Anti-Money Laundering (AML) Policy
- Definitions and interpretations
- “Act” refers to the Anti-Money-Laundering and Countering Financing of Terrorism Act.
- “The Company” means Kanak House Bullion LLC
- “MLRO” stands for Money Laundering Reporting Officer
- “KYC” refers to Know Your Customer
- “Relevant Employee” describes a employee who has access to information that could be used to determine whether or not a person is engaged in money laundering at any point in the course of his or her employment.
The policy of the Company is:
- To inquire about the client’s country of origin, and not do business with anyone from a nation deemed by the Financial Action Task Force (FATF) or the Government of the United Arab Emirates (UAE) to present a risk to the global financial system due to persistent or serious money laundering (ML) and terrorist financing (TF) activities or systemic deficiencies in anti-money laundering.
- Avoiding doing business with “shell” banks, evaluating customers and transactions based on risk, banning anonymous accounts, establishing a Know Your Customer (KYC) policy, etc.
- avoiding doing business with terrorists and other criminals,
- prohibitions on (a) processing financial transactions arising from criminal and/or terrorist conduct and (b) facilitating financial transactions that are the direct or indirect outcome of criminal and/or terrorist activity, including the funding of terrorism.
The Company is committed to implementing the necessary policies and processes to prevent money laundering and to comply with all applicable rules.
- The Company’s directors, officers, and employees will always work to uphold the greatest levels of integrity, candor, and foresight in all aspects of Company business in order to build and preserve the Company’s stellar reputation.
- Directors, officers, and employees must always act in a manner that protects the jurisdiction’s reputation and prevents it from being used for immoral or terrorist purposes.
- Company anti-money-laundering policies and procedures are outlined in this document and will be updated as necessary.
If you need guidance on a topic that isn’t addressed here, you may go to the anti-money-laundering laws mentioned in Section 1 for guidance.
The Need to Prevent Money Laundering
For each “regulated activity,” there are five mandatory anti-money-laundering regulations. The Company would be wise to think about using this method while trying to figure out how to mitigate the threat of money laundering.
- Customer identification procedures (KYC).
- Customer identity and transaction record-keeping procedures.
Internal processes for reporting information that raises knowledge or suspicion that a customer is involved in money laundering activities to the Compliance and AMLO assigned to receive and assess such information.
- Other internal control and communication mechanisms to deter and prevent money laundering.
- Taking steps to educate employees on anti-money-laundering policies and laws, as well as providing them with training in the identification and handling of suspicious or potentially illicit financial dealings.
PART II PROVISIONS BOTH GENERAL AND DETAILED
General anti-money laundering provisions.
In the event that law enforcement makes any of the above allegations, the Company and its employees will each bear criminal responsibility. The following are the many types of money laundering crimes:
- Arrangements relating to criminal property – It’s illegal to make deals that help criminals get their hands on, hold on to, or profit from stolen goods. The fact that the worker promptly informed law enforcement of the information or suspect through internal reporting procedures is a defense.
- Tipping off – If you have information that might compromise an investigation into money laundering, don’t provide it to the individual under suspicion or anybody else who isn’t a law enforcement official.
- Acquisition, use or possession of criminal property – It is unlawful to acquire, use, or be in possession of stolen goods.
- Handling the proceeds of corruption – Crimes of a serious kind are always a part of the picture when corrupt government leaders and public servants are involved. Dealing with the proceeds from such activities is fraught with legal, ethical, and reputational peril, including the prospect of criminal charges and constructive trust lawsuits.
- To report – Anyone who knows or thinks, or has reasonable grounds to suspect, that someone is participating in money laundering must disclose this information to the authorities via internal reporting procedures as soon as reasonably practical.
Protecting the privacy of our clients is of the utmost importance to us.
It is essential to underline that sharing your concerns about money laundering does not compromise client confidentiality.
Obligations of the Board of Directors
The Board’s money laundering and terrorist funding prevention responsibilities include the following:
- Determining, recording, and approving the Company’s general policy principles for money laundering and terrorist financing prevention and communicating them to the MLRO.
- Appoint the MLRO and, as needed, assistant MLROs and define their duties and responsibilities, which are documented in this Anti-Money Laundering Procedures.
- Approval of Anti-Money Laundering Procedures.
- Ensuring that all requirements of the Law and Regulations are met, as well as implementing adequate, effective, and sufficient systems and controls to meet the requirement.
- To ensure that the MLRO and his assistants, if any, and any other person charged with implementing the procedures for the prevention of money laundering and terrorist financing have complete and timely access to all data and information concerning Clients’ identities, transaction documents, and other relevant files and information maintained by the Company, so that they can fully execute their duties, as included h.
- Ensure that all employees are aware of the person who has been assigned the MLRO’s duties, as well as his assistants (if any), to whom they report any information concerning transactions and activities about which they have knowledge or suspicion that they may be related to money laundering and terrorist financing.
