MODULE 3-Anti-Money Laundering & Countering of Terrorist Financing

At the end of this course you should have an awareness and general understanding of Anti Money Laundering (AML) and Countering of Terrorist Financing (CFT). It explains Money laundering, Terrorist Financing, and provides and overview of the legislative requirements that must be adhered to by Massy United Insurance Limited (Massy United).

As Massy United work towards limiting any financial activities that may lead to ML & TF, we highlight the use of Knowing Your Customer (KYC) & Knowing your Employee (KYE) to mitigate this risk.

Here we introduce the KYC & KYE requirements of Massy United with focus and emphasis on the Source of Funds requirement and Customer Due diligence verification process.

Money Laundering (ML) & Terrorist Financing (TF)

Definition of Money Laundering

Video- MBA Online- Money Laundering: https://www.youtube.com/watch?v=1ObJPaSZxCs

As highlighted by the preceding video, Money laundering is the process by which criminals attempt to hide and disguise the true origin and ownership of the proceeds of their criminal activities.  This definition covers a wide range of activity and you need to understand how people launder money so that you can identify money laundering and know how to help prevent it.

Criminal Activities include:

  1. Kidnapping
  2. Drug Trafficking
  3. Bribery
  4. Corruption
  5. Tax evasion
  6. Extortion
  7. Forgery
  8. Smuggling of: Arms/People/Good
  9. White Collar Crimes (Insider Trading)
  10. Robbery

Example 1: Courtesy the Trinidad Guardian Online- Fifa corruption: Documents show details of Jack Warner 'bribes' (2015)

A BBC investigation has seen evidence of the $10m sent from Fifa to accounts controlled by former vice-president Jack Warner.

The funds, sent on behalf of South Africa, was meant to be used for its Caribbean diaspora legacy programme. But documents suggest Mr Warner used the payment for cash withdrawals, personal loans and to launder money. In the three transactions - on 4 January, 1 February and 10 March 2008 - funds totalling $10m (£6.5m) from Fifa accounts were received into Concacaf accounts controlled by Jack Warner. Reports revealed that JTA Supermarkets, a large chain in Trinidad, received $4,860,000 from the accounts.

The money was paid in instalments from January 2008 to March 2009. The largest payment was $1,350,000 paid in February 2008. US prosecutors say the money was mostly paid back to Mr Warner in local currency.

  (Full Report: http://www.guardian.co.tt/news/2015-06-07/fifa-corruption-documents-show-details-jack-warner-bribes )

 

Example 2: Courtesy Stabroeknews Online-Pilot held with US$620,000 has private hangar at Timehri (2014)

The aircraft on which US$620,000 was found in Puerto Rico last week was registered in the United States but it was based in a private hangar at the Cheddi Jagan International Airport (CJIA), Timehri owned by businessman/pilot implicated in the haul, Kem Khamraj Lall.

Lall, who is also a businessman and owns a gas station in Guyana, is now detained in a Puerto Rican jail following his initial court appearance before Magistrate Judge Marcos E. Lopez. During the hearing he was provided with a copy of the complaint and another hearing was set for December 1st where it would be determined whether Lall, a US citizen, was to remain in custody.

The charge against Lall reads that he knowingly concealed more than US$10, 000 in currency; to wit over US$600,000 and other monetary instruments in a plastic trash bag covered with a blanket under an exit seat of the plane and in an article of luggage, and attempted to transport and transfer such currency and monetary instruments from San Juan, Puerto Rico, a place within the US, to Guyana.

(Full Report: http://www.stabroeknews.com/2014/news/stories/11/27/pilot-held-us620000-private-hangar-timehri/)

 

How Money Laundering Works

There are countless ways to launder money. Generally, it can be broken down into three stages:

STAGE 1: PLACEMENT – the initial entry of illicit money into the financial system

  • The Placement stage is the most challenging stage of the laundering process, at this stage the launderer can be caught trying to get rid of their illicit proceeds.  Some methods used are loan repayment, currency exchange and gambling. An example of the placement stage is Smurfing.
  • Smurfing/Structuring: This is the process of breaking up the transaction into smaller amounts. For example: A Source of Funds Declaration Form must be completed for all transactions over the threshold (TT$90,000). The launderer will try to circumvent this process by breaking up the transaction into smaller amounts and finding persons who would assist in this process. (The TT$90,000 would now be 10 transactions at TT$9,000 each).

