New Zealand
Version 1.0 Agent Name: Agent Code: NEW ZEALAND Contacting Xpress Money To contact Xpress Money regarding any information, please find the contact details below: The Compliance Officer Xpress Money Level 5, 1 Queens Road, Melbourne, Victoria 3004, AUSTRALIA t: +61-3-9863 8398 e: xm.compliance@xpressmoney.com Distribution The use of the document is solely for internal purposes to be used by Xpress Money Agents. This document should not be used by or distributed to others. XM Services (Australia) Pty Limited. All rights reserved. Reproduction in any manner whatsoever without the written permission of XM Services (Australia) Pty Limited is strictly forbidden. 2
Introduction Money laundering and terrorist financing has been identified as a major threat to the International Financial Services Community and many governments have passed legislation designed to prevent these threats. In New Zealand, the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 (AML/CFT Act) imposes certain obligations on financial institutions. For the financial remittance industry, this legislation is administered by the Department of Internal Affairs. As the providers of designated financial remittance services, Xpress Money and its agents are consequently required to adhere to certain obligations. Failure to comply with these legal obligations can result in strict penalties to be applied by New Zealand authorities. Xpress Money has adopted best practices in the industry for AML & CFT policy and procedure. This Policy & Procedure will help you: Comply with Customer Due Diligence requirements; Identify suspicious activity; Detect and prevent money laundering & terrorist financing; Protect the branding of Xpress Money and Agents businesses from being tainted. In addition to the above, you may assist law enforcement authorities in their effort to track down individuals who illegally use their money for money laundering & terrorist financing. This document should be used as a guide to help agents to comply with their obligations and to establish appropriate compliance processes which are both consistent with the policies and processes in place with Xpress Money and compliant with legal obligations. However, please note that the information contained within this guide should not be construed as legal advice and agents are advised to seek the services of a legal professional, where required. It should also be noted that this guide reflects only a summarized version of the Xpress Money AML compliance policy. 3
What is Money Laundering Money laundering is the process by which: Illegally obtained funds are disguised to give the appearance of having been legitimately obtained; or Legitimate funds are disguised and utilised for illegitimate purposes. In many cases, money laundering involves the transfer of money or value across borders and it is therefore necessary to follow the correct due diligence when identifying customers and processing transactions to limit the risk of being inadvertently involved in money laundering. The money laundering process typically involves three stages, however it should be noted that all stages will not always be evident. 1 Placement the activity whereby illegitimate funds first enter the financial system in order to be able to be undergo additional activities and disguise the true source of the funds. This is usually the stage where it is easiest to detect money laundering activity. Subsequently, it is the reason for strict identification and Customer Due Diligence requirements being implemented; 2 Layering is the process of placed funds being moved, transferred or converted into other forms or mediums to further distance and disguise the original source of the tainted funds; 3 Integration is the process of re-integrating funds into a form so that they can be used for purchasing or investing so as to have the appearance of being legitimate. The money remittance industry is vulnerable for misuse by money launderers and criminals in each of these stages. It is therefore necessary to maintain vigilance for all transactions and ensure correct compliance processes are followed at all times. 4
AML/CFT Programme & Risk Assessment AML/CFT legislation in New Zealand requires all reporting entities to have an AML/CFT Programme and Risk Assessment in place. The AML Risk Assessment should incorporate an assessment of the risk factors associated with Business Risk, or the risk that XM agent will be used for money laundering or financing of terrorism. Some risk groups to consider may include: Customer risk, Products/Services risk, and Country risk. There may be other risks associated with agent organisation structure which should also be considered. As well as Business Risk, agents should consider Regulatory Risk, or the risk that agent will not meet obligations under AML/CFT Act. The Department of Internal Affairs is the regulatory body responsible for the money remittance industry sector. The requirements of AML/CFT Programmes and Risk Assessments are contained within sections 57 & 58 of the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 (AML/CFT