This Policy represents the basic standards of Anti-Money Laundering and Combating Terrorism Financing (hereinafter collectively referred to as AML) procedures of P.L.A. Consulting OÜ (the “Company”). The Company drafted its AML policy in compliance with the EEA laws with respect to money laundering and terrorist financing.
This policy is effective and copies of this Policy will be distributed to all employees and all relevant employees must be thoroughly familiar with and make use of the material contained in this Policy.
The adopted risk based approached taken by the Company takes into consideration different factors including country of residence/origin of clients, amount of funds, way of transfer of funds, number of transfers, economic profile of clients, risk profile of clients, and many others factors.
The same risk based approach taken by the Company takes active techniques and procedures to identify the risks involved like:
a. Ongoing monitoring of clients’ accounts, transactions, and instruments traded, etc.
b. Ongoing implementation and updating of AML (anti money laundering) procedures implemented by the European Union (EEA)
c. Use of modern software for screening clients before and in the process of accepting them; and during their engagement with the company if there is reasonable suspicion that have risen against them.
After successfully injecting the illicit funds into the financial system, laundering them requires creating multiple layers of transactions that further separate the funds from their illegal source. The purpose of this stage is to make it more difficult to trace these funds to the illegal source.
This is the final stage in a complete money laundering operation. It involves reintroducing the illegal funds into the legitimate economy. The funds now appear as clean income. The purpose of the integration of the funds is to allow the criminal to use the funds without raising suspicion that might trigger investigation and pursuit.
In reality, the three stages often overlap and the benefit from many crimes including most financial crimes does not need to be ‘placed’ into the financial system. Money laundering is a crime that is most often associated with banking and money remittance services. Whilst banks are often an essential part of successful laundering schemes, the financial and related services that Licensees offer are also vulnerable to abuse by money launderers.
Terrorist financing is an activity that supports future illegal acts, whereas money laundering generally occurs after the commission of illegal acts; legitimately derived property is often used to support terrorism, whereas the origin of laundered money is illegitimate.
Permanent residential address:
Date of birth:
Place of birth:
Primary identity documentation for identity must be obtained and retained on these clients. They must bear a photograph of the principal. Primary identity documentations acceptable are:
1. Current valid passports;
2. National Identity cards;
3. Current valid driving licenses;
In addition to this primary identity documentation, we must also obtain additional verification of identity information- secondary identity documentation. The following documentation is acceptable:
1. A recent utility bill (which is less than 3 months old);
2. A recent bank or credit card statement (as such PO Box addresses are not acceptable as permanent residential addresses of clients. Some countries have P.O Box addresses such as in Middle East and Africa) (which is less than 3 months old);
3. A recent bank statement (which is less than 3 months old);
4. A domestic passport (page with registration address).
The same document cannot be used for the verification of both the identity and the residential address of the client.
In case if client is not an individual but is a legal person or arrangement:
(i) Being a Private company:
(a) Obtain an original or appropriately certified copy of the certificate of incorporation or registration; (b) Check with the relevant companies’ registry that the company validly exists;
(c) Obtain details of the registered office and place of business;
(d) Verify the identity of the principals of the company as above;
(e) Verify that any person who purports to act on behalf of the company is so authorized, and identifying that person;
(ii) Being a Trust
(a) Obtain a copy of a trust deed or pertinent extracts thereof;
(b) Where the trust is registered – check with the relevant registry to ensure that it does exist;
(c) Obtain details of the registered office and place of business of the trustee;
(d) Verify the identity of the principals of the trustee as per (1) and or (2) above.
(iii) Being a Partnership
(a) Obtain a copy of the partnership deed;
(b) Obtain a copy of the latest report and accounts;
(c) Verification of the nature of the business of the partnership to ensure that it is legitimate;
(d) Verifying the identity of the significant partners (20% interest) as above;
(e) Verifying that any person that purports to act on behalf of the Partnership is so authorized, and identifying that person.
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.
• Promote a “Know Your Customer” policy as a cornerstone principle for the 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;
• Conduct self-assessments of compliance with AML policy and procedures. Adherence to this policy is absolutely fundamental for ensuring fully comply with applicable antimoney laundering legislation. The company will not have any relationship with any shell banks. The company is committed to examining its anti-money laundering strategies, goals and objectives on an ongoing basis and maintaining an effective AML Policy. Company is obliged to follow the 40+9 recommendations given by the FATF Financial Action Task Force.