STAGE 2: LAYERING – the process of separating the funds from their source

  • The Layering stage is most complex, the launderer attempts to confuse the original source of the funds, in many instances money service businesses are used to transfer these funds to other countries in an attempt to confuse the money trail.

STAGE 3: INTEGRATION – the money is returned to the criminal from legitimate-looking source.

  • The Integration stage is when the funds are being converted to what appears to be a legitimate business.  After the launderer is successful in placing the money into the financial system and confusing the process by layering, they can now do what appears to be everyday business.
  • MONEY LAUNDERING PROCESS:

 

Terrorist Financing

Terrorist financing

Definition: Terrorist financing is the provision of financing for terrorist activity. This may involve legitimate funds, such as personal donations, subscriptions and profits from businesses and charitable organizations, as well as funds from criminal sources, such as the drug trade, the smuggling of weapons and other goods, fraud, kidnapping and extortion.

Terrorist activity involves acts that use or threatened use of violence (terror) in order to achieve a political, religious, or ideological aim.

Terrorist activities include:

Bombings are the most common type of terrorist act. Typically, improvised explosive devices are inexpensive and easy to make. Modern devices are smaller and are harder to detect. They contain very destructive capabilities; for example, on August 7, 1998, two American embassies in Africa were bombed. The bombings claimed the lives of over 200 people, including 12 innocent American citizens, and injured over 5,000 civilians.
 
2. Armed Attacks and Assassinations
3. Hijackings and Skyjackings
3. Cyberterrorism is a new form of terrorism which allows terrorists to conduct their operations with little or no risk to themselves.
4. Kidnappings and Hostage-Takings 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

With the spate of terrorist attacks around the world, countering terrorism financing has become a major focus of governments, regulators and financial entities- like Massy United. It encompasses all efforts put in place to stop the financing of terrorism. It also provides terrorists an opportunity to disrupt or destroy networks and computers. The result is interruption of key government or business-related activities.

 

 

Unlike money laundering which is always preceded by an unlawful activity, TERRORISM MAY ALSO BE FINANCED FROM THE PROCEEDS OF LEGAL ACTIVITIES; such as humanitarian organisations, various associations, donations. This makes detection of terrorist financing very difficult, even more so if we bear in mind the fact that transaction amounts involved in terrorist financing often tend to be smaller than the amounts that under law have to be reported under money laundering. As the measures taken to prevent money laundering are not sufficient in the fight against terrorist financing, they have to be supplemented by special measures prescribed by competent international bodies.

  1. Bombings

How Terrorist Financing Works

NOTE:  the acquisition of goods and funds can be from legal or illegal activities.

Similarities & Difference between ML & TF

Money Laundering and Terrorist Financing are linked. For both the nature of funded activity and the funding activity are concealed. 

 On the other hand, the major differences in ML & TF are highlighted below:

Difference between Money Laundering & Terrorist Financing

MONEY LAUNDERING

TERRORIST FINANCING

The source of funds tends to be illicit

The source of funds may be licit or illicit

It’s purpose is not to increase profit or maintain it but rather to hide and disguise the source.

It has an ideological purpose

It’s used to hide the illicit source of funds

It’s used to finance illicit activities

SOURCE of funds must be verified

The DESTINATION of the funds must be verified

PREVENTION: KNOW YOUR CUSTOMER

PREVENTION: KNOW YOUR CUSTOMER

 

NOTE

 

 

NOTE 1:

 

NOTE 2:

NOTE 3:

Place the stages of Money Laundering in the Correct order:

  • STAGE 1
    PLACEMENT
  • STAGE 2
    LAYERING
  • STAGE 3
    INTEGRATION

Legislation

History of  AML/CFT & the FATF

VIDEOS

History of Money laundering  AFP Video: https://www.youtube.com/watch?v=-8OWQdTfLcw

TF & AML Regulations https://www.youtube.com/watch?v=7Ldx2EVYnJI

The Financial Action Task Force (FATF), an inter-governmental body was established in 1989 to set standards and promote effective implementation of legal, regulatory and operational measures for combating money laundering, terrorist financing and other related threats to the integrity of the international financial system. 

The FATF issued 40 Recommendations which are recognized as the standards for AML/CFT legislations internationally.

These Forty (40) recommendations are used by countries all around to world to develop their AML/CFT framework.  This is the reason why AML/CFT laws from different jurisdictions are similar.

