Anti-Money Laundering Policy and KYC Policy of Easy link Remittance.

INTRODUCTION

Most anti-money laundering policies openly conflate money laundering (which is concerned with the source of funds) with terrorism financing (which is concerned with the 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:

1. Circulars and directives of Nepal Rastra Bank (Central Bank).
2. Easylink Remittance’s rules and regulations.
3. Concerned government authorities rules and regulation.
4. Fundamental and prudential norms on AML established by international financial institutions.

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.

1. To set Easylink Remittance’s basic guidelines on Anti Money laundering policy (AML) and Know Your Customer (KYC) Policy.
2. To make Easylink Remittance’s staffs and Agents aware of the AML and KYC policies.
3. To meet international need and demand of these policies
4. To prevent illicit transfer of money
5. To prevent Money Laundering and use of Easylink Remittance and its agents for criminal activities.

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:

1. KNOW YOUR CUSTOMER STANDARDS

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:

• Customer Acceptance Policy (CAP): Must be clear with explicit criteria. Perform due diligence with background checks to ensure that customer/entity is using their real name and not involved in terrorism or other illegal activities by checking valid photo ids.
• Customer Identification Procedures (CIP): Must be clearly outlined for and performed at every stage of the company relationship: establishing an account, carrying out a transaction, resolving doubts about the authenticity of previously obtained identification, etc. Identify and verify all customers’ identities and purposes (using reliable, independent data, information, and/or source documents) to the bank’s satisfaction.
• Monitoring of Transactions: Effective KYC procedures require continuous monitoring of your customer base and its normal behavior to reduce risk. High-risk transactions (classified based on country of origin, fund sources, etc.) or activities (such as complex or unusually large transactions and those with no visible lawful purposes) should undergo extra scrutiny. Company can set thresholds for transaction amounts that warrant enhanced due diligence.

A CUSTOMER FOR THE PURPOSE OF KYC POLICY IS DEFINED AS:

• A person or entity that maintains a business relationship with the Easylink Remittance
• One on whose behalf the transaction is maintained (i.e., the beneficial owner)
• Beneficiaries of transactions conducted by professional intermediaries, such as Stock Brokers, Chartered Accountants, Solicitors, etc as permitted under the law
• Any person or entity connected with a financial transaction which can pose significant reputational or other risks to the Easylink Remittance.

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:-

1. Registration of customer
2. Due Diligence of customer through OFAC and Contradiction list to ensure that customer/entity is using their real name and not involved in terrorism or other illegal activities.
3. Examination legitimacy of customer
4. Source of Income
5. Relationship with beneficiary and origin of country
6. Multiple transaction tracking/Monitoring transaction
7. Checking daily limit for sender/receiver
8. Follow standard and specific rules and regulation described by FCA/AMLR

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.

• Purpose of Remittance & Source of Income is mentioned by the customer, as this enables to verify the appropriateness of the transaction.
• Breaking up of transactions to circumvent the limit restrictions is not allowed. Proper methods are being evolved to detect multiple transactions or split transactions in order to get required information/documents.

3. Internal Control & Communication

Proper procedures have been set up for the staff to have effective control over the activities undertaken.

• The format of the Application Form for remittance has been designed to confirm the local regulations and is able to capture all the required data for enabling effective supervision & control.
• Application Forms contain a declaration from the customer certifying the correctness of the data provided by him/her and in case of registered customers any change in the address given is being notified to the agent.

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.

• The customer’s name and likeness must match the information and picture on the photo ID.
• The photo ID must be issued by a legitimate government agency and must include a picture and expiration date (if applicable).
• If the customer is not a resident of the Nepal, he / she must present a passport, alien identification card or other official document evidencing nationality or residence.
• The Business must not accept any form of identification that has expired or appears to be altered or fabricated.