- To develop a clear and swift reporting chain in which information about suspicious transactions is provided on to the MLRO without delay, either directly or through his assistants, if any, and alerts the MLRO accordingly for its stated prescription in the Anti-Money Laundering Procedures.
- To ensure that the MLRO has adequate resources, including skilled personnel and technological equipment, to carry out his tasks effectively.
- To evaluate and approve the MLRO’s Annual Report, and to take whatever action is necessary under the circumstances to correct any flaws and/or deficiencies noted in the report.
Money Laundering Reporting Officer (or MLRO)
The Compliance officer oversees all money laundering compliance and reporting issues. The Compliance Officer will first serve as the Money Laundering Reporting Officer (herewith – MLRO). The MLRO will oversee ensuring compliance with the government requirements on anti-money laundering systems and controls. The MLRO will have adequate authority and independence, as well as access to resources and information, to carry out that task. If the Company decides to separate the Compliance Officer’s responsibilities from those of the Money Laundering Reporting Officer, this document will be updated accordingly.
The MLRO’s responsibilities are:
- Creates an internal procedures manual for the prevention of money laundering and terrorist funding, outlining, and designating the responsibility boundaries for each department involved.
- Creates and submits the customer acceptance policy to the Board of Directors for consideration and approval.
- Creates a risk management procedures handbook to combat money laundering and terrorist financing.
- Monitors and analyses the proper and effective execution of the policy, practices, measures, processes, and controls set in place, as well as the use of the risk management procedures manual in general.
- Receives information from personnel that leads to a belief or suspicion of money laundering or terrorism funding, or that may be related to such activities. The information is received in the form of a written report titled “Internal Money Laundering Suspicion Report”
- Examines and analyses the information received for any suspicious transactions, referring to any other relevant information as needed, and discusses the case’s circumstances with the reporting employee and, if applicable, management. The reported information will be evaluated on a separate form, which will be registered and kept on file.
- Assesses the systems and procedures used by a third party.
- Makes recommendations and revises policies to screen transactions for customers or transactions that the Company deems to be of significantly high risk (which may include persons, entities, or countries on lists issued by government/international bodies) and that require special attention prior to completing any such transactions.
- Communicates with the appropriate authority.
Compliance with the Company’s anti-money laundering measures is critical. Failure to comply may not only constitute a criminal offense and call into question whether the Company and the person in question are fit and proper to undertake the business for which the Company has been licensed. Individuals who fail to follow the money laundering procedures outlined in this manual may face summary dismissal.
The Compliance Officer will be responsible for ensuring that the Company’s anti-money laundering policies and procedures are followed. The Compliance Officer will be specifically accountable for:
- Supervision of the Company’s anti-money laundering policies and processes, including updating or changing such policies and procedures to reflect changes in the Regulations.
- Ensuring that all relevant personnel are aware of the Company’s anti-money laundering policies and procedures.
- Ensuring that all relevant workers are informed of anti-money laundering legislation.
- Ensuring that all relevant staff are trained in the identification and processing of transactions carried out by or on behalf of anyone who is or seems to be involved in money laundering.
- Ensuring that all new relevant workers are trained as soon as possible following their appointment.
- Ensuring that the Company’s employees, management, and directors follow the rules and procedures outlined in this handbook.
PART 3 PROCEDURES AND OBLIGATIONS OF THE COMPANY
Duty on establishing business relationships.
The Company is not permitted to engage in a one-time transaction or establish a commercial link during the applicable financial activity unless:
- Procedures for a) identifying customers, b) collecting records, and c) keeping tabs on their activity are all part of its system for combating money laundering.
- Find Suspicious Purchases.
- Internal reporting systems and any other internal control and communication processes required to prevent and identify money laundering.
- To ensure that its employees are aware of their legal responsibilities and the Company’s policies and procedures, the organization implements and regularly updates training and education initiatives.
- The MLRO is responsible for handling any requests for statements or information from the media or any other source.
As soon as practically feasible after the first interaction, and in any case before transferring or paying out any money to a third party, the Company must ensure that adequate proof of the identity of any client or counterparty is supplied, or such other precautions are implemented. If a customer seems to be acting on behalf of someone else, they must also provide sufficient proof of the other party’s identity in order to pass the identification check.
If the company is not presented with sufficient documentation, it will cease doing business with the customer and will cancel any contracts that have been made, unless the company has already notified the proper authorities. Any suspicion or actual knowledge of money laundering must be reported to the MLRO without delay.
Methods of Identification
The Company will take precautions to verify that it is communicating with a legitimate individual or corporation, and will gather sufficient proof to support the applicant’s claims of being the person or entity claimed in the application. Company has the ultimate legal duty for ensuring that the techniques and evidence collected are adequate when relying on a third party to verify or confirm the identity of an application.