It serves to ensure that the world speaks with one voice in response to the scourge of money laundering and terrorism.

The FATF on a quarterly basis issues an advisory on countries with strategic AML/CFT deficiencies. These advisories are placed on the Global server for staff to review. Careful review is made for our policyholders from these territories and when funds are also wired to these countries. A copy of the March 2016 Advisory can be seen in the picture below.

 

 

Trinidad & Tobago AML/CFT Legislation

 

In Trinidad and Tobago, there are various legislation that provide the necessary guidance and set rules to deal with AML & CFT. These legislations (and their subsequent amendments) include:

  1. Proceeds of Crime Act (POCA)
  2. Anti-Terrorism Act (ATA)
  3. Financial Obligations Regulations (FOR)
  4. Financial Intelligence Unit of Trinidad and Tobago Act

The legislation also outlines the penalties and fines that companies and individuals are subject to once prosecuted. For example:

 BRIEF DESCRIPTION OF THE OFFENCE          

RELEVANT LAW

 PENALTY        

Money Laundering ‐ the offence includes concealing, disguising, transferring, receiving, bringing into or removing from T&T money or other property knowing or suspecting that the money or other property was obtained from a specified offence

 S. 29, POCA‐A

 25 Million & 15 years imprisonment on indictment

Tipping Off – disclosing information to any other person knowing that the matter is subject of investigation or proposed investigation

S. 29, POCA‐A  

 5 Million & 5 years imprisonment on summary conviction

Failure to report complex, unusual large transactions to the FIU

 S. 57 (1), POCA               

 500K and 2 years imprisonment on summary conviction; 3 Million & 7 years imprisonment on indictment

Failure to make a suspicious transaction or suspicious activity report to the FIU

 S. 57 (1), POCA               

 500K and 2 years imprisonment on summary conviction; 3 Million & 7 years imprisonment on indictment

 

The Compliance Programme provides a comprehensive listing of the applicable legislation and the subsequent amendments. The Programme is always updated to incorporate these changes. The Complaince Programme can be found on the Global Server, in the Compliance Folder: N:\COMPLIANCE.

 

THE FIU & CBTT

There are two Regulatory Bodies that ensure Massy United complies with the applicable legislation. They are the; Financial Intelligence Unit (FIU), Central Bank of Trinidad and Tobago (CBTT)

1. Financial Intelligence Unit (FIU)-

The FIU is the primary institution that collects financial intelligence information, analysis, dissemination, and exchange on all money laundering and terrorist financing activities. They maintain comprehensive statistics on-

  1. Suspicious transaction or suspicious activity reports within 14 days of the date of the activity.
  2. Money laundering investigation and convictions;
  3. Property frozen, seized and confiscated; and
  4. International request for mutual legal assistance or other co-operation.

A suspicious transaction (mentioned above) is a transaction which gives rise to a reasonable suspicion that it may involve the laundering of money or the proceeds of any crime; or funds linked or related to, or to be used for, terrorism or acts of terrorism, whether or not the funds represent the proceeds of a crime:

  •   An unusually large and complex transaction, whether completed or not;
  •  A transaction which is made by or on behalf of a person whose identity has not been established to the satisfaction of the person with whom the transaction is made;
  •  A transaction which gives rise to reasonable suspicion; and
  •  Unusual patterns of transactions and insignificant but periodic transactions which have no apparent economic or visible lawful purpose;

Red Flags that may give rise to a suspicious activity include:

  •  Customers who are reluctant to provide identifying information when purchasing a product, or who provide minimal or seemingly fictitious information and/or suspicious or fraudulent documents or ID.
  • Delay in providing or failure to provide information to enable verification to be completed.
  •  Clients who avoid direct contacts with employees, collaborates or the intermediary entity through frequent unjustified issue of mandates or powers of attorney.
  •  Applicant provides information that is difficult or expensive for the institution to verify.
  •  The applicant for insurance business uses a mailing address outside the jurisdiction and where during the verification process it is discovered that the home telephone has been disconnected.
  • Media reports of illegal activity.
  • Abnormal business requests.
  • Any transaction involving an undisclosed party.
  • Customers who show little concern for the investment performance of a product, but a great deal of concern about the early termination features of the product, including “free look” provisions.

