Anti-Money Laundering & Counter-Terrorism Financing
MoneyGram Payment Systems Inc.For Affiliates
Version 1 May 2012
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Table of ContentsAdoption of the Compliance Program
Statement of Policy
Purpose of the compliance program & message to moneygram affilaite employees
A1. Money Laundering and Terrorist FinancingA2. IdentificationofMoneyLaundering&Terrorist Financing RisksA3. Monitoring of TransactionsA4. Suspicious ActivityA5. AppointmentofComplianceOfficerA6. RegistrationObligationundertheAML&CTF Act (2006)A7. ReportingObligationsundertheAML&CTF Act (2006) A8. AML and CTF Risk Awareness Training ProgramA9. AffiliateEmployeeDueDiligenceProgramA10. AffiliateResponsetoLawEnforcementRequestsA11. AUSTRAC FeedbackA12. Reporting and Investigation of any violations of this Compliance Program
B1. IdentificationofMoneyLaundering&Terrorist Financing RisksB2. Know Your Customer PolicyB3. RecordKeepingRequirements
C1.MoneyGramKnowYourAffiliateProgramand Registration C2.MoneyGramComplianceTrainingtoAffiliate
Legal disclaimerAlthough this document contains legal information, it is not intended to be, nor should it be considered legal advice.
For legal advice, including the interpretation and application of any law, please consult an attorney.
Statement of policyTheAffiliatesupportsthefightagainstmoneylaundering&terrorism; it has adopted this MoneyGram Compliance Programtopreventitsfinancialservicesfrombeingused to promote criminal activity.
TheAffiliatewillfullycomplywithboththeintent&letterofalllaws®ulationsrelatingtoAnti-MoneyLaundering (AML) & Counter-Terrorist Financing(CTF). MoneyGram& the Affiliate will train theiremployees to comply with these laws and regulations.
A copy of this Compliance Program is kept at the followingofficesofMoneyGram:SydneyAustralia,HongKongandDallasU.S.A.
Every employee of an Affiliate who conducts oris involved in MoneyGram money transfer service in Australia is required tounderstandandcomplywith thecontents of this document.
Purpose of the compliance programThis Compliance Program is prepared for the following purposes:
Message to affiliate employeesThe penalties for violating the AML and CTF Act are severe. Violations may cause loss of customer goodwill andunfavourablepublicity, aswell ascivil andcriminal penalties.
Affiliate staff must be aware that liability may beimposedonthemifthebusinessand/oremployeeis/arewilfully blind to suspicious activity or knew information that he/she should have known wassuspicious.Forexample,allEmployeesmustcompletetrainingandcertificationoftheAML/CTFprogrammeinAustraliaaspartofinductionandannualAML/CTFtrainingwhichwillprovide them with the information and skills to be reasonably expected to identify suspicious activity.
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Any employee that violates the policies & procedures, either unknowingly or intentionally may be subject to disciplinary action, including but not limited to, civil penalties and/or criminal penalties.
PART AA1. Money Laundering and Terrorist Financing
Money Laundering (ML)ML is theattempt toconcealordisguisethenature,location,source,ownershiporcontrolofillegallyobtainedmoney. If illegal money is successfully laundered,criminals maintain control over their illegally obtained funds and they can establish a separate cover for their illicit source of income. AML laws apply to any funds derivedfromillegalactivities,suchasfundsheldbydrugtraffickers,terrorists,organisedcrime,illegaltaxevaders,peoplesmuggling&othergroups&individualsseekingtotransfer,spendand/orinvestmoneyderivedfrom any type of crime.
The ML cycle includes placing funds into the financialsystem by sending money transfers. Once the funds have enteredthesystem,thesourceofillegalfundsisfurtherdisguisedbytransferringthemthroughlayersoffinancialinstitutions,suchasbankor investment accounts.Finally, the funds are legitimised by purchasingitems or investing in legitimate investments such as real estate,realproperty,stocksandbonds.
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ML isnot limited tocash,MLcanbedone throughanytypeoffinancialtransaction,including,butnotlimitedto, funds transfers, money orders, checks, debit cards,storedvalue&creditcardtransactions.
Terrorist Financing (TF)TFincludesthefinancingofterroristacts,&ofterroristsand terrorist organisations.
A2. Identification of ML & TF RisksInordertoimplementareasonablerisk-basedapproach,MoneyGramtakesintoaccountthefollowingfactors:
a) Customer Type Risk
i) MoneyGram money transfer service in Australia is only provided to individual customers. The maximum amount per MoneyGram money transfer transaction isUSD10,000(orequivalentamount inAUD). AcapofUSD20,000(orequivalentamount inAUD) issetasthemaximum send amount per sender per day;ii)Customerstransactionbehaviour&patternarefactorstoconsider,e.g. frequent transactionswithout justifiablereasons.
i) The MoneyGram money transfer service provided by MoneyGraminAustraliaisacash-to-cashdomesticandinternational cash to account in countries where availablemoneyremittanceservice.Everysenderisrestricted to send an accumulated amount of a maximumofUSD20,000(orequivalentinAUD)perday.ForanytransactionhigherthanUSD10,000(orequivalentinAUD), the sendermay be interviewed and subject tofurtherquestioningbyMoneyGramoverthephonebeforeprocessing the transaction. The abovementioned policies are designed to mitigate the risk of making use of MoneyGramsservicetoconductML&TFactivities;ii) MoneyGram money transfer service involves cash but every customer has to produce a Government issued photo identification document for verification.Anonymous transactions are not permitted.
Atpresent, cash is theonlymeansofpayment for theMoneyGram money transfer service in Australia. EverysenderorreceiverhastogototheAffiliateLocationinperson&conductthesendorreceivetransaction.
d) Country or Geographic Risk
i)Country risk, in conjunction with other risk factors,providesusefulinformationastopotentialML&TFrisks.ii) Before a transaction is paid out to the designated receiver,thenameofeverysender&receiverischeckedagainst international sanctions lists, including thesanction list named by theOffice of ForeignAssetsControl (OFAC)of the U.S.A., theUnited Nations,EuropeanUnion&theReserveBankofAustralia(RBA).
e) Regulatory Risk
TheAffiliateisregisteredasanAffiliateofMoneyGramwiththe Australian Transaction Reports and Analysis Centre (AUSTRAC) who in turn is registered as a designated remittance network service provider with AUSTRAC. The entityhastocomplywiththerelevantrequirements,
includingbutnotlimitedtopropercustomerverificationprocedures, having in place an adopted AML/CTFProgram,submissionofrelevantreportsandappointmentofaComplianceOfficer.
Risk Mitigation & Control
In viewof therisks identified inpointa) tod)above,MoneyGram is adopting the following measures to mitigatetherisks:
i)themaximumamountpertransactionisUSD10,000(orequivalent amount in AUD in consideration of thefluctuationoftheexchangerate);ii)anysendtransactionhigherthanUSD10,000hastobeprocessedthroughMoneyGramsCallCentre;iii) a capofUSD20,000 is set to be the send limit of asender per day;iv) detailed personal information has to be obtained from each sender or receiver customer (for details, pleaserefer to PART B of this Compliance Program);v) For transactions sent to countries that are considered highriskforML,terroristactivitiesorfraudulentactivities,more detailed scrutinyof the transactions iscarried out before paying out to the receivers; vi)MoneyGramssoftwarereviewsandchecksallnameslisted on money transfer transactions against a number of sanction lists of money launderers, terrorists,terroristorganizations,drugtraffickers,etc.Thesanctionlistsinclude,interalia,thesanctionlistsmaintainedbyOFAC of theU.S.A., theUnitedNations, the EuropeanUnion,Australia,UnitedKingdomandvariouscountries,etc. Any customer name that possibly matches with the name of a prohibited person or entity in the sanction lists is automatically blocked by the MoneyGram system and no money will be paid out to the receiver of that transaction.Theblockedtransactionissubjecttofurtherreviewofthecustomersidentityorinsomecircumstances,thecustomermayberequiredtobeinterviewedbyMoneyGrams staff over the phone.MoneyGramwillpay out the money of a transaction to the receiver only if it isconfirmed thateithersenderor receiverdoesnotmatchwith all of thesanction lists.Forexample, ifacustomersname&otherpersonaldataexactlymatcheswith a name appearing on a Government sanction list,MoneyGramwillfreezethetransaction&informtherelevantbody,whichinturnwilladviseMoneyGramhowto proceed; vii)WorldCheck,RegulatoryDataCorp(RDC),theInternet,LexisNexis,Accuity&CorporateRiskInternational(CRI) are used to check for any possible exposure to PoliticallyExposedPersons.
Ongoing Customer Due Diligence (OCDD)The Affiliates OCDD Policy refers to the processeswherebyfurthercollectionofacustomerspersonaldatashallbedoneviaMoneyGramsAffiliatesorbyconductingadirecttelephoneinterviewwiththecustomer.Namesnoted under OCDDwill beprovided toMoneyGramComplianceSydneyOfficefortheirrecords.
