Anti-Money Laundering and Counter-Terrorism Financial Policy
IIG Limited (“IIG” or “the Company”) aims to prevent, detect and not knowingly facilitate money laundering and terrorism financing activities. IIG does this to protect its reputation, to comply with relevant laws and requirements, as well as to be a good corporate citizen. IIG also aims to comply with anti-money laundering (“AML”) and counter-terrorism financing (“CTF”) recommendations in a way that complements business priorities.
The management of IIG places extremely high importance on assisting in discovering any money laundering scheme. These policies are to be read by and adhered to by all employees and officers of the Company. Any employee found not to be adhering to these policies and procedures will face severe disciplinary action.
It is the policy of IIG and its affiliates to prohibit and actively prevent money laundering and any activity that facilitates money laundering or the funding of terrorist or criminal activities.
This Anti-Money Laundering and Counter-Terrorism Financing Policy (the “Policy”) is based on the following, amongst other documents and information:
1. Code On The Prevention Of Money Laundering & Terrorist Financing.
2. FATF IX Special Recommendations.
3. FATF 40 Recommendations.
4. AML and CFT laws applicable in Belize.
“Transaction” means any deposit, withdrawal, exchange or transfer of funds.
“Money laundering” is the conversion of criminal monetary proceeds into clean money, so that it may be used as if it was legitimately acquired funds. It can also be seen as the need to change the form of the proceeds in order to shrink the huge volumes of cash generated by criminal activity. These proceeds include those derived from a variety of criminal activities including tax evasion, terrorism, sale of drugs, corruption, theft, etc.
Generally, money laundering occurs in three stages. Cash first enters the financial system at the “placement” stage, where the cash generated from criminal activities is converted into monetary instruments, such as money orders or traveller’s checks, or deposited into accounts at financial institutions. At the “layering” stage, the funds are transferred or moved into other accounts or other financial institutions to further separate the money from its criminal origin. At the “integration” stage, the funds are reintroduced into the economy and used to purchase legitimate assets or to fund other criminal activities or legitimate businesses. Terrorist financing may not involve the proceeds of criminal conduct, but rather an attempt to conceal the origin or intended use of the funds, which will later be used for criminal purposes.
3. RISK-BASED APPROACH
The possibility of being used to assist with money laundering and terrorist financing poses many risks for IIG, including:
1. Civil action against the group as a whole and as an individual partner.
2. Damage to reputation leading to a loss of business.
These risks must be identified, assessed and mitigated, just as are done for all business risks facing IIG. The Company believes that if it knows its client well and understands its instructions thoroughly, it will be better placed to assess risks and spot suspicious activities. The risk-based approach means that IIG focuses its resources on the areas of greatest risk.
The resulting benefits of this approach include:
1. More efficient and effective use of resources proportionate to the risks faced.
2. Minimising compliance costs and burdens on clients.
3. Greater flexibility to respond to emerging risks as laundering and terrorist financing methods change.
4. AML COMPLIANCE OFFICER
IIG shall designate an Anti-Money Laundering Program Compliance Officer (“AML Compliance Officer”), who is also qualified in terms of experience, knowledge and training and to whom any internal report of suspicious transactions must be made.
The AML Compliance Officer will be fully responsible for the Company’s AML and CFT program and report to the Board of the Company or a committee thereof any material breaches of the internal AML/CFT policy and procedures and of the AML/CFT laws, codes and standards of good practice.
The duties of the AML Compliance Officer will include monitoring the Company’s compliance with AML/CFT obligations, overseeing communication and AML/CFT training for employees. The AML Compliance Officer will also ensure that proper AML records are kept. When warranted, the AML Compliance Officer, will ensure Suspicious Transactions Reports (“STR”) are duly filed. The AML Compliance Officer will also be responsible for ensuring that the Company has adequate customer identification and verification program in place at all times and in accordance with requirements of the law. The AML Compliance Officer shall also prepare reports on an annual basis and such other periodic reports as he deems necessary to the Board of the Company or a committee thereof dealing with:
· the adequacy/shortcomings of internal controls and other AML/CFT
· procedures implemented,
· recommendations to remedy the deficiencies identified above,
· the number of internal reports made by staff, and
· the number of reports made to the Financial Intelligence Unit.
