Anti-Money Laundering Policy June 2017 1
1. Introduction The Bank has a legal, moral and social responsibility to its customers to deter and detect those who would seek to use United Bank UK (UBL UK) to facilitate the movement of criminal funds, and funds designed to finance terrorism. The Bank also has a statutory duty to comply with prevailing legal and regulatory requirements relating to Money Laundering and Terrorist Financing. In the United Kingdom these are included in (amongst others):- Proceeds of Crime Act (POCA) 2002 (as amended by the Serious Organised Crime and Police Act 2005); The Terrorism Act 2000 (as amended by the Anti-Terrorism, Crime and Security Act 2001); The Bribery and Corruption Act 2010; The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017; The Criminal Finances Act 2017; HM Treasury Sanctions, notices and new releases; System and Control (SYSC) Rules of the FCA Handbook. Industry guidance on compliance with these requirements is set out in the Joint Money Laundering Steering Group (JMLSG) Guidance Notes. The term Money Laundering (ML) within this Policy refers to the concealment, acquisition, use or possession of criminal property. The term criminal property refers to property derived or suspected to have been derived from criminal activity (i.e. the proceeds of crime ) The term Terrorist Financing (TF) within this Policy refers to the use of funds, or the making of available funds for the purposes of terrorism; or the acquisition, possession, concealment, conversion or transfer of funds (directly or indirectly) that will in turn be used or made available for such purposes. 2. Objectives The objectives of this Policy are to: - Provide a consistent approach across the Bank to the deterrence and detection of those suspected of laundering the proceeds of crime or those involved in the funding or execution of terrorism, and the disclosure to the relevant authorities. Explain clearly the responsibility of the Senior Management team, the Money Laundering Reporting Officer (MLRO) and other key colleagues. Set out requirements for effective implementation and monitoring of compliance with this policy. 3. Risk Appetite UBL UK is committed to complying with its legal and regulatory responsibilities in relation to Anti-Money Laundering and Counter Terrorist Financing, and has no appetite for non-compliance. No member of staff must do anything to frustrate or circumvent the intended purpose of this Policy. Any colleague not acting in compliance with this Policy may be subject to internal disciplinary action. 2
4. Scope This Policy applies to all colleagues working within UBL UK and includes agency workers, self-employed or contract workers and any individual on work experience (including interns). 5. The Bank s Policy It is the Policy of UBL UK that: - UK statutory and regulatory obligations to prevent money laundering are met in full. Under the Criminal Finances Act 2017, any knowledge or suspicious activity relating to suspected tax evasion will be reported to the appropriate authority. Positive management action will be exercised in order to minimise the risk of the Bank s services being abused for the purposes of laundering funds associated with drug trafficking, terrorism or other crime, as defined by UK legislation. The Bank will not continue established relationships with customers whose conduct gives rise to suspicion of involvement with illegal activities. Any customer relationship where the customer s conduct gives the Bank reasonable cause to believe or suspect involvement with illegal activities will be reported by the MLRO to the National Crime Agency (NCA). Thereafter action will be undertaken in conjunction with the law enforcement agencies to avoid any risk of the Bank committing a tipping-off offence. Wherever possible, the relationship will be terminated. The Bank s policy and procedures will be based upon the requirements of the Money Laundering regulations as interpreted by the most recent Guidance Notes issued by the Joint Money Laundering Steering Group (JMLSG), Financial Action Task Force (FATF), and European Supervisory Authorities on the regulatory rules and information issued by the Financial Conduct Authority (FCA). 6. Mandatory Requirements 6.1 Organisation Adequate and competent resource must be in place to manage ML/TF risks effectively and must be organised to minimise the risk of facilitating the movement of suspected criminal property whilst complying with legal and regulatory requirements. 6.2 Money Laundering Reporting Officer To meet regulatory requirements, all UK Banks are required to appoint a Money Laundering Reporting Officer. Mr Trevor Davies is the appointed Money Laundering Reporting Officer (MLRO). He can be contacted on the following phone / fax numbers: - Phone number: 020 3326 9976 Fax number: 0207 491 8706 Mobile: 07786 985135 Email: trevor.davies@ubluk.com 6.3 Responsibilities Senior Management Responsibility 3
