This Policy is issued by Max Capital Limited as a main guidance for its employees and management for combating the financing of terrorism and preventing money laundering procedures based on the Vanuatu AML&CTF REGULATIONS, such as “AML&CTF Regulation Order No. 122 of 2014”, “AML and CTF Amendment Regulation No. 153 of 2015” and “Anti-Money Laundering and Counter-Terrorism Financing Act No. 13 of 2014” and all its amendments.
The term “money laundering” includes all schemes to conceal the origins of criminal incomes so that they appear to originate from a legal source. Max Capital Limited (“Company”) aims to recognize, control and mitigate the risks associated with money laundering and terrorism funding.
This Policy will be applicable for all operations, local and international. The objective of this policy is to ensure that the services of Max Capital Limited are not used to launder the proceeds of crime and that all of the staff is aware of their obligations and the need for vigilance in the fight against money laundering and terrorist financing.
The policy of the Company – not to enter into business relationships with criminals and/or terrorists, not to process transactions which result from criminal and/or terrorist activity and not to facilitate any transactions involving criminal and/or terrorist activity including the financing of terrorism.
The Company undertakes to implement all policies and procedures necessary to prevent the money laundering and to comply with all applicable legislation in this regard, such as the regulatory instructions, laws, and regulations (issued from time to time) by the Vanuatu Financial Services Commission (VFSC), the Vanuatu Financial Intelligence Unit (VFIU) and regulators of the countries where Max Capital Limited operates.
The Company is obliged to regularly monitor the risk exposure level of money laundering and terrorism funding.
The Company maintains the know-your-client policy and understands Anti Money Laundering directions thoroughly in order to evaluate risks and identify unusual actions.
GENERAL PROVISIONS CONCERNING MONEY LAUNDERING
Money laundering involves the placement of illegally obtained money into legitimate financial systems so that monetary proceeds derived from criminal activities are transformed into funds with an apparently legal source. Money laundering has many destructive consequences both for society as a whole and for those entities involved in money laundering activities.
Under Vanuatu law, a money laundering offence involves various acts committed with the intention to conceal or convert property or the proceeds of property (such as money) knowing or believing that these were derived from the commission of a designated offence. In this context, a designated offence means most serious offences under the Penal Code or any other Vanuatu Act. It includes, but is not limited to those relating to illegal drug trafficking, bribery, fraud, forgery, murder, robbery, counterfeit money, stock manipulation, tax evasion and copyright infringement.
Terrorist financing refers to the processing of funds to sponsors involved in or those who facilitate terrorist activity. Terrorist individuals/ groups/ organization derive income from a variety of sources, often combining both lawful and unlawful funding, and where the agents involved do not always know the illegitimate end of that income.
It is important to stress out that the reporting of the suspicion of money laundering does not constitute a breach of client confidentiality.
SPECIFIC MONEY LAUNDERING PROVISIONS FOR CONDUCTING THE REGULATED ACTIVITIES
The following points apply to the Company in order to facilitate recognition of suspicions of money laundering and reporting of the foregoing to the authorities and so that the Company may produce its part of the audit trail to assist in official investigation. In particular, the Company is obliged to:
The implementation of a compliance regime is a legislative requirement and a good business practice for anyone subject to the Anti-Money Laundering and Counter-Terrorism Financing Act No 13 of 2014 as amended by the Anti-Money Laundering and Counter-Terrorism Financing (Amendment) Act No. 2 of 2015 (the Act) and its regulations. A well-designed applied and monitored regime will provide a solid foundation for compliance with the legislation.
The Compliance Officer is responsible for establishing and conducting Employee training programs to ensure that all appropriate Employees are aware of the applicable AML/CFT Laws and Regulations, AFS's AML/CFT Policies & procedures and their responsibilities with respect to these policies.
DUTY ON ESTABLISHING BUSINESS RELATIONSHIPS
The Company may not carry out a one-off transaction or form a business relationship in the course of relevant financial business unless:
It has money laundering procedures in place, meaning:
CUSTOMER DUE DILIGENCE
Effective Customer Due Diligence (”CDD”) standards are crucial for managing risks related to money laundering and terrorism funding. CDD suggests actions and procedures directed to recognise the customer and verify his/her authentic identity. Customers must provide documents, data or information both at the moment of beginning the business relationship with the Company and on an ongoing basis if needed. The required steps to finalize CDD measures include the acquisition of data and efforts to verify that information given by customers.