5. SUSPICIOUS TRANSACTION REPORTS (STRS)
Internal suspicious transaction reports are not to be disclosed to anybody other than to the AML Compliance Officer.
The AML Compliance Officer making an STR is protected from civil, criminal or disciplinary action in respect of any information contained in the report, unless the information was disclosed in bad faith.
The AML Compliance Officer is obliged to keep records in a form that will allow a transaction to be completely reconstructed at any time by the authorities.
All STR records are to be kept for a period of at least seven years.
6. CUSTOMER DUE DILIGENCE
Effective Customer Due Diligence/‘know your customer’ (“CDD” or “KYC”) measures are essential to the management of money laundering and terrorist financing risk. CDD is identifying the client and verifying their true identity on the basis of documents, data or information obtained from a reliable and independent source both at the moment of starting a business relationship and on an ongoing basis.
Identification of a client is coming to know a client’s identifying details, such as their name and address, his financial status and the capacity in which he is entering into the business relationship with the Company. Verification is obtaining evidence satisfactory to the Company which supports this claim of identity.
1. collect certain identification information from each customer who opens an account;
2. utilize risk based measures to verify the identity of each customer who opens an account;
3. record customer identification information and the verification methods and results;
Prior to opening of account, the Company collect the following information:
For all accounts, if applicable, for any person, entity or organization opening a new account and whose name is indicated on the account:
1. Name, incorporation number, legal status, date and country of incorporation or registration (for an entity other than an individual);
2. Date and place of birth (for an individual);
3. occupation, public position held and where appropriate, the name of the employer (for an individual) or nature of business (if an entity other than an individual);
4. A current address, which will be residential (for an individual) or registered office address and principal place of business (where different from the registered office (for an entity other than an individual);
5. Passport number and country of issuance, identification card number and country of issuance of any other government issued document evidencing nationality or residence and bearing a photograph or other similar safeguard e.g. national identity cards, current valid passports or current valid driving licences;
6. The identity of underlying principals (including beneficial owners, controllers, directors or equivalent) with ultimate effective control over the capital or assets of an entity other than an individual in addition to evidence that any person who purports to act on behalf of the legal person is duly authorised and identify that person.
Where the underlying principals are not individuals, the Company shall investigate further to establish the identity of the natural persons ultimately owning or controlling the business.
When opening an account for a foreign business or enterprise that does not have identification number, the Company will request alternative government issued documentation certifying the existence of the business or enterprise.
Customers who refuse to provide information
If a potential or existing customer either refuses to provide the information described above or such information as the Company may require or appears to have intentionally provided misleading information, the Company shall not open a new account and, after considering the risks involved, will consider closing any open account(s) of an existing customer.
Based on the risk, and to the extent reasonable and practicable, the Company will ensure that it has a reasonable belief that it knows the true identity of its customers by using risk based procedures to verify and document the accuracy of the information received about the customers. In verifying customer identity, the Company will analyse any logical inconsistencies in the information obtained.
Customer’s identity must be verified when:
1. Establishing a business relationship with a new client
2. The Company suspects money laundering or terrorist financing
3. The Company has doubts about the veracity or adequacy of documents, data or information previously obtained for the purpose of CDD.
Where verification of identity is conducted during the establishment of the business relationship, verification will be completed as soon as practicable.
Methods of verification
The Company will verify customer identity through documentary evidence and non-documentary evidence (electronic verification). The Company will use documents to verify customer identity when appropriate documents are available. In light of the increased instances of identity fraud, the Company will supplement the use of documentary evidence by using the non-documentary means described below whenever possible. It may also use such non-documentary means, after using documentary evidence, if still uncertain about whether the true identity of the customer is known.
In analyzing the verification information, the Company will consider whether there is a logical consistency among the identifying information provided, such as the customer’s name, date of birth, street address and telephone number.
Appropriate documents for verifying the identity of customers include, but are not limited to, the following:
For an individual: a current government issued identification evidencing nationality, residence, and bearing a photograph or similar safeguard, such as a driver’s license or passport; and
For a person other than individuals, documents showing the existence of the entity, such as Certificate of Incorporation, Articles of incorporation, a government issued business license (if applicable), etc.
