Anti-Money Laundering Compliance Guide

• Reports

• Recordkeeping

• Suspicious Transactions

• OFAC

• Patriot Act

© 2002-2006 MoneyGram

MoneyGramMoney Orders

MoneyGramMoney Transfers

Dear MoneyGram Agent:

The purpose of this guide is to help you and youremployees:

• Detect and prevent money laundering;• Comply with the Bank Secrecy Act’s (“BSA”) recordkeeping and reporting requirements;• Comply with the USA Patriot Act;• Identify suspicious activity; and,• Comply with the requirements of the Office of Foreign Assets Control (“OFAC”) and other anti-money laun- dering regulations.

Your knowledge of the information in this Guidemay help prevent your business from beingvictimized by money launderers, and help youcomply with the law. In addition, your compliancewith these requirements may help law enforce-ment agents in their effort to track down andcapture terrorists who illegally launder money.

It is MoneyGram’s policy to follow the spirit, aswell as the letter of the law. We do not want ourmoney orders, money transfers and other financialservices to be used for illegal purposes, and wewill not do business with anyone who knowinglyviolates the law. Although we cannot take respon-sibility for you or your employees’ compliancewith the anti-money laundering laws and regula-tions, we believe this Guide can help you developyour own effective compliance program.

MoneyGram thanks you for yourshared dedication to the fight against moneylaundering and terrorism.

WHY YOUSHOULD

READ THISGUIDE

2

Businesses and their employees who conduct money ordersales and money transfer transactions must comply withall anti-money laundering laws and regulations that applyto them.

Chapter I. Money Laundering Overview (page 5)Money laundering is the attempt to conceal or disguisethe nature, location, source, ownership, or control ofillegally obtained money. The government requiresbusinesses like yours to file reports and maintain records.

Chapter II. USA Patriot Act (page 6-9)You must implement an anti-money laundering programbased on the risks associated with your business, suchas size, location, volume of business, etc.

Chapter III. Recordkeeping (pages 10-11)You must record information regarding money orderpurchases and MoneyGram transactions greater than$3,000.

Chapter IV. Currency Transaction Report (“CTR”)(pages 12-14)You must file a CTR for any transaction greater than$10,000 in cash.

Chapter V. Structuring (pages 15-16)Structuring is the illegal act of breaking up a largertransaction that would normally have to be recorded orreported into smaller transactions in order to avoid therecordkeeping or reporting requirements.

Chapter VI. Suspicious Activity Reporting(pages 17-20)Suspicious activity involves transactions that appear tobe structured or do not have any legitimate purpose.

3

TABLE OF CONTENTS

You must file a Suspicious Activity Report by MoneyServices Business (“SAR-MSB”) whenever suspiciousactivity is attempted or occurs and it involves at least$2,000.

Chapter VII. OFAC and Other Reports (pages 21-22)The US Treasury Department’s Office of Foreign AssetsControl (“OFAC”) prohibits all US businesses from conduct-ing business with targeted countries, drug cartels, terroristsand other specially identified individuals.

All MSBs are required to register with the US TreasuryDepartment. However, most MoneyGram agents are coveredby MoneyGram’s registration, so they do not have to registeron their own. But all check cashers must register, even ifthey are an agent of MoneyGram.

Chapter VIII. Penalties (page 23)The government can impose severe penalties againstindividuals and businesses for violating money launderinglaws and regulations. These penalties can include fines,imprisonment, and loss of one’s business.

This Guide is not legal advice. If you need legaladvice, you should seek the services of an attorney.

4

Money laundering is the attempt to conceal ordisguise the nature, location, source, ownership, orcontrol of illegally obtained money.

This definition covers a wide range of activity. Youneed to understand how people launder money sothat you can identify money laundering and knowhow to help prevent it.

To help prevent the laundering of cash and toobtain documentation that may be used to prosecutemoney launderers, the government requiresbusinesses like yours to file specific reports andmaintain records on certain cash transactions.

WHO IS COVERED?

