ICM Limited (“ICM” or “the Company”) aims to prohibit, detect and actively pursue the prevention of money laundering and terrorism-funding activities. It also vows to comply with all related laws, rules and regulations with full attention with no compromise to any of the abovementioned illegal activities.
The management of the Company is committed to Anti-Money Laundering (“AML”), Counter Terrorism Financing (“CFT”) compliance in accordance with applicable laws, and places extremely high importance on unveiling any money laundering scheme and/or terrorism financing activities.
ICM also requires its officers, employees, introducing brokers and affiliated companies to adhere to these standards in preventing the use company’s products and services for the purposes of money laundering and terrorism financing activities.
The purpose of “AML, CFT & KYC Policy”, (“the Policy”), is to provide guidance on the Anti-Money Laundering (“AML”), Counter Terrorism Financing (“CFT”), and Know your Client (“KYC") procedures, which are followed by the Company in order to achieve full compliance with the relevant AML and CTF legislation.
This policy applies to all of the Company’s Officers, introducing brokers, affiliated companies, as well as products and services offered by the Company. Any employee found not to be adhering to these policies and procedures will be subject to sever disciplinary action.
3- Legal Framework
The Company is required to comply with the provisions of the applicable laws regarding the prevention of Money Laundering and Terrorist Financing. The main purpose of these Laws is to define and criminalize the laundering of proceeds generated from all serious criminal offences aiming at depriving criminals from the profits of their crimes.
In accordance with the AML and CTF Laws, the Company is obliged to set out policies and procedures for preventing money laundering and Terrorist Financing activities.
The AML and CFT procedures, which are implemented by the Company, are based on AML and CFT laws applicable in Saint Vincent, the recommendations of The Financial Action Task Force (FATF), in addition to other documents and information.
4.1- Money Laundering
Money laundering is the process of creating the appearance that large amounts of money obtained from serious crimes, such as drug trafficking or terrorist activity, originated from a legitimate source.
There are three steps involved in the process of laundering money: Placement, Layering and Integration.
Placement refers to the act of introducing "dirty money" (money obtained through illegitimate, criminal means) into the financial system in some way.
Layering is the act of concealing the source of that money by way of a series of complex transactions and bookkeeping gymnastics.
Integration refers to the act of acquiring that money in purportedly legitimate means.
4.2- Terrorism Financing
Terrorist financing (proceeds for crime) is the process by which funds are provided for financing or financial support to individual terrorists or terrorist groups.
A terrorist, or terrorist group, is one that has a purpose or activity to facilitate or carry out any terrorist action, and can involve: individuals or groups.
The term AML CTF refers to “Anti Money Laundering and Counter Terrorism Financing” or “Anti Money Laundering and Combating Terrorism Financing”.
4.3.1- Anti-Money Laundering
Anti-Money Laundering (“AML”) refers to a set of procedures, laws or regulations designed to stop the practice of generating income through illegal actions.
4.3.2- Counter Terrorism Financing
Counter Terrorism Financing (“CTF”) refers to a set of procedures, laws or regulations designed to prevent financing or providing financial support to individual terrorists or terrorist groups.
4.4- Financial Action Task Force (FATF)
The Financial Action Task Force on Money Laundering (“FATF”), also known by its French name, Groupe d'action financière (GAFI), is an intergovernmental organization established in July 1989 by a Group of Seven (G-7) Summit in Paris, initially to examine and develop measures to combat money laundering.
In October 2001, the FATF expanded its mandate to incorporate efforts to combat terrorist financing, in addition to money laundering.
The objectives of the FATF are to set standards and promote effective implementation of legal, regulatory and operational measures for combating money laundering, terrorist financing and other related threats to the integrity of the international financial system.
Starting with its own members, the FATF monitors countries' progress in implementing the FATF Recommendations; reviews money laundering and terrorist financing techniques and counter-measures; and, promotes the adoption and implementation of the FATF Recommendations globally.
The Task Force was given the responsibility of examining money laundering techniques and trends, reviewing the action which had already been taken at a national or international level, and setting out the measures that still needed to be taken to combat money laundering.
In April 1990, less than one year after its creation, the FATF issued a report containing a set of Forty Recommendations, which were intended to provide a comprehensive plan of action needed to fight money laundering.
In 2001, the development of standards in the fight against terrorist financing was added to the mission of the FATF.