Individual customers must provide the following credentials to the Company during the registration process:
The Company requires to verify Customer’s location. One of the following documents must be provided by the Customer as the proof of address, which must include Customer’s name and address indicated:
The Customer is required to provide a scanned copy or photo of the credit/debit card (front and back side) for any transactions related to funds deposit or withdrawal via credit/debit card. The front side of the card must confirm the cardholder's full name, the expiration date and the first six and the last four digits of the card number (all of the rest digits must be hidden). The copy or scan of the reverse side of the credit/debit card should indicate clearly the cardholder's signature, while the CVC2/CVV2 code must be masked.
If a customer has authorized another person, the additional documentation are required. These include:
Power of Attorney duly attested by Notary Public on prescribed format duly signed by all Account Holders with the following minimum information:
The authorized person is only allow to issue instruction for buy or sale of securities on behalf of client and all payments or receipt of funds must be made to or from the client own accounts
If the high-risk level of the business relationship with a Customer has been estimated by the Company, the following additional measures can be imposed:
In case if an existing Customer either refuses to provide the information described above or if a Customer has deliberately provided incorrect information, the Company will consider closing any of the existing Customer’s accounts after acknowledging the risks involved.
The Company’s staff is allowed to ask for and examine details of the person’s employment status or business/occupation when obtaining verification data of the customer’s statements about the source of funds or wealth. In particular, the list of appropriate documents to confirm the Customer’s employment/occupation can include employment agreements, bank statements, letter from employer or business etc.
The Company will conduct continuous Customer’s due diligence and monitor Customer’s accounts in all business relationships, involving regular reviews and updates of the Company’s prospect of customers’ actions, the risk-level imposed, and any contradictory information or assumptions previously provided by the customer. It can also include anything that resembles to be a significant change in the nature or purpose of the Customer’s business relationship with the Company.
In order to the obligation to verify identity, Max Capital’s using the best evidence and means available. In cases where our Compliance officer is not satisfied with the documentary evidence provided or with the results of public inquiries, he can approach another institution, on a non-competitive basis, specifically for the purpose of verifying identity. A standard format can be used for making such enquiries. It may be necessary to obtain the prior consent of the prospective client for disclosure of their information by the other financial institution. For additional screening and verifying the Company can use services of https://complyadvantage.com/ from time to time.
The Company’s Client Identification Procedures are based on the premise that the Company will accept funds from a new and existing Client only after the Client's identity is confirmed and its known for sure that the Client is acting as a principal and not for the benefit of any third party unless specific disclosure to that effect is made.
The Client Identification Procedures should be reviewed in light of the specific characteristics presented by a Client and in any instance, the Compliance Officer may determine to apply enhanced measures for reasons other than those discussed in the section below. As a reference tool, an Individual Client KYC Checklist is used.
Following are the examples of Clients who pose a high money laundering risk:
POLITICALLY EXPOSED PERSON (PEP)
A politically exposed person (PEP) is defined as an individual who is or has been entrusted with a prominent public function. Due to their position and influence, it is recognized that many PEPs are in positions that potentially can be abused for the purpose of committing money laundering (ML) offenses and related predicate offenses, including corruption and bribery, as well as conducting activity related to terrorist financing (TF). This has been confirmed by analysis and case studies. The potential risks associated with PEPs justify the application of additional AML/CFT preventive measures with respect to business relationships with PEPs.
It includes, but is not limited to, the following:
A person who is a PEP should continue to be treated as a PEP for a period of at least three (3) years after the date on which that person ceased to be entrusted with that public function; or for such longer period as the relevant person considers appropriate to address risks of money laundering or terrorist financing in relation to that person.
The Company’s Back office stuff can check if the client is PEP in open internet sources such as https://namescan.io/FreePEPCheck.aspx
Regulation defines ‘family members’ of a PEP to include the following:
“Known close associate” of a PEP to include the following:
A known close associate of a PEP is not a PEP themselves purely as a consequence of being associated with a PEP.