Act). Further information and guidance about AML Programmes and Risk Assessments can also be obtained from www.dia.govt.nz Xpress Money requires all agents who have obligations under the AML/CFT Act to have an AML/ CFT programme in place. Such a programme should comply with legislative requirements to the satisfaction of Xpress Money. Xpress Money has established Customer Due Diligence (CDD) procedures which are set out in this document and in the XM brochure: Customer Identification & Verification Requirements New Zealand. The CDD procedures, which are to be followed by XM agents in New Zealand, should be in accordance with the XM CDD requirements, for all XM transactions. XM has also set out the Suspicious Transaction Reporting procedures in this guide and the requirements for XM agents which are to be followed in this regard. 5
Customer Due Diligence (CDD) A robust Customer Due Diligence (CDD) policy is the most effective weapon against being unwittingly used to facilitate money laundering and terrorist financing. Having adequate CDD procedures will help to: Detect suspicious matters in a timely manner; Promotes compliance with all laws; Promotes safe and sound money transfer practices; Minimizes the risk that our service will be used for illicit activities; Protects the company s reputation. Information contained in this guide outlines the CDD procedures which are to be applied for all customers/transactions in New Zealand. Agents should adhere to these standards as a minimum, with further checks to be carried out where prescribed or where the agent deems it to be necessary. Customer Due Diligence comprises of two elements: 1 Standard Due Diligence Required for all transactions and is to be carried out in accordance with Xpress Money Customer Identification & Verification (CIV) requirements (further details contained in this AML Compliance Guide). 2 Enhanced Due Diligence Required when circumstances dictate that additional checks and verifications are to be performed. Further details are contained in Enhanced Due Diligence section of this AML Compliance Guide. The customer MUST be physically present to send and receive transactions, and total cash payment must be collected before processing transaction. 6
Standard Due Diligence Certain information regarding customers and transactions is obtained from customers as a matter of course to better understand the circumstances surrounding particular transactions. This information includes all mandatory information as per regulatory legal requirements (see below for mandatory customer information which is required for send and receive transactions). In addition to these requirements, Xpress Money also makes it mandatory to obtain the following information from customers for each transaction: Purpose of transaction Source of funds Xpress Money agents in New Zealand should undertake standard customer due diligence procedures as per Xpress Money Customer Identification & Verification (CIV) requirements (see following page for further details). Mandatory customer information In accordance with Xpress Money CDD policy and system requirements, the following information is to be collected as mandatory for all customers: For Send transactions: Full name and residential address of sender Contact telephone number of sender Date of birth of sender Identification document details (e.g. ID type, ID no, issue date, expiry date) Full name and address of receiver (including city and country) Contact telephone number of receiver (if known) Purpose of Transfer Source of Funds For Receive transactions Full residential address of receiver Contact telephone number of receiver Date of birth of receiver Please note that full names of overseas sender and receiver in NZ are also mandatory details for transactions received in New Zealand. However, since these name details are pre-captured at overseas send location and are not able to be modified at receive level in NZ, the name requirements are satisfied. **Agents should still acknowledge ID matches name on transaction. 7
Customer Identification & Verification (CIV) requirements Xpress Money CIV requirements are compatible with the Identity Verification Code of Practice 2011, as approved by Department of Internal Affairs. Details are outlined in below table and are provided in Xpress Money s brochure Customer Identification & Verification (CIV) Requirements New Zealand, as guidance for agents and customers. For transactions NZD $500 or greater PHOTO ID SECONDARY ID ADDRESS PROOF CUSTOMER REGISTRATION NZ Passport N/A Yes (see Note 2) Yes (see Note 1) Foreign Passport N/A Yes (see Note 2) Yes (see Note 1) NZ Firearms licence N/A Yes (see Note 2) Yes (see Note 1) NZ Driver Licence 1 of the following : Credit/Debit card Bank stmt<6 mths SuperGold card Yes (see Note 2) Yes (see Note 1) For transactions less than NZD $500 PHOTO ID SECONDARY ID ADDRESS PROOF CUSTOMER REGISTRATION NZ Passport N/A N/A N/A (see Note 4) Foreign Passport N/A N/A N/A (see Note 4) NZ Firearms licence N/A N/A N/A (see Note 4) NZ Driver Licence N/A N/A N/A (see Note 4) 1. Customer Registration is required the first time a customer processes a transaction > $500 2. Any one of the following document will satisfy proof of address: Rates notice, Utility bill, Bank Statement, Student Letter, Hotel/ hostel booking confirmation or Foreign driver licence 3. Loyal customers who are already registered need to present only a Photo ID 4. Agents are encouraged to register all new Customers 5. The NZD$500 threshold to obtain ID from customers applies when carrying out a single transaction or a series of linked transactions totalling NZD$500 or more. 6. Details of photo ID should be entered in XM system with appropriate records of secondary ID details retained by agent (refer Record Keeping section on page 11). 8