 

2. Central Bank of Trinidad and Tobago (CBTT)

The Financial Obligations Regulations 2010 (FOR) names the CBTT as a Supervisory Authority for the financial institutions that it regulates. The CBTT regulates Massy United.  As such, the CBTT is responsible for ensuring that Massy United complies with the applicable legislation listed above. Part of its regulatory function, the Central Bank issues Guidelines and Circular letters which provide guidance to the industry in respect of anti-money laundering and combating the financing of terrorism on processes, systems and other practices to ensure compliance with the legislation.

 

 

 

What is the purpose of AML/CFT Legislation?

  • To clean dirty money.
  • To Identify and report criminal activity
  • To detect and deter Money Laundering & Terrorist Financing
  • To protect your computer from viruses.

Prevention of ML/TF

Customer Due Diligence

Customer Due Diligence

The most effective way to prevent money laundering and terrorist financing is during the new customer account opening process or the initial on boarding, this is when one decides if to accept or reject a customer.

Customer Due Diligence (CDD) is the process of Knowing Your Customer (KYC) before you enter into a business relationship with him or her.

Knowing Your Customer informs you of the potential risks that Massy United may face from the customer. 

How can you successfully Know Your Customer?

You can know your customer through:

 

CDD- Identification & Verification

IDENTIFICATION & VERIFICATION

The POCA, FOR and Massy United’s COMPLIANCE PROGRAMME clearly identifies the required documents to be submitted by our customers. For example:

Regulation 15 of the FOR states that the insurance company shall, on initiating a business relationship or transaction with an applicant, obtain the relevant identification records of the applicant as follows:

(a) Full name of the applicant

(b) address of the applicant

(c ) date and place of birth;

(d) nationality;

(e) place of business/occupation where applicable;

(f) occupational income where applicable;

(g) signature;

(h) purpose and intended nature of the proposed business relationship or transaction and source of funds, etc.

The KYC information is clearly outlined on Massy United’s KYC Forms. Customers are required to complete this form in its entirety and submit the documents to support the information completed on the form.

Example of a completed  Individual KYC FORM (note all the fields are completed):

Along with the completed Form, copies of the supporting documentation must be clear when reviewed. The customers face on the ID must be visible.

For example of accurate documentation

 

YES (ACCURATE & CLEAR COPY).

 

 

 

NO (ANOTHER COPY OF THIS ID NEEDS TO BE TAKEN OR REQUESTED FROM THE BROKER!

 

At a minimum for New Direct customers, Massy  United requires a completed KYC Form and one form of ID (Drivers’s permit, National ID, Passport).

During the customer verification process, the information on the KYC Form must support the documentation on the form.

For example:

 

 

Massy United Trinidad Requirements ID & Verification

Massy United's Compliance Programme clearly identifies the requirements for new and renewal customers. In addition, a summary of the documentation required is available on the global server. It is separated into:

  1. Individuals & Non-corporate customers- N:\COMPLIANCE\KYC Requirements Individuals & Non Corporate.pdf
  2. Corporate customers: N:\COMPLIANCE\KYC Requirements Corporate.pdf

Example: Additional details found on the global server

Customer Risk Assessment

There are circumstances where the risk of money laundering or terrorist financing is higher. Once it is higher Enhanced Customer Due Diligence Measures have to be taken. On the other hand, there are instances where the risk may be lower and simplified due diligence measures are carried out.

Things to consider when assessing the money laundering and terrorist financing risks;
 

  1. Types of customers
  2. Type of insurance product
  3. Premium amount
  4. Sum insured amount
  5. Customer’s country (of birth/location) or geographic areas- For example, a person who is a citizen of a country which is considered high risk. High risk countries are those outlined in the FATF advisory.
  6. Type of transaction or delivery channels.

              

The Compliance Programme identifies customer by Risk Types: High, Medium & Low.

NOTE: High risk here means a customer has a higher probability of ML & TF. It does not mean that they are Money Launders or Terrorist Financiers. In addition, the based on the rating of the customer, the type of CDD process will vary:

  1. High Risk customer undergo Enhance Due Diligence (EDD).
  2. Medium Risk customers undergo Standard due diligence.
  3.  Certain Low Risk customers undergo Simplified Due Diligence (SDD).

These will be discussed further but are clearly outline in the Compliance Programme.

 Massy United Compliance Programme risk rating:

PEP

Customer Type- Politically Exposed Persons (PEP)

PEP- Politically exposed persons are local and foreign individuals who are or have been entrusted with prominent public functions, e.g., Heads of State or of government, senior politicians, senior government, judicial or military officials, senior executives of state owned corporations and important party officials who are or have been entrusted with prominent functions. (For example the Prime Minister of Trinidad & Tobago).

The immediate family member of a PEP; parents, siblings, spouse and children are also PEPs. A close associate of a PEP is also considered a PEP. In addition, any individual who is widely and publicly known to maintain a close personal relationship with a PEP is considered a PEP.

For the High risk (customers, products etc)- Enhance Due diligence (EDD) is carried out. EDD requires additional steps to customer due diligence for customers such as Politically Exposed Persons(PEP) or any customer whose business activity, ownership structure which are complex or unusual.

For example:

An individual PEP who applies for a Massy United Product must submit:

  1. KYC Form
  2. PEP Form
  3. Two Forms of ID
  4. Proof of Income
  5. Proof of Address

In addition to this Assessment of the policy is carried out by the Compliance Officer and/or Alternate, with the General Manager accepting the risk of the policy by signing off on the Compliance Assessment.

 

Low Risk & Simplified Due Diligence (SDD)

Simplified Due Diligence (SDD) is the lowest level of due diligence that can be completed on a customer. The use of simplified due diligence is appropriate where there is little opportunity or risk of your services or customer becoming involved in money laundering or terrorist financing. Regulation 14 of the Financial Obligations Regulations identify the customers that fall into this category:

  1.  a public authority- example WASA, T&TEC
  2.  a public company listed on the Trinidad and Tobago Stock Exchange- example Angostura Holdings
  3.  a financial institution regulated by the Central Bank or the Trinidad and Tobago Securities and Exchange Commission- example RBC, RBL, FCB, UTC
  4.  a customer where lower risks have been identified either through a national risk assessment or where a national risk assessment does not exist, through an adequate analysis of risk by the financial institution or listed business- example all Massy Ltd Companies & Massy group of Companies staff.

 

For these customers less KYC information is requested. For example, for a Massy United employee purchasing car insurance, they are only required to provide:

  1. Completed KYC Form
  2. Copy of ID
  3. Proof of address

For the individuals who are subject to SDD, the proof income (and SOFD if applicable) is not required.

Prohibited Customers

The goal of Massy United is to mitigate the ML & TF risk. As a result, Massy United will NOT do business with customers where the CDD process cannot be completed and the KYC information cannot/will not be verified.

As outlined in the Compliance Programme, the TYPES of customers to avoid:

  1. Where you cannot establish their identity
  2. Shell banks is a financial institution that does not have a physical presence in any country.
  3. Anonymous accounts
  4. People designated as terrorist by the UN
  5. Anonymous or fictitious names
  6. Casinos
  7. Online Gaming
  8. Customers residing or conducting in countries where identified as having strategic AML/CFT deficiencies by the FATF (please note that this will change from time to time).

Massy United should not enter into any business transactions with these entities.

Source of Funds/Wealth Verification

The Source of Funds/Wealth Verification is an important part of the CDD process as it is critical to understand the source of your customer’s funds. That is where the customer obtained the funds to purchase insurance with Massy United. This is is an important step in the customer due diligence process you need to be sure that the funds being deposited into Massy United accounts are coming from a legitimate, non-criminal source. (Similarly for funds being wired out of  Massy United, we have to ensure the funds are not being utilized to finance terrorist activities).

 For premium over specific thresholds, a Source of Funds Declaration Form SOFD must be completed. The thresholds identified in the legislation are included in the Compliance Programme.

The Financial Obligation Regulation identifies the following thresholds:

1.      a one- off transaction or occasional transaction more than or equal to TT$90,000,

2.      a one- off transaction or occasional transaction more than or equal to TT$6,000 in the case of wire transfer;

3.      two or more one-off transactions which appear to be linked but which together total TT$90,000 or greater; or

4.      two or more one-off wire transfers which appear linked but which total less than TT$6,000.”

5.      for Members’ club registered under the Registration of Clubs Act and such persons licensed under the Gambling and Betting Act shall submit SOFD for:

(a)   one- off transaction or occasional transaction of more than or equal to TT$18,000

(b)   two or more one-off transactions which appear to be linked but which together total TT$18,000 or greater

The Source of Funds Declaration Form (“SOFD”) will be filled out for transactions identified above and the cash limit specified by MUIL:

  1. cash payments greater than or equal to TT$15,000.00

The completed SOFD are reviewed and assessed by the CO and/or ACO.

