Anti-Money Laundering AML Policy Handbook | Schemes and Procedures | Legislation and Risk Based Approach | Monitoring and Auditing Due Diligence | Template for FCA Applications and Authorised Firms

The Handbook Statement

In a fast-paced society, full of technological advancements there is a greater need to be taking adequate control measures that require cooperation, both with authorities and with each other.

HIRETT LIMITED and its staff are committed to the highest standards of anti money laundering (AML), including anti-fraud, anti-corruption and taking measures to mitigate against financial crime. We abide by and adhere to all applicable laws and regulations regarding AML in all jurisdictions where it conducts its business. We have developed and implemented a comprehensive set of measures to identify, manage and control all AML risks. We understand that the money laundering regulations and legislation place a responsibility upon HIRETT LIMITED employees to combat money laundering with regard to a wide area of financial transactions, including possessing, or in any way dealing with or concealing, the proceeds of any crime.

Fighting money laundering and terrorist financing contributes to global security, integrity of the financial system and sustainable growth. Laws to combat money laundering and the financing of terrorism are designed to prevent the financial market from being misused for these purposes.

Importance of adopting the 2020 Handbook

On 19 April 2018, the European Parliament adopted the 5th Anti -Money Laundering Directive. The amendments stemmed from the European Commission’s 2016 Action Plan to tackle the use of the financial system for the funding of criminal activities, terrorist financing and the large-scale obfuscation of funds.

The Fifth EU Money Laundering Directive (5MLD) requires Firms to have a more robust risk based approach to the prevention of Money Laundering and terrorist Financing.

Based on this we are adopting the newest version of our internal guidelines. All to be found in this Handbook., which has been created to ensure that staff deal with the area that this policy relates to in accordance with legal, regulatory, contractual and business expectations and requirements. All guidances and objectives laid out in this policy have to be taken seriously, as failure to adhere may result in disciplinary actions and/or trigger legal procedures.

Understanding of Money Laundering Schemes

Money laundering is the term used to describe the process or act of disguising or hiding the original ownership of money that has been obtained through criminal acts such as terrorism, corruption, or fraud. Such monies are then moved through legitimate businesses and sources to make it appear ‘clean’

HIRETT LIMITED operates under and complies with the below laws, Acts and regulations with regards to our Anti-Money Laundering policies,  procedures and guidelines:

• The Proceeds of Crime Act 2002 (POCA)
• Serious Organised Crime and Police Act 2005 (SOCPA)
• The Anti-Terrorism, Crime & Security Act 2001
• Terrorism Act (Amendment) Regulations 2007
• The Terrorism Act 2006
• The Bribery Act 2010
• The Money Laundering Regulations 2007
• The FCA Handbook
• The Joint Money Laundering Steering Group (JMLSG)
• The Fifth AML Directive
• Markets in Financial Instruments (MiFID II) – Directive 2014/65/EU

Objectives

To prevent financial crime and money laundering within our organisation, HIRETT LIMITED aims to meet the below objectives:

• The reporting and detection of suspected money laundering to the NCA via a SAR
• All staff are trained and must remain vigilant for the signs of money laundering
• No payment of cash will be accepted by the company if it exceeds £10,000.
• Due diligence and client identification procedures will be followed by all staff and at all times
• Frequent risk assessment and audits of all AML and terrorist financing controls and systems
• To appoint a Money Laundering Reporting Officer with sufficient knowledge and seniority as to complete the tasks and objectives laid out in this document
• Maintain client identification procedures in all circumstances
• Implement procedures to enable the reporting of suspicions of money laundering
• Maintain record keeping procedures
• Utilise an employee screening program to ensure due diligence

Anti-Bribery and Anti-Corruption

HIRETT LIMITED operates a zero-tolerance policy with regards to bribery and corruption, we have a structured Anti-Bribery and Corruption Policy in place with our intent and objectives in this area and also realise that impact that bribery and corruption have on the money laundering requirements,

As bribery and corruption are often associated with organised crime and/or money laundering, we are committed to applying high standards of honesty and integrity throughout our organisation and ensure that all staff operate in accordance with the intent.