Senior Management (as defined by the FCA SYSC rules 3.2.6H and 6.3.8) are responsible for: - The establishment and management of effective systems and controls to counter the risks of Money Laundering and Terrorist Financing. The day to day compliance with money laundering obligations within the areas of the Bank for which they are responsible. Ensuring that the MLRO is provided with prompt advice of unusual/suspicious transactions and other matters of significance. Seeking from the MLRO, at least annually, a report relating to the Bank s compliance with its anti-money laundering obligations and acting on the findings and recommendations. MLRO Responsibility The Bank s MLRO is responsible for: - Undertaking the Senior Manager Function role (SMF 17) for the Bank. Developing and maintaining policy in line with evolving statutory and regulatory obligations. Developing internal procedures. The MLRO will have available copies of the current JMLSG Guidance Notes to enable internal procedures to be kept up to date and the MLRO will ensure that he is kept up to date with new ML/TF requirements and developments. Ensuring that staff are aware of their obligations and the Bank s procedures, that staff are adequately trained in money laundering prevention, their legal and regulatory responsibilities and their role in handling criminal property and money laundering/terrorist financing and risk management. Carry out regular assessments of the adequacy of the Bank s systems and controls to ensure that money laundering risks are managed effectively. Representing the Bank to all external agencies in the UK (Financial Conduct Authority, National Crime Agency, Police and Customs), and in any other third party enquiries in relation to money laundering prevention or compliance. Co-ordinating Senior Management focus on managing money laundering/ terrorist financing risk and ensuring that all parts of the Bank are complying with the stated policy and therefore monitoring operations and development of the policy to this end. Preparing regular compliance reports to the Board and Senior Management. Ensuring that all employees complete the Half-Yearly Suspicious Transaction Acknowledgement Form. Receiving and reviewing internal disclosures and determining as to whether a report needs to be disclosed to the National Crime Agency (NCA). Obtaining and making use of national and international findings concerning countries with serious deficiencies. Submit an Annual Financial Crime Report to the FCA annually. Undertake an annual review of sanction screening and suspicious activity monitoring systems to check effectiveness. Ensure that there is appropriate transaction monitoring in place to monitor Branch, NetRemit and Correspondent Partners. Employee Responsibility All employees are responsible for: - 4
Remaining vigilant to the possibility of money laundering/ terrorist financing. Complying fully with all money laundering/ terrorist financing procedures in respect of customer identification, account monitoring, record keeping, reporting, and training and competence requirements. Reporting all suspicions of money laundering to the MLRO. Promptly completing, every 6 months, the Suspicious Transaction Acknowledgement Form confirming that they had no suspicions during the previous six months or that any suspicions have been reported. Internal Audit Responsibility Internal Audit is responsible for: - Auditing compliance by the Bank with money laundering statutory and regulatory obligations, in respect of the Bank s money laundering policy and procedures. Advising Senior Management of any deviations from the Bank s policies and procedures that have been noted by Internal Audit during their reviews. 6.4 Risk Based Approach Senior management will take a risk based approach to managing money laundering/ terrorist financing risk. The steps will be to: - Identify the money laundering and terrorist financing risks that are relevant to the Bank; Assess the risks presented by the Bank s customers and the Bank s products; Design and implement controls to manage and mitigate these assessed risks; Monitor and improve the effective operation of these controls; and Record appropriately what has been done and why. The risk assessment will result in a categorisation of risk, e.g. high, medium and low. This will assist in allocating customers to risk categories and will determine the different treatments of identification, verification, KYC information and monitoring that will be required. The risk management process for managing money laundering and terrorist financing risks will be reviewed annually. 6.5 Senior Management and Certification Regime The Bank will maintain an up to date Responsibility Map and relevant employees will undergo screening. A relevant employee is one whose work is relevant to the firm s compliance with any requirement in the ML Regulations; or otherwise capable of contributing to the identification or mitigation of the risks of Money Laundering/Terrorist Financing (ML/TF) to which the firm is subject; or prevention or detection of ML/TF in relation to the firm s business. Screening of relevant employees means an assessment of: 5