Note: The SOFD should be completed by the policyholder and not the Broker.

  • If the customer is subject to Simplified Due Diligence (e.g. Massy Properties), then a SOFD is not required.

Example 1.

A customer insures his fleet of vehicles with Massy United totalling TT$50,000. Two weeks later he insures his properties with Massy United totalling TT$50,000. The Total premium amount received by Massy United for this customer is for TT$100,000. Therefore, a SOFD must be completed.

Customers are required to declare the origin or source of their funds by completing and signing the document.

The SOFD must provide the “full story” of the source of the customer’s wealth to purchase the insurance.

 

Example 2.

Customer A, insures his BMW with Massy United. His premium amount is $20,000. He opted to pay his premiums in cash. This cash amount is greater than the $15000 cash limit advised in the Compliance Programme. Thus, a SOFD must be completed.

On the form, Customer A states that a property was sold to obtain cash for the insurance purchase. For completion, the declaration must also contain the location of the property, to whom it was sold and the amount it was sold for.

Example of a completed Massy United SOFD:

Know Your Employee (KYE)

Know Your Employee (KYE)

Massy United must use the best practices of the industry in its recruitment policy as required by the FOR 2010. This refers to the aim of acquiring and retaining staff of the highest levels of integrity and competence. Every applicant’s identity and qualifications must be verified and copies of all documents must be maintained. This means that MUIL must ensure that every applicant’s experience, education and professional qualifications are valid. MUIL may also request additional documents for certain positions in the office, for example a Police Certificate of Good Character. Ensuring that the employee doesn’t have a criminal background is pertinent & checking references assist to make certain that all the information provided is true.

After being hired, ongoing due diligence must be upheld to be certain that employee information remains current. 

Apart from file maintenance, there must be ongoing monitoring of employees for any suspicious behaviour.

Suspicious Employee Activity:

  • Employee exaggerates or falsifies credentials, background or financial ability
  • Employee is involved in an excessive number of unresolved exceptions and breaches of policy
  • Employee lives a lavish lifestyle that cannot be support by their salary
  • Employee frequently overrides internal controls or established approval authority or circumvents policy
  • Employee uses company resources to further private interests
  • Employee assists transactions where the identity of the beneficiary or counter party is undisclosed
  • Employee avoids taking periodic vacations
  • Refusal of a change in responsibility such as a promotion
  • Refusal to comply with disclosure and other AML/CFT requirements

Some more specific cases:

  1. Staff on sick leave but working elsewhere.
  2. Corporate information supplied to outsiders for personal gain. (Employee being paid to provide company data to an external company)
  3. An employee submitting false travel claims
  4. In fall 2006, a 47 year old woman was sentenced to three years in the penitentiary after pleading guilty to 12 fraud-related charges. The charges concerned the misappropriation of more than $100,000 from various businesses, including former employers and two group benefits providers. The group insurance portion of the money obtained fraudulently was taken between 1999 and 2005 when the woman submitted false claims using receipts that she altered or created. Evidence gathered through Manulife’s investigation contributed to the conviction for fraud.
    This serious penalty was partially influenced by the woman’s previous conviction for similar crimes. The victims of this behaviour are many and the costs are borne by the insurance company, the employer, and the employees. The end result of benefits plan fraud is higher premiums or reduced benefits, or in some cases, the complete loss of an affordable benefits program.
  5. Joseph Winstead, a Washington, D.C., postal worker, managed to bilk the USPS out of close to $40,000 in unearned wages over a total of 144 days by claiming he was serving jury duty on an extended federal trial. (The USPS worker fabricated court paperwork to support his reimbursement because he was excused before the deliberations began.)
    He would’ve gotten away with it if he didn’t try his luck again — three years later. After a supervisor caught on, Winstead plead guilty to fraud — in the same federal courthouse where he claimed to have spent over 100 days fulfilling his civic duties

 

Useful KYE links:

http://www.managementstudyguide.com/how-to-know-your-employees.htm

Massy United's & Your Personal Responsibility to AML/CFT

Massy United & Your Role

 

MASSY UNITED does not, and will never knowingly participate in money-laundering and terrorist financing activities with any individual or business.

In Massy United, the Compliance Officer-CO (and/or the Alternate Compliance Officer-ACO) acts as the liaison between Massy United and its regulators. It is the CO/ACO who reports to, and receives all requests from the CBTT and the FIU. The identity of the CO & ACO must remain in strictest confidence and never shared with individuals outside of Massy United.