In October 2001, the FATF issued the Eight Special Recommendations to deal with the issue of terrorist financing. The continued evolution of money laundering techniques led the FATF to revise the FATF standards comprehensively in June 2003.
In October 2004, the FATF published a Ninth Special Recommendations, further strengthening the agreed international standards for combating money laundering and terrorist financing - the 40+9 Recommendations.
In February 2012, the FATF completed a thorough review of its standards and published the revised FATF Recommendations. This revision is intended to strengthen global safeguards and further protect the integrity of the financial system by providing governments with stronger tools to take action against financial crime. They have been expanded to deal with new threats such as financing the proliferation of weapons of mass destruction. The new standards also impose higher levels of transparency and tougher regulations to halt corruption. The 9 Special Recommendations on terrorist financing have been fully integrated with the measures against money laundering. This has resulted in a stronger and clearer set of standard.
The provisions of the Laws adopted by the Company introduces procedures and processes that ensure compliance with the applicable Laws related to Money Laundering and Terrorism Financing activities.
5.1- Client Categorisation and Identification Procedures
The Company has adopted all requirements of the applicable laws in relation to client Categorisation and identification and due diligence procedures as explained below:
5.1.1- Client Categorisation
Clients are categorised based on their risk profile into three main categories as explained below:
a- Low Risk Clients
The following types of clients are considered lower risk. It should be noted that the Company shall gather sufficient information to establish if the client qualifies to be classified as lower risk client:
i- Credit or financial institutions situated in another country which impose requirements higher or equivalent to those laid down by Company’s regulators.
ii- Listed companies whose securities are admitted to trading on a regulated market of another countries, which are subject to disclosure requirements consistent with Community legislation.
b- Normal Risk Clients
All clients are neither High Risk nor Low Risk will be considered as Normal Risk Clients.
c- High Risk Clients
Clients with the following criteria are classified as High risk due to the following conditions:
i- Non-face-to-face customers
ii- Client accounts in the name of a third person
iii- Politically exposed persons (“PEP”) accounts
iv- Electronic gambling /gaming through the internet
v- Customers from countries which inadequately apply FATF’s recommendations
vi- Clients whose nature entails a higher risk of money laundering and terrorist financing
vii- Any other Client determined by the Company itself to be classified as such
5.1.2- Client Identification (Due Diligence)
a- Due Diligence Conditions
The Client Identification and Due Diligence procedures are applied in the following conditions:
i- Establishing a business relationship.
ii-There is a suspicion of money laundering or terrorist financing, irrespective of the transaction amount.
iii- There are doubts about the adequacy of previously obtained client identification data.
iv- Failure or refusal by a client to submit the requisite data and information for the verification of his/her identity and the creation of his/her economic profile, without adequate justification.
b- Due Diligence Timing
i- Client identification and due diligence must take place before the establishment of a business relationship or the carrying out of a transaction.
ii- The verification of the identity of the client may be completed during the establishment of a business relationship if this is necessary in order not to interrupt the normal conduct of business and where there is limited risk of money laundering or terrorist financing occurring. In such situation, these procedures needs to be completed as soon as possible.
iii- Reviews of existing records must take place on a regular basis, thus ensuring that the documents, data or information held are up-to-date.
iv- Failure or refusal by a client to submit the requisite data and information for the verification of his/her identity and the creation of his/her economic profile, without adequate justification.
v- When a client’s account is opened, it should be closely monitored.
vi- Client due diligence procedures shall be applied, not only to all new clients, but also at appropriate times to existing clients on a risk sensitive basis.
vii- At frequent intervals, the Company should compare the estimated to the actual turnover of the account.
viii- Any serious deviation, should be investigated, not only for possible action by the Company in relation to the particular account concerned, but also to gauge the reliability of the person or entity who has introduced the customer.
c- Due Diligence Procedures
The practice to which the Company adheres in order to comply with the requirements of the Law on the subject of the client identification is achieved on a risk-based approach, and it is set out below:
Normal Client Due Diligence Procedure
- Identification of the client and verification of the client’s identity on the basis of information obtained from a reliable and independent source.
- For legal persons, taking risk-based and adequate measures to understand the ownership and control structure of the client.
- Obtaining information on the purpose and intended nature of the business relationship.
