ANTI MONEY-LAUNDERING

ANTI MONEY-LAUNDERING

CIP CALIPSO

ANTI MONEY-LAUNDERING (AML)

And

KNOW YOUR CUSTOMER (KYC)

POLICY

I. AML Policy and definitions It is the policy of CIP CALIPSO ( hereinafter the „Company“) and its affiliates, to prohibit and actively pursue the prevention of money laundering and any activity that facilitates money laundering or the funding of terrorist or criminal activities. Company is committed to AML compliance in accordance with applicable laws of jurisdictions where Company is registered. COMPANY requires its officers, employees and affiliates to adhere to these standards in preventing the use of its products and services for money laundering purposes. For the purposes of the Policy, money laundering is generally defined as engaging in acts designed to conceal or disguise the true origins of criminally derived proceeds so that the unlawful proceeds appear to have been derived from legitimate origins or constitute legitimate assets. Generally, money laundering occurs in three stages.

  1. 1. Cash first enters the financial system at the “placement” stage, where the cash generated from criminal activities is converted into monetary instruments, such as money orders or traveler’s checks, or deposited into accounts at financial institutions.
  2. 2. At the “layering” stage, the funds are transferred or moved into other accounts or other financial institutions to further separate the money from its criminal origin. 3. At the “integration” stage, the funds are reintroduced into the economy and used to purchase legitimate assets or to fund other criminal activities or legitimate businesses.

Terrorist financing may not involve the proceeds of criminal conduct, but rather an attempt to conceal the origin or intended use of the funds, which will later be used for criminal purposes.

Each employee of COMPANY, whose duties are associated with the provision of products and services of Company and who directly or indirectly deals with the clientele of COMPANY, is expected to know the requirements of the applicable laws and regulations which affect his or her job responsibilities, and it shall be the affirmative duty of such employee to carry out these responsibilities at all times in a manner that complies with the requirements of the relevant laws and regulations.

To ensure that this general policy is carried out, management of the Company has established and maintains an ongoing program for the purpose of assuring compliance with the relevant laws and regulations and the prevention of money laundering. This program seeks to coordinate the specific regulatory requirements throughout the group within a consolidated framework in order to effectively manage the group’s risk of exposure to money laundering and terrorist financing across all business units, functions, and legal entities.

II. Risk Assessment

An assessment of the risk of exposure to money laundering issues across all customer relationships shall be completed using the COMPANY standardized risk rating model. Each user has his own „risk rating“, which is not public. When a user's risk rating is unusual, it is required to take necessary measures – to declare a source of funds by user or blacklist the user and close his account by Company.

III. Suspicious Activities

There are signs of suspicious activity that suggest money laundering. These are commonly referred to as “red flags.” If a red flag is detected, additional due diligence will be performed before accepting client’s requests or providing services.

Examples of red flags are:

  • The customer exhibits unusual concern regarding the AML policies, particularly with respect to his or her identity, type of business and assets, or is reluctant or refuses to reveal any information concerning business activities or furnishes unusual or suspect identification or business documents.
  • The customer wishes to engage in transactions that lack business sense or apparent investment strategy or are inconsistent with the customer’s stated business strategy.
  • The information provided by the customer that identifies a legitimate source for funds is false, misleading, or substantially incorrect.
  • Upon request, the customer refuses to identify or fails to indicate any legitimate source for his or her funds and other assets.
  • The customer (or a person publicly associated with the customer) has a questionable background or is the subject of news reports indicating possible criminal, civil, or regulatory violations.
  • The customer exhibits a lack of concern regarding risks, commissions, or other transaction costs.
  • The customer appears to be acting as an agent for an undisclosed principal, but declines or is reluctant, without legitimate commercial reasons, to provide information or is otherwise evasive regarding that person or entity.
  • The customer has difficulty describing the nature of his or her business or lacks general knowledge of his or her industry.
  • The customer attempts to make frequent or large deposits of currency, insists on dealing only in cash equivalents.
  • For no apparent reason, the customer has multiple accounts under a single name or multiple names, with a large number of inter-accounts or third--party transfers.
  • The customer’s account has unexplained or sudden extensive wire activity, especially in accounts that had little or no previous activity.
  • The customer’s account shows numerous currencies or cashier’s check transactions aggregating to significant sums.
  • The customer’s account has a large number of wire transfers to unrelated third parties inconsistent with the customer’s legitimate business purpose.
  • The customer’s account has wire transfers that have no apparent business purpose to or from a country identified as money laundering risk or a bank secrecy haven.
  • The customer’s account indicates large or frequent wire transfers, immediately withdrawn by check or debit card without any apparent business purpose.
  • The customer makes a funds deposit followed by an immediate request that the money be wired out or transferred to a third party, or to another firm, without any apparent business purpose.
  • The customer makes a funds deposit for the purpose of purchasing a long--term investment followed shortly thereafter by a request to liquidate the position and transfer of the proceeds out of the account.
  • The customer engages in excessive journal entries between unrelated accounts without any apparent business purpose.
  • The customer requests that a transaction be processed in such a manner to avoid the firm’s normal documentation requirements.
  • The customer, for no apparent reason or in conjunction with other red flags, engages in transactions involving certain types of securities, such as penny stocks, bearer bonds, which although legitimate, have been used in connection with fraudulent schemes and money laundering activity. (Such transactions may warrant further due diligence to ensure the legitimacy of the customer’s activity.)

IV. Customer Identification

Company will document and maintain written customer identification procedures (hereinafter the “verification”) that will enable it to form a reasonable belief that the Company knows the true identity of its customers. When identification is required, the user is informed by the website before using the services of the Company. If the Company is not able to verify the identity of a customer within a reasonable period of time after services or account opening requests, that services shall be suspended, and the account will be closed. Such an account and services will be subject to increased due diligence until such time as the customer’s identity has been verified or the account has been closed and services suspended.