HIGH RISK INDICATORS – GEOGRAPHICAL:
A client may pose a greater risk if she/he is from, or closely connected to, a country with some of the following characteristics:
List of countries having strategic AML/CFT deficiencies:
MEASURES TO BE APPLIED IN WORKING WITH PEPs AND CLIENTS FROM HIGH-RISK COUNTRIES
The following measures can be appropriate in lower-risk situations:
The following measures can be appropriate in higher-risk situations:
COMPLIANCE OFFICER APPROVAL
Once completed, the Client Identification Questionnaire should be completed and signed by the employee or the person designated by the Company and must be handed over to the Compliance Officer for record keeping. For each applicant the Compliance Officer must also countersign the forms and will be responsible for deciding what further information, including documentation, is required prior to conducting business for the applicant.
COMPLIANCE AND REPORTING OFFICER
The Company has appointed a dedicated CRO to oversight the Compliance function who will be reporting to the Board of Directors. The officer has the appropriate qualifications, experience, competence, authority and independence to be able to effectively and independently fulfill the reporting obligations.
The reports must include any information related to the Company’s internal AML policy violations and the Regulations procedures breaches, as well as principles and standards of good practice infringements.
Any Employee shall immediately notify the CRO if he/she suspects or has any reason to suspect that any potentially suspicious activity has occurred or will occur if a transaction is completed. Employees are encouraged to seek the assistance of the Compliance Officer with any questions or concerns they may have with respect to the AML/CFT Policy & Procedures
AML Compliance and Reporting Officer’s responsibilities include:
The degree of decision-making responsibility placed on the CRO is significant. Informing an independent judgment about whether there are reasonable grounds for suspicion, he/she should consider all other relevant information available within the reporting entity concerning the person or business to which the initial report relates. This may include a review of other transaction patterns and volumes through the account or accounts in the same name, the length of the business relationship, and referral to the identification and other records held. If after completing this review, the CRO decides that reasonable grounds for suspicion exist, then he/she must immediately proceed to make an STR to the VFIU. All STRs must be made within two working days of forming the relevant suspicion (or knowledge).
Before any decision will be made by the VFIU, the CRO must confirm that funds will not be transferred beyond the reach of the courts of Vanuatu. If there is any possibility of these events occurring, the CRO should make contact with the VFIU by telephone at the earliest opportunity so that appropriate directions can be given to preserving the status quo. The STR should be submitted in writing on the prescribed form as soon as possible thereafter.
All STRs should be hand delivered to the office of the VFIU. When submitting an STR the Company should provide the VFIU as a matter of course with all information that it has about the transaction or attempted transaction and the parties to the transaction, including the records prescribed under the AML Act. If it is not possible to provide this information with the STR then it should follow as soon as reasonably practicable.
EMPLOYEES’ AML DUTIES
All Company employees, managers and officers must be aware of this policy. The knowledge of any officer, employee or agent of the Company is taken to be knowledge of the entity.
Employees, managers and directors who are engaged in AML-related duties must be vetted to meet the AML policy requirements. This includes an examination of potential criminal activity of the employee and continuous monitoring during the work contract. Any violation of this policy or the AML management rules must be reported confidentially to the AML Compliance Officer unless the violation involves the AML Compliance Officer himself, in which case the employee must report about the violation to the Chief Executive Officer.
Employees, working in positions that are susceptible to money laundering or terrorism funding schemes, must be trained in how to comply with this policy or the AML program. This includes knowing how to be alert to money laundering and terrorism funding risks and what actions are needed to be made once the risks are identified.
This AML/CFT policy and procedures are intended to ensure that, prior to accepting funds from Clients, all reasonable and practical measures are taken to confirm the Clients' identities. Max Capital may take assistance from the bank or other financial institutions for completing client identification process. The assistance shall not relieve Max Capital for identification process to be conducted by the company.
Employees are encouraged to provide the Compliance Officer with any revisions they consider appropriate. The Compliance Officer shall retain copies of all documents reviewed or checklists completed in connection with its Client Identification Procedures in accordance with the Company's Client Records Retention policy.
EMPLOYEE TRAINING PROGRAMME
The Company provides AML training to employees who will be dealing with customers or will be involved in any AML tests, verification or monitoring processes. The Company will conduct its training internally once every six (6) months and also will hire external third-party consultants (once every two years). It can be https://www.int-comp.com/ or any other appropriate and respectful training company that can prove its high educational level and will be accepted by management.