• 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 of the country;
• All records must be kept for at least 6 years;
We are committed to complying fully with all applicable laws and regulations relating to combating money laundering and any activity which facilitates the funding of terrorist or other criminal enterprises. We are responsible for uncovering or reporting any activity that might constitute, indicate or raise suspicions of money laundering. To this end, we provide continuing education and training for all such persons. The Company is required to comply with all trade and economic sanctions imposed by OFAC against targeted foreign countries and shall cooperate fully with government agencies, self-regulatory organizations and law enforcement officials. As required by the legislations, the Company may supply information about former, current or prospective clients to such bodies.
In cases of attempts of enough suspicion that there were real or attempts of fraudulent or suspicious transaction the company will actively report these transactions in accordance with the laws.
1. In verifying customer identity, appointed producers shall review photo identification. The Company shall not attempt to determine whether the document that the customer has provided for identification has been validly issued.
2. For verification purposes, The Company shall rely on a government-issued identification to establish a customer's identity. The Company however, will analyse the information provided to determine if there are any logical inconsistencies in the information obtained.
3. The Company will document its verification, including all identifying information provided by the customer, the methods used and results of the verification, including but not limited to sign-off by the appointed producer of matching photo identification.
Monitoring and Reporting Suspicious Activity
1. The Company collects and verifies identification data of the Client and also logs and tracks itemized statements of all transactions carried out by the Client.
2. If The Company tracks suspicious transactions of the clients and transactions executed under non-standard conditions.
3. The Company performs its AML compliance on the basis of AML Financial Action Task Force recommendations.
4. 4. The Company neither accepts cash deposits nor disburses cash under any circumstances.
5. The Company reserves the right to refuse to process a transaction at any stage, when it believes the transaction to be connected in any way to money laundering or criminal activity.
6. In accordance with the international law The Company is not obligated to inform the client that they were reported to the corresponding governing bodies due to client's suspicious activity.
The Anti-Money Laundering Policy prohibits and actively pursue the prevention of money laundering and any activity that facilitates money laundering or the funding of terrorist or criminal activities.
The Company is committed to Anti-Money Laundering compliance in accordance with applicable laws and requires its officers, employees and appointed producers to adhere to these standards in preventing the use of its products and/or services for money laundering purposes.
Money laundering is engaging in doings made to hide or cover the origin of money that were derived due to criminal or illegal or legal activity so that these monies appear to have come from legitimate sources or constitute legitimate possessions.
The AML policy of the Company is to prevent and stop money laundering and any other activity that might help money laundering or the funding of terrorists or criminal activity. The Company applies certain procedures in a proportionate way to focus on the prevention of money laundering and terrorist financing depending on the degree of possibility for these acts to takes place.
The term ‘money laundering’ is in fact a misnomer. Often it is not money that is being laundered but other forms of property that directly or indirectly represent benefit from crime. Any form of tangible or intangible property is capable of representing another person’s benefit from crime. 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.
Traditionally, money laundering has been described as a process that takes place in three stages as follows:
This is the first stage in which illicit funds are separated from their illegal source. Placement involves the initial injection of the illegal funds into the financial system or carrying of cash across borders.
Terrorist financing is the act of providing financial support to acts of terror, terrorists or terrorist organizations to enable them to carry out terrorist acts. Unlike other criminal organizations, the primary aim of terrorist groups is non-financial. Yet, as with all organizations, terrorist groups require funds in order to carry out their primary activities.<>The need for funds, is key in fighting terrorism. Follow the money. Follow the financial trail. This is the core objective of all measures that aim to identify, trace, and curb terrorist financing.
There are similarities and differences between money laundering and terrorist financing.
Terrorist groups are often engaged in other forms of criminal activity which may in turn fund their activities; both money laundering and terrorist financing require the assistance of the financial sector.
The key to the prevention of both money laundering and terrorist financing is the adoption of adequate CDD measures by all Licensees both at the commencement of every relationship and on an on-going basis thereafter.
Customer Due Diligence Procedures to be adopted:
Identify and verify the identity of applicants for business.
This should be done by identifying and verifying the identities of applicants for business whether they are Directors, Shareholders, Beneficial Owners, Settlers or Contributors of capital, Beneficiaries, Protectors, Enforcers, Trustees, Bank mandate and Power of Attorney holders, etc by verifying :
• Global Sanctions List - If the flag is a match on the Global Sanctions List, the Company shall deny the purchaser and let them know of the disposition of the review.