There is no one piece of documentation or data source (outside of a database constructed from a number of other valid data sources) that can be relied upon to verify both name and permanent address, hence the identification process must be cumulative.
The Company will take all necessary actions to verify the identity of its customers and, if relevant, their beneficial owners in line with applicable law and regulatory authority regulations.
For all customer types, it is essential to collect and maintain the following details, in addition to identity information (as described below):
- Source of wealth (description of economic activity which has generated the net worth)
- Estimated net worth;
- Source of funds to be invested;
- References or other documents to confirm reputation information, if available; and
- Independent background checks are conducted by a recognized screening system.
The Company will be satisfied with the identity after reviewing government-issued identification papers or other suitable evidence. Full name, DOB, nationality, and residence address will all be collected as part of the identification process. All forms of identification presented at the door must be up to date.
- Passports, national identity cards, or their equivalents in the relevant jurisdiction are examples of common forms of customer identification.
- Separate proof of residency (utility bill, bank statement, acknowledgment of address issued by a relevant official).
No special steps beyond the usual commercial checks and due diligence are usually necessary if the applicant company is listed on a recognized or approved stock exchange, or if there is independent evidence that the applicant is a wholly owned subsidiary or subsidiary under the control of such a company.
If the application is an unlisted business, further steps will be taken to confirm the company’s identity, good standing, and the authorization of persons acting on its behalf. Although the specific paperwork needed in these situations might vary from jurisdiction to jurisdiction, it will often consist of:
- The company’s current directors must be listed in a Certificate of Incumbency or similar document, and the company’s incorporation or registration must be verified by a certificate of incorporation/certificate of trade or equivalent document issued by the relevant jurisdiction in accordance with applicable law.
- The firm’s governing papers, such as its statutes, memorandum and articles of association, or comparable documents, that spell out the scope and manner of the executive’s ability to bind the company.
- Extracts from the Commercial Register of the country of incorporation may also be used to substantiate the above information if such details are included in the extract.
Beneficial Owners Due diligence must be done on all principal owners identified in accordance with the following principles:
- Natural persons: where an applicant is an individual, the Company must clearly demonstrate whether the client is operating on his or her own behalf based on facts and evidence provided by the client.
- Legal entities: where the client is a company, such as a private investment company, the Company must understand the structure of the company sufficiently to determine the provider of funds, principal owner(s) of the shares, and those who have control over the funds, e.g., the directors and those with the power to direct the company’s directors. In the case of other shareholders, the Company will make a reasonable determination as to the necessity for additional due diligence. This principle is true regardless of whether the share capital is registered or bearer.
While clear scanned versions of documents will be accepted, attested scanned copies or genuine attested copies may be requested if further clarification is required.
- Notaries public or other authorities with equivalent power to certify copies of documents in the relevant jurisdiction;
- necessary state officials (judge, police officer, consular official, etc.); or licensed financial institutions may act as certifiers.
- Officials from the company may attest to the veracity of copies of documents created in their presence.
The Company may use an online version of a document relating to the corporate entity (such as an extract from the Commerce Register) if it is available on the official website of the relevant state authority, so long as a printout of the document is made by a member of the Company’s staff and filed away in the appropriate client file. Contact details such as a phone number and email address will also be sought from our customers.
High- risk countries.
higher level of scrutiny will be applied to clients and beneficial owners living in, and funds originating from, countries that have been identified by credible sources as having insufficient anti-money laundering standards or as posing a substantial risk for crime and corruption. The Company will be more cautious about doing business with customers or beneficial owners located in such nations.
Foreign Countries and Territories referred to as “Offshore Jurisdictions”.
The risks associated with offshore entities are included into the due diligence procedures detailed here. But for business performed by customers or beneficial owners located in certain places, the Company will impose further limits.
High Risk Activities.
There will be a heightened level of scrutiny placed on clients and beneficial owners whose funds originate from suspicious or high-risk activities for money laundering.
Officials of the state.
More attention will be paid to the personal lives of those in positions of public trust, such as elected officials, senior executives of government businesses, lawmakers, political party leaders, and others like them.
Accountability for Confirmation.
A key responsibility of the MLRO while onboarding a new client is verifying the identity of each individual. A customer agreement should not be given to a new applicant until all verification processes have been completed and sufficient identification has been supplied (as determined in writing by the Compliance Officer).
Procedures for Verification.
Clients must be checked and evaluated using the “Client Profiling” form, and the process must be documented by noting the relevant details on the Company’s documentation checklist as required by Section 3.2.
The stamp of approval from the Compliance Officer.
As soon as the employee or the Company’s designee has finished filling out the Client Identification Questionnaire, it should be signed and sent to the Compliance Officer for filing. Each applicant’s documents need to be countersigned by the Compliance Officer, who is also in charge of deciding what, if any, extra information or paperwork is needed to start doing business with the applicant.