Procedures

HIRETT LIMITED adheres to and complies with the principles of the Know Your Customer policy which aims to prevent financial crime and money laundering through client identification and due diligence. All customers/clients who are new to the organisation will undergo procedural due diligence checks prior to opening an account, as laid out below: 6.1. Identification

Proof of who an individual or business is will be gained and recorded on a New Customer Application. 2 forms of ID are required with the person/business name on and 1 form of ID with the trading/home address. Acceptable forms of ID can include:

• Individual – Drivers Licence, Passport, Bank Statement, Utility Bill
• Business – Director/Proprietor ID, Certificate of Incorporation, Company Registration Number & Registered Office, Utility Bill, Supplier Invoice, Bank Statement

Due Diligence Checks

For businesses, credit and company background checks will be performed prior to account acceptance, details of which will be kept on file as evidence of due diligence and antimoney laundering checks.

Due diligence checks are obligatory in the UK when a single transaction exceeds EUR15,000 or where doubt exists about the identity or reliability of the customer.

Monitoring & Auditing Due Diligence

At HIRETT LIMITED the Compliance Officer is responsible for ensuring that due diligence checks, and anti-money laundering measures are being completed and are fit for purpose. Regular monthly audits are completed on due diligence forms, company checks and customer ID to ensure that staff are carrying out the due diligence and AML processes in accordance with this policy and legal requirements.

Measures to Prevent Money Laundering

There are certain measures and controls that can be implemented and carried out to help prevent against money laundering. HIRETT LIMITED carries out such measures in the course of its daily business activities and is committed to preventing any aspect of financial crime.

Client Identification Procedures – as set out in clause 6 of this policy, client ID and due diligence is performed on all new customers and where legal or regulatory standards require it.

Due Diligence Questionnaire – this questionnaire acts as an application form for new customers and asks detailed questions about the business/person for purposes or performing due diligence checks. Customers are also expected to provide accompanying documents where applicable such as Certificate of Incorporation, Data Protection Certificate and Regulatory Body Membership etc.

Traceable Transactions – all transactions carried out by HIRETT LIMITED are recorded in such a manner that their original origin can be traced should the need arise. Records Management – all documents, accounts and transactions associated with clients/ customers will be retained as per the legal or statutory retention periods, which currently stands at ‘Close of Account +5 Years’.

Reporting – Where required, an MLRO will be appointed and is responsible for monitoring all anti-money laundering measures and raising SAR’s when needed. All documents relating to money laundering reporting, business transactions, client identification and customer due diligence are retained for a minimum of 5 years. We will ensure that the below minimums are met with regards to the information disclosed on any reports:

• Full details of the people involved
• Full details of the nature of their/your involvement
• The types of money laundering activity involved
• The dates of such activities
• Whether the transactions have happened, are ongoing or are imminent
• Where they took place
• How they were undertaken
• The approx./exact amount of money/assets involved;
• What has given rise to the suspicion

Using all of the information available at the time, the MLRO to make an informed decision using sound judgment as to whether there are reasonable grounds for knowledge or suspicion of money laundering and to enable them to prepare their report for the National Crime Agency (NCA), where appropriate.

Ongoing Due Diligence – the customer engagement team is responsible for the ongoing due diligence checks for the life of the client/customer account, ensuring that all information is kept up-to-date and that no adverse information has arisen since the last monitoring check was performed. Such checks are to be performed on all existing, active customers on a rolling annual basis.

Training

HIRETT LIMITED has implemented a comprehensive Anti-Money Laundering and Financial Crime training program to ensure that all staff, in particular individuals responsible for transaction processing and/or initiating and/or establishing business relationships, undergo AML knowledge, competency and awareness training.

Our training methods and sessions are tailored to the business to ensure that staff are aware of the different possible patterns and techniques of money laundering that could occur in their everyday duties and roles.

Responsibilities

HIRETT LIMITED will appoint an MLRO where regulatory or legally required and will comply with all UK legislation and regulations regarding the prevention and mitigation of money laundering.

HIRETT LIMITED will ensure that all staff are provided with the time, resources and support to learn, understand and implement processes and actions to prevent money laundering and will be expected to be vigilant at all times with respect to any acts of suspected financial crime. Any suspicions re to be reported to the Compliance Officer immediately.

The Compliance Officer will ensure that any actual or suspected case of money laundering is detailed on a Suspicious Activity Report (SAR) and is reported to the National Crime Agency (NCA) with immediate effect.