the skills, knowledge and expertise of the individual to carry out their functions effectively; and the conduct and integrity of the individual. All members of staff are to receive training on at least an annual basis to ensure that they are aware of the requirements of this Policy and, in particular, the law relating to Anti-Money Laundering and Counter Terrorist Financing (AML and CTF), including how to identify and report suspicious activity. All new members of staff must complete AML/CTF induction training within 3 calendar months from commencement of employment. Comprehensive training records will be kept by Compliance to monitor who has been trained, when they received the training and the nature of that training. 7. Clearly Defined Procedures The Bank s AML/CTF Procedures are documented within the AML/ CTF Handbook. This handbook sets out the comprehensive policies and procedures for preventing money laundering, including account opening and Know Your Customer (KYC) procedures. The handbook consists of: Policies and Standards; AML/CTF Procedures; Financial Crime and AML Risk Appetite The purpose of the handbook is to assist all members of management and staff to understand: The legal requirements and the different penalties for non-compliance; What the Bank requires of the management and staff. How to recognise money laundering and action that must be taken, and that all members of the Bank s management and staff are expected to: Be aware of their personal legal obligations and the legal obligations of the Bank. Be aware of the Bank's AML/CTF Policy and follow the Bank's procedures Be alert for anything suspicious Report suspicions in line with internal procedures. The AML/CTF Handbook must be routinely reviewed and amended to ensure that it remains up to date and must be clearly accessible to all members of staff. 8. Customer Due Diligence (CDD) The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 make it mandatory to apply a risk based approach to the verification of identity as well as further customer due diligence. The CDD Risk Category assessment form must be completed for all accounts and placed in each file alongside the KYC information form. The Bank must ensure that:- 6
Appropriate CDD is carried out when opening accounts and customers are properly identified. It maintains records of who our customers are and the transactions that they carry out are maintained. It meets and maintains the required standard of Know Your Customer, Know Your Business, Customer Due Diligence and Enhanced Due Diligence (EDD) information. It carries out appropriate CDD and EDD on Correspondent Banks, Syndicated Loans, Commercial Property Lending, Bonds and Trade Finance deals including ensuring that they comply with UK and European legal requirements, USA Patriot Act requirements and FCA/PRA regulations. 9. Suspicious Activity Reporting (SAR) The Bank must ensure that all members of staff are aware of their personal obligations under the Proceeds of Crime Act (POCA) 2002, to promptly raise an internal report where they have knowledge or suspicion, or where there are reasonable grounds to have knowledge or suspicion, that another person is engaged in money laundering, or that terrorist property exists. The MLRO receives any internal reports and is responsible for reporting to the NCA if he considers a suspicious activity report is deemed appropriate. 10. Handling of Orders The Bank must ensure that it has adequate systems, controls and procedures in place to ensure timely compliance with legal requests for information (e.g. Production Orders, Disclosure Orders, and Monitoring Orders). This includes the ability to release funds held under restraint. 11. Annual Policy Review This Policy Statement was last reviewed on the 8 th July 2016. Any questions about this policy or suggestions for additions that staff would like to be considered on review should be directed to the MLRO via the Line Manager in the first instance. Version Control Version Date Amendment Comments By Whom Approved by 1.1 08 Jul 2016 Policy Revision CD ManCom 22/07/16 1.2 20 June 2017 Policy revision and aligned to the Fourth Money Laundering Directive Trevor Davies 7