AML /CTF Compliance

 

AML /CTF Compliance Program

 

Instant Express Pty Ltd

2 23 Foster Street Surry Hills, NSW 2010

 

1. Background

 

AML/CTF programs are required und er the Anti-Money Launder in g and Counter-Terrorism Financing Act 2006 and Anti-Money Laundering and Counter-Terrorism Financing Amendment Act 2017 (AML/CTF Act) as a way for reporting entities (businesses) to identify , mitigate and manage the risk of their products or services  facilitating  money laundering or terrorism financing. Requirements for AML/CTF programs came into effect on 1 2 December 2007.

 

AML/CT F programs are risk based. This means repotting entities can develop their own programs with minimal cost, tailored to their situation and money laundering and terrorism financing risks. This approach recognises that the repotting entity is in the best positing to assess the risk of their customers, product s and services and to allocate resources to counter those risks. The risk-based approach also ensures there is minimum impact on customers.

 

Overtime the requirements of the AML/CTF Act will replace   those of the Financial Transactions Repo1t s Act which currently deals with reporting of cash transact ions over $ 10,000 and suspicious cash transactions. The AML/CT F Act applies to cash and non-cash transactions.

 

Instant Exchange  Pty  Ltd  offers  remittance  e  services  to its  customers and  it  is  committed  to  comply  with  the   Anti-Money Laundering   and  Counter-Terrorism Financing Act 2006 (AML/CT F Act) and  Anti-Money  Laundering  and  Counter-Terrorism Financing Amendment Act 2017 (AML/CTF Act), AML and CTF Financing Rules 2007 and Anti-Money Laundering and Counter-Terrorism Financing Rules Amendment Instrument 20 18 (No. 1)'  (Instrument)  and  other  rules  and  regulations  issues  the re  under ,  and  any other  rules and guide lines under laws in force.

 

The business has its customers mainly from the same community as that of business owner(s). Through the service is o pen to all, it feels comfortable to deal with clients whose identity and background ca n be easily verified. In addition to that business is working toward end to end money transfer in Australia to Nepali banks via API get away after verifying identity to remote change of unlawful activities, quick and reliable services.   

 

This guideline along with regular updates will guide the operation   of the company's International Money Transfer Business. We have organised the manual l in the following order.

 

Pursuant to Practice 8.1.5 of the AML/CT F Rules, Part A of the  AML/CTF  program  must be designed to enable a reporting it y to identify and recognises signify cant changes in ML/TF risk for the purposes of its Part A and Part B programs.

In particular, Part A of the AML/CTF program must be designed to enable a repo1ting entity to assess the ML/TF risks posed by:

• All New designated services prior to introducing them to the market;

• All new methods of designated services delivery prior to adopting them; and

• All new or develop in g technology used for the provision of a designated service prior to adopting them.

 

 

2. PART A - AML/CTF COMPLIANCE PROGRAM

The primary purpose of Part A of the AML/CTF program for Instant Exchange Pty Ltd is to enable a reporting entity to:

 

• identify significant changes in the risk associated with money laundering or terrorism financing it faces;

• recognises such changes in ML/TF risks for the purposes of the requirements of Part A and Part B of its AML/CTF program;

• assess the ML/TF risk posed by:

o all new designated serv ices before int reducing them to the market

o all new methods of designated service delivery before adopting them

o all new or developing technologies used to provide a designated service before adopting g them

• determine the appropriate level of employee due diligence to apply to its employees, agents and consultants who carry out functions connected with the designated services and who are in a position to facilitate an ML/TF offence; and

• design, having regard to ML/TF risks it might reasonably face a staff ML/TF risk awareness training program and determine the frequency and extent of that training.

By accepting these terms and conditions you give consent forInstant Remit PTY LTD  to disclose your name, address and date of birth to Australia Post and from there to a credit reporting body to provide an assessment of whether the personal information so provided matches (in whole or in part) personal information contained in a credit information file held by the credit reporting body to assist in verifying your identity for the purposes of the Anti-Money Laundering and CounterTerrorism Act 2006.

You confirm these are your details and you have authority to provide them for identity check purposes. The credit reporting body may prepare and provide Instant Remit PTY LTD (via Australia Post) with such an assessment and may use your personal information including the names, address and dates of birth contained in credit information files of you and other individuals for the purposes of preparing such an assessment. If you disagree with having your identity verified by a credit reporting body, please contact Instant Remit PTY LTD so that we can discuss other options with you.”

 

A.1 How have we been organised

 

A.1.0 Organisation Chart/Governance Structure

 

Online international money transfer business has been carried out under the company Instant Exchange Pty Ltd by the director.

 

The snapshot of the governance structure of the business is presented in chart given below. The directors' control over the business is in the hands of the board. However, there is a system of internal checks for jobs done by staff of the company to minimise the risk of Anti Money Laundering / Terrorist Finance.

 

 

 

A.1.1 How We Operate and Our business

Na me of Business: Instant Exchange Pty Ltd

We are expecting the average number of remittance transactions of the company to be 100 per week and the average transaction value per week to be about $ 12 0,000. Hence, the average value of per transaction is estimated to be $1,200.00. The company offers only remittance services to its customers. It does not offer other services covered by the AML/CTF Act.

 

A.1.2 Customers and Services

The company is planing to serve follwoing customers:

o Individuals

o Locals

o Customers who deal through internet and tele phone, not face to face

o Students

o Non-individual customers, such as sole traders, partnership and company

With regard to the compliance of AML/CTF Act, Rules and Regulations, it is very important to identify and verify the identity of the customers. We anticipate more than 98% of the customers are individuals other than sole traders. Therefore, in these guidelines, we have made the explicit mention of the procedures for identify and verify individual customers.

However, it also guides as a ready reckoned so that the identification and verification may be made by referring the corresponding les and regulations of the AML/CTF Rules. We offer about 100% remittance services to Nepal via registered entity with Government of Nepal. We will start the remittance to other countries in near future.

 Before sending money, clients are asked to create account by accessing online system. Clients account is verified two ways first one is by system which generates random codes to verify email address and phone number then clients are asked update ID copy (Australian Driving license or Passport) this is manually verified then clients are allowed to send money via a bank account to deposit bank account.  

 

A.1.3 3 Services and Method of Delivery

We offer the following services and method of delivery:

 

Outgoing internat ional funds transfer instruct  

 

o Mobile App

o Web App

o Web or mobile app  

We transfer all collected remittance on behalf of our customers through banking systems.

 

We send money only to Nepal and at this stage we do not send  or receive  from other countries .

 

A.1.4 Management of AML/CTF Risks

 

The business inherent risks associate risk with the International fund transfer. It also recognises that the risks become more complicated due to the interaction of Regulatory and Business risks with cross-border risks, which makes the risk management much more complicated.

Being the majority of clients from the Nepalese community and students, they need to send and receive money in this difficult time due to COVID-19 restrictions form a legal relabel sources. Nepal has not been linked with the terrorism.

 

Majority of beneficiary' s money y is being deposited on their bank accounts through Overseas Permanent Representative which is a legal entity registered under overseas authority. Overseas Permanent Representative sends back a copy  of  depos it  voucher  of  overseas  banks  where money is being deposited.

 

However, the business assumes the responsibility y of being cautious and managing risks with a view that "prevention is better than cure".

 

However, it  is  our  responsibility to reduce the  AML/CTF  risks at  the  lo west  level. As guided by AUSTRAC, the business categories the risks in the following bases .

 

 

A.1.4.1 Regulatory Risks:

 

The business is very much cautious to comply with rules and regulations prescribed in the AML/CTF Act and Rules and other rules and regulations  prescribed by AUSTRAC. Moreover , the business is more inclined to align or incorporate the new AML/CTF regulatory obligations within its existing compiance framework and procedures to be enforced by AUST RAC. With regard to the  regulatory  risks,  it  is  also  inclined  to  include  the  implementation  of  a  robust compliance plan that encompasses relevant obligations and defines the control and revie w mechanisms needed to ensure compliance.

 

 

A.1.4.2 Rsks to the digital currency exchange

There are risks in every steps of carrying out the business. 'Business risk' is the risk that the business may be potentially exposed to facilitate money laundering or terrorism financing. Business understands that those regulatory and business risks may overlap. Business has categorised the business risks as:

  


ML/TF risk indicators

Risk rating

Potential Treatment/Action

Likelihood

Consequence

Risk score

Customer provides insufficient, incomplete or suspicious information or information that cannot be verified

Low risk.

 None as process in place not to allow to send money before verifying identity  

 

 

·       Customer due diligence (CDD) procedures in place to identify and verify all customers

·       Procedures in place to identify suspicious matters and submit suspicious matter reports (SMR) to AUSTRAC

·       Employee AML/CTF risk awareness training program implemented

Use of proxies, unverifiable IP address or geographical location, disposable email address or mobile number, ever changing devices used to conduct transactions  

low risk

System is setup to mitigate this risk as it verifies, and issues checks.

 

 

·       Collect IP addresses and other device identifiers

·       Ongoing customer due diligence and transaction monitoring program in place

·       CDD procedures in place to identify and verify all customers

·       Employee AML/CTF risk awareness training program implemented

·       Procedures in place to identify suspicious matters and submit SMRs to AUSTRAC

·       Require the use of one time PINs sent to (Australian) mobile phone number to conduct digital transactions

Customers or transactions in high risk locations (e.g. prescribed foreign countries and the application of sanctions laws)

Low risk.

Only dealing with one low risk country

 

 

·       Screen customers against the DFAT Consolidated List for sanctions monitoring

·       Procedures in place to undertake enhanced customer due diligence, in particular, where it determines the ML/TF risk is high or a party is present in a prescribed foreign country

·       Procedures in place to identify suspicious matters and submit SMR to AUSTRAC

·       Employee AML/CTF risk awareness training program implemented

 

Unusual patterns of transaction activity (e.g. volumes, velocity, structuring to avoid detection/reporting obligations, source, destination)

Low risk.

Transaction monitoring program in place

 

 

·       Transaction monitoring program in place

·       Limit the value of transactions that can be conducted in a day/week/month

·       Enhanced customer due diligence program in place

·       Employee AML/CTF risk awareness training program implemented

·       Procedures in place to identify suspicious matters and submit SMRs to AUSTRAC

Transactions involving known blacklisted addresses such as ‘darknet’ market place transactions and tumblers

Low risk.

Blacklisted uses are blocked

 

 

·       Transaction monitoring program (including tools to monitor the Blockchain) that screens for interaction with dark-net marketplace

·       Procedures in place to identify suspicious matters and submit SMR to AUSTRAC

Ransom-ware

Low risk.

Tire 1 cloud server with secure SSL connection implemented.

 

 

·       Procedures in place to identify suspicious matters and submit SMR to AUSTRAC

·       Employee AML/CTF risk awareness training program implemented

Transactions in higher risk or anonymous digital currencies

Low risk.

Only dealing with one low risk country

 

 

·       Obtain additional customer information

·       Employee AML/CTF risk awareness training program implemented

·       Procedures in place to identify suspicious matters and submit SMR to AUSTRAC

Employee collusion

Low risk.

Few trusted employees

 

 

·       Procedures in place to identify suspicious matters and submit SMRs to AUSTRAC

·       Employee due diligence processes in place

·       Employee AML/CTF risk awareness training program implemented

 

 

 

 

 

 

(A) Inherent Risk

Under inherent risks, busine ss examines the inherent ML/TF risk across business as a whole and in particular:

- Customer type risk

- Products or services risk

- Delivery method risk

- Jurisdiction risk.

Wit h in each of the above categories, business tries to consider having mechanisms in place that will influence the risk or potential risk of ML/TF which must be managed. More precisely and from the experience, it considers the composite risk posed by the above categories across their businesses and ident if y what controls, systems and procedures should be put in place in order to identify, mitigate and manage risks as warranted by the situation in particular.

 

(BJ Residual Risk

This is a changing world where today’s top technology or process is going to be less effective and dealing with people and money is much tough to predict. We have built a robust risk mitigation and management program is each business will still have so me exposure to residua l ML/TF risk which must be managed.

 

In recognising the existence of residual risk, business understands the great assistance provided by the ongoing customer due diligence  program. Hence, business undertake s ongoing due diligence and regularly monitors their ML/TF ris k profiles according to the nature, size and complexity of operations.

The risk management framework of a business consists of:

- Identifying risks

- Evaluating or assessing risks

- Treating risks (mitigating, managing, control, monitoring and periodic reviews).

 

With regard to risks identification and assessment, the business recognises of updating and reassessing risks and identifying new and significant changes to risks, which may assist in the mitigation and management of risks.

Once risks are identified, the busine ss:

- Assesses the likelihood and impact of the risk

- Assesses the level of the risk identified

- Identifies risk mitigation and control procedures relevant to the level of risk identified.

Once risks are identified and assessed, the business does treat risks, including mitigating, managing, control, monitoring and periodic reviews including implement ting adequate controls as necessary for higher risk products, such as setting transaction limits and/or a management approval escalation process. More practically, the development and  application of risk.

 

 

 

 

 

categories may be used as one of the strategies for managing potential  risks  by enabling the business to subject customers to appropriate controls and oversight.

 

With regards to the management of potential risks, the business may adopt the following risk management strategy:

 

- reviewing the progress towards implementing stated ML/TF risk management objectives at the senior management level

- clearly defining management responsibilities and account abilities regarding ML /T F risk management

- providing adequate staff resources to undertake functions associate d with ML/TF risk management

- specified staff reporting lines from ML/TF risk management system

- policies to resolve identified non-compliance

- appropriate training program(s) for staff to develop expertise in the identification of ML/T F risk(s)

- an effective information management system which would:

- produce detailed and accurate financial, operational l and compliance data relevant to ML/TF risk management

- incorporate market information re levant to the global AML/CTF environment which may assist to make decisions regard in g its risk management strategy

- enable relevant, acc urate and timely information to be available to the ultimately responsible personnel

- allow to identify, quantify, assess and monito r business activities re levant to ML/TF risk(s)

- allow to monito r the effective ness of and compliance with its internal AML/CTF systems and procedures allow to regularly assess the timeliness and relevance of information generated, together with its adequacy, qua lit y and accuracy.

 

 

We do not accept money from customers without any identific at io n document. As mention above, our customers are our community people and majority of them we know their family background and are regular customers. It poses lo w risk.

 

A.1.4.3 Remitter  Risk Checklist

 

To identify business’ ML/TF risks, we are examining customer profiles, including:

o the types of customers you have and their source of funds

o customers domiciled in a foreign country 

o the nature and purpose of your business relationship with your customers

o whether any of your customers are likely to be Politically Exposed Persons

 

 

Risk Types & Risk Indicators

 

In all cases we must employ the following risk control s:

A. Obtain minimum KYC information

B. Maintain ongoing monitoring of transactions Possible Control Options Risk Rating after control- High, Medium or low

 

 

 

 

 

C. Ensure employees have risk awareness training

Customer profile and delivery method

 

Customer is an individual and considered "low risk" but we are not satisfied about true identity of the customer or the true intent of the transaction

 

 

 

We do not accept order

Customer who does not deal face to face We seek additional identification (beyond minimum requirements) and or we make independent enquiries about the customer and their background. We do prefer to meet face to face. Proceed if we are satisfied.

 

If we are not satisfied, we do not accept order.

 

If we are still suspicious then we lodge a SMR. with AUSTRAC Low

A customer who is not a local resident or is outside our normal target customer base We seek additional identification (beyond minimum requirements) and or we make independent enquiries about the customer and their background. Proceed if we are satisfied. Low

A customer is not willing to produce evidence of identification or produces unsatisfactory or seemingly forged identification We do not accept order.

 

If we are still suspicious then we lodge a SMR with AUSTRAC.

A customer (or an immediate relative) who holds a public position and or is located in a country which carries a risk of exposure to the possibility of corruption We seek additional identification (beyond minimum requirements) and or we make independent enquiries about the customer and their background. Proceed if we are satisfied. Medium

 

 

 

 

If we are still suspicious then we lodge a SMR with AUSTRAC.

A customer who wants to carry out a large one - off transaction We seek additional identification (beyond minimum requirements) and or we make independent enquiries about the customer and their background.

 

We make further enquiries about the nature of the transaction and source of funds.

Proceed if we are satisfied.

 

If we are still suspicious then we lodge a SMR with AUSTRAC Medium

A customer who is engaged in a busine ss which involves significant amounts of cash We seek additional identification (beyond minimum requirements) and or we make independent enquiries about the customer their business and background .

 

We make further enquiries about the nature of the transaction the customer wishes to undertake, including about the beneficiary customer and the country of destination and source of funds. Proceed if we are satisfied.

 

If we are still suspicious then we lodge a SMR with AUSTRAC. Medium

A customer which is a company with com plex ownership structu re s and or with the potential to conceal underlying beneficiaries We seek additional identification (beyond minimum requirements) and or we make independent enquiries s about the customer their business and background.

 

We make further enquiries about the nature of the transaction the customer wishes to undertake, including about the beneficiary customer and the country of destination and source of funds. Proceed if we are satisfied.

 

If we are still suspicious then we lodge SMR with AUSTRAC Medium

 

 

 

A customer who begins remitting more often and or in larger amounts than usual We make further enquiries about the nature of the transaction and source of funds.

Proceed if we are satisfied.

 

If we are still suspicious then we lodge a SMR with AUSTRAC. Low

A customer or group of customers making frequent transactions to the same individual/ group of individuals We seek additional identification (beyond minimum requirements) and or we make independent enquiries about the customer their occupation and background.

 

We make further enquiries about the nature of the transaction and source of funds.

Proceed if we are satisfied.

 

If we are still suspicious then we lodge a SMR with AUSTRAC. Low

A customer is willing to pay unusually high charges or fees We seek additional identification (beyond minimum requirements) and or we make independent enquiries about the customer their occupation and background.

 

We make further enquiries about the nature of the transaction and source of funds.

Proceed if we are satisfied.

 

If we are still suspicious then we lodge a SMR with AUSTRAC. Low

Where the customer is or appears to be, acting on behalf of another person ,and is not willing to give the name (s) of the person(s) they represent. We do not accept order.

 

If we are still suspicious then we lodge a SMR with AUSTRAC.

A customer who insists on transfers which are immediate or 'as soon as possible' for no apparent good reason We seek additional identification (beyond minimum requirements) and or we make independent enquiries about the customer their occupation and background. Medium

 

 

 

 

 

We make further enquiries about the nature of the transaction and source of funds.

Proceed if we are satisfied.

 

If we are still suspicious then we lodge a SMR with AUSTRAC.

Remittance services We are registered with AUSTRAC before offering a remittance service.

We are implementing an AML/CTF program.

 

We are reporting relevant transactions to AUSTRAC. Low

Is our overseas counterpart licensed? Our overseas counterpart is licensed.

Country, we deal Nepal has not been linked with the terrorism. From experience we have not encountered with even a single transaction linked with AML/CTF. Low

 

A.2 Employee Due Diligence

 

The business has an employee due diligence program. The business has one director and no employee at this stage to run the business. This business is more likely in the nature of family/ friends run business. All directors have obtained d Australian Federal Police National Police Certificate and Ministry of Home Police Headquarter Nepal. 

 

The identity, background and character of the director /employees are well known to the each other. Even then the compliance officer is responsible to oversee the activities of its working directors who are actively engaged in the business.

 

 

We obtained public criminal records of the following employees including director Icompliance officer:

 

 

 

...-.......

 

.............................. ................................................... _

 

Job descriptions of - Director/Compliance Officer

 

• Assisting in the record keeping of customers' identification

• Assisting in the daily reconciling of money received and transferred from bank statements

• Assisting data entry y for AUSTRAC repotting

• Preparing the daily reconciliation of money in and out

• Receiving verifying online order take n of client s

• Entering full data of money sender and beneficiaries s on the system 

• Assisting in Compliance Office for face to face interview of the client

• Assisting in Compliance Office for verify indemnification n of the client

• Preparing information for Business Activity Statements and Financial Re po1t s

 

A.3 AML/CTF Risk Awareness Training Program

 

With regard to the training and awareness program, our focus is to go through the AML/CTF Act and Rules and other guidance notes and public at io n of the A UST RAC.

 

The Monitoring and the compliance repot of AUST RAC are also the main sources of gain in g the knowledge and experience.

 

We follow the consultative process among the staff members. The consultative process has been proved the source of complementing the knowledge each other.

 

Even then, the required level of knowledge falls short, then we take help of agencies for the required knowledge.

 

While taking the help of outside agencies for training, we try to get the updated know ledge on AML/CTF.

 

While ta king the help of outs ide agencies for training, we select the training provider based on:

 

Contents In- depth on:

• Obligations of the RE und er the legislation

• Consequences of no n-compliance with the leg is la t io n

• ML/TF risk assessment

• Threshold transaction reporting procedures

• E FTI originator information procedures

• IFTI repotting procedures

• Controls in p lace (thro ugh AML/CTF program) to address ML/TF risk

• Customer identification procedures for staff

• SMR procedures and " risk triggers"

Delivery Mode Face to face or online 

Duration 2-3 Hours

Frequency of the Training Semi-Annually

 

 

 

 

When we change rules and update d AML/CFT Programs and processes

 

Director/Compliance Officer, regularly vis it website of AUSTRAC and distributes monthly newsletters published by AUSTRAC. All employees including directors read and discuss new changes and case studies given in the newsletter that affect day to day running g of the business. After finishing reading, the compliance officer keeps the newspaper filed for future references.

 

At Instant Express Pty Ltd, we use AUSTRAC e-learning AML/CTF Programs training material for training of staff/director. We keep the record of trainings and see k feedbacks from employees in relation to their understanding of AML/CTF following the completion of the trainings.  

procedures. Such staff /director will be  provided retrained. After giving three warning letters, if  an  employee  /director   continues  to   breach   AML/CTF   program  or  procedures,   then   the employee / will be sacked and director will be terminated.

 

 

A.4 Appointment of Compliance Officer

  

• Emailing g and maintaining business details with AUSTRAC

 

• Ensuring the business is registered with AUSTRAC and meets the record- keeping requirements

 

• Approving the AML/CTF programs and procedures

 

• Updating and maintaining the ML/TF risk assessment

 

• Training employees about their AML/CTF responsibilities

 

• Screening prospective employees

 

• Ensuring criminal history checks of main staff are undertaken

 

• Responding to feedback from AUSTRAC

 

• Monitoring transaction and customer activity to identify suspicious transactions

 

• Conducting further enquiries on high-ris k or suspicion us customers

 

• Sighting and recording identification for customers

 

• Reporting IFTl s, t threshold transactions and suspicious matters to AUSTRAC

 

 

 

• Keeping records of the AML/CTF program and customer identifications safe for 6 years

• Define general data protection policy, responsible user policy, privacy policy & terms of use agreement

 

• Monito ring data base systems for the payment of beneficiaries and update IT systems to enhance the good record keeping and compile AUS TRAC reporting.

 

A.5 Regular Independent Review

The Rules provide that the Instant Exchange Pty Ltd must regularly review Part A of the program to ensure that it continues to provide adequately for the identification, management and mitigation of the ML/TF risks. However, Part A is the principle focus of the review.

Instant Express Pty Ltd provides services to mostly know n community members. Hence, the company possesses a very low lev el of risk, and consequently Instant Exchange Pty Ltd recommends for an annua l revie was being acceptable. Higher level risk will require reviews to be undertaken more frequently:

How often is the revie w to take place?

 

Ever y 12 Months

 

The revie w can be internal (conducted by Compliance Office or a board member) or external (conducted by an AML/CTF auditor). For low risk entity like Instant Exchange Pty Ltd an internal review is acceptable. But the revie w must be independent. The results of the review mus t be provided to the board.

The review must address:

 

a) the effectiveness of the AML/CTF program

b) whether the AML/CTF program complies with the AML/CTF Act

c) whether the program has been effectively implemented

d) whether we have complied wit h our AML/CTF program

 

The results of the independent revie w needs to be submit in a report format to Compliance Officer is responsible for ongoing oversight of the AML/CTF program.

 

We will engage outs ide independent AUST RAC authorise d External Audit or to revie win every l2 month s from the date of this update who is not involved to prepare AML/CTF programs.

 

Once we received independe nt revie w report then we will have a staff meeting to address the recommendations and improvement of our compliances. We will prepare an action plan with timeline to address the recommendations of the independent reviewer's report.

 

 

 

 

A.6 Dealing with AUSTRAC Feedback

 

In order to follow AUSTRAC instructions/feedbacks to improve our AML/CTF compliances, we have following procedures:

• Compliance Officer is responsible for responding to AUSTRAC feedback.

• We prepare written response of and execution of the AUSTRAC feedback and send it by e mail to AUSTRAC

• We keep AUSTRAC feedback and written n response manually in the compliance folder and digital version on the computer

• We response AUSTRAC as per provided tin1e on if we are not able to send respond as provided time, we seek extension of time to submit our response of feedback to AUSTRAC

 

A.7 Permanent Establishment in a foreign country

 

Regulations in Nepal

 

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 Instant Exchange Pvt Ltd in Nepal and its employees; it has become imperative for us to develop and implement appropriate policies and procedures on AML. For developing and designing the policies and procedures on AML, following have been considered:

 

I. Circulars and directives of Nepal Rastra Bank (Central Bank).

2. Concerned government authorities' rules and regulations.

3. Fundamental and prudential norms on AML established by international financial institutions.

 

Instant Exchange  Pty  Ltd  has  agreement  with distribution banks in Nepal o distribute money to beneficiaries in Nepal which is registered with Nepal  Rastra  Bank  as  a  Money  Remittance  License.  Only  registered  remittance  entities in Nepal can offer remittance services.

 

 

Part B (Customer Identification)

More than 99% of our customers are individual customers and the remaining 1% is so le traders, partnerships and companies. Th e majority y of our customer are either students/workers remitting a portion of their savings earned from their hard work in Australia to their loved ones as gifts in the auspicious occasions or receiving money by Nepalese students in Australia from their family members to meet their living expenses and tuition fees in Australia.

Being majority of clients from, Nepalese community, they are by nature shy, calm and cool. Nepal has not been linked with the terrorism. From our past experience, we have not encountered any transact io ns linked with AML/CTF .

 

 

The following is the how we collect and verify the customer identification.

 

B.1. The Snapshot of How We Collect and Verify Customer Identification

 

 

 

We use combination photo ID and non- photographic documents to and devices email address to verify customers. If customers wish to delete their profile, they can request us to do so as per our general data protection policy.

 

Our system keeps all documents in secure cloud server that gets backed up every day to CDN network provided by Amazon web services. In addition to this manual data backup take end of every month.  

 

 

 

B.2 Monitoring and Ongoing customer Due Diligence (OCDD)

We do update and re-verify the existing customer information in the following 

 

• When customer has changed name

• When customer has moved to a new address

• Email we sent to a customer is bounced or change new mobile number

• Unusual patterns of money transact io ns to be sent when we cross check with client occupation and identify that which is outs ide the industry standard

 

We do ask further evidence and source s of the fund in the following transact io ns including their occupations, purposes of money to be sent, notice of income tax assessment, if sale of a property , a copy of settlement or if non- individual client a copy of financial reports certified by the Accountant:

 

• Complex, unusually large transact io ns

• unusual patterns of transact ions

• transactions with no apparent purpose

 

This will be done by Compliance Officer. Who will be loo king at the factors which poses the threat of high risk. All employees/director are trained to seek approval before undertaking any unusual or large  transact io ns for a customer .  We do ongoing customer due diligence every month and in response to unusual l customer observed by me or my employees.

 

In order to enhance  customer  due diligence  procedures ,  we  have  following  procedure s  for situation ns where there is a high ML/TF risk or when a suspicion us matter reporting obligation n arises:

• seek further information from a customer or third party to clarify the customer's informant io n

• undertake more detailed analysis of the customer 's information

• verify or re-verify the customer' s information

• undertake more detailed analyst is and monitoring of the customer's past and present transact ions from data base

• if appropriate report the suspicious matter to AUSTRAC.

If we had a suspicion about a customer, we would follow the following:

 

• Engage the customer in conversation to find out more about them

• Interview employees to hear their version of events

• Review information held about the customer's identity

• Ask the customer for identarian or re-verify the customer' s identification

• Review the customer' s transactions looking for suspicious patterns

• Record the findings of enhanced customer due diligence

• Submit and SMR to AUSTRAC.

 

B.2.1 Screening Process for Politically Exposed Person (PEP's) towards AML

 

 

 

 

An individual (or an immediate relative) holding a public position, which carries a risk of exposure to the possibility of corruption - e.g. a politically exposed person (PEP). Politically exposed persons (PEPs) are entrusted with prominent public functions and they are potential targets for bribes.

 

Remittances to or from specific countries that may be co ns ide re d a risk due to the country being known as a source of drug s or other significant criminal activity- for example, subject to trade sanctions; known to be a tax haven; or linked to proscribed terrorist organizations.

 

Some of the job roles with the greatest perceived risk of involvement in money laundering, illicit payments, corruption and other illegal activity, such as:

• Head s and deputies of state / national governments; senior members of the armed forces;

• National government minister s;

• Heads and deputy heads of regional government; political party officials;

• Senior members of the police services.

 

Our majority clients sending money to Nepal are students/workers remitting a po1tion of their income earned through their hard work in Australia to their loved ones as a gift or other support. Even though, we have not faced a sing le transact io n related to anti-money la undaring, still, we do consider a small proton of risk factor due to political instability in Nepal,  associated  with politically exposed persons.

 

Our 100% remittance service s  to Nepal done via  registered  entity  with Government  of Nepal. In respect to receiver in Nepal, similarly, we keep the identification of receiver that need to be matched with provided details by sender with amount of money.

Screening process

► In the context of Nepal, no political party has been la belle d as threat, banned or und e r

the Foreign Terrorist Organizations (FTOs) or under similar sanction.

We use the reports of "Commission for the Investigation  of  Abuse  of  Authority"  for any individual or organization if detected or listed under corruption issues

(http://www.ciaa.gov.np).