- Constantly monitoring the business relationship, including scrutiny of transactions undertaken throughout the course of the relationship to ensure that the transactions being conducted are consistent with the data and information help by the firm in connection with the client.
ii- Simplified Due Diligence Procedure
Simplified procedures may apply for low-risk clients. These measures shall apply when there is no suspicion of money laundering, regardless of any derogation, exemption or threshold, and not whenever a business relationship is established.
iii- Enhanced Client Due Diligence Procedure
The Company should apply enhanced client due diligence measures in situations which by nature can present high risk of money laundering or terrorist financing.
The Company shall take specific and adequate measures to compensate for the high risk by applying one or more of the following measures:
- Ensure that the client’s identity is established by additional documents, data or information.
- Apply supplementary measures to verify or certify the documents supplied.
- Ensure that the first payment of the operations is carried out through an account opened in the client’s name. This account shall be with a credit institution, which operates in a country that imposes requirements higher or equivalent to those laid down by Company’s regulators.
d- Verification Procedure
The following verification procedure will be followed by the Company in order to verify the identity of the client during the establishment of the business relationship:
i- The Company will ensure that the construction of the economic profile, assessment of appropriateness and assessment of suitability shall be performed at all times prior the establishment of the business relationship.
ii- The clients are provided with a grace period of fifteen (15) days to provide the Company with their identification documents; During this 15-days period the Company is required to ensure the following:
- The cumulative amount of funds to be deposited will not exceed the amount of USD 2,000.
- The funds may come only from a bank account or through other means that are linked to a bank account in the name of the client.
- Notification / Reminder emails will be sent to the clients requesting the client’s identification documents.
- Closure of the account in cases where the verification procedure is not concluded following the grace period.
- The Company shall not withhold any clients’ funds, and no accounts shall be frozen unless under suspicion of money laundering.
e- Other Due Diligence related matters
i- Politically exposed persons
Politically Exposed Persons (“PEPs”) are individuals who are or have been entrusted with prominent public functions in a foreign country, as well as those in a close relationship with politically exposed persons.
The Company should adopt the following additional due diligence measures to determine whether a prospective client is a politically exposed person:
- Special Approval from Senior Management prior to the establishment of a business relationship with the client.
- Take appropriate measures for the establishment of the origin of the client’s assets and the source of funds that are related with the establishment of the business relationship or transaction.
- Conduct enhanced and continuous monitoring of the business relationship.
ii- Anonymous or Numbered Accounts
The Company is prohibited from keeping anonymous or numbered accounts. Additionally, the Company shall pay special attention to any money laundering or terrorist financing threat that may arise from products or transactions that might favour anonymity. The Company shall also take necessary measures to prevent their use for money laundering or terrorist financing purposes.
iii- Due Diligence Performance by Third Parties
The Company is permitted, and may rely on third parties, to meet the clients’ due diligence requirements. However, in such cases, the ultimate responsibility for meeting those requirements shall remain with the Company, which relies on such aforementioned parties.
5.2- Client Account Opening and KYC Documentation Procedures
Prior to accepting new clients, the company shall requires these clients to provide certain information and identification documents.
5.2.1- Account Opening
a- Required Information for Account Opening
All clients interested in opening an account with the Company are requested to provide certain information including:
i- The Client’s personal details
ii- The Client’s Economic Profile Construction
iii- The Client’s Appropriateness/Suitability Assessment
It is obvious that the identification of the client, including construction of economic profile and appropriateness/suitability assessment, shall take place prior the establishment of the business relationship with the client.
b- Account-Opening Procedure
i- The client completes the account-opening forms filling all required information.
ii- The responsible administrator collects all of the client’s initial information and forwards it directly to Senior Management, as well as to the Anti-Money Laundering Compliance Officer for examination, review and approval.
iii- Following the approval, the administrator records all necessary information into the Company’s software systems and communicates it to the related departments.
