MTN Mobile Money 2012

Anti-Money Laundering It is the policy of MTN to prohibit and actively prevent the use of its money transfer services to facilitate money laundering, the funding of terrorists or criminal activity This session is designed to provide you with information and guidance as to how to comply with your Anti-Money Laundering (AML) responsibilities The session covers:- - Know Your Customer (KYC) Procedure - Suspicious Activity Reporting 2011 Mobile Telephone Networks. All rights reserved. 2

Why Are We Concerned? Uganda is strategically placed within the East & Central Africa region Due to lack of a National Identity card system, people may seek to take advantage of identity fraud The need to keep Uganda free from underhand activities A local & International obligation & requirement Nature of criminal activities generate financial assets The need to protect Uganda s financial systems 2011 Mobile Telephone Networks. All rights reserved. 4

Money Laundering Risks in Mobile Money Convenient, fast & cheap means of:- Transferring funds to persons (countries) Making payments of goods & services Storing of funds in the account Reliance on partner agents to conduct important regulatory checks & controls Agents lack the rigorous screening process of traditional banks Lack of national identity card system in further complicates the issue 2011 Mobile Telephone Networks. All rights reserved. 5

What is Money Laundering? Definition: Engaging in acts designed to conceal or disguise the true origin of illegally acquired proceeds [goods, assets, etc] so that these unlawful proceeds appear to have originated from legitimate sources or constitute legitimate proceeds It is the process of making criminal assets appear legitimate Examples in the Ugandan Scenario: Proceeds from child traffickers, car jacking, wildlife poaching, etc How is Money Laundering done? by conducting one or a series of legitimate financial and commercial transactions 2011 Mobile Telephone Networks. All rights reserved. 6

Stages of Money Laundering Placement where illegal/black money is placed into an account (MTN Mobile Money)without arousing suspicion Layering where illegal/black money will be moved around from account to account (including direct deposits). This often involves reducing the funds into smaller amounts and using different people & business to try and disguise its original source Integration where illegal/black money is put back into the legal financial system and appears to be legitimate funds or assets (withdrawn from MTN Mobile Money and put in a bank account or used to purchase goods & services) Why is this done? to hide the true origin of the assets make detection of proceeds of crime by law enforcement agencies difficult 2011 Mobile Telephone Networks. All rights reserved. 7

Effects of Money Laundering? Encourages criminals to continue with their illegal acts because they get to spend the profits without repercussions Results in more fraud, more corporate organizations losing money (people s pension lost), more drugs in the street Laundered money is usually untaxed, which means the rest of us have to pay to make up for the tax shortfalls Small to medium size businesses like MTN MM agents unable to compete with others who only act as a front since they make abnormal profits, or their intention is just to clean money hence may offer services at a lower price than normal 2011 Mobile Telephone Networks. All rights reserved. 8

How do we fight it? KYC Know Your Customer In any Money Laundering operation, the first step is always opening the account where the proceeds of crime can be placed Therefore, confirmation of identity is mandatory and KYC is crucial Agents & staff are our first line of defense against money laundering & territory financing By knowing your customer, you will be able to understand what is potentially suspicious Transactions that are not consistent with the known circumstances of the customer should raise suspicions 2011 Mobile Telephone Networks. All rights reserved. 9

How do we fight it? Reporting Suspicious Activity It s important as it protects you from the liability of a money laundering offence Always proceed with transaction otherwise it may be seen as tipping off Reporting must only be done to the Anti- Money Laundering Compliance Officer (AMLO) A suspicious activity report form needs to be filled when making such a report 2011 Mobile Telephone Networks. All rights reserved. 10

KYC Procedure As an Agent, it is your responsibility to ensure that ALL transactions [registrations, withdrawals & deposits] are carried out with proof of identity Acceptable identification documents are: Valid Passport, L/C certificate, Driver s License, Voter s card, Military ID, Tax certificate [All Original] For registration purposes, customer must also avail a copy of the ID presented and after verification, fill in the customer registration form 2011 Mobile Telephone Networks. All rights reserved. 11

KYC Procedure For value transactions [deposits & withdrawals], agent first verifies the ID document presented, then only after that may continue with the transaction Counterfeit, photocopies and expired documents are not acceptable for transacting Where a valid & original identification cannot be produced, the transaction must be declined Customer registrations and transactions MUST only happen with face-to-face customers [you must decline transactions for no face-to-face customers] 2011 Mobile Telephone Networks. All rights reserved. 12

Transactions Monitoring MTN has the necessary tools to identify instances of Agents defrauding customers. These tools include:- SIM replacement information details Location details Call Information Handset information Transaction monitoring reports to identify agents inflating commissions by breaking down transactions; registrations using fake IDs; direct deposits; etc Non-compliance to KYC & AML will lead to Agent being penalized as per penalties guideline 2011 Mobile Telephone Networks. All rights reserved. 13

Examples of Money Laundering: Customer submits copies of identification documents while refusing to present the originals without any rational reasons Customer provides identification documents which are suspected to be forged or false Customer conducts a series of large deposits and withdrawals within a short period of time Customer deposits very dirty or moist currency notes Multiple deposits into an account by third parties Customer conducts frequent transactions just below the thresholds 2011 Mobile Telephone Networks. All rights reserved. 14

Confronted with a suspicious transaction? Ask the right questions without raising suspicion Do not tip-off; treat your suspicion confidentially Treat all customers with courtesy suspicious or not, they should all be treated with courtesy Continue with the transaction whether it s one or several transactions, carry on as usual Immediately report the suspicion or unusual transaction to the MLCO 2011 Mobile Telephone Networks. All rights reserved. 15

Important to Note: No civil or criminal action will be taken against MTN or its agents for reports made in good faith You are NOT TO disclose the information to anyone other than the MTN officer authorized (MLCO) Do not inform or tip-off the customer [tipping off is an offence] Agents must ensure confidentiality 2011 Mobile Telephone Networks. All rights reserved. 16

Thank you.