The Company will not be required to take steps to determine whether the document that the customer has provided for identity verification has been validly issued and it may rely on government issued identification as verification of a customer’s identity. If, however, it appears that the document shows some obvious form of fraud, the Company will consider that factor in determining whether it can form a reasonable belief that it knows the customer’s true identity.
The Company will use the following non documentary methods of verifying identity:
1. Contacting a customer;
2. Independently verifying the customer’s identity through the comparison of information provided by the customer with information obtained from Internet and/or other source;
3. Checking references with other financial institutions; or
4. Obtaining a financial statement.
Non documentary methods of verification will be used in the following situations:
1. When the Company is unfamiliar with the documents the customer presents for identification verification;
2. When there are other circumstances that increase the risk that the Company will be unable to verify the true identity of the customer through documentary means.
Lack of verification
Should the Company reasonably believe that the true identity of a customer cannot be established, it will do any or a combination of the following:
1. Not proceed with or terminate any business with the customer;
2. File a STR in accordance with applicable law and regulations.
7. ENHANCED DUE DILIGENCE (EDD)
The regulatory measures requires further research and identification of clients who may pose a high risk of money laundering to better assess the risks they pose.
If the Company has assessed that the business relationship or occasional transaction is a high risk relationship, based on the customer’s individual risk status, that is, the nature of the customer, the business relationship, its location, or any other specificity of the business relationship, it will apply EDD measures. By way of non-exhaustive examples, circumstances when EDD will be applied are:
1. If IIG establishes a business relationship with a customer from a country that has insufficient anti-money laundering and countering financing of terrorism systems or measures in place; or
2. If a customer seeks to conduct, through IIG, a complex, unusually large transaction or unusual pattern of transactions that have no apparent or visible economic or lawful purpose
The Company may in all circumstances consider that the level of risk involved is such that enhanced due diligence should apply to a particular situation.
In addition to CDD, the following enhanced requirements under EDD will apply:
1. Information relating to the source of the funds or the wealth of the customer will be required;
2. Carrying out more frequent and more extensive ongoing monitoring on the customer and comparison with provided lists of terrorists and other criminals within openly accessible media sources (World-Check, internet) will be conducted.
If suspicious information is found indicating possible money laundering or terrorist financing activity, the AML Compliance Officer shall file a STR in accordance with applicable law and regulations.
8. POLITICALLY EXPOSED PERSON (PEP)
The Company will review public information, including information available on the Internet or in databases, to determine whether any account holders are individuals who are or who have been entrusted with prominent public functions, their family members or close associates (“PEPs” If information indicating that an account holder may be a PEP is found, and upon taking additional reasonable steps to verify this information, it is determined that the individual is, in fact, a PEP the Company will:
1. Take enhanced due diligence measures to establish the source of funds and source of wealth of the PEP.
2. Conduct enhanced ongoing monitoring of the business relationships involving the PEP.
3. Establish or continue the business relationship only with senior management approvals.
If suspicious information is found indicating possible money laundering or terrorist financing activity, the AML Compliance Officer shall file a STR in accordance with applicable law and regulation.
9. MONITORING ACCOUNTS FOR SUSPICIOUS TRANSACTIONS
The Company will monitor a sufficient amount of account activity to permit the identification of patterns of unusual size, volume, pattern or type of transactions, geographic factors such as whether jurisdictions designated as “non-cooperative” are involved, or any of the “red flags” identified below.
The Company will look at transactions, including trading and wire transfers, in the context of other account activity to determine if a transaction lacks financial sense or is suspicious because it is an unusual transaction or strategy for that customer.
The Company will closely monitor any transaction of live account holder for identification of any suspicious activity.
The AML Compliance Officer will be responsible for this monitoring, will document when and how it is carried out, and will report suspicious transactions to the appropriate authorities, when necessary.
Examples of suspicious transactions, behaviours or activities that should raise a “red flag” and cause further inquiry. These “red flags” may alert IIG employees to possible suspicious activity.
Some examples of “red flags” that could cause further investigation include:
· Customers who wish to maintain a number of trustee or client accounts that do not appear consistent with the type of business, including transactions involving nominee names.
· Matching withdrawals with deposits by different ways on the same or previous day.
· Exposure or abuse of transfers without completing trading operations on the trading account.
· Revelation of unusual nature of operations that do not have obvious economic substance or obvious legal purpose.