• PEPs - If the flag is a match on PEPs, the Company’s council shall review the AML report and may request proof of identification or additional verification from the prospective purchaser.
• After receiving any additional verification information, the Company shall provide the prospective purchaser with notice of disposition.
• Adverse Media - If the flag is a match on Adverse Media, the Company’s counsel shall review the adverse media and make a determination on whether to allow the prospective purchaser.
Additional Due Diligence measures for financial institutions Company must undertake following additional due diligence measures while establishing and maintaining correspondent relationships:
• Obtaining sufficient information about a respondent institution to avoid any relationships with “shell-banks”;
• 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 a periodic basis. Company is bound to comply with the anti-money laundering regulations and international laws. As company is dealing with foreign financial brokerage firms we must monitor all financial transactions with utmost vigilance and must report suspicious activities to the concerned authorities.
• All personnel must be diligent in monitoring for any unusual and potentially suspicious transactions/activity basing on the relevant criteria applicable in the jurisdiction of Estonia and the EEA.
• The reporting of suspicious transactions/activity must comply with the International laws/regulations
• Training on anti-money laundering will 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 which includes;
Identification and reporting of transactions that must be reported to government authorities, examples of different forms of money laundering and internal policies to prevent money laundering.
• Follow-up trainings must take place not less than twice a year.
1. The Client exhibits unusual concern regarding the firm's compliance with government reporting requirements and the firm's AML policies, particularly with respect to his or her identity, type of business and assets, or is reluctant or refuses to reveal any information concerning business activities, or furnishes unusual or suspect identification or business documents.
2. The Client wishes to engage in transactions that lack business sense or apparent investment strategy, or are inconsistent with The Client's stated business strategy.
3. The information provided by the Client that identifies a legitimate source for funds is false, misleading, or substantially incorrect.
4. Upon request, the Client refuses to identify or fails to indicate any legitimate source for his or her funds and other assets.
5. The Client (or a person publicly associated with The Client) has a questionable background or is the subject of news reports indicating possible criminal, civil, or regulatory violations.
6. The Client exhibits a lack of concern regarding risks, commissions, or other transaction costs.
7. The Client appears to be acting as an agent for an undisclosed principal, but declines or is reluctant, without legitimate commercial reasons, to provide information or is otherwise evasive regarding that person or entity.
8. The Client has difficulty describing the nature of his or her business or lacks general knowledge of his or her industry.
9. The Client attempts to make frequent or large deposits of currency, insists on dealing only in cash equivalents, or asks for exemptions from the firm's policies relating to the deposit of cash and cash equivalents.
10. The Client engages in transactions involving cash or cash equivalents or other monetary instruments that appear to be structured to avoid the EUR 10,000 government reporting requirements, especially if the cash or monetary instruments are in an amount just below reporting or recording thresholds.
11. For no apparent reason, the Client has multiple accounts under a single name or multiple names, with a large number of inter-account or third-party transfers.
12. The Client is from, or has accounts in, a country identified as a non-cooperative country or territory by the Financial Action Task Force.
13. The Client's account has unexplained or sudden extensive wire activity, especially in accounts that had little or no previous activity.
14. The Client's account shows numerous currency or cashier's check transactions aggregating to significant sums.
15. The Client's account has a large number of wire transfers to unrelated third parties inconsistent with The Client's legitimate business purpose.
16. The Client's account has wire transfers that have no apparent business purpose to or from a country identified as money laundering risk or a bank secrecy heaven.
17. The Client's account indicates large or frequent wire transfers, immediately withdrawn by check or debit card without any apparent business purpose.
18. The Client makes a funds deposit followed by an immediate request that the money be wired out or transferred to a third party, or to another firm, without any apparent business purpose.
19. The Client makes a funds deposit for the purpose of purchasing a long-term investment followed shortly thereafter by a request to liquidate the position and transfer of the proceeds out of the account.
20. The Client engages in excessive journal entries between unrelated accounts without any apparent business purpose.
21. The Client requests that a transaction be processed in such a manner to avoid the firm's normal documentation requirements.
22. The Client, for no apparent reason or in conjunction with other red flags, engages in transactions involving certain types of securities, such as penny stocks, and bearer bonds, which although legitimate, have been used in connection with fraudulent schemes and money laundering activity. (Such transactions may warrant further due diligence to ensure the legitimacy of The Client's activity.)
23. The Client's account shows an unexplained high level of account activity with very low levels of securities transactions.