AML/KYC Policy

Definition

Money Laundering (ML): means the process by which criminals attempt to conceal the origin and/or illegitimate ownership of property and assets that are the proceeds of criminal activities.

Terrorism Financing: includes both legitimate and illegitimate money characterized by concealment off the origin or intended criminal use of the funds.

Know Your Customer (KYC): This entails obtaining and verifying customer identity, preservation of records of customers, mandatory disclosure of transactions to authorized statutory bodies.

Politically Exposed Persons (PEPs): Individuals who have been entrusted with prominent public functions in any country. Generally presenting a higher risk for potential involvement in bribery and corruption by virtue of their position and the influence that they may hold.

Enterprise Risk Management (ERM): includes the methods and processes used by organizations to manage risks and seize opportunities related to achieving their objectives.

Client: includes any entity with a business relationship with the Company or any entity connected with a financial transaction that can pose significant reputational or other risks to the Company.

Policy Mandate

This policy is connected to a more comprehensive in-house Anti-Money Laundering (AML), Know Your Customer (KYC), and the combating the Financing of Terrorism Policy (CFT). It sets out an abbreviated version of the guidelines for CVI Trade Group (herein referred to as ‘the Company’) compliance with AML/CFT obligations under the law, as well as regulatory directives. It prevents any transaction that facilitates criminal activities.

CVI Trade Group understands that it has a vital role in preventing criminals from using our services to facilitate money laundering and terrorist financing. We are committed to detecting and avoiding money laundering and will cooperate fully with the Regulators and Law Enforcement Agencies where necessary.

Policy Description

Money Laundering and financing terrorism are financial crimes with economic effects. This policy is to eradicate the adverse effects of criminal economic activity and promotes integrity and stability in financial markets. Compliance with this policy is also critical to preserving the Company’s corporate integrity, reputation, and operational efficiency.

The purpose of this Policy is:

1. To guide the standard of conduct and practice that CVI Trade Group must follow in implementing the AML, KYC, and CFT regulations.
2. To protect the Company against fraud, reputational and other financial market risks.
3. To minimize the risks faced by the Company from proceeds of crime.
4. To prevent money laundering and establish ERM systems to monitor the Company’s exposure to financial crime.

Compliance with Policy

The Company shall comply with the following:

• Formulate and implement internal controls and other procedures that will deter criminals from using its facilities for money laundering and terrorist financing and ensure that its obligations and subsisting laws and Regulations are met.
• Embark on Enterprise Risk Management (ERM) and maintain an ERM register.
• Designate a Money Laundering Reporting Officer (MLRO) with the relevant competence and independence to implement the Company’s AML/KYC compliance policy.
• Comply with the Money Laundering (Prohibition) Act, the Money Laundering (Prohibition) (Amendment) Act (together, the Money Laundering Act) and the Economic and Financial Crimes Commission Act.
• Identify and report any suspicious transactions from the criminal activities defined in AML/KYC Regulations.
• Ensure the implementation of the AML/KYC Act requirements is not inhibited through the Company’s Confidentiality Agreement or Policy.
• Effectively communicate and raise staff awareness on AML/KYC issues.
• Establishing and maintaining a risk-based approach to assessing and managing money laundering and terrorist financing risks.

Know Your Client

KYC is the due diligence that the Company must perform to identify their clients and ascertain relevant information before carrying out any investment or financial businesses with them. The Company, in upholding its KYC policies, shall undertake the following:

• Establishing and maintaining a risk-based approach to Customer Due Diligence (CDD), Enhanced Due Diligence (EDD), including customer identification, verification, and KYC procedures.
• Issue a KYC compliance form to clients.
• Obtain the necessary documents and information from every client.
• Report suspicious activities and transactions to the regulatory authorities.
• Update client information as and when available.
• Identify the client and verify the client’s identity using reliable, independent source documents (e.g. passport data page, national ID card, stating their current postal address, etc.), data, or information.
• Conduct due diligence for higher-risk clients, business relationships, or transactions including PEP, cross-border transactions, and business relationships.

Record Keeping and Reporting

The Company shall keep the record of a customer’s identification for at least three years after the closure of the account or the severance of relations with the customer.

Upon request by a regulatory or law enforcement agency, the Company shall make available records related to AML/CFT compliance or its clients as soon as possible from the date of the request.

If the company notices any illegal transaction, it shall:

• Draw up a report on the identity of the principal and the beneficiary or beneficiaries.
• Take appropriate action to prevent the laundering of the proceeds of criminal conduct.

Politically Exposed Persons (PEPs)

Business relationships with family members or close associates of PEPs involve reputation risks similar to those PEPs themselves. The Company shall evaluate the risks to its business operations when dealing with PEPs.

Sanctions

A breach of the AML/CFT is a severe offense and could lead to investigations, imposition of fines, and criminal sanctions (including imprisonment).