1. INTRODUCTION

1^st May 2020

Dear Colleagues,

The following document defines the clear process and procedures of Hirett Limited (herein after referred to as Hirett) and our approach to anti-money laundering (AML).

I fully endorse our policies keeping with our business model and obligations to prevent all forms of money laundering, tax evasion, terrorist financing, bribery and corruption. Also added is a section on whistle blowing procedures.

The obligation to comply with the rules as stated in this policy is legally binding to all who work for and are with this company and all relevant employees are to undertake to comply with and implement these policies.

Please ensure to read it, understand it and follow it.

[Name]
[Title]

2. MONEY LAUNDERING

Money Laundering is the process by which criminals attempt to hide and disguise the true origin and ownership of the proceeds of their criminal activities, thereby avoiding criminal prosecution, conviction and confiscation of illegally obtained funds.

In the industry, it is widely regarded that there are 3 key stages of the Money Laundering process. These are:

1. Placement
2. Layering
3. Integration

The ability to launder the proceeds of criminal activity through the financial systems of the world is vital to the success of criminal operations.

Historically, the traditional Banking sectors have led the efforts to combat money laundering but with the successes of international FX and remittance firms, the fight against criminal activity requires all of us to do our part.

It is our duty to be vigilant at all times in all aspects of our business as criminals continuously probe to find weaknesses in the system and look at various methods to convert illegally obtained money.

Money, usually in the form of hard cash, is vital for any terrorist organisation. The absence of money makes it almost impossible for the organisation to function.

Therefore, to protect themselves and achieve success in their harmful acts, terrorists work hard to concealing their money and its true origin. The process is a joint effort between people who are recruited to raise funds for terrorist finance and the terrorist quartermaster/finance Director who mastermind the process the remittance and receipt of the funds.

All staff, partners and affiliates of Hirett are required to maintain the highest levels of due diligence when engaging in any aspects of remittance services.

Hirett places the utmost importance on the fighting against money laundering and combating terrorist funding. An approach fully endorsed by its Senior Management and the MLRO.

3. DEFINITION

Legal definitions of the crime of money laundering used in European Council Directives have been adopted into UK legislation are:

• The conversion or transfer of property for the purpose of concealing or disguising the origin of the property.
• The concealment or disguise of the true nature, source, location, disposition, movement, rights with respect to or ownership of illicitly gained property.
• The acquisition, possession or use of property derived from criminal activity or participation in criminal activity.

4. LEGISLATION IN THE UNITED KINGDOM

The legislation governing money laundering and Terrorist Financing and the fight against it is contained in the following:

• Proceeds of Crime Act 2002 (as amended)
• Terrorism Act 2000 (as amended by the Anti-terrorism, Crime and Security Act 2001)
• Money Laundering Regulations 2007
• Money Laundering Regulations 2017 (now superseding MLR 2007)

In addition, references, guidance and instruction are given in HM Treasury Sanctions notices and news releases and the FCA Handbook.

It is important to note that United Kingdom legislation in respect of money laundering is an “all crimes legislation”.

5. OUR OBLIGATIONS

In accordance with our responsibilities under the regulations in force, Hirett have appointed a Money Laundering Reporting Officer/Nominated Officer (MLRO/NO) – [Name] – who can be contacted at [Contact Information]

His obligations include, but are not limited to:

• ensuring all staff of Hirett are trained regularly in anti-money laundering
• ensuring that they understand their training
• adopting a risk-based approach to customer due diligence and enhanced due diligence including ongoing monitoring of any business relationships

6. ‘RISK BASED’APPROACH

Applying Due diligence at the start of customer engagement What is it?

To us, this means identifying the person or company that is to become our ‘Customer’. We should verify the Customer’s identity on the basis of information obtained through legally acceptable documents that are reliable.

The customers could be individuals or firms (a limited company or LLP or partnerships).

For individuals, we have to verify their identity and addresses.

For firms or companies, the ultimate beneficial owners (UBO) who own/control 25% or more of the shares are to be identified. Hirett will undertake adequate measures to ensure the UBO’s identity and propriety; UBO’s do not belong to, or are linked to any political or sanctioned entities/countries.

Hence it should be ensured

• To take appropriate measures to understand the ownership and control structure the UBO.
• Identify the UBO, who owns or controls more than 25% of the shares or voting rights or if controlled by another entity, the person who controls the management of the body.