Because you sell money orders and/or moneytransfers, you are subject to the Bank Secrecy Act(“BSA”), the USA Patriot Act, OFAC and otherantimoneylaundering laws, and to their reporting andrecordkeeping obligations. The BSA requiresanyone doing business in one or more of thecapacities listed below to comply with these laws:A. A money transmitter;B. A seller of money orders, or stored value (otherthan a person who never sells such checks ormoney orders or stored value in an amount greaterthan $1,000 to any person on any day in one ormore transactions);C. A person engaged in the business of a checkcasher (other than a person who never casheschecks in an amount greater than $1,000 for anyperson on any day in one or more transactions).

All entities that are covered by the definitionsabove are known as “MSBs” which stands forMoney Services Businesses.

MSB =

MONEY

SERVICES

BUSINESS

5

CHAPTER IMONEY LAUNDERING OVERVIEW

The USA Patriot Act requires that all MSBs adopta written anti-money laundering program that isreasonably designed to ensure properrecordkeeping and reporting of certain transactions,and to prevent your business from beingused to launder money. Your anti-money launderingprogram must include, at a minimum, thefollowing:

A. Internal policies, procedures and controls for:• Verifying customer identification• Filing reports• Creating and retaining records• Responding to law enforcement requests

B. The designation of a compliance officer whois responsible for assuring:• Policies and procedures are followed• Procedures are updated as needed• Training and education are provided

C. An ongoing employee training program that:• Explains policies and procedures• Teaches how to identify suspicious activity

D. An independent review of your anti-moneylaundering program.• The review should take place as needed and beas thorough as needed based on the risksspecific to your business• The review may be performed by one of youremployees but can not be performed by yourcompliance officer.

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CHAPTER IIANTI-MONEY LAUNDERING PROGRAM

The information contained in this Guide willprovide your business with the tools it needs tobuild a compliance program that meets therequirements of the USA Patriot Act. However,the quality and effectiveness of the programdepends on your commitment to it. The onlyopportunity to verify customer information andidentify suspicious activity is at the point of sale.This can only be done with a knowledgeable,welltrained staff.

MoneyGram recommends the following stepsin order to satisfy the requirements of the USAPatriot Act:

First, your business should formally adopt ananti-money laundering program. This Guide canserve as the basis for that program. See AppendixI for a form that can be used to certify adoptionof such a program.

Second, your business must designate a Compli-ance Officer. The Compliance Officer may be anemployee who has other duties at your business,but it should be someone in a responsible position.The Compliance Officer is responsible foryour business’s day-to-day compliance with theanti-money laundering laws and regulations, andfor ensuring the compliance program is updatedas needed. The Compliance Officer is alsoresponsible for overseeing your business’songoing education and training program. Whenyou designate a compliance officer, you shouldcomplete the Designation of Compliance Officerform contained in Appendix II, and then retain it inyour anti-money laundering compliance files.

7

MSBS

MUST ADOPT

COMPLIANCE

PROGRAM

Third, your business must establish an em-ployee-training program for all employees who willhave any involvement with MSB activities. Theeducation and training should include instructionon the employees’ responsibilities under theprogram, as well as the detection of suspicioustransactions. One good tool for training is thisGuide. All employees should be required to readthis Guide prior to conducting any MSB transac-tions. In addition, prior to conducting any MSBtransactions, employees should sign a copy ofthe form in Appendix III that is then kept in theirpersonnel file. Employees should also receiveperiodic updates to their training, particularlywhen there are changes in regulations.

Fourth, your business must subject its anti-money laundering program to an independentreview to assure its adequacy. The regulationsstate that the scope and frequency of this reviewshould be “commensurate with the risk of thefinancial services provided by the money servicesbusiness.” Such a review should be doneannually, at a minimum. The review may beconducted by an officer or employee of yourbusiness, but it can not be conducted by theperson who is designated as the ComplianceOfficer. Once again, a form is provided in Appen-dix IV that can be used to help your businesscomply with this requirement.

Finally, it is important that you createrecordkeeping files for your anti-money launderingprogram. These files can then be readily ac-cessed if your business is examined/audited bystate or federal regulators. In addition to filescontaining the information described above, youshould have files that are clearly labeled andcontain the following:

8

TRAINING IS

ESSENTIAL

FOR AN

EFFECTIVE

COMPLIANCE

PROGRAM

A copy of this Guide in a file labeled “Anti-Money Laundering Compliance Program” alongwith any other compliance guides you mayreceive from other vendors, trade associations,accountants, lawyers, etc. These materialscan serve as the basis for your program. Thisfile should also contain a copy of thecompleted “Certification” form shown inAppendix I.

Multiple copies of the SAR-MSB form shownin Appendix VII in a file labeled “SAR-MSB”.This is also where you should maintain copiesof any “SAR-MSBs” that you file with the govern-ment, along with any supporting materials.(See Chapter VI for further information on theSAR-MSB.)

For CTRs, money order Logs, and MoneyGramsend and receive forms for transactions of$3,000 or more do the same as for SAR-MSBs.(See Chapters III and IV for further information onLogs and CTRs.)

A file for any OFAC reports you may submit, andany materials you receive regarding OFAC orExecutive Orders. (See page 21.)

A file containing any updated information youreceive from regulators or law enforcementagencies regarding money laundering orterrorism.

A file containing a copy of your business’s MSBRegistration Form, if you were required toregister. (See Chapter VII for further information.)

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1.

2.

3.

4.

5.

6.

Recordkeeping for Money Orders:

If a customer purchases money orders, checks orother monetary instruments, with cash in theamount of $3,000 to $10,000 certain informationmust be obtained and retained. The informationis to be recorded on a Monetary Instrument Log(“Log”). Only cash purchases are covered by thisrequirement – purchases by check or credit cardare not, regardless of the amount. Likewise, if acustomer makes multiple cash purchasesthroughout the same business day that totalbetween $3000 and $10,000, you must record theappropriate information on a Log.

Appendix V shows a copy of a blank Log. Youmay order copies of a Log by contacting yourAccount Specialist at 800-257-8418.

Purchases of more than $10,000 require filing aCurrency Transaction Report (“CTR”) which isexplained later in these materials.

Verification of Money Order Purchaser’sIdentity. Before completing a transaction thatrequires a Log entry, you must verify the nameand address of the individual buying the moneyorders by looking at a valid identification docu-ment, such as a driver’s license, passport or alienidentification card that contains the customer’sname and address.

You must obtain all of the information required forthe Log before you complete the transaction.

10

MONEY

ORDER

“LOG”

$3,000

TO

$10,000

CHAPTER IIIRECORDKEEPING

Recordkeeping Requirements For MoneyTransfers:

Both sending and receiving agents must obtainand record specific information for money transfersof $3,000 or more regardless of the method ofpayment.

Money Transfer “Sends” and “Receives”: Formoney transfer sends and/or receives of $3,000 ormore, you must obtain and record all of theinformation requested on both the front and backof the send/receive form. By completing the frontand back of the send and receive forms you willhave all of the information that you are required toobtain and retain for five years on money transfersof $3,000 or more.

If you know that the person is sending onbehalf of someone else, then you must alsoobtain similar information on that otherperson.

MoneyGram’s Identification Requirements:

1. Before completing any “Send” money transferof $900 or more you must verify the customer’sidentity by examining a document that containsthe person’s name, address and preferablyphotograph, e.g. driver’s license, passport, alienidentification card or other official documentverifying nationality or residence.

2. MoneyGram requires the same verificationprocedure for all “Receives” regardless of theamount. However, “test” questions are permittedfor money transfers up to $900 if the recipientdoes not have acceptable photo identification.Identification details or the answer to the testquestion must be recorded for all receive amounts.

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MONEY

TRANSFERS

$3,000

OR MORE

A Currency Transaction Report (“CTR”) must befiled with the federal government for any cashtransaction of $10,000 or more conducted in oneday by any person (or on behalf of anotherperson). You must treat multiple cash purchasesof money orders or money transfers as a singletransaction if you have knowledge that they areby (or on behalf of) the same person and totalover $10,000 during one business day. (This$10,000 amount includes both the face amount ofthe transaction and any fees paid by the cus-tomer.)

You must file the CTR report with the InternalRevenue Service (IRS) on a Currency TransactionReport - Form 4789, shown in Appendix VI.

Identification Requirements for CTRs.Before conducting any transaction that requires aCTR you must verify your customer’s name andaddress in the following manner:

For U.S. citizens and residents, you must see adocument that banks normally accept whencashing checks for non-customers, such as adriver’s license, passport, or a state issuedidentification card. For non-resident aliens, youmust see a passport, alien identification card, orother official document that shows nationality andhome address. In all situations, you should onlyaccept valid, current identification that contains aphotograph of the customer.

The regulations require that you record yourcustomer’s name, address and Social Securitynumber (or taxpayer identification number orother identifying number) on the CTR. The CTRform also asks for occupation, date of birth, andother information.

12

CTR =

MORE

THAN

$10,000

IN CASH

CHAPTER IVCURRENCY TRANSACTION

REPORTING REQUIREMENTS

If two or more people are conducting the transac-tion, or if the transaction is being conducted onbehalf of someone else, you must obtain similarinformation for all parties.

You must obtain all of this information before youcomplete the transaction.

Identification for Elderly or Disabled Persons.Elderly or disabled persons may not have identifica-tion documents, such as a driver’s license orstate-issued identification card. In these cases,you may accept as appropriate identification aSocial Security, Medicare, Medicaid or otherinsurance card presented along with anotherdocument that contains both the name andaddress of the individual (e.g., an organizationmembership or voter registration card, utility orreal estate tax bill).You must maintain a writtenlist of the specific types of documents that you oryour employees may accept from elderly ordisabled people.

Filing Requirements for the CTR. You mustprepare and file the CTR within 15 days of thetransaction. The CTR form shows the addresswhere it is to be filed. Do NOT send CTRs toTravelersExpress/MoneyGram.

Recordkeeping of CTRs. You must keep acopy of each CTR for at least five years from thedate of filing.

Question: When do you have knowledge ofmultiple transactions conducted by or onbehalf of the same person?

A. If you or your employee witness themultiple transactions;B. If someone tells you or an employee aboutthe multiple transactions;C. If you or an employee know a customer isconducting a transaction for someone else forwhom you or your employee know has alreadyconducted another transaction. 13

?

Question: Do you have to verify the informa-tion given by the customer?

You must verify the identity of the customer byviewing an official document that contains thecustomer’s name, address and photograph.Official documents that may be used to verify thecustomer’s identity include a driver’s license,passport, national identification card (i.e., Cedulacard) alien identification card or state-issuedidentification card. Although it is not necessaryto verify other information obtained from thecustomer, if you believe the information providedis false, do not complete the transaction and filean SAR-MSB if applicable.

Exampes of when a CTR must be filed:

Example 1: Jim brings in $12,000 in cash andrequests a money transfer or wants to purchasemultiple money orders. You must file a CTR.

Example 2: Jim brings in cash several timesduring the same day and requests moneytransfers, or purchases money orders which addup to more than $10,000 (including fees). Youmust file a CTR.

Example 3: Jim brings in $11,000 in cash andrequests an $8,000 money transfer and pur-chases money orders totaling $3,000. You mustfile a CTR.

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CTR

EXAMPLES

?

Many money launderers are familiar with the dollarthreshholds that require recordkeeping andreporting. Therefore, in order to remain anonymousand avoid the detection of law enforcementagents, they will “structure” their transactions sothat the recordkeeping or reporting requirementswill not be triggered. Structuring is the act ofbreaking up a potentially large transaction intoseveral smaller ones.

It is illegal for you or your customer to structuretransactions in order to avoid the recordkeeping orreporting requirements. For example, if a cus-tomer buys $2,000 of money orders with cash inthe morning and $2,000 of money orders withcash at the end of the day, they may be structur-ing their purchases in order to avoid therecordkeeping “Log”.

Likewise, it is illegal for you or your employees toassist anyone in structuring transactions in orderto avoid recordkeeping or reporting requirements.For example, you may not tell or even imply to acustomer that they can avoid providing informationby conducting a smaller transaction. Somecriminals may attempt to trick you or your em-ployees into allowing them to structure transac-tions by splitting up transactions with severalaccomplices or by trying to “con” you with ahardluck story. You need to be on the lookout forstructuring so that you can prevent it from occur-ring.

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CHAPTER VSTRUCTURING

STRUCTURING

TRANSACTIONS

TO AVOID

RECORDKEEPING

AND

REPORTING

REQUIREMENTS

IS ILLEGAL.

Question: Are all multiple transactionsconsidered structuring?

No. For example, Jim sends two money transfersto separate receivers, one for $2000 and anotherfor $1,500. Each transfer is less than $3000 butthe total transaction exceeds $3000. There wasnothing suspicious about the transactions, andyou learn that Jim is sending money to hischildren attending two different schools. Youshould record the appropriate information on theback of both send forms in order to fulfill therecordkeeping requirement and to show there wasno attempt to structure the transactions.

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“Suspicious activity” is a difficult concept to definebecause it can vary from one transaction toanother based upon on all of the circumstancessurrounding the transaction, or group of transac-tions. For example, transactions by one customermay be normal because of your knowledgeof that customer, while similar transactions byanother customer may be suspicious. Manyfactors are involved in determining whethertransactions are suspicious, including theamount, the location of your business, commentsmade by your customer, the customer’s behavior,etc. That is why it is important for you to readthis Guide in order to help you detect suspiciousactivity and structured transactions.

The federal government requires you to file aSuspicious Activity Report by Money ServicesBusiness (“SAR-MSB”) for any transaction - orpattern of transactions - that is attempted orconducted with at least $2,000, that you know,suspect, or have reason to suspect:

1. Involves funds derived from illegal activity or isintended to hide funds derived from illegal activity;

2. Is structured to avoid recordkeeping or reportingrequirements; or

3. Has no business or apparent lawful purpose.

You may file an SAR-MSB on suspicious activitybelow $2,000, but the regulations do not require it.

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CHAPTER VISUSPICIOUS ACTIVITY REPORTING

Filing the SAR-MSB. You must file an SAR-MSBwith the federal government within 30 daysof the suspicious event. You must keep a copy ofthe report and all supporting documentation for atleast five years from the time of filing. AppendixVII shows the SAR-MSB form and it is alsoavailable at www.treas.gov/fincen, or www.msb.govor through the IRS. Do NOT send SAR-MSBs toTravelersExpress/MoneyGram.

AS OF JULY 1, 2002, THE FEDERALGOVERNMENT HAS NOT ISSUED THE NEWSAR-MSB FORM. THEREFORE, UNTIL IT ISISSUED, YOU SHOULD CONTINUE TO USETHE EXISTING BANK SAR FORM TOREPORT SUSPICIOUS ACTIVITY.

Federal law provides protection from civil liabilityfor all reports of suspicious transactions made toappropriate authorities, including supportingdocumentation.

Never Tell Your Customer That You Filed anSAR-MSB. It is illegal to tell your customer thatyou are filing a suspicious transaction report.

If MoneyGram believes that some of your customersmay be misusing its money orders or money trans-fers, our compliance staff may contact you as part ofan investigation. You must not tell your customerabout such an inquiry.

Question: Should you file supporting documenta-tion with the SAR-MSB?

No. You should retain a copy of the SAR-MSBand all original supporting documentation orbusiness records (including copies of instruments,receipts, photographs, surveillance audioor video tapes, etc.) for five years from the date offiling the SAR-MSB. All supporting documentationmust be made available to appropriateauthorities upon request. An SAR-MSB reportmust be typed or legibly handwritten.

18

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Examples of suspicious activity:

Example 1: Jim sends a $4,400 money transfer.The next day Jim sends $9,400 to the sameperson. Jim may be structuring his transactionsin order to avoid the CTR reporting requirements.You should consider whether a CTR and/or anSAR-MSB should be filed.

Example 2: Jim purchases money orders withcash just below $3,000 over the course of severaldays. Jim may be structuring his purchases andyou should consider whether an SAR-MSB needsto be filed, and whether a Log needs to becompleted.

Example 3: You see Jim hand cash to Bill andSusan outside your store. Bill and Susan eachgive you cash and purchase money orders thattotal less than $10,000 for each of them. Thisappears to be a structured transaction, and mayrequire the filing of a CTR and/or an SAR-MSB,and a Log.

Example 4: Jim comes in several times on thesame day to pick up money transfers which addup to more than $10,000. You must file a CTR ifyou paid out more than $10,000 in cash to Jim.You should also determine whether an SAR-MSBneeds to be filed.

Example 5: Jim and Bill each pick up moneytransfers. Neither money transfer alone exceeds$10,000, but together they exceed $10,000 incash. You give Jim and Bill cash in the amount oftheir separate money transfers. You then see Jimand Bill give the cash to Susan. This appears tobe a structured and suspicious transaction. If youconclude that a structured transaction occurred,you must file an SAR-MSB. If you conclude thata structured transaction has not occurred, but youdetermine that Jim and Bill are acting on thebehalf of Susan, you must file a CTR. If you areunable to fully complete the CTR, you mustcomplete as much as possible and file the CTR. 19

EXAMPLES

OF

SUSPICIOUS

ACTIVITY

Example 6: Jim picks up a money transferfrom your location. After Jim has left, you discoverthat Jim also picked up money transfers atsome of your other offices on the same day. Jimmay be attempting to avoid the reporting require-ments. You should consider whether a structuredor suspicious transaction has occurred. If youconclude that a structured or suspicious transac-tion has occurred, you must file an SAR-MSB ifthe $2,000 (in total) reporting threshold is met. Ifthe total amount of currency paid to Jim in allsuch transactions exceeds $10,000 you mustalso file a CTR.

Example 7: Jim says that he wants to send an$11,000 money transfer that he wants to pay forwith cash. When you tell Jim that you will need tocomplete a CTR he says he no longer wants todo the transaction, or asks how he can avoidhaving a CTR filed on the transaction. You mustfile an SAR-MSB on the transaction or attemptedtransaction.

NOTE: CTRs, SAR-MSBs, AND OTHERRECORDS AND REPORTS ARE ONLY ASGOOD AS THE INFORMATION YOU PROVIDE.THEREFORE, IT IS VERY IMPORTANT THATTHE INFORMATION YOU PROVIDE ON SUCHREPORTS IS ACCURATE AND COMPLETE.THIS IS YOUR RESPONSIBILITY. THE GOV-ERNMENT AND LAW ENFORCEMENT AGEN-CIES DEPEND ON THIS INFORMATION ASTHEY FIGHT AGAINST MONEY LAUNDERINGAND TERRORISM.

20

The Office of Foreign Assets Control (“OFAC”) ofthe Department of the Treasury administers andenforces U.S. economic and trade sanctionsagainst targeted foreign countries, terrorists, drugcartels and others. The OFAC regulations requireall businesses to identify and freeze the assets ofoppressive governments, international terrorists,narcotic traffickers and other specially designatedpersons identified by OFAC.

OFAC maintains a list called the SpeciallyDesignated Nationals and Blocked Entities List(“SDN List”) that identifies most individuals andentities against whom the OFAC restrictionsapply. Any type of transaction involving an SDNis prohibited as a blocked transaction. Some ofthe countries and groups that are currentlytargeted by OFAC include: Burma, Cuba, Iran,Iraq, Libya, North Korea, Syria, Sudan, Unita andthe Taliban. The scope of the regulations (andwhat businesses may and may not do) varies withthe specific economic sanctions program. Referto the OFAC web site (www.ustreas.gov/ofac)for further information.

