Most anti money laundering policy openly conflate money laundering (which is concerned with source of funds) with terrorism financing (which is concerned with destination of funds) when regulating the financial system.
Money laundering is the process of transforming the proceeds of crime into ostensibly legitimate money or other assets. However, in a number of legal and regulatory systems, the term money laundering has become conflated with other forms of financial crime, and sometimes used more generally to include misuse of the financial system (involving things such as securities, digital currencies, credit cards, and traditional currency), including terrorism financing and evasion of international sanctions.
Money obtained from certain crimes, such as extortion, insider trading, drug trafficking and illegal gambling is “dirty”. It needs to be cleaned to appear to have been derived from legal activities so that banks and other financial institutions will deal with it without suspicion. Money can be laundered by many methods, which vary in complexity and sophistication.
Different countries may or may not treat payments in breach of international sanctions as money laundering. Some jurisdictions differentiate these for definition purposes, and others do not. Some jurisdictions define money laundering as obfuscating sources of money, either intentionally or by merely using financial systems or services that do not identify or track sources or destinations.
Many regulatory and governmental authorities issue estimates each year for the amount of money laundered, either worldwide or within their national economy. In 1996, the International Monetary Fund estimated that two to five percent of the worldwide global economy involved laundered money. Regardless of the difficulty in measurement, the amount of money laundered each year is in the billions (US dollars) and poses a significant policy concern for governments. As a result, governments and international bodies have undertaken efforts to deter, prevent, and apprehend money launderers. Financial institutions have likewise undertaken efforts to prevent and detect transactions involving dirty money, both as a result of government requirements and to avoid the reputational risk involved. Issues relating to money laundering have existed as long as there have been large scale criminal enterprises. Modern anti money laundering laws have developed along with the modern War on Drugs. In more recent times anti-money laundering legislation is seen as adjunct to the financial crime of terrorist financing in that both crimes usually involve the transmission of funds through the financial system (although money laundering relates to where the money has come from, and terrorist financing relating to where the money is going to).
Regulations in Nepal
In order to combat money laundering, laws and regulations have been formalized and implemented in various countries. The rules and regulations in combating money laundering may vary from country to country.
In Nepal, Legislature- Parliament has enacted asset (Money) Laundering Prevention act. Act No. 34 of the year 2008 (2064). The act shall be applicable throughout Nepal and to any individual or corporate body, where may be residing, remitting, transferring or sending assets from Nepal to abroad or abroad to Nepal obtained by the act which is offence under this act. The government of Nepal may formulate necessary rules or implementation of this act.
As activities such as money laundering affects the image and reputation of Easylink Remittance and its employees, it has become imperative for Easylink Remittance to develop and implement appropriate policies and procedures on AML. For developing and designing the policies and procedures on AML, following have been taken into account:
Objective of the Policy
The main purpose of this policy is to avoid the movement of illicit money into the financial system of the country. The following are the objectives of this policy manual.
Scope of Policy
This policy applies to all Easylink Remittance officers, employees, and products and services offered by the company within and outside Nepal. All business units of the Easylink Remittance will cooperate to create a cohesive effort in the fight against money laundering.
Each business unit and locations have implemented risk-based procedures reasonably expected to prevent, detect and cause the reporting of transactions required. All efforts exerted will be documented and retained in accordance with AML policy of the company.
Easylink Remittance fully committed that it will not let its services to be used for illegal purposes, and it is always ready to extend its cooperation to regulators and other Government authorities in this regard.
Anti money laundering Policy (AML) & Procedure
The fight against money laundering is a priority for Easylink Remittance. We, at Easylink Remittance recognize that the fight against anti-money laundering is a team effort. We support the major international organizations, which collectively set and enforce standards for anti-money laundering policies and programs like FATF, UN, EU, The organization of American States – The Office of Foreign Assets Control (OFAC) and the Local Regulatory Authority. These organizations are increasingly insistent that compliance be assessed in terms of implementation and not simply concurrence with the policy standards or guidelines established.
Easylink Remittance prohibits remittances to charitable, religious and social organizations and societies.
Our co-operation to our regulators is in it’s entirely wherein we aim to maintain the highest operating standards to safeguard the interest of our customers, our shareholders, our staff and the communities where we operate. In conducting business with due skill, care and diligence, Easylink Remittance seeks always to comply with both the letter and spirit of relevant laws, rules, regulation, codes and standards of good practice. We aim to promptly address any irregularities that may arise, as we believe in transparency in our financial and regulatory reporting with swift disclosure of any breaches. The Three basic tenets of Anti Money Laundering i.e., Know Your Customer (KYC), Source of Funds and End Use/destination of funds. Our Anti-Money Laundering policy and procedures are as follows:
The objective of the KYC guidelines is to prevent Easylink Remittance from being used, intentionally or unintentionally, by criminal elements for money laundering activities. KYC procedures enable Easylink Remittance to know/understand their customers and their financial dealings better which in turn help them manage their risks prudently. The KYC policy of Easylink Remittance incorporates the following three elements:
A CUSTOMER FOR THE PURPOSE OF KYC POLICY IS DEFINED AS:
Policy The objective of KYC guidelines is to prevent Easylink Remittance and its agents from being used, intentionally or unintentionally, by criminal elements for money laundering activities. KYC procedures also enable us to know/understand our customers and their financial dealings better which in turn help us manage our risks prudently.
Easylink Remittance KYC Process are as follows:-
2. Precautions for Transactions crossing the threshold amount limit, as per local rules
We take additional precautions on transactions involving amount that cross the threshold limit as per local rules. True copy of Original ID is being kept on record after due verification with originals.
3. Internal Control & Communication
Proper procedures have been set up for the staff to have effective control over the activities undertaken.
4. Record Keeping
We keep records of remittance transactions for a minimum period of six years. Records provide the sufficient basic information on the customer and also able to reconstruct the transaction if needed.
5. Appropriate Training to Staffs
Staffs and agents have been trained on all matters pertaining to Money Laundering & Terrorist Financing.
6. Reporting to Regulatory Authorities
There is a proper reporting system in place both within the organization and to the Regulatory Authorities.
Acceptable Forms of Photo Identification
When documenting a customer’s photo ID, the Business will include the type of ID, the ID number, and the issuer of the ID.