Further, we would rate micro businesses and non-regulated entities with a simple business model and Small Payment Institutions (SPI) that are regulated but with a simple business model as low risk or medium risk based on the geography of incorporation and the countries they remit to. We would categorise MSBs and PSPs with further downstream agents as high risk. Taking all the above into consideration, the MLRO will risk rate all non- individual customers, on a case by case basis.

Geographic Risk:

This is where vigilance about the risks associated in dealing with people, companies from geographical regions that are exposed to high levels of crime, terrorism, fraud, corruption and so forth. Although payments can be ordered by any person present in the UK, payment cards are issued and accounts opened to UK residents only, however, the affiliation of our resident clients (for payments, cards, accounts) and non-resident clients (for payments only) with certain countries (e.g. citizenship, dual residency, etc.) may pose additional money laundering risk. Thus, geographical risk is mandated (and changed) based upon the following:

• Business risk appetite of Management (and MLRO)
• Ability to service various market corridors
• Risk appetite of our Banking partners
• Revised Sanctions
• Adverse information on certain geographic regions

As per current regulations in force for financial services Hirett adopts a risk-based approach for all clients and categorizes clients based on their nationality, if resident of another country we would go by the country of residence. Hirett uses the Basel AML index, wherein countries are rated on a scale of 1 to 10 for money laundering risk. (see Appendix-3 Basel AML Index), based on which, we classify countries as

If a client is classified as high risk, then enhanced due diligence will be practiced as well as ongoing transaction monitoring.

**All high-risk client accounts will only be opened on the approval of the MLRO**

7. CUSTOMER DUE DILIGENCE

KNOW YOUR CUSTOMER (KYC)

KYC requirement is a key aspect in Hirett’s relationships with its clients. The documents required for various sizes of transactions and services are as detailed in the ID framework, in section 9. Also, all the customers are required to fill out our KYC questionnaires and forms (see Appendices 4-8).

Customers who wish to make payments, including one-off payments, open accounts and/or obtain payment cards are required to provide their key details such as name and address. Hirett requires all clients to provide us with their ID and proof of address to register as a customer.

All requests to issue payment cards, open accounts, receive and deposit funds or make payments, no matter what their size, require caution and staff should apply due diligence at all times. If there are any suspicions or staff have market knowledge, a suspicious activity report (SAR) should be filed internally to the MLRO. The staff while interacting with customers should be conscious not to tip off the customer.

The proof of source of funds is mandatory when the individual is a politically exposed person (PEP), in such cases the staff member has to verify the source of funds – but not TIP OFF the individual (also see P13).

DUE DILIGENCE:

Step A
Identify the customer
Conduct a consultation with the proposed customer. Find out who they are. Identify them.

Step B
What do they want?
Understand the reason for them to want to do business with Hirett. Confirm their legitimacy.

Step C
Have customers fill out KYC and other applicable forms, obtain required legal and formal identity documents.

Step D
Complete external KYC checks where required, if there are any irregularities, refer to MLRO

Step E
Check if all the documents have been obtained and are satisfactory and then complete the file

8. ID/REMITTANCE, ACCOUNTS AND PAYMENT CARDS FRAMEWORK

ID DOCUMENTS

• Current signed passport / EEA State ID Card
• EU National: Resident permit
• Current UK / EEA photo card driving license (full or provisional)
• National ID card
• Asylum seeker Registration Card with Work Permit

PROOF OF ADDRESS

• Recent utility bill / statement (dated within 3 months)
• Valid local authority tax bill (dated within 3 months)
• Bank statement (dated within 3 months)
• Current Full/provisional UK photo card Driver’s License
• Confirmation from the electoral register
• EEA Member state ID card containing a current address

SOURCE OF FUNDS & DECLARATION OF FUNDS

As evidence of source of funds, we require the Pay slips, Bank Statement or P60 (needless to add that the amount transferred should be within the income) and a self-Declaration in specified form from the customer.

If funds are from a loan or remortgage then the following original documents should be provided:

– Loan/mortgage agreement
– Credit card statement or cash advance receipt
– Statement showing proceeds from sale of an asset orassets

Hirett will ensure that the customers are not on the sanction list. For corporate customers credit checks through service providers will be conducted, to check corporate clients’ details and transactions to ensure that information matches with those provided by the client.

