AMLCO: Anti-Money Laundering Compliance
This policy describes 24Five Ltd.’s approach to preventing and detecting money laundering and terrorist financing. 24Five fully recognizes that its products and services are at risk of being used by individuals or groups seeking to launder criminal proceeds or facilitate funds intended for the financing of terrorism. 24Five is fully committed to fostering and promoting a company-wide compliance process that emphasizes the importance of preventing money laundering and terrorist financing. 24Five is committed to allocating sufficient resources to the company’s internal controls, supervisory system, human resources and staff training to prevent financial crime.
All employees, directors, officers, and associated agents are required to comply with these policies. Failure to comply may result in disciplinary action.
The Board of 24Five appoints a senior management person as the Company’s Anti-Money Laundering and Compliance Officer (AMLCO). The AMLCO will assume responsibility for the Company’s AML/CTF strategy.
1. Structure
- The Anti-Money Laundering Compliance Officer (AMLCO) is appointed by the Board and assumes responsibility for the company’s regulatory compliance and anti-money laundering strategy.
- The AMLCO’s responsibilities include overseeing compliance with anti-money laundering regulations, investigating internal reports of (suspected) money laundering and terrorist financing, and reporting relevant suspicious activity.
- The AMLCO approves business relationships with Politically Exposed Persons (PEPs) and consumers in high-risk jurisdictions.
- All employees are trained to identify and report suspicious activities. They receive regular training on laws related to money laundering and terrorist financing.
2. Actions
- As required by the anti-money laundering regulatory framework, 24Five will conduct a regular risk assessment to examine all money laundering and terrorist financing risks to which the Company is subject.
- In assessing and identifying such risks, the firm will take into consideration the following factors: Risks posed by the firm’s clients, products and services offered by the firm, geographic areas of the firm’s clients, and volume and complexity of client transactions.
- Customer Due Diligence: Perform enhanced customer due diligence measures prior to entering into a transaction or business relationship or during a business relationship with a designated high-risk person.
Ongoing Monitoring: Conduct enhanced ongoing monitoring of any business relationship with a designated high-risk person.
Systematic Reporting: Collect enhanced information and documents and make enhanced reports to senior management regarding transactions and business relationships with a high-risk person.
Limit or Cease Business: Do not enter into or discontinue a transaction or business relationship with a high-risk person when directed to do so by the AMLCO or Senior Management.
3. Due diligence and compliance
24Five is required to apply comprehensive due diligence measures to its entire customer base to ensure a thorough assessment of all potential customers. This involves establishing and verifying their identity and assets, understanding the nature and intended purpose of the business relationship, and assessing liabilities. 24Five applies a risk-based approach to determine the level of due diligence required by different types of customers and the potential money laundering and terrorist financing risk associated with them.
In assessing the level of risk for each customer, 24Five takes into account several factors, such as the customer’s characteristics, the specific product or service they obtain, the expected frequency and volume of transactions, and their geographic location. This approach helps tailor its due diligence efforts to the unique risk profile presented by each client and each business relationship.
A) Simple due diligence
This is the most basic level of customer due diligence. However, it requires a preliminary risk assessment to confirm that the customer presents a low risk of money laundering or terrorist financing and requires ongoing monitoring. SDD is typically used for low-risk customers and involves verifying their identity, which may include requesting copies of government-issued identity documents or conducting electronic Know Your Customer (KYC) checks. Documents proving the customer’s address are also required.
For medium-risk customers, enhanced identity verification is required, along with additional documentation for cross-referencing and information on the source of the customer’s wealth or funds. If there are doubts about the validation of identity, enhanced due diligence measures should be applied.
B) Enhanced due diligence
Enhanced due diligence (EDD) is required when a risk assessment identifies a high risk of money laundering, particularly in the case of customers who are politically exposed persons (PEPs), sanctioned persons or from high-risk countries. EDD involves various measures depending on the level of risk, such as additional identity verification, source of wealth documentation, internet searches and enhanced transaction monitoring. All EDD clients require approval from 24Five’s AMLCO before entering into any business relationship. Clients sanctioned by the EU or UN are not eligible to become clients.
C) Politically Exposed Persons (PEP)
When a valid PEP, or a family member or close associate of a PEP, is identified, the 24Five AMLCO must approve the initiation of a specialized business relationship. This includes existing customers who are identified as PEPs after the initial onboarding process. In such cases, 24Five applies enhanced due diligence (EDD) measures based on the level of risk.
24Five adheres to the definition of PEP provided by the Financial Action Task Force (FATF), which refers to a person who holds or has held a prominent public office. Identification of potential PEP status typically occurs during AML checks conducted across the client base and during the initial onboarding process. 24Five then conducts a thorough media search to confirm an actual match, and the results are forwarded to the AMLCO for evaluation.
4) Suspicious activity reports
24Five’s AMLCO reports any transaction or activity suspected of being related to money laundering or terrorist financing to the correspondent jurisdiction through Suspicious Transaction Reports (STRs). These reports are filed promptly upon suspicion. Sensitivity is crucial in handling communications to avoid alerting the parties involved. Tipping off is strictly prohibited. Internal Suspicion Reports are filed with the AMLCO even if the transaction has not occurred.
5) Continuous monitoring of customer activity
24Five must continuously monitor client relationships, checking the consistency of transactions and documentation. The monitoring system must detect unusual transactions, which are reviewed immediately. Monitoring factors include transaction size, frequency, geographic origin/destination, and parties involved. 24Five will retain customer information for five years following the termination of a business relationship or occasional transfer, except in situations where legal obligations imposed on 24Five require otherwise.
6) Suspicious Money Laundering Activity Report
To report any suspicious activity, please contact [email protected] immediately.