· Customers who give conflicting information to different staff members.
· Large cash withdrawals from a previously inactive account, or from an account which has just received an unexpected large credit from abroad.
· A customer exhibits an unusual level of concern for secrecy, particularly with regard to the customer’s identity, type of business or source of assets.
· A corporate customer lacks general knowledge of its own industry.
· A customer is unconcerned with the risks, commissions or other costs associated with trading.
· Revelation of circumstances implying that the operations are performed for the purpose of money laundering or financing terrorism.
Responding to red flags and suspicious activity
When a member of the Company detects any “red flag”, he must file an incident report without delay to the AML Compliance Officer. He may also be required to investigate the activity further under the direction of the AML Compliance Officer. This may include gathering additional information internally or from third party sources, classifying the account as a high risk account, placing the account under heightened supervisory review, which includes, but is not limited to, depending on the situation, turning the account over to the AML Compliance Officer for review of all orders prior to entry, daily review of all trading activity, review of all money transfer requests, review of all deposits, contacting the authorities, freezing the account, or filing a STR. The Company shall not inform anyone outside of law enforcement or other competent authorities about a STR.
10. RECORD KEEPING
Obligation to keep transaction records
When transferring funds, the Company will record in its database at least the following information:
1. The execution date of the transmittal order;
2. The name and address of the recipient;
3. The amount of the transmittal order;
4. The identity of the recipient’s financial institution, and;
5. The account number of the recipient.
For each transmittal order that the Company accepts, it will retain in its files any payment instructions received from the transmitter with the transmitter order and any form relating to the transmittal of funds that is completed by the person placing the transmittal.
STR Maintenance and Confidentiality
All employees of the Company shall be aware of to whom and in what format their suspicions must be reported. They will also receive training from the AML Compliance Officer upon, and during the course of, their employment. The AML Compliance Officer shall hold AML records, STRs and supporting documentation confidential and ensure that STRs are filed as required. This information will not be communicated to anyone other than law enforcement or other competent authorities. Once an internal suspicion report is made to the AML Compliance Officer or a STR has been submitted to the revolving FIU, no employee of the Company shall warns or inform the owner of any funds of any report or any action that is to be taken in respect of any transaction concerning such funds. When a STR has been made to the revolving FIU with respect to a particular customer, the Company shall ensure that due care is taken during subsequent enquiries so as not to alert the customer about the disclosure. Appropriate measures shall be taken by the Company to ensure that the offence of tipping off is not committed.
As part of its AML program, IIG will maintain and keep documentation pertaining to customer identity and verification for at least seven years or such other period as may be required by law.
The Company and the AML Compliance Officer shall ensure that employees are properly trained and are fully aware of the Company’s AML/CFT policies and procedures. The Company will also perform criminal and disciplinary background checks on all employees before they are hired.
IIG will monitor its employees to ensure that AML procedures are adhered to. Based on the severity and nature of the violation, the employee will be reprimanded and warned that any future violation may result in termination. If IIG deems the violation to be intentional and or suspects the employee is involved in money laundering in any way, the employee will be terminated for cause without warning and reported to the appropriate authorities.
The Company will develop on-going employee training under the supervision of the AML Compliance Officer and senior management. The training will occur on an annual basis. It will be based on the Company’s size, customer base and resources. The Company will either develop the training program or contract for it.
On an annual basis, thereafter, the AML Compliance Officer will hold internal trainings for all employees. The training will include at a minimum:
1. How to identify red flags and signs of money laundering that arise during the course of the employees’ duties.
2. What to do once the risk is identified.
3. What employees’ roles are in the Company’s compliance efforts and how to perform them.
4. The Company’s record retention policy.
5. The disciplinary consequences (including civil and criminal penalties) for non-compliance with the requirements of the applicable legislation.
The Company will review its operations to determine if certain employees, such as those in compliance, margin, and corporate security, require specialized additional training. The written procedures will be updated to reflect any such changes.
Employees must report any violation of the Company’s AML/CFT compliance program to the AML Compliance Officer, unless the violation implicates the AML Compliance Officer, in which case the employee shall report the violation to senior management. Such reports will be confidential, and the employee will suffer no retaliation for making them.
12. Restricted Country List
The Company do not conduct any business with client from the countries in the Restricted Country list as below: