EDBI's AML/CFT Policies

Transcription

1 Preamble AML/CFT policies of EDBI is set to avoid money laundering and terrorism financing being made by use of EDBI s accounts and facilities, and also to facilitate the implementation of Islamic Republic of Iran s AML/CFT laws, which criminalizes the money laundering and terrorism financing. EDBI policies also try to facilitate the application of rules and regulations issued by the Central Bank of Iran and the Islamic Republic of Iran Financial Intelligence Unit (IRIFIU), as well as FATF recommendations, BCBS standards and Wolfsberg group principles. 1- Scope and Goals of Policies Accurate implementation of this policy enables Bank of Iran to combat money laundering and prevent terrorism financing as per the country s laws and regulations as well as the international recommendations, principles and standards. Execution of this policy is mandatory for all domestic and foreign branches, subsidiaries and affiliates and also administrative units of the Bank. In case, the country where the EDBI s subsidiaries are located do not apply any AML/CFT laws, or even their standards are not equivalent to those in Iran; this policy is also mandatory for them. 2- Know Your Customer (KYC) policy Bank of Iran ranks the AML/CFT risk of the clients on a risk-based approach. The Clients due diligence is carried out as per the said risk model and following steps: Identity, Address, Occupation and Income Information In this step all natural and legal persons as clients declare the full information of their own and those of their affiliated legal and natural persons (including legal attorneys, signatories, share holders, beneficial owners and Page 1 of 7

2 ultimate beneficial owners ). This declaration is made as per documents and evidences specified by AML/CFT committee which has already approved by the Bank Board Members. Documents and evidences offered by clients must be consistent with KYC laws and regulations and also comply with the international standards. Clients Information Verification and Compliance, and Clients Activity Level Determination All information received from clients must be in compliance with the original documents and verified through competent portals. The verification web portals are as follows: a. National ID Number Portal for Iranian Natural Persons b. National ID Number Portal for Iranian Legal Persons c. Designated Code Web Portal for Foreign Natural and Legal Persons d. Postal Code Web Portal of Islamic Republic of Iran Post Co e. Economic Code Web Portal of Tax Affairs Organization f. Guild Code Web Portal of the Ministry of Industry, Mine and Trade g. The National Official Gazette s Database Having taken all the above steps, client s activity level is determined as per instruction on Determining the Expected Turnover Level of the customer in Credit Institutions. Customer Acceptance After above mentioned process, EDBI can accept or reject the client as per clients AML/CFT risk rating. EDBI will be able to refuse accepting the client in this step. Page 2 of 7

3 Walk-in clients acceptance and providing foreign currency services to them is possible only after full identification is made, and finding out that there is no exposure to AML/CFT risk. In case the client has been ranked as high risk, enhanced due diligence must be carried out, The Bank's EDD Model has been designed by AML/CFT committee and approved by the Bank s Board Members. Required process to operate identification of the following group of clients must be prepared; i. Iranian Nonpolitical Natural Persons ii. Iranian Political Natural Persons iii. Foreign Nonpolitical Natural Persons iv. Foreign Political Natural Persons v. Iranian Legal Persons vi. Foreign Legal Persons vii. International or Foreign Entities, Organizations, Embassies, and Consulates Planning and Procedures Improvement Department must arrange for periodic updating or irregular correction of practical procedures for customer due diligence as per the clients risk ranking. However, these procedures must be updated at least once a year, anyway. Money laundering risk ranking model considers the following clients as high risk: Politically Exposed Persons (PEP) Nonprofit (Charity) Organizations Exchange Companies Non Financial Business (e.g. Jewelers, Precious Stone Sellers, Car and Housing Agencies) Fiduciary Account Applicants Page 3 of 7

4 Non Face to Face Clients Retirement and Investment Founds Nonresident Clients Pooled Accounts and Monetary Fund Appliers Money Service Businesses 3- Correspondent Relations To thoroughly identify the correspondent banks, EDBI s compliance officer must investigate the following criteria on a risk-based approach and analyze the findings: Geographic risk of the intended bank, branches, subsidiaries and affiliates Management structure, regulatory and allegiance of the bank, branches, subsidiaries and affiliates regarding to AML/CFT The bank s clients activity and business type Services and products offered to the bank s clients as well as their correspondents. PEP presence among the bank s managers, shareholders and related persons How the bank deals with PEP clients Suspicious transaction control and monitoring Probable sanctions status Account opening procedures, and service offering to high risk accounts and clients, such as; nominee accounts, fiduciary accounts, pooled accounts, retirement and investment funds, non face to face and nonresident clients, and payable through accounts Sanctioned and black list persons monitoring status in transferring financial and non financial messages AML/CFT policies issued by the bank and the updating procedures Page 4 of 7

5 The bank s policy in cooperation and information exchange if needed The results and outcomes concluded by the officers of AML Department (Compliance Officer), as an independent unit, would be stated to the designated committee for correspondent relations management. Correspondent relationship is possible under the rules stipulated in EDBI s guideline of Correspondent Relationship Establishment and Maintenance In case the applied parameters for correspondent bank evaluation do not suffice or the documents received from the correspondent bank fails to provide a clear picture of the bank s situation, the EDBI s compliance officer shall visit the requesting party s officials at their premises. To accomplish the correspondent banking due diligence process, this visit shall take place before the establishment of correspondent relations or within a reasonable period subsequently. The AML Department of EDBI is accountable to propose suitable procedures for implementation of AML/CFT policies and the AML/CFT committee is responsible to verify and ratify the said procedures. 4- Suspicious Transaction Monitoring and Reporting All EDBI s transactions and activities are monitored on the basis of AML law and its executive by-law as well as the Islamic Republic of Iran s Combating of Terrorism Financing Law and also Suspicious Transaction Detecting and Reporting Guideline, and accordingly the suspicious transactions and activities should be reported to AML and FIU centers. EDBI s AML software must be able to monitor and control all suspicious transactions according to the circular no. 91/ dated Sep 13 th, 2012 under the topic of Preparation and Execution of AML Software. Page 5 of 7

6 This software must act automatically showing the suspicious transactions on the basis of specified rules and the changeable parameters chosen by user. Transparency and traceability are the main factors in international deals made through SWIFT network. To monitor all parties involved in transactions, EDBI must practice all necessary observations, depending on the type of transactions made by SWIFT system, (e.g. transaction parties, source of fund, banks involved, brief description of goods, shipping companies, etc.). None of the involved parties in transactions should be enlisted in internal and international sanction lists. EDBI must use suitable portals to monitor the transactions. In case of information shortage in received SWIFT messages MT 202 and MT202 COV, MT205 and MT205 COV, in addition to the rejection of the message, EDBI must report the case to IRIFIU as a suspicious report. 5- Training; All EDBI s staffs related to these policies must pass proper training courses which contain the following subjects: a) AML/CFT Training Course b) KYC Training Course c) Suspicious Transactions Detecting Course d) Suspicious Transactions Analyzing Course (for AML/CFT department staffs) AML Department is entitled to arrange for other proper and required courses for the staffs if needed. 6- Electronic Transactions All EDBI s branches and subsidiaries are required to act according to the instruction on Compliance with the Regulation on AML in E-banking and E- Page 6 of 7

7 payment issued by the Central Bank of Iran for the electronic transaction applicants. 7- Cash Transaction Report All EDBI s branches and subsidiaries are required to report cash transactions over the threshold as per the instruction on "Reporting Cash Transactions above the Designated Threshold Amount" issued by the Central Bank of Iran. After receiving and accumulating all reports, the AML Department will send them all to the IRIFIU. 8- Documents Retention All documents applicable to these policies must be retained as per the rules specified in By-law on the Duration and Method for Maintaining Commercial Papers, Banks Ledgers and Documents imparted in circular No. 90/41478 dated 2011/05/16 9- Policy Updating and Confirmation These policies must be verified by AML committee and ratified by the Bank s Chairman of the Board. The policy updating would be made in suitable time not exceeding two years, anyway. Page 7 of 7