Any inconsistencies must be raised to the MLRO through an internal SAR. If staff suspect fake or fraudulent ID has been presented, they must not disclose or discuss their concerns with anyone else, including the presenter of the ID – as this may count as “TIPPING OFF” which is a severally punishable offence.

9. POLITICALLY EXPOSED PERSONS(PEPs)

PEPs are defined as individuals who have been entrusted with a prominent public function outside of the UK.

Hirett also extends the definition of a PEP to add any immediate family member and/or a close associate of a PEP.

In order to comply with regulations, Hirett ensures that all accounts relating to PEP’s must;

• be approved by the MLRO
• be subject to enhanced due diligence
• consider all transactions and any association with a PEP as high risk

Any PEP wishing to obtain payment cards, open accounts or conduct a remittance with Hirett shall be asked to verify the source of their funds, even if the sum is below our £2500 threshold.

10. SANCTIONS

What are sanctions?

Sanctions (or embargoes) are political trade restrictions put in place against certain target countries whohave failed to meet certain unilateral conditions or are part of/have failed to satisfy conditions pertaining to Money Laundering, Fraud, Terrorist Finance.

The aim of applying sanctions is to maintain or restore international peace and security. There are lists that have been created that detail countries and dictatorship regimes, these are called ‘sanctions lists’.

Any client found on a sanctions list will be declined and no transactions will be carried out. Our staff will identify sanctioned entities by running checks against internal records, open source information and data bases of local authorities, regulators, law enforcement, Worldcheck, Thomson Reuters, etc.

Sanctions list and Politically Exposed Persons (PEPs)

A consolidated list of targets listed by the United Nations, European Union and United Kingdom under legislation relating to current financial sanctions regimes will be available to our staff. Our staff will detect if both the client’s name and receiver’s name match with the names in the sanctions list by running checks against internal records, open source information and data bases of local authorities, regulators, law enforcement, Worldcheck, Thomson Reuters, etc.

11. INDIVIDIAL AND CORPORATE CLIENTS AND AGENTS

When providing services to individual and corporate clients and agents, the following procedure would apply. In adopting a risk-based approach Hirett staff should ensure they understand the individual and corporate clients, including their background, the company’s legal form, structure and ownership, etc.

We take a risk-based approach while on-boarding individual and corporate clients and agents. It would be our endeavour to on board agents with simple and transparent business models such as Small Payment Institutions or non-regulated businesses who cater to everyday public and avoid agents with a complex business models such as MSBs/PSPs who have sub agents under them as their clients. For other businesses that need payment services, we would endeavour to take on only small and micro businesses.

ONBOARDING PROCESS:

Hirett will obtain an application form and AML-KYC questionnaire in respect of individual and corporate clients and agents as per Appendixes 4-8, along with the personal information, the ownership structure to ascertain the actual beneficial owners holding over 25% of stake in the firm/company. Verification of ownership shall be by an online search of Companies House or other electronic search engine for companies.

The identity of all directors, the ultimate beneficial owners and all authorised signatories will be verified. It is important that Hirett is satisfied that a person acting on behalf of a corporate client has authority to do so and will obtain evidence of such authority as part of the KYC.

We must also remain vigilant and be sure of the activities of the client are within our approved business model. An indicative list of prohibited business activities includes, but can include others at the discretion of the senior management:

• Gambling
• Narcotic drugs (and some pharmaceutical activities)
• Racketeering and counterfeit goods trading
• Adult Content and Entertainment services
• Arms and weapons dealing and broking
• Military services
• Toxic waste servicing and reckless chemical supplying, processing, broking
• Sex trafficking

We recognise that Corporate and Legal Entities provide an attractive vehicle for money laundering. The use of “brass plate” or shell companies* is common place and will with due care verify the identity of the client (i.e. the Company); Limited liability partnerships and partnership firms are treated as corporate clients.

*NB – Where it is clear that the client in question is a shell (dummy) company the matter must referred to the MLRO immediately – Remember – DO NOT “TIP OFF”!

