Money laundering refers to financial transactions that aim to conceal the source of illicitly-obtained funds (fraud, corruption, organized crime, terrorism, etc.). Major crimes related to money laundering are defined and regulated by law.
Anti-money laundering policy involves the following activities:
Compliance with due diligence and the Know Your Customer policy
Monitoring of suspicious transactions/activities.
Risk assessment approach
Identifying possible risks of money laundering during transactions and cooperation with clients allows Ar-forex ltd to take appropriate measures to control and reduce these risks.
Risks are generally assessed according to the following types of risk:
Country risk together with other factors provides useful information on the potential risk of money laundering and terrorist financing.
The key factors responsible for the increase of country risk include:
Countries subject to sanctions, embargoes or similar measures;
Countries added to the FATF blacklist for being non-cooperative in the global fight against money laundering and terrorist financing, or having inadequate legislation with no special agencies to fight against money laundering. Reliable information that the country finances or supports terrorist organizations. The most «risky» customers are impossible to identify for sure.
However the following customer activities are regarded to be potentially risky:
Armament manufacturing;
Business with a high cash ratio;
Unregulated charity and other non-profit organizations.
Risk associated with certain activities
An overall assessment of money laundering risks should consider certain activities of service-providing financial institutions that are listed by regulatory and government agencies together with other reliable sources as potentially risky in terms of money laundering.
Due diligence and the Know Your Customer policy
Being an online FOREX broker, Ar-forex ltd cooperates with its clients only virtually. To identify a client, the company relies on data provided by online brokers while conducting due diligence (such as duplicate invoice check, account holder verification, etc.) in order to identify and verify a client’s identity and to obtain all the necessary information about the client, the purpose and nature of his or her activity. The company also receives and records any additional information about the client and assesses the risk of money laundering using risk assessment approach. The company should establish whether its customer acts as a representative on behalf of another person or entity (agent, trustee). In such cases the client is obliged to provide documents necessary to identity agent and the second party he or she represents as well as the trust agreement.
Monitoring and reporting of suspicious transactions/activities
In addition to the initial due diligence the company monitors customer operations for purposes of identifying any suspicious (or fraud) activity. Along with the automated monitoring the company might also involve their employees and outsourcing providers to carry out any additional monitoring. Customer accounts were provided with a number of status fields that display customer profiles in the system allowing us to track customer activity online. Ar-forex ltd launched both a system and a procedure necessary to identify suspicious activity that allow all company’s employees to inform the responsible officer about any suspicious activity related to money laundering or terrorist financing. The system consists of three stages:
All employees should closely monitor any unusual or suspicious transactions/activities;
Unusual or suspicious transactions/activities should be reported in compliance with applicable laws/regulations;
All information on suspicious transactions/activities will be monthly reported to the officer responsible for financial monitoring.
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