Individual list will be screened if any individual will be listed under "Wealth Disclosure (Money Laundering) Act 2064, Nepal".

Also, anyone individual under the "Black-List" by Inland Revenue Office in Nepal. Most of our remittance will be through the Banks or Financial Institutions under Reserve Bank of Nepal.

If any minimum cash payment done through our Nepal Office then, identification will follow thorough identification check list (detailed in A.1.4.3 Remitter Risk Checklist).

 

Dealing Process:

 

For any screening process above, if any issues arise, we will pr o pe rly keep the documentation

 

 

 

and repo1t to appropriate body. Suspicious information will be kept confidentially and reported with proper channel such as reporting to  Commission  for  the  Investigation  of  Abuse  of Authority, Nepal Police or Nepal Rastra Bank of Nepal as required.

 

 

B.3 Management approval and ongoing oversight of the AML/CTF program

Our director is  responsible  for  approving,  adopting  and  maintaining  ongoing  oversight of the AML/CTF program. Mr. Silwal is the director and the Compliance Officer of the Instant Exchange Pty Ltd.  This will be  signed  by  Mr.  Silwal to keep record in the  AUSTRAC  compliance  folder  manually  and  keep  a  digital  version  on  the computer. When we do update the AML/CTF  program,  we  put  revised  date and  date of  adopted in the header and the footer of the written AML/CTF program.

B.4 International Funds Transfer Instructions Reporting

We do transmit an IFTI out of Australia and receive an IFTI transmitted into Australia.  In order to meet AUSTRAC compliance, we do have following procedures:

• We must report those transactions to AUSTRAC within IO business days after the day on which the instruct ion was sent or received. All lFTis must be repo1ted to AUSTRAC

regardless of the a mount.

• We are  responsible for reporting IFT’s to AUSTRAC

• We do have remittance data base software and we produce report and send to AUSTRAC as per standard reporting format provided by AUSTRAC

• We keep logbook on our computer when we send report to AUSTRAC

• Before we send report to AUSTRAC , we do verify reporting period , incomplete information and any errors in our data base file.

 

B.S Threshold Transaction Reporting (TTR)

• We do not accept cash payment of $10,000or more. Most of our customers send money by internet banking directly into our provided bank account.

• We keep a record book to ensure that all TTRs are submitted to AUSTRAC

• We trained employees the process that we use to repo1t TTR s to AUSTRAC

• We keep logbook on our computer when we send TTRs report to AUSTRAC

 

B.5.1 System Capabilities

 

Instant Exchange is carrying out remittance business by using the remittance system "insta exchagne" web-based remittance software, developed by TechSherpa. Salient features of the system are as follows:

 

• "Insta exchange", the remittance system, is capable to verify the identity all the customer performing the transaction under the limit of $10,000.00. The unique ID (ID Type and ID Number) of customer is recorded to track the total amount exceeding the threshold amount i.e. $10,000.00.

 

 

• It will have an option for individual transaction or cumulative amount sent from customer in a day, a month or in a year and generate an exception report for remittance transaction value over $10,000.00.

• System does not auto authorize transaction over $10,000. When a new or regular customer request over $10,000 system flags the response to compliance officer to investigate 

 

 

 

 

B.6 Record Keeping

We are obliged to keep data in records as follows:

 

• Customers identification are kept on secure system with encryption 

• Data are kept under data retention policy found on the website 

• retain a copy of AML/CTF program and a record of the adoption of the program for seven years the program ceases to have effect. For example, if we modify our AML/CTF program, we must keep a copy of the old program for seven years after the date the program was modified.

 

 

 

 

3. Privacy Policy

How we    honor the privacy policy

Among the various privacy principles , we focus basically on the following in relat io n to the privacy of the data co llected from the customers.

 

3.1 Collection

 

The business will collect and hold your personal information for the purposes of:

 

• Identifying and verifying the identity of the customer to comply the AML/CTF rules and regulations there  under for the International Fund  transfer

 

• Repotting AUSTRAC of the transactions

 

• And other purposes as required by rules and regulations

 

The Business will not collect personal information unnecessarily, nor will it collect information that is excessively personal.

 

The Business will only collect personal information if it:

a) ensures that the information is collected fairly, law fully and not in an intrusive manner;

b) takes reasonable steps at or before collect io n or, if that is not practicable, as soon as practicable after collection, to inform the in dividual of;

• the purpose of the collection unless that purpose is obvious; and

• the collect io n being authorised or require d by or under law.

 

The information collected may include your name, postal or email address, date of birth, financial details, tax file number, or other information the organisation considers necessary.

 

3.2 Use of Information Collected

 

The Business will only use personal information for a purpose to which it is relvant.

 

 

The Business will not use personal information for a purpose other than the purpose of collect ion or a purpose incident alto or connected with that purpose unless:

 

I. The individual has expressly or impliedly consented to the use;

II. The Business believes, on reasonable grounds, that the use is necessary to prevent or lessen a serious and imminent threat to life or health of the individua l o r some other person;

JI!. The use is required by or under law;

IV. The use for that other purpose is reasonably necessary for:

The enforcement of the criminal law or of a law imposing a pecuniary penalty; or The protection of the public revenue; or

The protection of the in tersest of the government, statutory authority or statutory officehoder as an employer.