OTHER REPORTING REQUIREMENTS

There are other reporting obligations that you maybe subject to under the BSA, the USA Patriot Actand other anti-money laundering laws. Forexample, if the President issues an “ExecutiveOrder” it may also trigger the filing of additionalreports with the government.

Also some states may have specific anti-moneylaundering regulations that impose additionalreporting or recordkeeping requirements on yourbusiness.

21

CHAPTER VIIOFAC AND OTHER REPORTS

22

MSB REGISTRATION

If you engage in MSB activities on your ownbehalf - apart from serving as our agent - then youmay be required to register with the U.S. Depart-ment of Treasury as an MSB. For example, asupermarket that serves as a money order agentbut performs no other MSB services is notrequired to register. However, registration would berequired if the supermarket, in addition to actingas an agent, also cashes checks in an amountgreater than $1,000 for any person on any day, inone or more transactions.

The MSB registration must be filed on the formrequired by the Department of Treasury and sentto the address provided on the form.

The MSB must retain a copy of the registrationform and any registration number that may beassigned to the business for five years.

As this Guide has made clear, it is extremelyimportant that you and your employeesthoroughly understand the requirements ofanti-money laundering regulations. We haveprovided this Guide to you to help in thisimportant task. Make sure that all of youremployees read and understand this Guide.

You may obtain additional copies of this Guidefrom the MoneyGram website, or by calling yourAccount Specialist at (800) 257-8418.

If you have any questions about the provision ofthe laws and regulations, consult your attorney,as we cannot give you legal advice. The penaltiesfor non-compliance are severe, and ignorance orconfusion about the regulations and laws is not adefense.

SHARE

THIS

GUIDE

WITH

YOUR

EMPLOYEES

The government can impose harsh civil and criminalpenalties against anyone who violates the BSA,USA Patriot Act, OFAC or other anti-moneylaundering laws and regulations. Civil and criminalfines can quickly reach into the hundreds ofthousands or even millions of dollars. Criminalviolations can result in prison terms. In addition, thegovernment can seize any property involved incriminal violations of these laws. This includes yourbusiness, your bank account, or any other assetsthe government can link to criminal violations.

Under certain circumstances, the government willhold businesses criminally liable for the acts oftheir employees. It is important that your employ-ees are trained on anti-money laundering compli-ance. It is equally important that your businesshave a system to ensure that your employees arecomplying with the laws and regulations.

The government requires strict compliance withthese laws and regulations. If you do not comply,you may be subject to large fines, imprisonment,and possibly the loss of your business or otherassets. MoneyGram will also immediately cancelthe contract of any agent who knowingly or negli-gently fails to comply with the laws and regula-tions.

Non-compliance with the law simply is notworth the risk.

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CHAPTER VIIICIVIL AND CRIMINAL PENALTIES

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APPENDIX I

CERTIFICATION OF ADOPTION OFCOMPLIANCE PROGRAM

On behalf of this Money Services Business (“MSB”), Ihereby certify, under penalty of perjury, that it has adoptedan anti-money laundering program which complies with allof the reporting and recordkeeping requirements imposedby the Bank Secrecy Act, the USA Patriot Act, and anyother applicable anti-money laundering laws or regula-tions.

Date: _____________________

Signature:______________________________________

Name: _______________________________________

Name of MSB:__________________________________

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APPENDIX II

DESIGNATION OF COMPLIANCE OFFICER

As of this date, the individual named below is herebydesignated as the Anti-Money Laundering ComplianceOfficer (“Compliance Officer”) for this Money ServicesBusiness (“MSB”). The Compliance Officer, as well assenior management, is responsible for ensuring theongoing compliance of this entity with all state and federalanti-money laundering laws, and for ensuring that allemployees are trained on anti-money laundering require-ments before conducting any MSB activity, and on anongoing basis as needed.