ThereceiptofinformationasrequestedmayunderthecircumstancesinitiatetherequirementoffilingaSuspicious Matter Report (SMR) with AUSTRAC describing the activity that led to the report being
1.Secondaryidentitydetails,e.g.Creditcards,driverslicense,utilitybillsetc.;2. Occupation;3.Dateofbirth;4.Nationality;5. Place of Birth;6. Alias or other names used in the past;7. Purpose of the transaction(s);8.Relationshipbetweenthereceiver&thesender;9. Source of funding.
For the aforementioned it would be required thatdocumentaryevidence is requestedandheld(wherepossible andappropriate) as verification of the facts aspresented.
ThenameofasenderorreceiverhitsanyoftheGovernmentsanctionslists(e.g.OFAC,DFAT,etc);Thetransactionpatternofthecustomerlookssuspicious;Factors include the age of thepersonsendingorreceiving the funds; Knowledge obtained from theAustralianBureau ofStatistics (ABS) regarding income for professions;Jurisdictionsandvariouscorridorsidentifiedorknownas high risk. This would include those corridors experiencing political unrest and the like;Increaseofactivitythroughcorridorswithnoapparentunderlying reason;Customeroremployeeappearstostructuretransactionsin an attempt to avoid AML record keeping or reporting requirements; An individual provides minimal or fictitiousinformationconcerningtheirname&otheridentifyingdata;A customer engages in a discussion with anemployee to try to determine ways to avoid reporting or recordkeepingrequirements;AcustomerusesafalseorobviouslyalteredIDorapolicecertificateand/orconsularaffidavit;AcustomerisunableorunwillingtoprovideID;TwoormorecustomersusethesameorsimilarIDs;Acustomerappearstohaveanervousorsuspiciousdemeanor; Acustomertriestoalterhis/hertransactionafterbeingaskedtoshowID;Acustomerdeliberatelychangesthespellingofhis/hername on multiple transactions; Acustomerstateshe/shedoesnot havea localaddressbuthe/sheappearstoresidelocallybecausehe/she is a repeat customer; Twoormorecustomersapparentlyworktogethertobreak one transaction into two or more transactions to avoidrecordkeepingrequirements(i.e.AUD10,000);Acustomeruses twoormore locationsorcashiersonthe same day to process transactions; A customer offers bribes, tips or threatensemployeestoavoidrecordkeepingrequirements;A customer admits that the cash for his/hertransactions came from illegal conduct; Acustomermakeslargetransactionsthatarenot
consistentwithhis/heroccupationorbusinesspractice;Acustomerhasnobusinessorapparent lawfulpurpose to transfer the money;Whenitisknownthatamoneytransferistofacilitatecriminal activity;A sender sendsmoney toapersonwhom thesenderdoes not know or is not familiar with and the purpose of transaction relates to a lottery or internet purchase;Senders or receivers having the sameresidentialaddress with no known relationship;Receiving or sending money by parties that arevisiblyacquainted,butthetransactionsappearnottoberelated;Any other factors drawing theAffiliatesCompliancesattention and leading to a decision of not paying out the moneywithoutfirstobtainingfurtherinformationfromthesender,receiverorboth.
AComplianceOfficer isappointedtoensuretheAffiliate is in compliance with this document and therequirementsundertheAMLandCTFAct.
A3. Monitoring of TransactionsTheAffiliate will put in placeamonitoringsystemto review transactions on a daily basis. Suspicious transactions are highlighted and alerts are generated for furtherreviews(ECDD)bythecompliancestaff.
Ifnecessary,MoneyGramwill conductspecial reviewofareasortransmissioncorridorsthathavebeenidentifiedby Regulators, law enforcementagencies,or throughpriorMoneyGramexperience,asareasthatmaybemoresusceptibletocriminalactivity,includingthefinancingofterrorism.
A4. Suspicious Activity
Structuring Structuring is the act of breaking up large transactions into several smaller transactions to avoid providing personally identifying information.
Many money launderers are familiar with the dollar thresholds that require record keeping & reporting.To remain anonymous and avoid the detection of law enforcement officials, money launders attemptto process transactions to avoid triggering record keeping and/or reporting requirements.Theprocessingof transactions thatavoid recordkeepingand/or reportrequirementsisknownasstructuring.
Money launderers may also attempt to trick employees into allowing them to structure transactions by splitting up transactions with several accomplices or by trying to con employeeswith a hard luck story. Employeesneed to be on the lookout for structuring so that they can prevent it from occurring.
It is not appropriate and is suspicious to structure transactions or to help customers avoid record keeping orreporting requirements. Employees should not tellor even imply to a customer...