LEGAL COMPLIANCE

COMPLIANCE

SECURITY MEMORANDUM
AML POLICY

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Definitions:
Introduction:
Company Overview:
The Company’s clients are physical persons and business entities. Moreover, https://www.crypto4ac.net/ for details.
Working of Crypto Service Provider under FinCEN:
RISK BASED APPROACH TO AML/ CFT:
In order to document the identified ML/ TF/ PF risks, Crypto 4 A Cause will ensure an entity level Internal Risk Assessment Report (IRAR). IRAR shall cover ML/ TF/ PF risks including Transnational TF risks and other emerging risks to and from external to the entities. IRAR shall identify, assess, and understand ML/ TF/ PF risks at entity level for customers, products, services, delivery channels, technologies, and their various categories of employees etc.
IRAR shall take into account results of National Risk Assessment (NRA) issued respectively by the concerned government authorities, major international/ domestic financial crimes and terrorism incidents that have probability of posing ML/ TF/ PF risks to the entity itself, to other external entities and to the financial sector. Further, feedback from other related stakeholders should be taken into account while conducting Internal Risk Assessment.
The IRAR shall assess effectiveness of existing AML/ CFT/ CPF policies/ controls/obligations/ preventive measures including SAR and TFS etc.
The IRAR shall be used for evaluating residual ML/ TF/ PF risks about which entities have to take decisions i.e., on-boarding of customers, allowing execution of financial transactions, provision of financial service, launching of product, use of technology, and initiating business and operation in particular geographical location, etc.
Crypto 4 A Cause shall formulate policy for application of SDD, CDD and EDD in light of levels of ML/ TF/ PF risks identified as low, medium, or high in their IRAR, and as prescribed by regulatory laws.
IRAR shall be presented to the Board of Directors for approval. It shall include recommendations for the Board of Directors along with a time bound action plan for mitigation of ML/ TF/ PF risks and ensuring effective AML/ CFT/ CPF policies/ procedures/ controls/obligations/ preventive measures including but not limited to SAR and TFS.
Entities need to develop AML/ CFT/ CPF policies/ procedures/ controls/obligations/ preventive measures considering their size, nature of business and complexities of operations.
Crypto 4 A Cause will ensure adequate monitoring mechanism to assess ML/ TF/ PF risks and adequacy of AML/ CFT/ CPF controls including STR/ CTR and TFS through internal audit, transaction monitoring and name screening etc.
The policies/ controls/ procedures/ preventive measures shall be developed/updated/ implemented proportionate to level of ML/ TF/ PF risks as evaluated in IRAR.
The policies shall be approved by Board of Directors and controls/ procedures/ preventive measures shall be approved by senior management.
The ultimate responsibility of ensuring effective AML/ CFT/ CPF controls lies on Board of Directors. Therefore, Board of Directors shall ensure adequate, reliable, periodic management information system, from senior management, for ensuring effective oversight, monitoring, and accountability.
Know Your Customer:
Basic Identification Information:
Full name.
Date of Birth.
Place of Birth.
Permanent Address.
Other basic information:
Father/ spouse name.
Contact Number: Mobile Number (s)/ Land Line Number.
Purpose of account/ transaction/ business relation.
Beneficial ownership/ controlling rights.
Other relevant Information for natural persons, as applicable:
Current/ Mailing Address.
Personal Email Address (as applicable).
Nationality – Resident/ Non-Resident Status.
FATCA/ CRS Declaration, wherever required.
Profession/ Source of Income/ Funds: Salary, Business, investment income.
Next of Kin.
Live Photo in case of Digital onboarding.
Information for Legal Persons/ Legal Arrangements:
Registration/ incorporation number or business registration number (as applicable).
Date of incorporation or registration of legal person or arrangement (as applicable).
Place of incorporation or registration of legal person or arrangement (as applicable).
Entity`s Registration Number.
Nature of business, geographies involved and expected type of counterparties (as applicable).
Registered or business address.
Intended nature of business relations.
Expected monthly credit turnover (amount and No. of transactions).
Normal or expected modes of transactions/ delivery channels.
Additional Information in case of “Trusts”:
Whether the Trust is a Public Trust or Private Trust including foreign and national trust.
Trust Deed whereby the Trust has been created.
Details of Settlor (this will also be available in the Trust Deed).
Objects of the trust (this will also be available in the Trust Deed).
Trustee of the trust (whether trustee is associated person of the settlor).
Description of each class or type of beneficiary (this information may also be checked from Trust Deed).
Details of any possibility of influence of any other person on trustee regarding management and control of trust property.
In the case of “Private Trust” if the beneficiary of a trust is also the beneficial owner of the trust, identification and verification of the beneficiary is required otherwise the name and CNIC of each beneficiary of a trust should be obtained.
Customer Due Diligence (CDD)
Compliance as per the relevance of the requirement with their business & operational model, nature & types of customers they deal with, features of financial services they offer, and level of risk posed by geographical location in which they operate.
Compliance with minimum standards prescribed in US laws and FATF recommendations from time to time about data privacy & protection of customer’s information.
Where the customer/ occasional customer is represented by an authorized agent or representative, Crypto 4 A Cause will:
