AML /KYC

The primary purpose of Paypound’s AML & KYC policy is to establish the general framework to fight against money laundering (ML) and the terrorist financing (TF). Paypound has robust measures to control and limit ML/TF risk, including dedicating the appropriate means.

Paypound values are committed to high anti-money laundering / countering terrorism (AML/CFT) compliance and require all the employees, management, and subsidiaries to adhere to these standards to combat money laundering or terrorism financing.

Policy implementation requirements:

Each significant change in the Paypound AML policy is subject to approval by the Board Members & UK FCA Local Legislative Structure Anti-Money Laundering, its Amendments and Executive Regulations; KYC rules issued by the UK FCA; and AML/CFT Regulations for companies, published by UK FCA examining unusual and suspicious transactions referred to the Department, were substantiated with justifiable reasons. Paypound reports to FCA, the transactions suspected to be involved in money laundering, terrorist financing, or the other forms designed for this purpose. We ensure compliance of all company branches & Subsidiaries with AML/CFT regulations and internal controls via off-site and on-site supervision. We cooperate and coordinate with the Human Resources Department (HR) to set AML/CFT training plans for the company staff, proposing training programs necessary to carry out such projects and follow up their implementation. We are preparing a periodical report- at least once a year – on its AML/CFT activities and submitting it to the MLRO. The MLRO reviews the information, makes comments thereon, takes the necessary actions, and then sends it with his remarks and decisions to the FCA (Financial Conduct Authority).

Customer identification and verification (KYC):

Identifying customers on entry into commercial relations is vital for the regulations relating to money laundering and the KYC policy. The identification relies on the following fundamental principles: Each customer (= each person and person involved in the case of a legal entity) must use original supporting documents. These documents will record in a centralized system. Paypound will check Customer background, country of origin, public or high-profile position, linked accounts, business activities, or other risk indicators that should consider.

Identification of beneficiaries of transactions conducted by professional intermediaries; any person or organization connected with a financial transaction can pose significant reputational or operational risks. Records are to remain up-to-date and relevant. When an account has become online “live,” but verification problems arise in the business relationship, which cannot resolve, the company should close the account and return the funds to the source account. The company agrees never to open an account or conduct ongoing business with a customer who insists on anonymity or gives a fictitious name. Each individual identified must be registered by our internal IT system. A person or entity will not be treated as a customer if the KYC process proves incomplete.

Customer acceptance policy:

Paypound ensures that the sales department has a good knowledge of the customer KYC, KYB and will exercise the due diligence appropriate to their level of risk from the start of the customer relations. It will help to pretend Paypound from entering into business relations with persons who might involve our company in money laundering or terrorism financing transactions. Paypound screening customers vs. sanctions lists and ensuring all data and documents provided and uploaded to the system are valid and accurate. Values meet legal/regulatory requirements; – applying the risk-based approach run by Paypound in categorizing customers to risk criteria. (Low / Medium / High) Risk.

Ongoing customer due diligence:

Paypound will carry a risk-based approach review periodically to ensure that customer- related data or information will keep up to date for some dedicated higher-risk customer categories. The current KYC review system regarding the other customer categories primarily based on an “awareness principle” following examining an actual file by the AML team. This awareness principle consists of asking the customer’s account manager to perform a periodic KYC review of customer care. Ongoing transaction monitoring:

AML & compliance team ensures that an “Ongoing transaction monitoring” is conducted to detect unusual or suspicious transactions compared to the customer profile. Paypound will conduct transaction monitoring on two levels. The First Line of Control: Paypound makes its network aware of the concern about possible suspicious transactions so that any contact with the customer, account holder, or authorized representative gives rise to the exercise of due diligence for transactions on the account concerned. In particular, these include Requests for the execution of financial transactions on the account Claims concerning means of payment or services on the account Investment interviews the specific transactions submitted to the customer success team member, possibly through their Compliance Manager, must also be subject to due diligence. Determination of the unusual nature of one or more transactions primarily depends on a subjective assessment of the customer (KYC), financial behaviour, and the transaction counterparty. The transactions observed on customer accounts for which it is difficult to understand the lawful activities and origin of funds are more rapidly considered atypical (as they are not directly justifiable). Any Paypound staff member must inform the AML division of any atypical transactions they observe and cannot attribute to a lawful activity or source of income attributed to the customer.