In order to verify the information provided by individual and corporate clients and agents, we will verify the information our- selves or have a company search carried out through an independent source

• Proof of Address, Occupation and Income
• Company’s Registration number, name and trading name
• Registered address and any separate trading address
• List of Directors
• List of beneficial owners and shareholders
• Memorandum and Articles of Association
• Proof of trading
• The ID and Address proof of all UBOs and directors

Further we would also assess the following

• The fitness and propriety of UBOs, directors and senior management as per Appendix 6;
• Their business model, countries they send payments to and customer type
• The firm’s capability to handle transactions in terms of location, communication and security
• The firm’s ability to store and transmit data electronically

Publicly listed companies whether UK or non-UK are generally considered to be low risk, as the listing will be on a recognised or approved stock exchange, no further identification steps are required.

The MLRO will then assess the application as per Appendix-5, and accord approval.

MONITORING:

Individual and corporate clients and agents’ activities would be monitored on an ongoing basis by running checks against internal records, open source information and data bases of local authorities, regulators, law enforcement, Worldcheck, Thomson Reuters, etc. The agents whether regulated or unregulated will be monitored by Hirett UK’s MLRO and director – operations. Agents sizeable business would be subjected to an annual external compliance certification mandated in the agency agreement by a consultant firm of our choice. The performance of agents will be overseen by the senior management with regard to the nature, size, volumes and geographies serviced. The MLRO will also visit the business premises of all agents periodically.

The senior management has online access to the transactions of the agents and corporate clients. Also, for agents who use Hirett, the AML rules are set by us and will act as a safe guard and alerts will be generated and emailed to the senior management. For agents using their own platforms, their transactions will flow into the Hirett remittance platform and integrated hence would be subject to the same AML safeguards.

12. ENHANCED CUSTOMER DUE DILIGENCE

INDIVIDUALS SEEN IN PERSON

Where a new individual or corporate client is presenting in person:

i. Obtain acceptable photographic identification (photocopy the same and hold on record) ii. Proof of the address of the client has to be obtained, photocopied or scanned and retained; this document should not be older than 3 months from the date of the transaction.

*Note the unique reference number of the photographic identification on the account opening forms. The unique reference number will be:

• Passport number
• Driving license number
• National identity card number

Certify the documentation by signing and dating and including the words e.g.: ‘original seen’.

INDIVIDUALS NOT SEEN IN PERSON (NON FACE‐TO‐FACE CLIENTS)

When we take on customers non-face to face, the staff will have to obtain the ID proofs and have them verified by running checks against data bases of local authorities.

STEP 1
The Clients will provide their ID and proof of address by email, fax or post.

STEP 2
Hirett staff will possibly attend a short video-call with customer over skype/ whatsapp/ facetime / wechat.

STEP 3
We engage the services of our due diligence partners, to run an external ID/KYC online check, if needed.

STEP 4
Once the Client’s identity has been verified and the above conditions satisfied, they will be able to enjoy full use of our services available.

WHEN CLIENT IS UNABLE TO COMPLETE OUR STANDARD NON FACE‐TO‐FACE KYC PROCESS

In cases where we are unable to electronically verify the ID or address proof or other documents, we need to obtain true Copies of the originals certified by a person of holding responsible position. For e.g.

***Facsimile copies are not acceptable***

Certifying on each ID copy – “I hereby confirm that this is a true copy of the original” and print the name, date and the position or office the certifying person holds.

13. LINKEDTRANSACTIONS

In anticipation that a client will avoid requiring proof of funds and have structured his/her transactions in reaching the limit amount, the client may divide the amount among his/her friends and send the money at the same time to a single beneficiary. In this case, our staff will be able to detect linked transactions by running checks against our internal records.

14. ID SYSTEM

On our client registration rosters we allocate a unique ID number to each client. Clients are encouraged to use their ID number in all communications with us for security purposes. The outcome is that we can be assured that we are dealing with the right person and preventing usage of client’s account by others (i.e. an unauthorised person, hacker etc).

Clients must give the unique ID number every time they do a transaction. If we need to continue with further identity checks, these should be done by asking security questions such as date of birth, postcode, and contact numbers and details of beneficiaries or details of last transactions.

These checks are strictly implemented before proceeding with the transaction.