Enhanced Due Diligence Some transactions may represent a higher risk due to one or more of the following factors: Customer risk; Transaction risk, Product risk; and Country risk. Enhanced customer due diligence procedures are to be conducted in certain situations, as prescribed or where the agent considers it to be necessary to carry out additional checks in order to further mitigate the risk of money laundering/financing of terrorism. Enhanced Due Diligence (EDD) criteria Enhanced Customer Due diligence (EDD) is to be conducted in the following circumstances: 1. Where a transaction is processed from a non-resident customer from a high risk country; 2. Where a transaction is conducted for an amount of greater than NZD $5000 (this also includes split transactions from a single sending customer where the total of the transactions exceeds NZD $5000); 3. Where a customer conducts transfers as a series or pattern of transactions which have no apparent or visible economic or lawful purpose; 4. Where sending or receiving customer is believed to be a politically exposed person (PEP 1 ); 5. Transaction is processed for customers using XM cash to mobile or XM cash to card delivery mechanisms; 6. Any circumstances exist where XM determines an increased risk of a particular customer or transaction. 1 Politically exposed person is defined in the Anti-Money Laundering and Countering Financing of Terrorism Act 2009. The full definition should be consulted, however in summary, a PEP includes senior politicians, senior judges, and other senior public positions or high ranking members of armed forces from a foreign country. PEP also includes immediate family members. 9
Enhanced Due Diligence Large value transactions Xpress Money Transfer Transactions are limited to USD$7500 (per day) send and receive for New Zealand. However, some countries have lower maximum limits and the lower maximum limit will always apply. Agents should pay particular attention to higher value transactions and conduct appropriate due diligence in accordance with the risk of the transaction. Xpress money will not allow splitting of transactions to circumvent this maximum limit. Multiple transactions on the same day from same sending customer will result in transactions being suspended and cancelled, with excess money refunded to the customer. EDD is required to be performed for any transaction (or total of split transactions) which exceeds NZD$5000. High-risk countries Extra vigilance should be taken for transfers conducted to higher-risk jurisdictions/countries, particularly when other circumstances are also present, such as high transaction value, or suspicion. Higher risk countries may be classified as countries that are: on UN sanction list; or classified as non-compliant according to FATF (refer www.fatf-gafi.org); or countries/ geographic areas identified by credible sources as being linked to a significant source of criminal activity Measures to be undertaken when performing EDD: In addition to the Standard Due Diligence information, the following Enhanced Due Diligence measures become applicable for all customer transactions that match the criteria listed above, and which should be obtained: Relationship of sender to beneficiary Occupation of customer Proof of source of funds or wealth (e.g. bank statement, payslip) Consider obtaining additional ID document from customer - This secondary ID document should substantiate original ID document or to provide proof of other ID details such as proof of current address. 10
Record keeping It is a legal requirement for all Xpress Money agents in New Zealand to have record keeping measures in place regarding the retention, storage and usage of all transaction records collected by the agent. Xpress Money policy dictates that transaction records are to be retained for a period of 10 years. All other record keeping aspects should be in accordance with New Zealand legislative requirements including AML/CFT and Privacy law obligations. All transactions (of any value) require the obtaining of customer information, which is recorded in the XM system (e.g. customer details as per Standard Due Diligence requirements, refer page 7). Details which are not recorded in XM system should be recorded by either obtaining a photocopy of the document or by noting and recording the details of the other substantiating document as follows: Source of funds Payslip / Bank Statement / Other: Name of Employer: Name of Bank: or Additional ID document Type of document: ID number on doc: Name on document: 11