Identify every person who acts on behalf of the customer/ occasional customer,
Verify the identity of that person using reliable and independent documents, data or information as set out above; and
Verify the authority of that person to act on behalf of the customer/ occasional customer.
Entity shall identify the beneficial owner/s and take reasonable measures to verify the identity of the beneficial owner/s by using reliable and independent document, data, or sources of information as set out above such that the entity is satisfied that it knows who the beneficial owner is.
For customers that are legal persons or legal arrangements, Crypto 4 A Cause will identify the customer and verify its identity by obtaining the following information in addition to the information required above:
Name, legal form, and proof of existence.
The powers that regulate and bind the legal person or arrangement, as well as the names of the relevant persons having a senior management position in the legal person or arrangement; and
The address of the registered office and, if different, a principal place of business.
For customers that are legal persons or legal arrangements, Crypto 4 A Cause will understand the nature of the customer’s business and its ownership and control structure.
For customers that are legal persons, entities shall identify and take reasonable measures to verify the identity of beneficial owners:
By identifying the natural person(s) who has ultimate effective control of a customer (as defined under relevant laws) on a legal person; and
To the extent that there is doubt under (a) as to whether the person(s) with the controlling ownership interest is the beneficial owner(s) or where no natural person exerts control through ownership interests, the identity of the natural person(s) (if any) exercising control of the legal person or arrangement through other means; and
Where no natural person is identified under (a) or (b) above, the identity of the relevant natural person who holds the position of senior managing official.
For customers that are legal arrangements, entities shall identify and take following reasonable measures to verify the identity of beneficial owners:
For trusts, the identity of the settlor, the trustee(s), the protector (if any), the beneficiaries or class of beneficiaries, and any other natural person exercising ultimate effective control over the trust including through a chain of control/ ownership as ascertained during CDD/ EDD.
For other types of legal arrangements, the identity of persons in equivalent or similar positions.
Where any of the persons specified in (a) or (b) is a legal person or arrangement, the identity of the beneficial owner of that legal person or arrangement shall be identified.
REs shall not open or maintain numbered accounts and shall not conduct transactions on fake identity documents.
Enhanced Due Diligence (EDD):
Crypto 4 A Cause will apply EDD in the following circumstances, including but not limited to:
Business relationships and transactions with natural and legal persons when the risks are higher.
Business relationships and transactions with natural and legal persons from countries mentioned in Counter Measures for High-Risk Jurisdictions Rules, 2020 by FATF.
PEPs and their close associates and family members.
In line with their functions and powers prescribed under relevant law, entities may apply EDD measures which may include but not be limited to one or more of the following measures:
Obtaining additional information on the customer (e.g., occupation, volume of assets, information available through public databases, internet, etc.), and updating more regularly the identification data of customer and beneficial ownership.
Obtaining additional information on the intended nature of the business relationship/ transactions.
Obtaining information on the source of funds or source of wealth of the customer.
Obtaining additional information on the reasons for intended or performed transactions and purpose of transaction.
Taking reasonable measures to establish the source of funds and wealth involved in the transaction or business relationship to be satisfied that they do not constitute the proceeds from/ for crime.
Obtaining the approval of senior management to commence or continue the business relationship or execute the high-risk financial transaction by entities.
Where applicable, conducting enhanced monitoring of the business relationship by reviewing its nature and frequency of controls applied and selecting patterns of transactions that need further examination.
Where available, requiring the first payment to be deposited through an account in the customer’s name with a bank subject to similar CDD standards.
Simplified Due Diligence:
Crypto 4 A Cause will apply SDD only where low risk is identified as per IRAR. SDD measures may include the following:
Verifying the identity of the customer and the beneficial owner after the establishment of the business relationship.
Reducing the degree of on-going monitoring and scrutinizing transactions, based on a reasonable monetary threshold as prescribed respective laws.
Not collecting specific information or carrying out specific measures to understand the purpose and intended nature of the business relationship but inferring the purpose and nature from the type of transactions or business relationship established.
Entities shall not apply SDD whenever there is a suspicion of ML or TF or PF.
KYC Review and CDD updates:
Risk Assessment:
Transaction Monitoring:
Suspicious Activity Reporting:
Currency Transaction Reporting (CTR):
FATCA (Foreign Account Tax Compliance Act):
CRS Reporting (Common Reporting Standards):
Sanctions and Embargos:
Compliance Program:
Annual Reporting:
Record Retention:
Training of Staff:
Internal Controls:

AML POLICY

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Last updated 2 years ago