass plate” or shell companies is commonplace. Care must be taken to verify the identity of the client (i.e. the Company). Limited liability partnerships are to be treated as corporate clients.
- Shpun will create and maintain sufficient documentation to give a clear and full record of all contacts and communications with every client.
- It is the responsibility of all staff members to ensure completeness of records for the area in which they are employed
- All records will be kept for at least 5 years after the business relationship has ended.
- Where an investigation is being conducted all records will be kept for 5 years or until the investigation has ended; whichever is the longer.
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