Compliance Officer: ________________________

Date: ________________________

Name of MSB: ________________________

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APPENDIX III

EMPLOYEE TRAINING

I acknowledge receiving a copy of this Money ServicesBusiness (“MSB”)’s Anti-Money Laundering ComplianceProgram. In addition, prior to conducting any transactionsfor this MSB, I have received training on the Bank SecrecyAct reporting and recordkeeping requirements, includingthe reporting of suspicious activity.

Employee’s Name: ________________________

Employee’s Signature: ________________________

Date: ___________________

Name of MSB: ________________________

APPENDIX IV

27

CERTIFICATION OF REVIEW

I hereby certify that I have completed an anti-moneylaundering compliance review of the Money ServicesBusiness (“MSB”) named herein. I know and understandthe current requirements of the BSA, the USA Patriot Act,the OFAC regulations and other applicable anti-moneylaundering laws. Among other things, this review focusedon the requirements of the USA Patriot Act, which mandatesan anti-money laundering program that includespolicies, procedures and internal controls; employeetraining; and the designation of a compliance officer. Theresult of my review is that I find this entity’s anti-moneylaundering compliance program:

_____Acceptable

_____Acceptable, but recommend the following actions forimprovement: ____________________________________

_____Unacceptable for the following reasons:_______________________________________________

Signature of Reviewer:______________________

Name of Reviewer:_______________________________

Title of Reviewer: ________________________________

Date:__________________________________________

Name of MSB:__________________________________

APPENDIX V

Money Order Log

28

SAMPLE, NOT ALL PAGES SHOWN

APPENDIX VI

Currency Transaction Report

2927

SAR-MSB

APPENDIX VII

SAMPLE, NOT ALL PAGES SHOWN30

31

ANTI-MONEY LAUNDERING EXPRESS GUIDE

Reporting• Currency transactions greater than $10,000(including consumer fees)

Report on CTR – Form 4789File within 15 daysFollow instructions on form

• Suspicious activity of at least $2,000Report on SAR-MSB formFile within 30 daysFollow instructions on form

• Structured transactions of at least $2,000Report as suspicious activityReport on SAR-MSB form

Recordkeeping•Transactions of $3,000 or more(including consumer fees for money orders)

•VerifyCustomer’s name and addressUse valid photo i.d. (passport, driver’s license, etc.)

•RecordCustomer’s name and addressType of i.d. provided, i.d. #, and i.d. issuerCustomer’s S.S. # or alien i.d.Customer’s date of birthTransaction dateSerial # of money orders or MoneyGram reference #Amount of transactionPoint of sale addressIn addition, for money transfers record:

Receiver’s/Sender’s name and occupation, andany other information provided about them

If transaction is conducted on behalf of someone else,record similar information on that other person• Record information on

“Log” for money orders, or“Send/Receive” form for money transfers(any method of payment for money transfers - not just cash)

Maintain copies of all reports and records for 5 years.

32

ANTI-MONEY LAUNDERING EXPRESS GUIDE

USA Patriot Act Requirements for MSBs •Adopt written anti-money laundering program •Designate Compliance Officer for their business •Train employees on anti-money laundering compliance, including recordkeeping and reporting requirements, as well as identification of suspicious activity •Conduct independent review of the compliance program and make improvements as needed

MSB Registration •Register with U.S. Treasury on MSB Registration form •Required for all check cashers, any business that cashes checks for $1,000 or more, and other independent MSBs. •Many non-check casher agents are covered by MoneyGram’s registration •See Registration form for details

OFAC Sanctions •U.S. businesses are prohibited from doing business with any country, entity or person listed on OFAC sanctions list

For Further Informationwww.msb.govwww.treas.gov/fincenwww.treas.gov/ofacwww.temgweb.com

Treasury Department’s Financial Crimes Enforcement Network (FinCEN)“Hotline” at (800) 949-2732.

Money Transfers at (800) 926-9400

Money Orders at (800) 257-8418

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