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AML/CFT Policy

1. Introduction to AML Policy

Guided by the rules and regulations of the BVI Financial Services Commission, the purpose of this policy is to set the Firm’s internal practice, measures, procedures and controls relevant to the prevention of Anti-Money Laundering and Terrorist Financing and Know-Your-Customer principles.
The policy on Anti-Money Laundering (AML), Combating the Financing of Terrorism (CFT), and Know-Your-Customer (KYC) is developed and updated by the Money Laundering Reporting Officer (hereinafter the “MLRO” or “reporting officer”) who is at the same time the compliance officer of the Company. The policy is applicable and shall be communicated by the reporting officer to all the employees of the Company.
The Policy has been prepared to comply with the provisions of the Financial Services Commission’s Regulatory Code, (revised Jan 2020), Anti-money Laundering and Terrorist Financing Code of Practice (revised Jan 2020) and Anti-money Laundering and Terrorist Financing (Amendment) Code of Practice, 2022 (“the Code”) of the British Virgin Islands, and other relevant legislation as may be updated from time to time.
The Financial Investigation Agency (“FIA”) is the institution where money laundering and financing of terrorism activities are observed and reported within it.
The MLRO has a role in the monitoring and implementation of the Firm’s AML/CFT regime, including monitoring adherence to the Firm’s internal control systems to ensure full compliance with all enactments relating to AML/CFT.
The employees and professionals of the Firm are obliged to report suspicious activity or transactions to the MLRO in the form established by the Firm. The Reporting Officer will make a report to the BVI Financial Investigation Agency (the “FIA”) of every suspicious customer or transaction relating to the Company.

2. Compliance Monitoring

The Board of Directors shall periodically conduct reviews to ensure that the Firm has adequate compliance arrangements that are commensurate with the scale, nature, and complexity of its operations. The Board of Directors shall perform an oversight function, with the day-to-day compliance monitoring duties delegated to the Compliance Officer, who shall be responsible for the following:
  • enforcing compliance and application of this Policy;
  • developing and maintaining effective and practical internal compliance policies and procedures to ensure compliance with regulatory requirements; identifying compliance risks and developing a compliance monitoring program which translate regulatory requirements to actionable task(s) for each Employee;
  • enhancing existing processes to ensure adherence to new regulatory requirements and internal policies;
  • performing appropriate regular reviews based on the compliance monitoring program;
  • coordinating and reviewing the filing of all routine reports with the appropriate regulatory bodies; and
  • reporting and remediating any issues or breaches and submitting updates to the Board of Directors.
The Compliance Officer may be supported by external independent professional service providers to support the compliance function where appropriate

3. Client Onboarding: Know Your Customer

3.1. New Client Accounts/KYC
It is the responsibility of our client service personnel and all relevant staff who services our Clients to “know” our clients, and be aware of their broad investment objectives and risk profiles. We must perform AML/KYC checks on all investors during the initial subscription process and also on a regular basis.
All new client account opening forms have to be fully completed, processed and accepted by the Compliance Officer before the subscription can be processed. Compliance shall perform the due diligence process of “Know Your Customer” (KYC) for all our Clients.
3.1.1 Therefore, as set out by regulators, the Firm shall identify each customer by obtaining at least the following information:
  1. 1.
    full name, including any aliases;
  2. 2.
    unique identification number (such as an identity card number, birth certificate number or passport number, or where the customer is not a natural person, the incorporation number or business registration number);
  3. 3.
    the customer’s (i) residential address; or (ii) registered or business address, and if different, principal place of business, as may be appropriate;
  4. 4.
    date of birth, establishment, incorporation or registration (as may be appropriate); and
  5. 5.
    nationality, place of incorporation or place of registration (as may be appropriate).
3.1.2 Where the customer is a legal person or legal arrangement, the Firm shall, apart from identifying the customer, also identify the legal form, constitution and powers that regulate and bind the legal person or legal arrangement. We shall also identify the connected parties of the customer, by obtaining at least the following information of each connected party:
  1. 1.
    full name, including any aliases; and
  2. 2.
    unique identification number (such as an identity card number, birth certificate number or passport number of the connected party).
3.1.3 The Firm shall verify the identity of the customer using reliable, independent source data, documents or information. Where the customer is a legal person or legal arrangement, the Firm shall verify the legal form, proof of existence, constitution and powers that regulate and bind the customer, using reliable, independent source data, documents or information.
3.1.4 Where a customer appoints one or more natural persons to act on his behalf in establishing business relations with the Firm, or the customer is not a natural person, we shall:
Identify each natural person who acts or is appointed to act on behalf of the customer by obtaining at least the following information of such natural person:
  1. 1.
    full name, including any aliases;
  2. 2.
    unique identification number (such as an identity card number, birth certificate number or passport number);
  3. 3.
    residential address;
  4. 4.
    date of birth
  5. 5.
    nationality; and
  6. 6.
    verify the identity of each natural person using reliable, independent source data, documents or information.
3.1.5 The Firm shall verify the due authority of each natural person appointed to act on behalf of the customer by obtaining at least the following:
  1. 1.
    the appropriate documentary evidence authorising the appointment of such natural person by the customer to act on his or its behalf; and
  2. 2.
    the specimen signature of such natural person appointed.
3.1.6 For the purposes of ongoing monitoring, the Firm shall:
  1. 1.
    monitor its business relations with customers; and
  2. 2.
    detect and report suspicious, complex, unusually large or unusual patterns of transactions.
3.1.7 The Firm shall ensure that all customer due diligence (CDD) data, documents and information obtained in respect of customers, natural persons appointed to act on behalf of the customers, connected parties of the customers and beneficial owners of the customers, are relevant and kept up-to-date by undertaking biennial reviews of existing CDD data, documents and information, and annual reviews for higher risk categories of customers.
3.1.8 Where there are any reasonable grounds for suspicion that existing business relations with a customer are connected with money laundering or terrorism financing, and where we consider it appropriate to retain the customer:
  1. 1.
    The Firm shall substantiate and document the reasons for retaining the customer; and
  2. 2.
    the customer’s business relations with the Firm shall be subject to commensurate risk mitigation measures, including enhanced ongoing monitoring.

