AML Policy

Introduction

 

Global Money Shift s.r.o. (hereinafter referred to as “the Company”) is a legal person established in accordance with the relevant provisions of Act No. 89/2012 Coll., the Civil Code, and Act No. 90/2012 Coll., on Commercial Corporations. In the framework of its business activities, in accordance with the anti-money laundering and counter-terrorism financing Act No. 253/2008 Coll., it carries out the identification and examines the clients with whom it enters into commercial relations, volume and other parameters of their transactions, effectively preventing the legalization of proceeds from crime and the financing of terrorism through a financial institution. The main AML activity of Company is monitoring of trades, and focusing on the frequency and extent of certain deviations from the normal trading regime of the client.

1. List of abbreviations

AML Act | Anti-money laundering (AML) and Counter-terrorism financing (CTR) Act No. 253 of 2008, as amended

AML regulation | AML regulations Regulation No. 281 of 2008, on certain requirements on internal principles, procedures and control measures against money laundering and terrorism financing

CNB | Czech National Bank

EEC | European Economic Community

EU | European Union

FATF – Financial Action Task Force – is an inter-governmental body, that sets standards, develops and promotes policies to protect global financial system against money laundering and terrorist financing. FATF has a worldwide influence on AML/CTF country ranking.

FAO | Financial Analysis Office

STR | Suspicious Transaction Report

PEP | Politically Exposed Person

Sanction Act | Sanction Act69 of 2006 on international sanctions

SIP | Set of Internal Principles, procedures and control measures to fulfil obligations under the AML Act

Stored data | all data stored under Chapter II of the AML Act

2. Definitions

Terrorism financing
Collection or provision of funds or property to fund even if only partially, the crime of terror, terrorist attack or criminal offense, to support assistance of or actions leading to such a criminal offence, or to support a person or a group of persons preparing such a criminal offence. Actions leading to provision of remuneration or indemnification for crime of terror, terrorist attack or criminal offense to an offender which can enable or assist to commitment of such a criminal offence, or next of kin as defined by Criminal Code, or collection of funds for such a enumeration or indemnification. Financing proliferation of weapons of mass destruction (WMD). By financing proliferation of WMD is understood the collection or provision of funds or property to fund, even if only partially, person or group of persons conducting proliferation of WMD or to support proliferation of such weapons in any other way, contrary to the requirements of international law.

 

Money laundering
Actions to conceal illegal origin of any economic advantage arising from criminal activity with the aim of faking the impression that this economic advantage was acquired in accordance with law, Examples of such actions can be: conversion or transfer of property acquired from criminal activity, with aim to conceal or disguise its origin, or to assist a person committing criminal activity to evade the legal consequences of this person’s actions, conceal or disguise real origin of a source, place, movement of a property or handling or modification of rights with respect to a property, knowing that such a property was acquired from criminal activity. acquisition, possession, use or disposal of property, being aware of its origin from criminal activity. in a criminal confederacy of persons or other types of collaboration for actions stated above. It does not matter whether these actions were or will be committed entirely or partially on territory of the Czech Republic or abroad.

 

Non-transparent ownership structure
Situation when beneficial owner of a client cannot be determined from the following: a Commercial register statement, or similar register of a foreign entity country of origin which is not registered in the Czech Republic, if such a register is not available, then from an officially verified social contract or, other document, that would verify foreign entity’s establishment and contains all changes in foreign entity’s establishment, orfrom a verified source, trusted by the obliged entity.

 

Transaction
Every action carried out by obliged entity with other entity, if this action leads to dealing with entity’s property or providing services to this entity.

 

Business relationship
Contractual relationship between an obliged entity and other entity. Its purpose is to deal with entity’s property or to provide services to this entity, if in the establishment of this contractual relationship (considering all circumstances), this will lead to recurring performance.

 

Suspicious transaction
Transaction carried out under circumstances suspicious of money laundering or terrorism financing, or circumstances suggesting that the transaction is in any other way linked to terrorism financing, or any fact that could lead to such a suspicion. Suspicious circumstances can be e.g. abnormalities in client’s behaviour contrary to his usual behaviour or contrary to behaviour of similar type of clients.

 

Politically exposed person
a) a natural person who is or has been entrusted with a prominent public function with a national or regional importance, such as a Head of State, Prime Minister, Head of Central authority of State Administration and his deputy (Deputy, Secretary of State), a member of Parliament, member of a political party’s governing body, leader of local government, a judge of a Supreme Court, Constitutional Court or another highest judicial authority, whose decisions generally cannot be appealed against, Central Bank board member, a senior officer of the armed forces or army corps, their member or a member deputy, if it is a legal entity, a statutory body of a state controlled corporation, Ambassador or a Head of a Diplomatic Mission, or a natural person who administrates or has administrated in a similar function performed in another country, in a European Union institution or in an international organization,
b) a natural person, who is -a next of kin to a natural person listed in section a) -an associate or beneficial owner of the same legal entity, eventually an associate or beneficial owner of a trust fund or other legal arrangement without legal entity, as a person listed in section a), or is it known to obliged entity that this person is in any other close business relationship with a natural person listed in section a), or a beneficial owner of a legal entity, or a trust fund or any other legal arrangement without legal entity, which are known to obliged entity to be established in a favour of a natural person listed in section a).

 

Identity card
A document issued by Public Administration body, which contains forenames and surname, date of birth, with a photo identification or other detail which can enable identification of a person, who claims to be its authorised user.

 

Beneficial owner
As a beneficial owner for the purposes of this Act is understood a natural person, which can effectively or legally, directly or indirectly make decisions in legal entity, trust or in any other legal arrangement without legal entity Is it understood that if conditions from first sentence are met, the beneficial owner is – in business corporations a natural person, that alone or together with other persons, that are acting in agreement with this person, has more than 25% of voting rights of this business corporation or has shares greater than 25 %; alone or together with other persons, that are acting in agreement with this person, controls the person referred to in paragraph 1; shall receive at least 25 % of business corporation gains, or is a member of a Statutory Body, Deputy of a legal entity in this body or in a position similar to a position of a Statutory Body member, in case the beneficial owner is not available or cannot be defined according to paragraphs 1 to 3, – in the case of Association, Public Service Company, Owners Association, Church, Religious Societies or other legal entity under the laws regulating the status of Churches and Religious Societies, a natural person, that has more than 25% of voting rights; shall receive at least 25 % of its funds, or is a member of a statutory body, deputy of a legal entity in this body or in a position similar to a position of a statutory body member, in case the beneficial owner is not available or cannot be defined according to paragraphs 1 or 2, – in the case of Foundation, Institute, Endowment fund, Trust Fund or other legal arrangement without legal entity, the beneficial owner is a natural person or beneficial owner of a legal entity, that is in a position of a: settlor, trustee, beneficiary, a person, in which favour was a Foundation, Institute, Endowment fund, Trust Fund or other legal arrangement without legal entity founded, if a beneficiary s not appointed, and 5. persons authorized to supervise over the management of a Foundation, Institute, Endowment fund, Trust Fund or other legal arrangement without legal entity.

 

Country of origin
For a natural person country of origin is a country to which is this person is a citizen and concurrently all other countries, where he is a resident or has a temporary stay status, For a legal entity with branches or majority-owned subsidiaries in countries, that are non-member states of the EU or EEC, country of origin is a country, where its registered office its based, For a legal entity that has no branches or majority-owned subsidiaries in countries stated above, country of origin is a country, where its registered office is based and concurrently all countries where branch offices or organisational units are based.

3. Client identification method, including measures to identify PEP’s entities towards which the Czech Republic applies sanctions under the Sanction Act

 

Obliged entity will perform a “face to face” identification of the client, who is a natural person or any natural person acting on behalf of a client, who is a legal entity, in presence of the identified person unless stated otherwise in the AML Act.

3.1 Client identification

 

Obliged entity will perform client identification:

  • always before a transaction, that exceeds a value of 1,000 EUR, unless stated otherwise in the AML Act;
  • always, regardless the transaction value in case of:
  • suspicious transaction;
  • establishment of a new business relationship.

3.2 Retrieving identification details

 

Obliged entity is required to ascertain identification of a client who is:

 

  • a natural person non-entrepreneur: all forenames and surnames, personal identification number, if not issued then date of birth, birth place, sex, residency or other form of stay and citizenship. Obliged entity will make a record of obtained details, verify identity card, make a record of identity card type and number, country of issue, validity and eventually issuing body. Obliged entity will also verify the resemblance of a present person with a picture on identity card.
  • natural person entrepreneur: all forenames and surnames, personal identification number, if not issued then date of birth, birth place, sex, residency or other form of stay and citizenship. Obliged entity shall make a record of obtained details, verify identity card, make a record of identity card type and number, country of issue, validity and eventually issuing body. Obliged entity will also verify the resemblance of a present person with a picture on identity card. Further details that need to be recorded are: name of the company, distinguishing addendum or other designation, place of business and personal identification number;
  • legal entity: name of a company, distinguishing addendum or other designation, residency, personal identification number or its foreign equivalent. These identification details need to be recorded and verified from a document that proofs the existence of legal entity, this document can be either Commercial Register or other register, that is no older than 3 to 6 months and it is issued in its original form, or a copy verified by a competent authority. For entities, who are a Statutory body or a member of legal entity it is required to ascertain all forenames and surnames, personal identification number, if not issued then date of birth, place of birth, sex, residency or other form of stay and citizenship. Obliged entity shall make a record of obtained details, verify identity card, make a record of identity card type and number, country of issue, validity and eventually issuing body. Obliged entity will also verify the resemblance of a present person with a picture on identity card. It is required to personally identify every natural person, who acts on behalf of legal entity before obliged entity shall carry out first transaction pursuant an order from this natural person.

 

Personal identification number/ date of birth:

 

  • Personal identification number: mandatory for Czech citizens, foreigners with residence permit in the Czech Republic, asylum seekers and other persons to whom the personal identification number is allocated in accordance with § 16 of the Population Register Act no. 133 of 2000, as amended,
  • Date of birth: mandatory for persons not assigned with personal identification number

 

Required types of identity cards:

 

Identity card, passport, driving license, proof of residence permit for foreigners, gun license etc.

 

Above listed types of identity cards are only acceptable if they meet the following requirements:

 

  • it is a valid and state issued document;
  • it is not damaged beyond normal wear and tear (e.g. missing pages, patched, overwritten, illegible etc.)
  • picture of an identity card holder shall reflect his actual appearance and shall be legible and intact to enable identify card holder;
  • shall be clear in which country and by which body was document issued;
  • shall be a document which authenticity can be verified.

 

Some identification details (e.g. sex, address) do not need to be stated on every identity card. These details can be ascertained based on identified person statement.

 

Obliged entity can make copies or notes from the submitted documents and process such information for the purposes of the AML Act. Copies of personal documents can be taken only with consent of the holder.

 

When new transaction (or business relationship) is being established and obliged person gains suspicion that client does not act on behalf of himself or conceals acting on behalf of someone else, client shall submit power of attorney as evidence his intensions are legal.

3.3 Identification of Politically Exposed Persons

 

As a part identification process, obliged entity shall ascertain and report whether client is or is not a PEP. This applies to a client, persons that are authorised to act on behalf of client, or eventually to a beneficial owner, if known.

PEP status of a client can be found out by his declaration when establishing new transaction (or business relationship).

If a client is a PEP it is necessary to apply customer due diligence measures.

 

Identification of personnel and entities which are subject to international sanctions

In the identification process, it is necessary to ascertain whether a person who is about to carry out a transaction (or establish a business relationship), is beneficial owner or a member of a statutory body of this entity and it is not a person against which the Czech Republic applies sanctions under the International Sanctions Act. This applies to a client, persons that are authorised to act on behalf of client, eventually to a beneficial owner, if known.

 

List of entities sanctioned by various Sanction regulations can be found in:

  • Government Regulation no.210 of 2008, To implement specific measures to combat terrorism, as amended;
  • regularly updated list of sanctioned entities according to relevant EU legal Acts can be found at http://eeas.europa.eu/archives/docs/cfsp/sanctions/docs/measures_en.pdf

 

Listed information are obtained from contract details provided by client during signature of a contract or transaction verification.

 

Sanction lists verification shall be done before transaction is carried out (or business relationship established). In case of a match with a Sanction list, transaction cannot be carried out (or business relationship established) and STR shall be issued immediately (see Art. 11).

3.3.1 Identification of a client represented by Power of Attorney

 

Identification of attorney-in-fact is carried out (similarly to natural person identification see above). Power of attorney shall be submitted in its original form or a copy verified by a signature of a mandator. Attorney-in-fact shall provide identification details of represented person.

 

 

3.3.2 Identification of a client represented by legal representative

 

If a client is represented by legal representative or guardian, identification of legal representative or guardian is carried out (similarly to natural person identification, see above). Legal representative shall provide identification details of represented person; guardian shall provide relevant judicial decision.

 

 

3.3.3 Client identification for remote financial services establishment

 

In business relationships, which objective is provision of financial services and which are established remotely in accordance with the Civil Code Act no. 89 of 2012, as amended (hereinafter referred to as “CC”), client’s identification carried out by obliged entity can be also done in the following ways:

 

  1. first payment within the business relationship carried out through an account held in the name of the client with a credit institution or foreign credit institutions operating in the territory of a European Union or European Economic Area Member State;
  2. client sends a copy of a document confirming the existence of the account (referred to in subparagraph a) to obliged entity (e.g. a bank statement, a copy of account contract);
  3. client sends the following to obliged entity i) copy of relevant identity cards, ii) at least one supporting identification document (e.g. passport, driving licence, electricity or phone bill etc.), as well as details such as identity card type and number, country of issue, validity and eventually issuing body.

 

Copy (or scan) of all identity cards and other relevant documents shall be legible and can be stored for a period of time determined by this internal regulation and must include a copy of an image of identified individuals in such quality as to allow individuals appearance verification.

 

 

3.3.4 Interpreted identification

 

On a request of a client or obliged entity, identification of a client can be carried out by a notary or local point of public administration. Notary or local point of public administration shall issue an identification document, which is a public document and its requisites and attachments are stated in § 10 par. 2, respectively 3 of the AML Act.

3.4 Identification takeovers

 

According to § 11 paragraph 1 a) and b) of AML Act, authorised employee of obliged entity does not need to identify client, if identification, including identification of information about intended nature of transaction or business relationship and identification of a beneficial owner were carried out by

 

  • credit or financial institution, except person authorised to carry out exchange activities under the law regulating exchange activities, postal licence holder under the law regulating postal services, payment institution, providing payment services involving the transfer of funds where the payer or recipient do not use an account with a payment service provider, and payment service provider of small scale under the law regulating payments, or
  • foreign credit or financial institutions, except foreign entities authorized to carry out exchange activities, foreign credit institutions providing primarily remittances, or foreign payment service provider with a similar status as small scale payment service provider under the law regulating payments, if he acts on a territory of a country, which imposes comparable level of identification, customer due diligence and record keeping, is a subject of a mandatory professional registration in this country, is supervised through obligations compliance monitoring including on the spot individual transactions checks.

 

Obliged entity shall not accept client’s identification information, information about the purpose and intended nature of transaction or business relationship or ownership and management information about him and his beneficial owner when is suspected that given information are not correct or some information are missing and obliged entity is not ensured beforehand about obtaining relevant information, including client’s identification, purpose and intended nature of business relationship, client’s ownership and management information, identity of beneficial owner from a credit or financial institution or a person that carried out identification of relevant details.

 

Financial institutions that can provide identification to obliged entity are: banks, savings and loan associations, central depositories, securities dealers, investment companies, insurance companies and reinsurance companies.

 

Client information, including copies or relevant documents are stored with the obliged entity.

4. Procedures for conducting customer due diligence, determination of the extent of due diligence analogous to risks of money laundering and terrorism financing legalization

 

Obliged entity shall carry out customer due diligence always:

 

– before transaction outside a business relationship

 

  1. at the latest, when it is clear, that transaction will reach or exceed 15,000 EUR,
  2. with a PEP, or
  3. with a resident of a country that is regarded as a country with high risk classification by European Commission or otherwise regarded as a high risk classified country,

 

– in situations, that require identification according to AML Act, such as suspicious transactions or suspicious establishment of business relationship, at the latest before the transaction is carried out,

 

– during the duration of business relationship.

 

If a payment is divided into several separate transactions, the value of the transaction or the payment is the sum if all these separate transactions.

 

The client shall provide the information necessary to carry out the inspection, including the submission of the relevant documents. The Company may, for the purposes of this Act, make copies or extracts from the submitted documents and process the information thus obtained to fulfill the purpose of the AML Act. Information about the client is recorded by the client in the Company’s information system.

Customer due diligence consists of:

 

  • Identification details of a client;
  • obtaining information about the purpose and intended nature of a transaction or business relationship;
  • if client is a legal entity, Trust fund or other legal arrangement without legal entity, then identification of client’s and his beneficial owner’s ownership and management structure, and adoption of measures to identify and verify the identity of the beneficial owner;
  • conducting ongoing monitoring of business relationship including scrutiny of transactions undertaken throughout the course of this relationship to ensure that the transactions being carried out are consistent with obliged entity’s knowledge about the client, and his business and risk profile;
  • reviewing the source of funds or other property included in a transaction or business relationship;
  • if client is not on the list of sanctioned persons and persons suspected of co-operation and support of terrorism, as well as whether persons from the management (members of the statutory body, real owners, other participants in the trade or business relationship) and whether it does not originate from a country against which international sanctions are applied (see Appendix 1 to this internal regulation);
  • in a case of a business relationship with a PEP also justified steps to identify the origin of his property.

 

Obliged entity shall carry out customer due diligence within the extent necessary to assess a potential risk of money laundering and terrorism financing depending on the type of a client, business relationship, product or transaction.  The Company shall justify the adequacy of the extent of the client’s control or the verification of client to the supervisory authority that controls fulfilment of the obligations.

 

The above information Company finds out by the client’s AML questionnaire.

When carrying out customer due diligence, obliged entity records:

 

  • details about beneficial owner for the purposes of his identification,
  • information sufficient to identify the beneficiary at the time of payment of gains or when a beneficiary applies his acquired rights (in case of beneficiary of Trust fund or other legal arrangement without legal entity, which is determined based on particular characteristics or relating to a certain category),
  • life insurance beneficiary that is
  • appointed as a specific person or legal arrangement without legal entity – its name and surname or company name,
  • appointed based on its relationship to the insured person or otherwise – information sufficient to identify a specific beneficiary at the time of benefits payment,
  • Politically Exposed Person -all relevant circumstances and the course of business relationship.

 

Client will provide obliged entity with information, that are necessary for customer due diligence, including submission of relevant documents.

 

Obliged entity can make copies or notes from the submitted documents and process such information for the purposes of the AML Act.

 

Procedures for ongoing monitoring of business relationship

 

Company employees will carry out ongoing monitoring of client’s transactions. If particular transaction within business relationship has at least one of the following aspects, employees will report it to company executives, who will then decide next steps:

 

  • client wants to carry out a transaction over 1,000,000 EUR (or its equivalent in other currency),
    • client comes from / or moved his headquarters to a country with risk classification no. 2 or 3,
    • client wants to exchange money to/from of one of the following currencies: Russian Ruble, Ukrainian Hryvnia, the Vietnamese Dong or the Belarusian Ruble.

 

Compliance officer annually compiles and evaluates list of transactions (both executed or non-executed) with characteristics stated in this section.

4.1 Beneficial owner identification

 

Identification of client’s ownership structure and client’s beneficial owner is necessary for client’s assessment in terms of potential risk of money laundering or terrorism financing.

 

When customer due diligence is carried out, it is necessary to find out information about beneficial owner, in a following way:

 

  • if a beneficial owner is a Statutory body or a member of client’s Statutory body, eventually a member of legal entity’s Statutory body, which is a member of client’s Statutory body or controlling entity to a client, it is required to obtain identification details (see Art. 4), but it is not necessary to identify these persons personally, if they are not acting parties in this transaction (or business relationship) in the same time;
  • if the beneficial owner is not acting as a person mentioned in previous paragraph, it is not necessary to obtain all identification details (see Art. 4), only the amount of identification details to enable verification of a natural person with appropriate degree of certainty that is required. The minimum identification details are forenames, surname, address, beneficial owner’s country of origin and description of his relationship to a client.

 

Listed information are obtained from contract details provided by client when signing a contract or verifying a transaction.

 

Obliged entity shall identify relevant relationships after determination of specific natural person or more natural persons that have a significant impact on client’s actions through other legal entities.

 

After identification of beneficial owner, it is necessary to review whether is he not listed as a sanctioned person or entity (see no.4.1.3). In case of a match with sanction list, transaction with such a person cannot be set up (see Art. 9) and STR shall be issued to FAO according to Art. 11.

4.2 Procedures for situations when legal owner cannot be identified

 

There are situations when beneficial owner cannot be identified. Particularly, in this following cases:

 

  • beneficial owner cannot be identified because e.g. he is concealed behind companies registered in countries, that allow hidden ownership structure and client does not know people who manage or control this companies. This is a case of a non-transparent ownership structure, i.e. is it necessary to adjust client’s risk profile according to obliged entity rules
  • obliged entity finds out that such a person does not exist. In this case a natural person with an influence on client’s (eventually legal entity’s) business or a person with highest managerial post (i.e. a person, that has a direct decisive influence on company management, for example, Statutory body or a Company director), shall be determined as a beneficial owner (see Art. 2 Definition of a beneficial owner). If such a statement cannot be provided with an official document, it shall be accompanied by client’s responsible representative written statement (e.g. in a situation when limited company issues shares on behalf of their owner);
  • client will not cooperate with beneficial owner’s identification. This behaviour is for obliged entity a reason to refuse realization of a transaction (or establishment of a business relationship) see Art. 9.

4.3 Identification of information necessary for business relationship’s monitoring

 

Information are obtained from contract details provided by client when signing a contract or during a business relationship.

4.4 Reviews of fund sources

 

Listed information are obtained from client’s statement, that funds do not come from criminal activity and terrorism financing.

4.5 Further information for customer due diligence

 

Obliged entity shall identify information necessary to assess a potential risk of money laundering and terrorism financing depending on type of a client and type and scope of service provided. Persons authorised to carry out customer due diligence are informed by obliged entity about the extent of due diligence or verification of exception from due diligence considering above stated risks.

 

Listed information are obtained from contract details provided by client when signing a contract or verifying a transaction.

5. Rules for client acceptance, risk profile determination and other procedures

 

Obliged entity shall, based on information obtained during identification and customer due diligence, carry out client categorization considering risk of money laundering and terrorism financing, then shall set out rules for rejection of business relationship establishment or termination of existing business relationship and shall define so called client’s compliance rating based on risk factors defined by obliged entity for new clients (stated below). Details to determine Client´s Compliance Rating are stated in in paragraph 8 of this internal regulation.

6. Adequate and appropriate policies and procedures for risk assessment, risk management, internal controls and control assurance over compliance with AML Act obligations

 

Obliged entity’s rules and procedures to carry out following operations (with regard to client’s compliance rating):

 

  • client categorization;
  • decision about transaction set up (or establishment of business relationship) or termination of existing transaction (or existing business relationship);
  • new client’s risk assessment (including regular assessment during duration of a business relationship), client’s compliance rating according to obtained information;
  • for measures undertaken against clients classified as risky.

 

Obliged entity shall, based on information obtained during identification and customer due diligence, carry out client categorization considering risk of money laundering and terrorism financing, then shall set out rules for rejection of business relationship establishment or termination of existing business relationship and shall define so called client’s compliance rating, that shall be determined by obliged entity based on risk factors defined for new clients, ongoing ascertaining during existing relationship, and procedures against client’s classified with risk rating.

 

Client’s compliance rating is established and evaluated with respect to the following risk factors:

 

  • client’s, the person’s acting on behalf of client or client´s beneficial owner’s country of origin is a country that insufficiently or not at all applies Anti-money laundering and Counter terrorism financing measures or is a country which is (based on obliged entity’s assessment) considered a country with high risk classification;
  • subject of trade was or will be transferred or provided to or from a country that insufficiently or not at all applies Anti-money laundering and Counter terrorism financing measures (or is a country which is based on obliged entity’s assessment considered a country with high risk classification);
  • client, the person acting on behalf of client, client´s beneficial owner or if known the final owner, is on a list of persons or organizations, against whom are applied sanctions in accordance with relevant laws and regulations;
  • client is on a sanctioned entities list;
  • non-transparent ownership structure;
  • impossible to obtain information about client´s beneficial owner;
  • vague origin of client´s funds;
  • company is not economically active;
  • client is a company with residency in so called off-shore centres;
  • client is directly or indirectly influenced by a person with residency in so called off-shore centres;
  • facts that client might be acting on behalf of a third person or conceals that is doing so;
  • unusual set up of a transaction, with regards to type of client, value and method of transaction settlement, purpose of business relationship and client´s business activities;
  • facts suggesting that client is carrying out a suspicious transaction;
  • there is increased risk of money laundering or terrorism financing associated with client´s business activities according to information available to obliged entity.

 

Client’s Compliance Ratingis obtained from contract details provided by client when contract is signed.

 

For cases, when client is a foreign entity, cooperation with Managing Director of the Company is required. Managing Director of the Company shall verify ad hoc, whether person, does not come from a country sanctioned by EU sanctions or from a country with high risk classification, which up to date list is issued according to European Commission Regulation (EU) 1675 of 2016 dated 14th July 2016 and is available at www.mfcr.cz/fau or at http://www.fatf-gafi.org/countries/#high-risk.

 

Managing Director of the Company is also required to verify whether country is listed on OECD Global Forum list, which divides countries into 4 categories according to the degree of compliance with AML legislation.

 

Clients from countries in section “Partially compliant” will be assigned with AML compliance rating no.2, clients from countries in section  “Non-Compliant” will be assigned with AML compliance rating no. 3, in any other cases, client will be  assigned with AML compliance rating no. 1.

 

List of jurisdiction compliance rating is available at http://www.oecd.org/tax/transparency/exchange-of-information-on-request/ratings/#d.en.342263 Levels of each Risk Factors varies, some of them (e.g. vague origin of funds, or inclusion of a client on sanction entities list) are considered as indicators of suspicious transactions.

Obliged entity characterizes the following list of client’s AML compliance ratings:

 

Compliance rating no. 1 – client with no risk (zero compliance rating) – was identified with zero elements of compliance rating during a business relationship (contract) establishment or during subsequent business cooperation

 

Compliance rating no. 2 – clients with certain level of risk classification – i.e. clients that are identified with one or more risk elements of compliance rating, but these risk elements do not exclude establishment of business relationship. Business activities of these clients shall be monitored by responsible entities.

 

Compliance rating no. 3 – unacceptable client – i.e. client was identified with one or more risk elements of compliance rating. These elements are after evaluation considered to be unacceptable in terms of AML legislative measures.

 

Client that was identified with one or more risk elements of compliance rating, is for purposes of this internal regulation considered to be a “High risk client”.

 

Internal AML controls are integrated into the internal information system. Each new template, client, business, and country is controlled on regular basis according to updated lists of sanctioned and risky individuals on the FAO website. In the event of a positive outcome, the result is sent to selected employees and compliance officers.

 

In the case of a foreign client, the employee signing the contract and identifying the client is required to cooperate with the Compliance officer of the Company. This is always required to verify ad hoc whether a client is not coming from a state subject to EU sanctions or from risky states whose current list is set by Commission Regulation (EU) 2016/1675 of 14 July 2016 and is available on the website http://www.financnianalytickyurad.cz/. The Compliance officer is also required to verify whether the country is on the OECD Forum jurisdiction list, which divides the country into 4 categories according to the compliance level with the AML legal regulation. If the country is in the “Partially compliant” section, the client will be assigned Compliance rating no. 2., if the country is in the “Non-Compliant” section, the client will be assigned Compliance rating no. 3, otherwise the client will be assigned AML Profile # 1. The list of jurisdictions is available here: http://www.oecd.org/tax/transparency/exchange-of-information-on-request/ratings/#d.en.342263.

7. Detailed non-exhaustive list of suspicious transactions indicators

 

7.1 Facultative indicators of suspicious transactions

 

A transaction is considered as suspicious if:

 

  • Client’s funds clearly do not correspond with the nature or the extent of the client’s business activities or his wealth;
  • there is no economical, factual or legal reason for the transaction or recognizable relationship to normal business activities of a client;
  • transaction does not make sense or is non-transparent from an economical point of view;
  • client undergoes activities, that can disguise his identity or disguise identity of his beneficial owner; – client or the beneficial owner is a person from a country, that insufficiently or not at all applies measures against money laundering or counter terrorism financing measures;
  • obliged entity has doubts about the verity or completion of client’s identification data. It is clear from the context, that client tends to state inaccurate or incomplete information about himself;
  • client is nervous, refuse to identify himself or does it very reluctantly, eventually gives false information about himself (e.g. false statement about the origin of the money or area of business);
  • client has a criminal record or connections to people associated with criminal groups or is involved in criminal activity directly;
  • client has contacts or links with areas prone to Money laundering or areas where application of International Sanctions is frequent practice (Appendix 1);
  • identification documents look suspicious;
  • client seems to be acting for or on behalf of someone else, is accompanied or followed by other people, that probably want to remain anonymous;
  • client requires unusual transactions, unusual by their volume or carried out in an unusual way, seem to be in hurry for transactions to go through;
  • client’s business area is prone to be associated with criminal groups (e.g. erotic services, clubs, night clubs, military material trade, especially weapons etc.);
  • client consciously carries out losing trades or trades with high contractual penalties;
  • transactions are carried out with big amount of small change, eventually with a big amount of cash being carried in unusual way (e.g. in plastic bags, pockets etc.);
  • transactions are directed to areas where client usually, does not have or is unlikely that he has, business interests;
  • transactions to and from countries with high risk classification;
  • transaction amount is just below the limit of compulsory identification or due diligence;
  • electronic money issue payments are just below the compulsory identification limit;
  • unusual payment settlement;
  • incoming payments to individual (client’s) accounts without transactions being carried out, or with subsequent transfers to other accounts.

7.2 Essential indicators of suspicious transactions

 

Transaction is always suspicious when:

 

  • client or beneficial owner is a person against which the Czech Republic had imposed International Sanctions under the International Sanctions Act;
  • subject of the trade is or should be goods or services against which the Czech Republic applies sanctions under the International Sanctions Act;
  • client refuses to identify himself or identify the person he is acting on behalf of.
  • unusual requirements for the execution of the transaction, especially according to the type of client, his previous business activity, subject, amount and method of settlement of the transaction, the purpose of setting up the account and the subject of the customer’s activity
  • payment transactions from / to risk and sanctioned countries
  • the client, without a logical explanation, changes contact details or transaction instructions
  • the client group performs similar transactions
  • the available information indicates that the client has links with the perpetrators of the crime
  • clients transactions show a seasonal pattern and there is no obvious legal reason
  • the client presents documents issued by a foreign institution, which can hardly be verified
  • the frequency or amount of transactions does not correspond to the client’s profile

 

The transaction is always suspicious, if:

 

• The client or the Beneficial owner of the client is a person to whom the Czech Republic applies international sanctions pursuant to Saction Act;

• the subject of transaction are goods or services against which the Czech Republic applies sanctions under the Saction Act;

• the client refuses to submit to a control or refuses to provide the identification details of the person he  is dealing with (in this case, the Company will not enter into a business relationship with the client or does not perform the business).

7.3 Contact person

 

The Compliance Officer / Managing Director is obliged to:

 

  • receive and analyse internal suspicious trade reports to evaluate if it is suspicious trade
  • to fulfil the Company’s obligation to inform the FAO;
  • inform the Company’s Managing Director of the information provided by the FAO;
  • ensure the management of necessary records;
  • ensure archiving of suspicious transaction documentation;
  • provide training for the Company’s employees;
  • to elaborate an assessment report that will be kept for at least 5 years.

 

The Compliance officer’s duty is also to keep track of current developments in the fight against money laundering and the Financial Action Task Force on Money Laundering, the European Union bodies and other international anti-money laundering organizations, and ensure compliance with the Company’s internal rules with valid legislation.

8. Assessment of suspicious transactions

 

Applying the principle “know your client”, i.e. identification, customer due diligence and further monitoring of the nature, volume and other parameters of transactions carried out by client, is the basic rule for successful detection of suspicious transactions and effective prevention of money laundering and terrorist financing via obliged person. These facts are based on ongoing monitoring of transactions with an emphasis on frequency and extent deviations from client´s normal business activities. When identifying suspicious transactions, it is necessary to perform individual assessment of each transaction’s characteristics.

 

When assessing and evaluating suspicious transactions, obliged entity employees shall focus particularly on:

 

  • High risk client’s transactions;
    • PEP’s transactions;
    • Transactions with suspicious transactions indicators.

 

Considering particularly:

 

  • nature of the transactions and the circumstances of their realization;
    • nature and volume of client´s normal business activities;
    • client’s compliance rating.

 

If a transaction shows any indicator of suspicious transactions it does not necessarily mean that transaction is suspicious, but it is necessary to perform thorough evaluation.

 

Responsibility for overseeing client´s transactions lies with an employee, that provides service to a client on behalf of obliged entity. This is also related to the risk of involvement of this employee in the legalization of proceeds from crime and terrorist financing (so-called insider) and the associated risk of allowing the client to conduct a suspected transaction by that employee. As part of the company’s trading system, it is traceable which employee of the company the client has provided with which transaction. If a worker is suspected of being an insider, it is always possible to monitor the operation of the employee.

 

If a client changes the nature of transactions, significantly increases the number or value of transactions compare to past behaviour or compare to employees estimate, then the obliged entity employee is required to determine the cause of this development. In case of doubt, the employee is entitled to require the client to provide evidence of the reasons for such changes.

 

Information about client and his transactions are recorded in an electronic information system in a client’s electronic folder. Information about the client and transactions are kept in the internal information system, that is accessible to all employees of the Company who provide services to the client or who deal directly or indirectly with it.

 

Access to information about client and his transactions is enabled to all obliged entity employees, that provide services to a client on behalf of obliged entity or directly or indirectly negotiate with client.

 

Client’s folder contains the following information and documents:

 

  1. contractual documentation;
  2. eventually a power of attorney, issued by the client, authorizing for disposition of property on client’s account;
  3. up-to-date identification details (copy of identity card, proof of existence of legal entity etc.);

 

It shall be clear from individual documents in client´s folder when and by whom they were obtained and how they were updated.

 

If suspicious entities are identified during verification of entities suspected of supporting terrorism in financial and trade database, this then shall be reported to FAO.

9. Non-completed transactions

 

Obliged entity shall refuse to set up a transaction (or establish a business relationship) when:

 

– Identification is mandatory and

 

  1. client refuses to identify himself;
  2. client refuses to provide power of attorney, in case he acts on behalf of a third party,
  3. client will not cooperate during customer due diligence,
  4. 4 Is not possible to carry out client´s identification for any other reason,
  5. Person, performing identification or customer due diligence has doubts about the truthfulness of provided information or authenticity of submitted documents.
  6. Client is a PEP and origin of property used in transaction is not known to obliged entity.

10. Evaluation report

 

Secretary shall annually prepare a report assessing the activities of obliged entity on prevention of money laundering (hereinafter the “Evaluation report”).

 

Evaluation report contents of:

 

  • evaluation of procedures and measures, applied by obliged entity on prevention of money laundering, if effective;
  • evaluation of deficiencies in obliged entity’s internal regulations, procedures and measures, and subsequent risk assessment;
  • evaluation of internal regulation’s compliance with applicable laws and regulations;
  • details on last year’s Suspicious Transaction Reports;
  • if any deficiencies are detected, suggest actions to eliminate them in accordance to b).

 

Obliged entity will keep Evaluation report for at least 5 years.

11. Procedures for access to stored data by competent authorities

 

11.1 Data storage

 

Obliged entity maintains in the information system about the client all information related to the business relationship – identification and control of the client, verification of the validity and completeness of the data.

 

Obliged entity shall store following documents for 10 years from carrying out a transaction or from termination of business relationship with a client

 

  • identification details (acquired according to § 8, paragraph 1 to 3 or based on directly applicable EU regulations governing the information accompanying noncash transfers of funds), copy of identification details, if taken,
  • details on first identification of a client (by whom and when),
  • information and copy of documents acquired during customer due diligence,
  • documents justifying the exception from client’s identification and due diligence, and
  • when acting on behalf of third party, copy of power of attorney or number of the court’s decision on the guardian’s appointment. The period for document’s storage starts on the first day of the calendar year following the year in which the last transaction known to obliged entity was carried out.

 

Processes following the discovery of suspicious transaction up to delivery of report to the FAO, rules for suspicious transactions handling and specification of persons carrying out suspicious transaction assessment

11.2 Situations for STR submission

 

Obliged entity shall report suspicious transaction if:

 

  • exists continuous suspicion that transactions may have been used for the purposes of money laundering or terrorism financing even after customer due diligence has been performed;
  • client refuses to identify himself before transaction is set up (business relationship is established) but obliged entity has at least partial information about his identity (in this cases, STR shall contain all information obtained by obliged entity representatives such as signature, behaviour, outcomes of the negotiation process with unidentified participant of a transaction, his arrival and departure; furthermore identification details of obliged entity employees that lead negotiations with unidentified participant of a transaction);
  • client does not cooperate during due diligence;
  • obliged entity is unable to obtain information from public resources about funds used to carry out transaction with PEP and this person refuses to provide such an information;
  • other circumstances that can suggest suspicion of money laundering or terrorism financing.

 

If a transaction is considered to be suspicious, obliged entity shall report this to FAO, without undue delay, within 5 days. If 5th day is a weekend or bank holiday day, then the report deadline is the next working day.

 

If required by circumstances, obliged entity shall report suspicious transaction immediately. This is required in situations, if there is a risk that the property (or funds) which is the subject of a transaction, could have disappeared from the reach of authorities acting in criminal activities proceedings. In this case, obliged entity is required to report suspicious transaction immediately, even if not all relevant information is available (missing information will be completed later on).

11.3 Notification of STR

 

If transaction is considered suspicious, obliged entity’s employee shall immediately inform responsible secretary. Secretaries shall report suspicious transaction through Company’s internal system, for easier access to documents, reports and information about suspicious transactions by obliged entity.

 

Report shall contain:

 

  • identification details of obliged entity’s employee reporting suspicious transaction;
  • identification details of client suspected to attempt suspicious transaction, eventually identification details of a person, acting on behalf of a client suspected to attempt suspicious transaction;
  • description of the subject and of substantial circumstances of the transaction,
  • date of the transaction.

 

Suspicious transaction internal report shall contain all information required for complete assessment of potential suspicious transaction.

 

If obliged entity employee fails to report clearly suspicious transaction, this will be considered as a serious breach of obliged entity´s internal regulations.

 

If a transaction is evaluated as suspicious by company’s director, this shall be reported to FAO, without undue delay, within 5 days. If required by circumstances, company’s director shall report suspicious transaction immediately.

 

STR is submitted via mail as a signed for hard copy, via fax or orally recorded as a protocol in a place agreed by FAO. Secretary shall always check delivery status of STR at FAO.

11.4 Financial Analysis Office contact details

 

Phone: (7:45 – 16:15) +420 257 044 501
(16:15 – 7:45, weekends and bank holidays) +420 603 587 663

Fax: +420 257 044 502

Address for in person delivery: Washingtonova 1621/11, 110 00 Praha 1

Postal address: PO BOX 675, Jindřišská 14, 111 21 Prague 1

E-mail address: fau@mfcr.cz (not for STR submissions)

Data box: egi8zyh (not for STR submissions)

11.5 Requisites of STR

 

STR shall contain all the information available to the informant about this transaction, its context and its participants, namely:

 

    1. Identification details of an entity submitting Suspicious Transaction Report: trading company (name and surname, or company name including distinguishing addendum), residency (eventually delivery address), identification number, subject of trade as stated in commercial register or other register record – only subject of trade relevant to particular STR shall be noted;
    2. Identification details of a STR’s subject, following details are required for particular entities:

 

– natural person non-entrepreneur: all forenames and surnames, including any other names used, place of birth, type and number of personal identity card, when and by which body issued, including validity, citizenship, sex, eventually any other identification details from identity card;

 

natural person entrepreneur: all details as for natural person non-entrepreneur, business addendums, eventually a company name as stated in Commercial Register, subject of trade as stated in trade licence or commercial register, and a place of business;

 

legal entity: name of a company including distinguishing addendum, or any other designation, residency, identification number or its foreign equivalent, name and surname, personal identification number or date of birth and address of entities, which are its statutory body or members of its statutory body, if statutory body or its member is a legal entity, then name of a company including distinguishing addendum, or any other designation, residency, identification number and identification details of persons, that are its statutory body or its member and identification details of majority associate or controlling person;

 

– In case of representation of a natural person and always in a case of a legal entity, report shall include identification of the person who acts on their behalf;

 

  • identification details of all other participants in the transaction available to obliged entity at the time of report;
  • detailed description of subject and essential circumstances of suspicious transaction, mainly:
  • reason of transaction as stated by participant;
  • description of used cash or other means of payment as well as other cash payments circumstances;
  • time sequence;
  • transaction funds bank account numbers aa well as bank account numbers of transaction destination bank accounts including identification of bank account holders and managing clerks (if available);
  • currency;
  • why is transaction suspicious;
  • description of behaviour of transaction participant (and eventually his companions); eventually also phone and fax numbers, or vehicle – description and numbers of registration plates;
  • other information about transaction’s participants, subject of transaction or any other relevant information that could help with assessment in terms of suspicion of money laundering or terrorism financing;
  • report shall include copy of all available documents used in a STR;
  • a note in case, that report includes also property which is subject to international sanctions, announced in order to maintain or restore international peace and security, protect human rights or fight against terrorism. Note should be complemented with description of property, details about its location and owner, if known to the informant. Furthermore, the note should contain information whether there is imminent danger of damage, devaluation or use of this property against the law;
  • Informant shall always state, if and when was transaction set up, or whether was postponed, eventually a reason why transaction has not been set up. If a transaction has not been set up (except for property, which is subject to international sanctions except for § 40 paragraph 3 of the AML Act) obliged entity shall not inform the client (see provisions on the duty of confidentiality);

 

Contact information

 

  • STR shall contain name and a job title of a person submitting this report on behalf of obliged entity, and shall also contain contact details of FAO, including out-of-hours contact details (phone number, fax, email address).
  • Furthermore, STR includes date, time and a place of submission and a signature of a responsible person.
  • STR shall not include details about obliged entity employee or a person in a similar employment relationship that discovered suspicious transaction.
  • Obliged entity shall not inform the client about submission of STR (except for § 40 paragraph 3 of the AML Act).

12. Measures to obstruct the gain from money laundering via immediate execution of customer’s orders

 

By execution of client’s order is understood completion of any transaction suspected to be associated with money laundering or terrorism financing.

 

If immediate execution of client’s order could lead to obstruction of securing money-laundering or funds designated to finance terrorism, obliged entity can execute client’s order on suspicious transaction at the earliest 24 hours after receiving STR from FAO. (Risk described above can emerge especially after client’s order is executed and suspicious transactions will get beyond a scope of monitoring by Czech Government bodies.)

 

If investigation of suspicious transaction takes longer time then expected, FAO can decide to:

 

  • extent time for client’s order deferment, for the most of 2 days from receival of STR by FAO;
  • Postpone client’s order or securement of property, that is a subject of suspicious transaction, for 3 work days.

 

Execution of client’s order is not deferred if cannot be deferred, (especially in the case when transactions are done via electronic instruments), or that any such a deferment could impede or otherwise jeopardize the investigation of a suspicious transaction.

 

If a transaction was carried out before submission of STR, this should be communicated in the submitted report, if transaction was carried out later on, an exact date should be communicated subsequently with reference to particular report.

 

Deferment of a client’s order does not apply to securing property, which is subject to STR, if the property is to be secured by the relevant legal regulation issued for implementation of international sanctions.

13. Technical and personnel measures to defer execution of client’s orders according to § 20 of the AML Act and fulfil the Duty to inform deadline according to § 24 of the AML Act

 

13.1 Fulfilment of the Duty to inform

 

Obliged entity shall on request of the FAO (within the deadline defined by FAO):

 

  • shall communicate details about transactions under the Duty to inform or those being investigated by FAO;
  • shall provide evidence of these transactions or allow access to them to authorized employees of FAO, during verification of STRs;
  • shall provide information about persons involved in such transactions.

 

Obliged entity shall provide this information in electronic form, if enabled by nature of required information. Otherwise, in a format appropriate to the nature of required information.

13.2 Measures in case of deferment of client’s order

 

Cases, when a transaction is carried out because a deferment could impede or otherwise jeopardize investigation of a suspicious transaction, shall be always reported to FAO.

 

A declaration of client’s order deferment can be done orally, by phone, fax or electronically, a written hard copy is required subsequently to complete declaration.

 

If obliged entity reported a suspicious transaction, period for client’s order deferment including its extension, is counted from the moment report was accepted by FAO.

 

If obliged entity did not report a suspicious transaction and FAO shall decide to defer client’s order or secure property, beginning of period for client’s order deferment, is established from the moment report was accepted by FAO and announcement about the decision on investigation of a suspicious transaction recorded.

 

Obliged entity shall notify the FAO about the execution of client’s order deferment, extension of period of deferment, or shall secure property and confirm time from which the course of this period counts.

 

If FAO does not inform obliged entity about handing in a criminal accusation until the end of this period, obliged entity shall carry out the transaction.

 

Once given period passes, the obliged entity may carry out transaction regardless the end of this period (if during working day, bank holiday or weekend).

 

If criminal accusation has been handed in within the established period, obliged entity shall be informed. This terminates the established period. Obliged entity shall then carry out client’s order only after new period passes – this is defined to be period of 3 calendar days after criminal accusation was handed in. This shall be done only in a case, when criminal justice body shall not decide to seize or secure subjects of suspicious trade within this period. Period of 3 calendar days ends after its expiration or earlier in cases when criminal justice bodies assure appropriate protective measures before its expiration time. (Period of 3 calendar days counts from the beginning of a day consecutive to day when FAO handed in the criminal accusation document. If this day is a Saturday, Sunday or Bank Holiday day, the deadline of this period is the next working day.)

 

Decision about deferment of client’s order or securing property becomes legally effective upon its declaration. A declaration can be done orally, by phone, fax or electronically, a written hard copy is required subsequently to complete declaration.

 

If FAO does not inform obliged entity within 72 hours after receiving STR, that a criminal accusation was handed in, obliged entity shall carry out the transaction.

 

If FAO within 72 hours after receiving STR hands in a criminal accusation document, obliged entity shall carry out transaction 3 calendar days after this event, if criminal justice body shall not decide to seize or secure subjects of suspicious transaction within this period.

 

During the period client’s order deferment, obliged entity shall secure involved property with appropriate measures, so that it cannot be manipulated with contrary to this internal regulation, namely:

 

director of obliged entity shall give instructions to employees working with clients not to, to appeal, carry out any transactions, suspected to be subjects of STR.

 

Upon receipt of notification by FAO or after the relevant period has passed, director shall notify the employee of obliged entity, which reported suspicious transactions about when at the earliest can be client’s order carried out.

14. Provisions of staff training

 

Obliged entity shall at least once every 12 months provide training to employees, that can come across with suspicious transactions on their job, and also provide training to all employees before they are assigned with a position with such prospects.

 

New employees, starting on a position prone to coming across suspicious transactions shall always be provided with internal AML regulations training before they start their job.

 

Subject of staff training is particularly:

 

  1. set of internal regulations on Anti-money laundering;
  2. typology and signs of suspicious transactions;
  3. procedures for detection and evaluation of suspicious transactions;
  4. determination of client’s compliance rating;
  5. procedures during business relationship establishment, correct procedure of client’s identification and due diligence;
  6. cases for non-establishment or termination of business relationship, not setting up a transaction;
  7. changes in AML Act, or in internal regulations contained set of internal principles on Anti-money laundering;
  8. procedures for submission of STR.

 

Obliged entity employees shall confirm their presence at training session by signing an attendance register. Attendance registers are together with records of staff training performance and with a list of discussed topics are archived by obligatory person.

15. Internal control system

 

The Company carries out, through its executives, an ongoing review of compliance with the Company’s and its employees’ obligations set out in this Internal Regulation and AML Act.

 

Managing directors/compliance officer:

 

  • examine, test and evaluate the effectiveness and functionality of the system of measures to prevent money laundering and legalization of proceeds from crime and financing of terrorism;
  • verify the compliance of this internal regulation with the applicable legislation;
  • performs random checks on employees to prevent so-called “insiders”;
  • propose to implement the necessary measures (adjustments in internal regulations, improvement of the information system, improvement of the training system, etc.).

16. Duty of confidentiality

 

Duty of confidentiality which purpose is mainly to prevent any obstruction of investigation, covers:

 

  • submission of STR under § 18 of the AML Act (see Art. 11);
  • securing property under the § 20 of the AML Act (see Art.14),
  • fulfilment of Duty to inform under § 24 of the AML Act (see Art. 14).

 

Duty of confidentiality ends when the period of 3 calendar days passes or is terminated (under § 20 paragraph 7 of the AML Act).

 

If criminal accusation was not handed in by FAO, Duty of confidentiality ends after the end of detention period, or after its termination (up to 24 respectively 72 hours under § 20 paragraph 1 respectively 3 of the AML Act).

 

Duty of confidentiality shall not come to an end when obliged entity’s employee is assigned another job, employment or other contractual relationship with obliged entity is terminated, neither if obliged entity terminates activities referred to in § 2 of the AML Act.

 

Duty of confidentiality does not apply to securement of a property, which is subject to STR, if the property is to be secured by the relevant legal regulation issued for implementation of international sanctions. Person, who’s property should be secured can be informed about based on which “sanction” regulation is his property being secured.

17. Liability and efficiency

 

Obliged entity shall monitor development and changes in the field of Anti-money laundering and Counter terrorism financing (i.e. laws, regulations, Government Regulation, etc.). Relevant regulations are published by FAO at http://www.financnianalytickyurad.cz/ and CNB at www.cnb.cz/cs/dohled_financni_trh/legislativni_zakladna. This web site is only informational and assumes active approach by obliged entity.

 

If relevant regulations are changed, or new regulations are put into effect, the liable entity shall update the contents of this document in accordance with these regulations and also ensure training of all persons is affected by such changes.

 

Vetted Secretary shall have all rights to fulfil all obligations under this internal regulation.

17.1 Appendix 1

 

List of countries, that insufficiently or not at all apply Anti-Money Laundering or Counter terrorism financing measures

 

Iran, North Korea – high risk in terms of Anti-Money Laundering and Counter terrorism financing,

 

Algeria, Burma / Myanmar, Ecuador, Indonesia – their measures for Anti-Money Laundering and Counter terrorism financing have significant deficiencies,

 

Afghanistan, Albania, Angola, Iraq, Yemen, Cambodia, Guyana, Kuwait, Laos, Namibia, Nicaragua, Pakistan, Panama, Papua New Guinea, Sudan, Syria, Uganda and Zimbabwe – their measures for Anti-Money Laundering and Counter terrorism financing have also significant deficiencies, however, these countries are committed to an action plan to eliminate these deficiencies and this plan is at least sufficiently met.

 

Company should also consider countries with high risk classification, according to European Commission Regulation (EU) 1675 of 2016 from 14th July 2016, through which the directive (EU) 849 of 2015 of the European Parliament and the Council meets requirements on identifying countries with strategic deficiencies.

 

European Union Restrictive measures (sanctions) in force:

http://eeas.europa.eu/archives/docs/cfsp/sanctions/docs/measures_en.pdf

 

Government Decree No. 210/2008 Coll., On the implementation of specific measures to combat terrorism:

https://www.zakonyprolidi.cz/cs/2008-210

 

Further relevant information is available at:

http://www.treasury.gov/about/organizational-structure/offices/Pages/Office-of-Foreign-Assets-Control.aspx
http://eur-lex.europa.eu/homepage.html
http://www.financnianalytickyurad.cz/mezinarodni-sankce/aktualne-o-sankcich.html

 

Above and beyond these requirements, the Company also performs vetting of those entities, whose residency country is on the list of countries with high risk classification, available at:

http://www.oecd.org/tax/transparency/exchange-of-information-on-request/ratings/#d.en.342263

 

Following countries are also classified as unsupported countries and incoming and outgoing payments shall not be processed:

 

  • Afghanistan
  • Bosnia and Herzegovina
  • Democratic People’s Republic of Korea (DPRK)
  • Ethiopia
  • Guyana
  • Iran
  • Iraq
  • Laos
  • Serbia
  • Sri Lanka
  • Sudan
  • Syria
  • Trinidad and Tobago
  • Tunisia
  • Uganda
  • USA
  • Vanuatu