A supervisor will be assigned to every Company's employee. Supervisor’s duties are to teach employees in relation to all policies, procedures, customer documentary forms and requirements, forex markets, trading platforms, etc. A training plan for every new employee must be developed with examines which are being held for 2-3 months (depending on the level within the business).
The Company’s AML training programmes are aimed to ensure its employees to get an appropriate training level with regards to any possible AML/TF risks.
Training that will be provided for employees is:
Content of training:
As mentioned above, the Company will provide extra AML\CTF training every six (6) months for all employees. This training will include the following content:
The rules that appeal to illegal disclosure of suspicious transactions (“tipping off”). After training the employees will:
Copies of all documents related to Max Capital’s Client Identification Procedures will be retained for an appropriate period of time and, at a minimum, the period of time required by applicable law or regulation. The documents the Company retains are copies of documents reviewed in connection with Client Identification Procedures or enhanced due diligence procedures, Client identification checklists if any, or similar due diligence documentation, and any other documents required to be retained by applicable anti-money laundering legislation.
Max Capital will retain documents for so long as a Client is a client of the Company and for a minimum of 5 (five) years after this relationship ends. Max Capital shall, however, retain those records for a longer period where transactions, customers or accounts involved litigation or it is required by court or other competent Authority. The Company shall satisfy, on a timely basis, any enquiry or order from the relevant competent authorities including the VFIU and the VFSA for a supply of information and records as per law.
All records must be kept in a form which is immediately accessible upon request. Records do not have to be kept in hard copy. Retention may be by way of original documents, or by way of copies in any machine-readable or electronic form from which a paper copy can be readily produced.
The Compliance Officer on behalf of the organization is nominated to receive disclosures under this regulation.
Anyone in the organization, to whom information comes in the course of the relevant business as a result of which he suspects that a person is engaged in money laundering, must disclose it to the Compliance Officer;
Where a disclosure is made to the Compliance Officer, the officer must consider it in the light of any relevant information which is available to AFS and determine whether it gives rise to suspicion: and
Where the Compliance Officer determines in consultation with the Senior Management, the information must be disclosed to the Regulatory Authority after obtaining independent legal advice.
Below are some examples of suspicious activity that reporting entities in Vanuatu may encounter in the course of conducting business.
Suspicious customer behavior
Suspicious customer identification
Suspicious employee activity
Reporting a suspicion is a defense to a claim for breach of confidence. However, any statements to the press or other publicity must be routed through the MLRO or his deputy. Similarly, any requests for information or statements should be referred to him or his deputy for reply. Confidentiality whilst an investigation is ongoing is of the utmost importance and employees are reminded of the offence of “tipping-off”.
All officers and employees need to understand that they could be personally liable for non-compliance with AML obligations. They should be supported and encouraged by the CRO and other senior officers to participate in relevant training, to make prompt reports of all suspicious transactions, and to cooperate fully with the VFIU and other regulatory agencies.
It is a criminal offense for any person to make a false or misleading statement (or to mislead by omission) in any STR or other reports to the VFIU, or to authorize the opening or operation of an account with a reporting entity in a fictitious, false or incorrect. Where any body corporate is convicted of an offense under the AML Act or Regulations, and where the act or omission is shown to have taken place with the knowledge, authority, permission or consent of any director, controller, or other officer concerned in the management of the corporate, that person is also guilty of the offence.
If there are suspects or there are reasonable grounds to suspect that funds are the proceeds of a criminal activity, or are related to terrorist financing, the Company / MLRO will as soon as possible, yet no later than during 2 (two) days, report promptly his/her suspicions to the Vanuatu Financial Intelligent Unit (VFIU) in accordance with the “AML&CTF Regulation Order No. 122 of 2014”, the “Anti-Money Laundering and Counter-Terrorism Financing Act No. 13 of 2014, and its amendments.
In the process of carrying out its activity, including as part of own risk management, Max Capital Limited shall focus on applicable legislation of Vanuatu including Anti-Money Laundering and Counter-Terrorism Financing (Amendment) Act No 16 of 2017, Anti-Money Laundering and Counter-Terrorism Financing Amendment Act No. 2 of 2015, Anti-Money Laundering and Counter-Terrorism Financing Act No. 13 of 2014, UN Convention against Corruption (Ratification) Act (No. 15 of 2010), Counter Terrorism and Transnational Organised Crime Act [CAP 313], and other regulatory legal acts.