It is the role of all MASSY UNITED staff to make a reasonable effort to determine the true identity of the customers purchasing MASSY UNITED products. Massy is required to:

  1. Report quarterly to the FIU on the terrorist assets that may have resulted from an insurance transaction
  2. Be audited annually for compliance with AML/CFT legislation, guidelines and best practices. These reports are provided to the CBTT for assessment.
  3. Report ML/TF activities to ensure that, in the event of a suspicious activity being discovered, all staff are aware of the reporting chain and the procedures to follow.
  4. Provide suspicious activity reports to the FIU within 14 days of the date of the transaction.
  5. Maintain records for all customer transactions for a period of 6 years after the relationship has ended.

MASSY UNITED employees are required to adhere to all legislation, guidelines and the requirements outlined in MASSY UNITED’s Compliance Programme (CP). The CP is Massy United’s policy and procedures for all things on AML & CFT. It is maintained on the Global server & updated regularly by the CO.

 

 

 

Suspicious Activity Reporting & Tipping off

As an employee of Massy United, suspicious activities must be reported to the Compliance Officer and or Alternate Compliance Officer (CO/ACO) within 3 days of the suspicious activity. Failure to report is a breach of POCA and can result in fines for you and Massy United. The steps that must be followed by all staff is as follows:

The following steps are to be complied with at Massy United Insurance: 

  • Any member of staff who suspects or has reasonable grounds to suspect  that funds are the proceeds of criminal activity including but not limited to illegally obtained funds from fraud, theft, tax evasion, bribery, corruption or terrorist activity, the member of staff has a duty to report this to the CO/ACO.
  • Once a transaction has been identified as ‘suspicious’, the Member of Staff concerned must file an Internal Suspicious Activity Report with the Compliance Officer within three (3) business days under confidential cover following discussions with their direct Supervisor. The Form is found on the global server. Copies are also available from the CO/ACO.
  • The Compliance Officer shall consider any such report and commence investigation of the report in the light of all other relevant information, for the purpose of determining whether or not the information or other matter contained in the report gives rise to a suspicion of money laundering or criminal activity within five (5) business days of receipt of the report.
  • Where staff continues to encounter suspicious activities on a policyholder account which they have previously reported to the Compliance Officer, they should continue to make reports to the Compliance Officer with any further suspicious transactions.
  • Staff should NEVER tip off customers who have had transactions that are deemed suspicious.

Tipping off occurs where the staff member knows or suspects that a disclosure has been made to the CO/ACO, a police officer or the FIU and he discloses to this to the customer, or another person which is likely to prejudice any investigation which may be conducted or is ongoing.  Section 51 of the POCA prohibits Tipping off.

NOTE

  1. THE IDENTITY OF THE COMPLIANCE OFFICER & ALTERNATE OFFICER MUST REMAIN IN STRICTEST CONFIDENCE AND NEVER SHARED WITH INDIVIDUALS OUTSIDE OF MASSY UNITED.
  2. Report suspicious Activity:
  3. You have 3 days (from the date of the suspicious transaction) to complete the iSAR Form.

 

How long must Massy United maintain customer records?

  • 6 years
  • 6 years after the relationship with the customer has ended
  • 7 years
  • 7 years after the relationship with the customer has ended

Useful Links

Global Server

All things Compliance can be found in the Global Server: N:\COMPLIANCE. The folder contains:

  1. Compliance Programme & Training  (N:\COMPLIANCE\Compliance Programme & Training)
  2. Applicable Legislation  (N:\COMPLIANCE\Legislation)
  3. Compliance Forms   (N:\COMPLIANCE\FORMS)
  4. Memos & Newsletters (N:\COMPLIANCE\Newsletters & Memo

NOTE: The Compliance Newsletter on Suspicious Activity Reporting can also found on the server N:\COMPLIANCE\Newsletters & Memo.

CBTT & FIU

The Central Bank of Trinidad & Tobago's website contains guidance on AML/CFT. This can be found using the link: http://www.central-bank.org.tt/content/amlctf-legislation-and-regulations.

Similarly the Financial Intelligence Unit's website contains the all applicable AML/CFT guidance similar to the CBTT. This can be found using the link: http://www.fiu.gov.tt/.

Know Your Employee (KYE)

Useful Link to KYE:

http://www.managementstudyguide.com/how-to-know-your-employees.htm