Sanction’s screening:

To ensure compliance with the applicable sanctions against persons and entities, Paypound has put a list matching system to compare its customers’ names with official lists from the UK FCA, PRA, the EU, the OFAC, or the UN. Transactions are also filtered through an online matching system to ensure compliance with sanctions obligation for fund transfers with foreign banks.

In addition to the above, and to provide all business lines with up-to-date information related to jurisdictions under embargo, Paypound internally edits and maintains a Country Watchlist including the following authority:

  1. Jurisdictions subject to UK Economic & Trade sanctions (including the sanctioned people, Entities, or Transactions)
  2. Jurisdictions subject to EU Economic sanctions (including the sanctioned people, Entities, or Transactions)
  3. Jurisdictions subject to US sanctions (including the sanctioned People, entities, or transactions)
  4. Jurisdictions designated by officials (like FATF) as subject to being a higher money laundering
  5. Such jurisdictions are considered as fiscal paradise by the UK authorities & the Financial Conduct Authority

Enterprise-wide assessment:

Risk assessment is a critical component of the Paypound AML/CFT compliance management program. Paypound has conducted an AML “Enterprise-wide risk assessment” to identify and understand risks specific to Paypound and its business lines as part of its risk-based approach. The Values AML risk profile will determine after identifying and documenting the risks inherent to its business lines, such as the products and services a company offers. The customers to whom such products and services are provided, transactions performed by these customers, delivery channels used by the company, the geographic locations of the company’s operations, customers and sales, and other qualitative and emerging risks. The identification of AML/CFT risk categories will be based on Paypound understanding of regulatory requirements, regulatory expectations, and industry guidance. The Enterprise- wide risk assessment is reassessed yearly.

Risk Profile calculation:

To assist and to determine the level of AML/CFT due diligence to be exercised concerning a customer, a “Compliance” risk profile is calculated upon entry into relations (Low, Medium, High) and will recalculate based on the risk.

Data Access and Staff Protection:

Officials at the Compliance Department have the following abilities and powers.

To directly communicate with any of the company’s staff to access any files/information necessary for performing their duties.

To check potential non-compliance incidents and request support from the team in charge at the company’s (legal advisor- internal audit). Guarantee of Staff Protection:

The company guarantees the protection of those employees who report –in good faith- suspicious transactions.

Organization of internal control:

Suspicious transactions reporting:

Paypound describes precise terms and the instruction of its staff members when it is necessary to report and proceed with such reporting. Paypound will analyze the transactions within the AML team following the precise methodology described in the internal procedures.

Depending on the result of this examination, and based on the information gathered, the AML team will decide whether it is necessary to send a report to the FIU under the legal obligations provided by the FCA.

All transactions suspected of involving money laundering or terrorist financing, including attempts to conduct such transactions, must be reported, regardless of their volume or type. The report will include detailed reasons and causes that led the company to suspect the transaction.

Paypound shall make the report in the form designed by the FCA for this purpose. Paypound should attach all data and copies of documents of the suspicious transaction to the said form. Transactions suspected of involving money laundering or terrorist financing, or data related to it, shall not be disclosed to the customer, beneficial owner, or any other entity, except to the authorities and entities responsible for enforcing the provisions of Anti-Money Laundering Law.

Policies & Procedures:

The AML/CFT rules, including minimum KYC standards, have been translated into operational guidelines or procedures available on the Intranet site of Paypound.

Paypound should maintain the following documentation for five years: Unusual transaction reports and the documents are proving review thereof.

Paypound will keep the suspicious transactions includes copies of documents of suspicious transactions (originals will keep with the company’s records at the Archive), including copies of reports sent to the FCA.

Copies of documents and reports that the Head of Compliance Dept. has decided to keep.

Records of training programs provided that such documents contain data on all AML/CFT

programs offered to the company’s staff, trainees’ names, divisions/departments, content, the timeframe of training programs, and training entity, whether at home or abroad.

Ongoing training:

Paypound has developed different training and awareness programs to keep its staff aware of their AML/CFT duties. The training and awareness program is reflected in its usage by:

  1. Mandatory AML e-learning training programs following the latest regulatory
  2. Academic AML learning sessions for all new

Content of the AML & KYC training program will establish by the kind of business the trainees are working in, Paypound. These sessions will conduct by an AML-specialist working on the Paypound AML team.

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