15. SYSTEM AND CONTROLS

To confirm compliance, we have a system of controls. The following AML set of rules will trigger the system to hold the transaction:

• Incomplete KYC requirements will not allow any transactions to occur, accounts to be opened and payment cards to be issued
• Any payments in excess of £2500 require proof of the source of funds from the Sender
• Sender added more than ten (10) beneficiaries
• Beneficiary received more than £5,000 in total in amonth
• Beneficiary received funds from three (3) or more different Senders.
• Both sender and beneficiary names match with those names on the SanctionsList

16. EMPLOYEE OBLIGATIONS:

All relevant Hirett staff will undergo training tohelp them understand their role and comply with payment services regulations conducted by the MLRO. Staff are required to read the AML policy and manual, keep themselves up to date with the changes from time to time. All relevant staff will have to sign a declaration of having read the AML policy of Hirett and that they would abide by the policy. Format is attached as Appendix -7.

Where the instruction is to refer the matter to MLRO, the client should be informed that there is a problem with the identification and clarification is to be sought from MLRO. Such clearance or refusal to establish a business relationship/ transaction will be available within reasonable time. In practicing KYC and EDD, Hirett

staff should satisfy themselves as to the rationale behind the instruction or business. Furthermore, they should be satisfied that instructions by a client are rational and make good business sense. A risk-based approach across the business is mandatory.

INFORMATION ABOUT OUR SERVICES TO POTENTIAL CLIENTS

Hirett staff are not expected to carry out customer due diligence or enhanced due diligence procedures with a client where the meeting is merely to provide information to a prospective client about our services or is a first interview/discussion prior to a relationship being established.

17. ANTI BRIBERY AND CORRUPTION

Prevention of bribery and corruption is important for Hirett, as a failure to prevent bribery and corruption would hit its reputation and the trust, reposed by its customers. Recognising the threat, Hirett adopts a zero-tolerance approach to bribery and corruption. Hirett shall comply with the provisions of the Bribery Act 2010.

Employees are made aware that should they become aware of any bribery or corrupt practices involving any staff member, third party service providers or customers in conducting business with Hirett, they should report the matter to the Director of Operations.

Hirett employees are made aware that it is inappropriate to offer and/ or accept gifts and hospitality for the conduct of business. However certain gifts and hospitality of a modest nature and insignificant value, which are incidental to business, are exempt.

18. WHISTLEBLOWING:

The act of ‘making a disclosure in the public interest’ is referred to as ‘whistleblowing’. The Public Interest Disclosure Act 1998 (PIDA) is an Act that protects whistle-blowers in the UK. For the disclosure to be protected by the law, an employee should make the disclosure of any criminal offence, failure to comply with a legal obligation, miscarriage of justice, threat to an individual’s health and safety, damage to the environment and a deliberate attempt to cover up any of the above to a Director and in the right way. While doing so an employee must ensure to:

• Make the disclosure in good faith (with honest intent and without malice);
• Reasonably believe that the information is substantially true;and
• Reasonably believe the disclosure is made to the right ‘prescribed person’.

19. TRAINING

One of Hirett’s key controls to mitigate the threat of money laundering will be to have staff that are aware of, and alert to the threat. All relevant staff, whether full-time, part-time or contractual and any agents, their managers and staff, will be made aware of our anti-money laundering policy, manual and their obligations

arising for both themselves and Hirett. We will provide guidance on anti-money laundering and how and when to make a Suspicious Activity Report (SAR).

This training will comprise of two key elements:

Induction Training – The MLRO/NO is responsible for identifying relevant new staff that are required to undertake induction training. The training is provided by the MLRO or the MLRO will engage external AML Advisors and will conduct the training. The content of the training includes awareness training, covering Money Laundering and Terrorist Financing.

Refresher Training – all relevant staff must undertake regular refresher training on an annual basis. The training is provided by the MLRO or the MLRO will engage AML Advisors and assessment of staff understanding is carried out throughout the training.

Hirett will obtain acknowledgement from staff and agents that they have received the necessary training. All staff members will be required to sign their attendance at training sessions. Evidence of AML training provided will be recorded and held in the AML training file.

20. RECORD KEEPING

Hirett will create and maintain sufficient documentation to give a clear and full record of all contacts and communications with every client. It is the responsibility of all staff members to ensure completeness of records for the area in which they are employed.

Hirett retains all records for a minimum of 5 years after the business relationship has ended. Where an investigation is being conducted, all records will be retained for 5 years or until the end of the investigation, whichever is longer.