Methods for maintaining a record of events.
In addition, the Company must keep all documentation for at least 5 years after the deal closes. Documentation of transactions with or for this customer, as well as documentation of the counterparty’s identity, should be kept.
Education and training.
The following will be communicated to employees who handle or are in charge of handling transactions that may involve money laundering:
- Their responsibilities under the Company’s anti-money laundering arrangements, including obtaining sufficient evidence of identity, recognizing and reporting knowledge or suspicion of money laundering, and utilizing findings of material deficiencies.
- The identity and responsibilities of the MLRO;
- The law and regulatory framework governing money laundering and its prevention. Staff employees will get regular training in addition to the material presented here.
As part of this process, the Compliance Officer should provide presentations. It is imperative that employees keep their knowledge of the Anti-Money Laundering, Anti-Terrorism Financing, And Proceeds of Unlawful Act, the Guidelines on Anti-Money Laundering and Counter Financing of Terrorism and Other Business, and the Regulations up to date due to the severe consequences of violating these laws.
The dates, content, and names of people who have attended anti-money-laundering training should all be documented and maintained on file.
Obligation to report.
Any employee who has knowledge, suspicion, or reasonable grounds to suspect money laundering must report such information in accordance with applicable law and regulation. Consequently, a worker is in violation of the law even if he or she does not know or suspect anything but should have known or suspected something and did not disclose it. Getting there will need constant monitoring for suspicious purchases. The Company’s understanding of its customers is its first and best line of defense against and indicator of money laundering operations. Verifying the identities of new counterparties and making sure they are real businesses that adhere to the same ethical standards as the Company are both very important.
In the past, knowing about money laundering might include knowing about conditions that would suggest facts to such an honest and reasonable person or bring them into doubt, as well as knowing about the obvious and willfully disregarding them.
Suspicion is more than just a hunch, yet it’s judged on an individual basis.
The concept of “reasonable grounds to suspect” adds an objective test of suspicion as opposed to a subjective one. This may be the result of willful ignorance (ignoring obvious evidence) or carelessness (not doing essential research) or a failure to properly evaluate the information at hand.
Therefore, the Company will ensure that its staff takes all appropriate measures under the circumstances to learn about the customer and the motivation behind the transaction or instruction.
Money Movements That Raise Red Flags
In general, a suspicious transaction is one that doesn’t fit with the customer’s established pattern of lawful activity. Therefore, we’ll be paying special attention to the specifics of the client’s business and needs. Any employee who has any information about or suspicions of money laundering is required to report it.
Whether or not a transaction is suspicious may be determined with the use of the following questions:
- Is it at odds with the client’s prior behaviour?
- Is the size of the transaction out of line with what you would expect from this customer based on their usual behaviour and wealth?
- Asking, “Does the Company know of any additional transactions relating to the one in issue that may be used to hide money and reroute it to other forms, destinations, or beneficiaries?” is a good way to ensure that you’re not being scam.
- Is this a good fit for the client’s needs?
- Has the client’s spending behaviour altered?
Consider if the client’s preferred mode of payment fits the norm: No matter how little, every suspicion of money laundering should be dealt with in the absence of the MLRO. An in-house report form for reporting money-laundering concerns is available to the employees.
The MLRO’s duty is to inform the proper authorities whenever a report of knowledge or suspicion is made.
It is important to keep an eye on any and all accounts associated with customers who hold positions of public trust, such as government officials and politicians.
It is possible to defend yourself against a claim of breach of confidence by stating that you reported a suspect. However, the MLRO or his deputy must approve any statements made to the media. In a similar vein, he or his delegate should be contacted with any requests for clarification or further information. Confidentiality is of the highest importance throughout an investigation, and employees are reminded that “tipping off” is a crime.
Employees are obligated to report any suspected instances of money laundering to the MLRO. There has to be a complete record of the suspicious activity, including the identity and location of the employee who reported it, complete client and account information, and a detailed explanation of what happened.
It is important to keep track of any questions asked about the report internally, as well as the rationale for submitting or rejecting the report.
The MLRO must stress the need of keeping information about a report confidential and warn the reporting employee not to “tip off” the subject of the reported suspicion.
If the company or transaction was terminated due of red flags related to the application or proposal, then you must report this information.
The MLRO, or his duly authorized delegate, will look into the matter, and if reasonable suspicion is raised, it will be reported.
The MLRO or his or her delegate will not need anyone else’s help or permission before releasing any report.
In making this determination, the MLRO will have access to any relevant information, including “know your business information,” that is in the Company’s possession. Information regarding a client’s or any person for whom the client has been or is acting financially; and the nature of any transactions the Company has engaged into with or for the client would be considered”