4. Anti-Money Laundering and Terrorist Financing

4.1 The Firm and all employees shall comply with FSC’s requirements on anti-money laundering and countering the financing of terrorism [“AML/CFT”] requirements, as set out in the Code. The Firm shall take appropriate steps to identify, assess and understand its money laundering and terrorism financing risks in relation to our investors, and the countries or jurisdictions our investors are from or in. This requires that we document our risk assessments of the potential investor, keeping our risk assessments up-to-date on an annual basis; and having appropriate mechanisms to assist in our risk assessment of the investor, as outlined in our KYC procedures.
4.2 In addition, the Firm takes active steps to keep up-to-date with Financial Action Task Force (FATF)’s recommendations in strengthening its measures to tackle money laundering and terrorist financing.

5. The Firm’s Responsibility

The following principles serve as a guide for the Firm and all employees in the conduct of our operations and business activities with respect to AML/CFT monitoring:
  • Exercise due diligence when dealing with clients, natural persons appointed to act on the client’s behalf, connected parties of the client and beneficial owners of the client.
  • Conduct its business in conformity with high ethical standards, and guard against establishing any business relations or undertaking any transaction, that is or may be connected with or may facilitate money laundering or terrorism financing.
  • Assist and cooperate with the relevant law enforcement authorities in all relevant jurisdictions to prevent money laundering and terrorism financing.

6. Risk-Based Approach

In determining the level of identification and due diligence required for any particular clients, the Firm shall adopt a risk-based approach.
6.1 Each client who opens an account will be given a risk rating (low, medium or high) in accordance with the Firm’s risk assessment policies and FSC’s guidance.
6.2 The risk ratings are based on a number of factors including, but not limited to:
  • the nationality and address of the client
  • the type of industry the client is involved in,
  • whether the client is, or is associated with, a Politically Exposed Person (“PEP”) and
  • in the case of corporate clients, whether the company is regulated, and is privately held or publicly listed.
The risk ratings must be reassessed at least once as follows:
  • low – once every 3 years;
  • medium – once every 2; and
  • high – once per annum.
6.3 The relationship should be monitored on an on-going basis with the risk rating assigned to the particular client defining how frequently the Firm monitors the account. Monitoring will ensure that the transactions are consistent with the Firm’s knowledge of the client, its business and risk profile.
6.4 In addition to risk assessment of individual investors, the Firm shall conduct a firm wide AML/CFT risk assessment to assess our overall AML/CFT risk exposure. This risk assessment should include, but not limited to, the following factors:
  • target investor markets and segments
  • profile and number of investors classified as high risk
  • volume and size of customer transactions
  • products and services offered
  • jurisdiction of operations
Enterprise wide AML/CFT risk assessment shall be conducted every two years or upon any material changes to the risk factors. The results of the risk assessment shall be reported to and approved by the Board of Directors.