5.2.2- KYC Documentation
Prior to accepting new clients and allowing them to trade with the Company, the following documents shall be obtained for the verification of clients’ identity:
a- Natural Persons
The identification documents required from natural persons (Individual clients) in order to efficiently implement the Company’s KYC procedures are as follows:
i- Proof of Identity
A Valid government-issued Proof of Identity, (Passport, National ID Card, Driving License, …) which should include Client’s Full Name, Client’s Date of Birth, Client’s Photograph, and Validity Status (Date of Expiry and/or Date Issuance + Validity Period)
ii- Proof of Residence
A Recent proof of home address in the person’s name (Bank Statement, Utility Bills, Phone Bills, ..) which should include Client’s Full Name, Client’s Home Address, and Date of Issuance (must not be more than 6 months old).
b- Legal Persons
A different identification procedure is followed for Legal Persons (corporate clients) interested in opening an account with the Company. These documentation requirements are presented below:
i- Incorporation Documents
The form and name of corporate documents may vary depending on country of incorporation and/or legal form of the company. However the required government-issued Corporate Documents should include Corporation name, Date and Place of Incorporation, Registered Office Address, Directors and authorised signatories, Ownership/shareholding structure (Shareholders names and shareholding percentage), Corporate registered activities.
These documents may include but not limited to, Certificate of incorporation or Certificate of Registration, Certificate of Registered Office, Certificate of Directors and Secretary, Certificate of Registered Shareholders, Memorandum and articles of association,
ii- Directors and Beneficial Owners Documents
Personal KYC and identification documents are required from:
- Legal Person’s Directors
- Legal Person’s Ultimate Beneficial Owners with 10% beneficial ownership or more.
These identification documents include Proof of Identity and Proof of Residence.
iii- Board Resolution
A resolution of the board of directors of the legal person for the opening of the account and granting authority to those who will operate it.
5.3- Record Keeping Procedures
The Company should keep the below listed documents and information for use in any investigation into, or analysis of, possible money laundering or terrorist financing by national authorities.
The retention of the documents/data, other than the original documents or their certified true copies that are kept in a hard copy form, may be in other forms, such as electronic form, provided that the Company is able to retrieve the relevant documents/data without undue delay and present them at any time, to the relevant authorities, after a request. A true translation is attached in the case that the documents/data are in a language other than English.
a- The name and address of clients and copies or records of official identification documents (like passports, identity cards, or driving licenses).
b- The name and address (or identification code) of counterparties.
c- The form of instruction or authority.
d- The account details from which any funds were paid.
e- The form and destination of payment made by the business to the client.
f- Business correspondence.
g- For client due diligence, a copy of the references of the evidence is required, for a period of at least 5 years after the business relationship with the client has ended.
h- For business relationship and transactions, the supporting evidence and records for a period of at least five years following the carrying out of the transactions, or the end of the business relationship.
5.4- Suspicious Transactions Reporting
A suspicious transaction is a transaction which is inconsistent with a client's known, legitimate business or personal activities or with the normal business of the specific account, or in general with the economic profile that the Company has created for the client.
The Company ensures maintaining adequate information at all time and knows enough about its clients' activities in order to recognize on time that a transaction or a series of transactions is/are unusual or suspicious.
5.4.1- Examples of Suspicious Transactions
Examples of what might constitute suspicious transactions/activities related to money laundering and terrorist financing include but not limited to:
a- Transactions with no discernible purpose or are unnecessarily complex.
b- Use of foreign accounts of companies, or group of companies with complicated ownership structures, which is not justified based on the needs and economic profile of the customer.
c- Large volume of transactions and/or money deposited or credited into an account, when the nature of the customer’s business activities would not appear to justify such activity.
d- There is no visible justification for a customer using the services of a particular financial organisation.
e- There are frequent transactions in the same financial instrument without obvious reason and in conditions that appear unusual.
f- There are frequent small purchases of a particular financial instrument by a customer who settles in cash, and then the total number of the financial instruments is sold in one transaction with settlement in cash, or with the proceeds being transferred with the customer’s instructions into an account different than his own.
g- There are frequent small purchases of a particular financial instrument by a customer who settles in cash, and then the total number of the financial instrument is sold in one transaction with settlement in cash or with the proceeds being transferred, with the customer’s instructions, in an account other than his usual account.
h- Transactions which are not in line with the prevailing market conditions, particularly in relation with the order’s size and frequency.
i- The settlement of any transaction – mainly large ones – in cash and/or through a third party, which did not give the order.
j- The settlement of any transaction but mainly large transactions in cash and/or settlement of the transaction by a third person which is different than the customer which gave the order.
k- The transfer of funds to and from countries, or geographical areas, which do not apply, or inadequately apply FAFT’s Recommendations on money laundering and terrorist financing.
l- Reluctance in providing complete personal information upon establishing a business relationship, namely regarding the nature and purpose of its business activities, anticipated account activity, prior relationships with financial organisations, names of its officers and directors, or business address.
m- Providing information that are minimal, difficult or expensive for the Company to verify.
n- Providing unusual or suspicious identification documents that cannot be readily verified.
o- Frequent or large transactions by a customer with no record of past or present employment experience.
p- The introduction of a customer via a foreign financial organisation, or third party whose country(ies) or geographical area(s) of origin do not apply or inadequately apply FATF’s Recommendations on money laundering and terrorist financing.
q- The use of an address that is linked to individuals involved in cash transactions, particularly when that same address does not correspond with the stated occupation (e.g. student, unemployed, self-employed, etc.)
r- Shared address for individuals involved in cash transactions, particularly when the address is also a business location and/or does not seem to correspond to the stated occupation (e.g. student, unemployed, self-employed, etc).
s- The stated occupation of the customer is not commensurate with the level or size of the executed transactions.
t- Use of general nominee documents in a way that restricts the control exercised by the company’s board of directors.
5.4.2- Suspicious Transaction-Reporting Procedure
The procedure to report a client’s suspicious transaction is as follows:
a- The reports of Company’s employees from different departments are evaluated by the AML Compliance Officer.
b- If deemed necessary, the Compliance Officer shall notify the relevant Money Laundering Authorities.
c- Following the report’s submission, the concerned customer’s account(s), as well as any other connected accounts, are placed under close monitoring by the Compliance Officer.
d- After submitting the report, the Company adheres to any instructions given by relevant Money Laundering Authorities, and in particular, as to whether or not to resume or suspend a particular transaction, or to maintain the particular account active.
e- Transactions executed for the customer are compared and evaluated against the anticipated account’s turnover, the usual turnover of the activities/operations of the customer and the data and information kept for the customer’s economic profile.
f- Significant deviations are investigated, and the findings are recorded in the respective customer’s file.
g- Transactions that are not justified by the available information on the customer are thoroughly examined so as to determine whether suspicion over money laundering or terrorist financing arise. Should this be the case, a report will be respectively submitted to the Compliance Officer and then to relevant Money Laundering Authorities.
5.5- AML Compliance Officer Daily/Monthly Procedures
The procedure to be followed by the AML compliance officer on a daily/monthly basis is as follows:
i. Receive a daily report from staff members regarding any suspicious transactions.
ii. Examine submitted reports (if any)
iii. Inform Senior Management and advise on the necessity of taking any of the below actions.
iv. Halt the transactions if reports are in process.
v. Inform the client of the reasons why his transaction has been cancelled.
vi. Collect the transaction information if it has already been executed.
vii. Inform the appropriate authorities of the suspicious transaction as per the law.
6- Personal Education and Training
The Company ensures that its employees are fully aware of their legal obligations in accordance with the law on the prevention of money laundering and terrorist financing through a complete employee education and training program.
The training program aims at educating employees on the latest developments in the prevention of money laundering and terrorist financing, including the practical methods and trends used for this purpose.
The training program ensures that Company’s employees are fully aware that they can be personally liable for failing to report information or suspicion regarding money laundering or terrorist financing. The timing and content of the training provided to employees of various departments is adjusted according to the needs of each department.
The frequency of the training can vary depending on to the amendments of legal and/or regulatory requirements, employees’ duties as well as any other changes in the financial system.
The training program’s structure will be in line with the needs, as well as the various functions, of new employees, existing ones, as well as for the different departments within the Company.
On-going training is given at regular intervals to ensure that the employees are reminded of their duties and responsibilities and kept informed of any new developments.
Any personal information collected about the client such as name, address, date of birth and contact details will be maintained with ICM strictly for business purposes. Other information such as client transactions, copies of passports and proof of addresses will remain confidential and shared only between our account services and compliance departments. ICM may additionally inquire about the credit worthiness of the client, which will also remain confidential within our customer files. Such information may be maintained either physically or electronically with strict access procedures.
ICM may share client information with internal departments or affiliate offices who conduct marketing, back-office and customer service functions to accomplish normal business operations. Each employee within the ICM has signed a Confidentiality Agreement as client information is required to be kept confidential.