V. Verification and KYC process for Physical Persons For physical persons the following information should be obtained, where applicable:

  • Legal name and any other names used (such as maiden name).
  • Correct permanent address (the full address should be obtained. a Post Office box number is not sufficient).
  • Telephone number, fax number, and e--mail address.
  • Date and place of birth.
  • Nationality.
  • Passport/driving license or any other government document with photo and name
  • Occupation, public position held and/or name of employer.
  • An official personal identification number or other unique identifier contained in an unexpired official document (e.g. – passport, identification card, residence permit, social security records, driving license) that bears a photograph of the customer.
  • Source of wealth (where appropriate). Company shall verify this information by at least one of the following methods:
  • Confirming the date of birth from an official document (e.g. birth certificate, passport, identity card, social security records).
  • Confirming the permanent address (e.g. utility bill, tax assessment, bank statement, a letter from a public authority).
  • Contacting the customer by telephone, by letter or by e--mail to confirm the information supplied after an account has been opened or other services provided (e.g. a disconnected phone, returned mail, or incorrect e--mail address should warrant further investigation).

IV. Customer Identification

Company will document and maintain written customer identification procedures (hereinafter the “verification”) that will enable it to form a reasonable belief that the Company knows the true identity of its customers. When identification is required, the user is informed by the website before using the services of the Company. If the Company is not able to verify the identity of a customer within a reasonable period of time after services or account opening requests, that services shall be suspended, and the account will be closed. Such an account and services will be subject to increased due diligence until such time as the customer’s identity has been verified or the account has been closed and services suspended.

V. Verification and KYC process for Physical Persons For physical persons the following information should be obtained, where applicable:

  • Legal name and any other names used (such as maiden name).
  • Correct permanent address (the full address should be obtained. a Post Office box number is not sufficient).
  • Telephone number, fax number, and e--mail address.
  • Date and place of birth.
  • Nationality.
  • Passport/driving license or any other government document with photo and name
  • Occupation, public position held and/or name of employer.
  • An official personal identification number or other unique identifier contained in an unexpired official document (e.g. – passport, identification card, residence permit, social security records, driving license) that bears a photograph of the customer.
  • Source of wealth (where appropriate). Company shall verify this information by at least one of the following methods:
  • Confirming the date of birth from an official document (e.g. birth certificate, passport, identity card, social security records).
  • Confirming the permanent address (e.g. utility bill, tax assessment, bank statement, a letter from a public authority).
  • Contacting the customer by telephone, by letter or by e--mail to confirm the information supplied after an account has been opened or other services provided (e.g. a disconnected phone, returned mail, or incorrect e--mail address should warrant further investigation).

VI. Verification and KYC process for Institutions: The underlying principles of customer identification for natural persons have equal application to customer identification for all institutions. Where in the following the identification and verification of natural persons is involved, the foregoing guidance in respect of such persons shall have equal application. The term institution includes any entity that is not a natural person.

For corporate entities (i.e. corporations and partnerships), the following information should be obtained:

  • Name of institution.
  • Principal place of institution’s business operations.
  • Mailing address of institution. • Contact telephone and fax numbers.
  • Some form of official identification number, if available (e.g. tax identification number).
  • The original or certified copy of the Certificate of Incorporation and Memorandum and Articles of Association.
  • Nature and purpose of business and its legitimacy. This information should be verified by at least one of the following methods:
  • For established corporate entities – reviewing a copy of the latest report and accounts (audited, if available).
  • Conducting an enquiry by a business information service, or an undertaking from a reputable and known firm of lawyers or accountants confirming the documents submitted.
  • Undertaking a Company search and/or other commercial enquiries to see that the institution has not been, or is not in the process of being, dissolved, struck off, wound up or terminated.
  • Utilizing an independent information verification process, such as by accessing public and private databases.
  • Obtaining prior bank references.
  • Visiting the corporate entity, where practical.
  • Contacting the corporate entity by telephone, mail or e--mail.

VII. Client Activity Monitoring Transaction and activity monitoring must be undertaken throughout the course of the relationship held with the client to ensure that the transactions and activity being conducted are consistent with the clients KYC, their business, source of funds and source of wealth. The monitoring of complex, unusual and large transactions or unusual patterns of transactions must be examined and recorded in writing.

These examinations are based on the background and purpose of such transactions.

VIII. Control

In case of control which may be done at discretion of the Company (especially in case of Red Flag) is the Customer obliged to explain every step connected with the control. However, control may be done because of requirements of other (bank institutions parties) involved in transactions between the Company and Customer. In case that Company is checked by the bank institution for the transaction that has been made by the Customer, Company has no responsibility for how long time could this take. In case of control by third party (which may freeze the customers money – as any bank institution according the AML) when Customer refuse the Control (means to refuse to provide the source of funds or transaction purpose) and the Company will not be able to explain to the partner the required details of transaction, the money may be held by this third party until situation is explained. Customer accepts that the Company has no responsibility (because it has no instrument to change this) for these issues.

IX. Data Storage

The storage of customer due diligence (“CDD”), transaction documents, wire transfer records, internal and external suspicion reports and compliance monitoring reports are retained and stored electronically via a secured online storage facility. Each client has a folder created under their username. All KYC documentation and security check reports are saved in a sub folder for compliance documentation.

Documentation in regard to payment transactions is stored in a further sub folder for payments & reports.

Documentation can be retrieved from the online storage facility as and when required by the EBCG administrators and authorized users, via login details requiring a password for access to the data.