7. Onboarding Approval

7.1 The Firm shall ensure that adequate on-boarding checks and risk assessment have been completed before each investor is approved and on-boarded. The following check list shall be completed prior to on boarding of clients:
  1. 1.
    Client Profile and Account Opening Checklist
  2. 2.
    Connected Persons
  3. 3.
    Authorised Persons
  4. 4.
    Beneficial Ownership
  5. 5.
    Screening
  6. 6.
    Enhanced Due Diligence (For high risk clients)
  7. 7.
    Sign off (Approval for on-boarding)
  8. 8.
    Documents Collected
  9. 9.
    Risk Profile (To assess risk profile of clients)
7.2 In accordance with the Code, the Firm shall conduct due diligence under the following circumstances :
  1. 1.
    when establishing a business relationship;
  2. 2.
    when effecting a one-off transaction (including a wire transfer) which involves funds of or above US$15,000 or such lower threshold as the entity may establish;
  3. 3.
    Under the newly enforced 2022 Code, the Firm where applicable shall comply with the new “travel rule” in relation to transfers of virtual assets which requires originating and beneficiary Virtual Asset Service Providers (“VASP”) to obtain, verify, and maintain complete information on the originator and beneficiary of each transfer of virtual assets above US$1,000 before the transaction is executed, or accepted.
  4. 4.
    when there is a suspicion of money laundering or terrorist financing, irrespective of any exemption or threshold that may be referred to the Code including where an applicant for business or a customer is considered by an entity or a professional as posing a low risk;
  5. 5.
    where a business relationship or transaction presents any specific higher risk scenario;
  6. 6.
    when the firm has doubts about the veracity or adequacy of previously obtained customer identification data.

8. Client Due Diligence

8.1. Beneficial Owners
When the client is not a natural person, the Firm must establish the ownership, control structure, and identify the natural persons who has a controlling interest in the client and the management of the client.
8.2. Simplified Customer Due Diligence
The Firm is allowed to conduct simplified customer due diligence methods in cases where the Firm is satisfied that the risk of money laundering and terrorist financing is low. The simplified customer due diligence shall be commensurate with the level of risk, based on the risk factors identified by the Firm.
8.2.1 When simplified customer due diligence is performed, the Compliance Officer shall document:
  • The details of the risk assessment; and
  • The nature of the simplified customer due diligence measures 8.2.2 However, simplified customer due diligence shall not be performed:
  • where a client or any beneficial owner of the client is from or in a country or jurisdiction in relation to which the FATF has called for countermeasures;
  • where a client or any beneficial owner of the client is from or in a country or jurisdiction known to have inadequate AML/CFT measures, as determined by the Firm for itself or notified to the Firm by the FSC, or other foreign regulatory authorities; or
  • where the Firm suspects that money laundering or terrorism financing is involved.
8.3. Enhanced Customer Due Diligence
The Firm must perform enhanced customer due diligence measures on clients determined to be high risk.
8.3.1 If a client is deemed high risk, the following steps must be taken before on boarding of the client:
  • obtain approval from the Board of Directors to establish or continue business relations with the client;
  • establish, by appropriate and reasonable means, the source of wealth and source of funds of the client and any beneficial owner of the client; and
  • conduct, during the course of business relations with the client, enhanced monitoring of business relations with the client. In particular, the Firm shall increase the degree and nature of monitoring of the business relations with and transactions for the client, in order to determine whether they appear unusual or suspicious.
8.3.2 Enhanced due diligence must be undertaken on clients:
  • from countries notified by the FSC or other regulators as having inadequate AML regulations in place and which has determined internally to be unacceptable
  • identified as Politically Exposed Persons (“PEP”) and
  • who are classified as high risk for money laundering and terrorist financing.
8.3.3 A “PEP” is defined as an individual who is or has been entrusted with prominent public functions and members of his or her immediate family, or persons who are known to be close associates of such individuals.
8.3.4 The Firm shall perform enhanced due diligence for:
  • domestic PEPs, their family members and close associates;
  • international organization PEPs, their family members and close associates; or
  • PEPs who have stepped down from their prominent public functions, taking into consideration the level of influence such persons may continue to exercise after stepping down from their prominent public functions, their family members and close associates, except in cases where their business relations or transactions with the Firm present a higher risk for money laundering or terrorism financing.
8.3.5 Screening / eWallet Screening
  1. 1.
    The Firm shall screen a client, natural persons appointed to act on behalf of the client, connected parties of the client and beneficial owners of the client against relevant money laundering and terrorism financing information sources, as well as lists and information provided by FSC or other relevant authorities for the purposes of determining if there are any money laundering or terrorism financing risks in relation to the client.
  2. 2.
    Additional screening shall be conducted for clients that transacts digital assets using eWallets, mobile money services and other digital financial service platforms.
8.3.6 Ongoing Monitoring The Firm shall monitor on an ongoing basis, its business relations with clients by observing the conduct of the client’s account and scrutinizing transactions undertaken throughout the course of business relations, to ensure that the transactions are consistent with the Firm’s knowledge of the client, its business and risk profile and where appropriate, the source of funds. In particular, the Compliance Officer must detect and report suspicious, complex, unusually large or unusual patterns of transactions in any of the accounts.
8.4 Reliance on Third Parties
8.4.1 For purposes of establishing a business relationship or conducting a transaction, the Firm may rely on an introduction made of an applicant for business or a customer by a third party as provided in the Anti-money Laundering Regulations.
8.4.2 An introduction made of an applicant for business or a customer shall be in writing and shall be recorded by the entity or professional receiving it.
8.4.3 Where such reliance are made, the Firm shall satisfy itself that:
  1. 1.
    the third party has a business relationship with the applicant for business or customer;
  2. 2.
    the third party has taken measures to comply with the requirements of BVI’s Anti-money Laundering Regulations or, if the third party resides outside the Virgin Islands, their equivalent in the third party’s jurisdiction; and
  3. 3.
    the requirements BVI’s Anti-money Laundering Regulations or, if the third party resides outside the Virgin Islands, their equivalent in the third party’s jurisdiction has been complied with.
8.4.4 The Firm remains responsible for ensuring compliance with relevant AML/CFT laws and regulations during the on-boarding process performed by the third party. The Compliance Officer shall monitor and periodically perform sample checks on the on-boarding documentation of the third party to ensure that all documents are in place.