Know Your Agent/Employee (KYA) A robust Know Your Agent (KYA) policy is the most effective weapon against being unwittingly used to facilitate money laundering and terrorist financing. A KYA policy helps to: Mitigate risk of non-compliant employees or agents; Promotes compliance with all laws; Promotes safe and sound money transfer practices; Minimizes the risk that our service will be used for illicit activities; Protects the company s reputation. Agents can ensure agent and employee compliance risks are minimised by: Conducting appropriate Employee Due Diligence for all employees to ensure staff are of good character; Ensuring Financial Service Provider (FSP) registration is confirmed; Designating an AML Compliance Contact for Agent/Sub-agent; Providing AML awareness/training opportunities for all employees. This can primarily be achieved by ensuring a copy of this booklet is made available to all employees and that any particular questions or concerns are directed to XM Services (Australia) Compliance Department at the first opportunity. Employee due diligence Agents should conduct appropriate checks on prospective employees Police checks should be conducted as required Compliance training should be provided to employees 12
Suspicious Transactions Suspicious Transaction Reporting (STR) What is a suspicious transaction? A suspicious transaction may involve a variety of scenarios whereby during the process of providing money transfer services (including a transaction or proposed transaction), if a reporting entity/xpress Money agent has reasonable grounds to suspect whether: 1. If there are any concerns over the true identity of customer; 2. If the transaction/inquiry could be relevant to authorities for offences against the laws of New Zealand including: money laundering, drugs offences, terrorism/financing of terrorism, proceeds of crime, or a serious offence as per section 243(1) of the Crimes Act 1961. What are the reporting obligations for suspicious transactions? Xpress Money agents are obligated to submit a Suspicious Transaction Report if there is a reasonable belief that a Suspicious Transaction has occurred. The details of the format and method of providing this report are provided below. The Suspicious Transaction Report should be submitted to New Zealand Police Financial Intelligence Unit (FIU) within 3 working days as per regulatory requirements. What should agents do if they identify a suspicious matter? Agents who identify a suspicious matter as a result of a transaction or proposed transaction at their location should undertake the following process for Suspicious Transaction Reporting: 1. Refer to relevant ML/TF indicators for identifying suspicious matters (see next page) 2. Complete reporting entity registration requirements with New Zealand Police FIU (see contact details on the next page) 3. Complete Suspicious Transaction Report via the New Zealand Police goaml web portal. Please note, it is an Xpress Money requirement that all agents should be registered as a reporting entity with NZ Police FIU and to process suspicious transaction reporting, as required, via direct reporting to NZ Police FIU. 13
Suspicious Transactions Please note: 1. It is the responsibility of NZ Agents to process any Suspicious Transaction Reports directly with NZ FIU, as per legal requirements. 2. Details of the customer/transaction must be secretly recorded. Under no circumstances should the customer be informed of a suspicious transaction report. It is an offence to disclose information about an STR to un-authorised parties. 3. The AML/CFT Act also provides protection for persons who report suspicious transactions. New Zealand Police FIU contact details Web site: http://www.police.govt.nz/fiu Phone: +64 4 460 2969 Email: fiu@police.govt.nz Relevant ML/FT indicators for identifying suspicious transactions Please note: the following indicators are not necessarily exhaustive and should be used for guidance purposes only as there may be other factors that lead a person to recognise and identify a suspicious customer or transaction: Multiple transactions from different people to same/common beneficiary Value and circumstances of transaction are inconsistent with purpose of transaction or source of funds information as disclosed by customer Customer undertaking transactions which are inconsistent with their profile Multiple transfers to a high-risk jurisdiction Transfers to a particular country that are un-characteristic of transfers sent to particular country Multiple customers simultaneously conducting international funds transfers under the guidance or instruction of an individual Use of identification that appears to be false or inconsistent High value international funds transfers for no apparent logical reason Domestic transfers Other circumstances surrounding behaviour of customer including illogical behaviour 14
15 Notes
Notes 16
XM Services (Australia) Pty Limited 17 Level 5, 1 Queens Road, Melbourne, VIC 3004, Australia wwww.xpressmoney.com