 

3.3 Protecting your Personal Information

 

The Business stores information in different ways, including in paper and electronic form.

The security of your personal information is important to us, and it takes reasonable steps to protect them from mis use, loss, unauthorize d access, modification or disclosure. Some of the steps undertaken by the company are:

- confidentiality y requirements for its employees;

- document storage security policies;

- security measures for systems access;

- providing a discreet environment for confidential discuss ions.

 

3.4 Your Sensitive Information

Without your consent, the busine ss will not collect information about you that reveals your racial or ethnic origin, political opinions, religious or philosophical  beliefs or affiliations, member s hi p of a professional or trade association, member s hip of a trade un ion, details of health , d is ability, sexual orientation , or criminal record.

This is subject to some exceptions includin g: The collection I required by law; and

When the informant ion is necessary for the establishment , exercise or defense of a legal claim .

 

 

Annex 1: Record Keeping of Staff meetings and training at City Express Money Transfer Australia Pty Ltd

 

Staff Meetings Included  AML/CTF Advice

 

Date of staff meet ingsthat included AM L/CTF advice:

 

 

Staff Bulletins Included AML/CTF Ad vice

 

 

Date of staff bullet ins that included AML/CTF advice:

 

 

Staff completed AML/CTF Staff Training Manual Quiz

 

Name of Staff Date

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Annex 2: Ongoing customers due diligence record keeping at City Express Money Transfer Australia Pty Ltd

 

On-going customer due diligence procedures it has in place.

 

  · · · - - -

Annex 3: Register of Suspicious matters

 

I ) Date:

 

2) Name of employee _ type of report:

a) Transactio ns above $10,000 .00 or less than $ 1 0 000.00

 

  · · 

 

 

4) KYC documentat io n provided by customer:

 

Na me: 

 

Res identia l address: _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _

 

Date of birth: 

 

5) KYC documentation vie wed (e.g., driver's licence, pension card).

 

Must verify name and one of residential address or date of birth

 

... If possibly take a copy and attach to the program

 

 

 

 

 

 

 

6) Any other rele vant information: _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _

 

 

 

 

 

 

 

 

 

 

 

 

 

***If insufficient space use a separate sheet and attach to the register

 

 

 

 

Annex 4: Risk Register for Changes in ML/TF Risk

 

ldenti fv risk Treat risk Allocate risk ratina

Newly identified or changed ML/TF

ris ks Treatment (Con trol s) Ris k rating (after treatment)

1

2

3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Abbreviations:

 

• AML/CTF - means anti-moneylaunderin g and counter-terrorism financing

• AML/CTF Act I The Act- means the Ant i- Money Laundering and Counte r-Terroris m Financing Act 2006

• AUSTRAC Online An onlin e information sys tem accessed through the AUST RAC website, which provides bus inesseswith an electronic way to submit reports to AUSTRAC and access AML/CTF information.

• Designated service - mean s the services designated in sec tio n 6 of the Act

• E- Currency - means an In ternet -based, electronic means of exchange that is known as any of the follow ing:

o e-currency;

o e-money;

o (e.g. , electronic transfers but not c heques)

• KYC information - means know your customer information being: Name, date of birth, residential address

• ML/TF - means money -laundering and/or terroris m financing

• Program - means the AML/CTF program prepared by co mplet ing Chapter 4

• Remittance services/ remittance dealer -Also known as ' money transfer businesses', these are financial se rvices that accept cash, cheques, other monetary instrument s or other stores of value, in one locatio n and pay a corresponding su m in cash or other form to a be neficiary in another locat io n. Th is is done by a commun ic ation , messa ge, transfer or through a cle aring netwo rk to whic h the money/value t ransfer system belongs.

• Reliable and independent KYC documentation/ KYC documentation - means the documents shown und er diagram

• Rules = means the Anti-Money Laundering and Counter -Terroris m Fina nc ing Rules Instrument 2007(No. 1)

• Structuring This is a mo ney launder ing technique whic h  involves  the deliberate splitt ing of a large amount of cash into a number of smalle r deposits to evade thres ho Id reporting requirem ents. Struct uring can also involve layering funds for internat ional funds transfers in an effo 1 to avoid the transfers attract in g scrut iny

• SMR Suspicious matter report: submitted to AUSTRAC under the AML/CTF Act when a business forms a suspicio n that a matter may be related to an offence against an Aust ralia n law, inc lud ing money launder ing, the financing of terroris m, proceeds of crime , or tax evasion

 

• Suspicious matters - has the mea ning set out in chapter 5

 

 

 

 

 

 

MINUTE BOOK

Minutes of a meeting of director(s)

 

Instant Express Pty Ltd

 

ACN 644329395

 

 

 

 

Held at: Online

 

Date: 17 September 2020

 

 

Apology:

 

Resolution: It was resolved that the company adopted written AML/CTF program of Instant Express Pty Ltd

which was prepared on 30 August 2020 to retain that record for the period of seven years from the date when the adoption ceases to be in force.

  

 

Meeting Closed: There being no further business the meeting was declared closed

 

Signed as a true and correct record.

-

 

 

Chairperson