9. Record-Keeping

The Firm shall keep record of a business relationship or transaction or any other matter required to be maintained under the Anti-money Laundering Regulations and the Code in a form that it can be easily retrievable.
9.1 For CDD information relating to the business relations and transactions undertaken without an account being opened, as well as account files, business correspondence and results of any analysis undertaken, a period of at least 5 years following the termination of such business relations or completion of such transactions; and
9.2 For data, documents and information relating to a transaction, including any information needed to explain and reconstruct the transaction, a period of at least 5 years following the completion of the transaction.

10. Suspicious Transaction Reporting

10.1 Where there are reasonable grounds for suspicion that the assets or funds of a customer are proceeds of drug dealing or criminal conduct, or are property related to the facilitation or carrying out of any terrorism financing offence, the Firm shall not establish business relations with, or undertake a transaction for, the customer; and submit a Suspicious Activity or Suspicious Transaction report to the Report Officer.
10.2 In order to ensure that the Firm to meet its legal requirements on Anti-Money Laundering, all employees must be mindful of the issue of money laundering and constantly stay vigilant for signs of such activities.
10.3 Examples of suspicious transactions include:
  • Attempts to settle large and unusual transactions in cash or bearer form;
  • A client being introduced by an overseas bank, affiliate or other client both of which are based in countries where production of drugs or drug trafficking may be prevalent;
  • Abnormal redemption instructions or settlement instructions; and
  • Any dealing with an agent where the identity of the ultimate beneficiary or counterparty is undisclosed, contrary to normal procedures for the type of business concerned.
10.4 If Employees of the Firm are suspicious about a client or transaction, they should as a first step request more information from the client about the circumstances surrounding the transaction.
10.5 The Employees must decide if the explanation received is reasonable and legitimate and if not the Employees must make a decision about whether the client’s activity is suspicious or not and if decided it is, report the transaction to the Reporting Officer.
10.6 The Report Officer shall without delay, conduct a balanced and objective assessment before making a decision whether or not to report to the Financial Investigation Agency (“FIA”).

11. Staff Training

11.1 Employees of the Firm shall attend training in relation to AML/CTF on a regular basis. Refresher training should be undertaken at least once a year. The Compliance Officer or any other qualified service provider may conduct this training.
11.2 Consistent with the training obligations outlined in the Anti-money Laundering Regulations, the Firm shall ensure its employees:
  1. 1.
    receive appropriate and proportionate training to the standard and level required by the Anti-money Laundering Regulations, in relation to money laundering and terrorist financing; and
  2. 2.
    employing appropriate systems and procedures of testing the awareness and understanding of the Anti-money Laundering Regulations.