APPENDIX 1:

THE PROCEEDS OF CRIME ACT 2002 AND SUSPICIOUS ACTIVITY

The Proceeds of Crime Act 2002 (POCA) requires (amongst other things) that when in the course of business, a member of staff of Hirett comes across what is described as Suspicious Activity that it should be reported in the first instance to the MLRO.

There is no definitive list of what constitutes suspicious activity, however if the principles of KYC are rigorously applied then in the course of conducting business with the client sufficient information should be available, to make a judgment about what constitutes suspicious activity in each case.

When an activity is suspicious, the following procedures will be followed:

• The person suspecting should immediately make a written report or e- mail to the MLRO/NO If urgent phone first, then follow up with a written report;
• No discussion with other members of staff should take place. Date and time of report should be recorded;
• Acknowledgement of the report should be obtained from the MLRO/NO and can be done via email;
• New suspicion of the same client means a new report must be made:

FAILURE TO REPORT:

Failure to report knowledge or suspicions of laundering of the proceeds of crime could entail a maximum of five years imprisonment and/or an unlimited fine.

TIPPING OFF

It is an offence to make a disclosure which is likely to prejudice any investigation which might be conducted following the making of a Suspicious Activity Report. The crime of tipping off could entail a maximum 2-year imprisonment/or an unlimited fine.

• It is an offence to enter into or become concerned in an arrangement which he knows or suspects; facilitates the acquisition retention use or control of criminal property by or on behalf of another – penalty is a maximum of fourteen years imprisonment and/or an unlimited fine;
• It is an offence to acquire use or have possession of criminal property – penalty is a maximum of fourteen years imprisonment and/or an unlimited fine.

GENERAL

If in doubt report your suspicion to the MLRO, you have then complied with your obligation. The MLRO will judge whether to report further to NCA. All contact with Law Enforcement Agencies will be handled by the MLRO/NO or a MLRO nominated senior management person.

The MLRO/NO is responsible for providing information and updates to the legislation, as and when they occur. Hirett considers any failure to comply with any of the relevant legal or regulatory requirements by any member of staff to be gross misconduct and could lead to immediate dismissal of that member of staff.

APPENDIX 2:                                                Hirett Limited

Suspicious Activity Report Form

Please complete and present to UK MLRO

APPENDIX 3:

COUNTRY RISK CLASSIFICATION

*: Country AML Risk classification as per Basel AML Index 2017 Scores and Rankings. (Overall score based on a new FATF evaluation)

APPENDIX 4:

Space for additional information if any: (Pl indicate the question to which it relates to)

………………………………………………………………………………………………………

………………………………………………………………………………………………………

………………………………………………………………………………………………………

………………………………………………………………………………………………………

………………………………………………………………………………………………………

PLEASE PROVIDE THE FOLLOWING DOCUMENTS:

1. FILLED UP APPLICATION & AML-KYCFORM
2. COPY OF REGULATORY APPROVAL (IF A REGULATED ENTITY)
3. COPY OF CERTIFICATE OF INCORPORATION
4. COPY OF MEMORANDUM / ARTICLES OFASSOCIATION
5. LAST 3 YEARS FINANCIAL STATEMENTS
6. PASSPORT COPIES OF THE BOARD OFDIRECTORS
7. ANTI MONEY LAUNDERING POLICY
8. BOARD RESOLUTION FOR AUTHORIZED SIGNATORY or AUTHORISEDSIGNATORY BOOKLET

APPENDIX 5:

On Boarding Process note for Agents

APPENDIX 5:

On Boarding Process note for Agents …… cont’d

APPENDIX 5:

On Boarding Process note for Agents …… cont’d

MLRO’s appraisal/comments and approval

   Risk Rating:                                    Low __  Medium __  High __

Approved / Not approved

Signature of MLRO

APPENDIX 6:

Corporate Client and Agent KYC and Fitness & Propriety Questionnaire

It must be completed per corporate client/agent applicant for payments cards, accounts and services

The fit and proper test

New regulation MLR2017, introduced new requirements in relation to the fit and proper testing and Hirett is required to obtain fit and proper assessment form for all agents.

This fit and proper test applies to Hirett corporate clients, agents and their responsible persons:

• The person applying to register the business
• The person running the business either on their own or in partnership
• Officers of the business, including director and company secretary
• Senior managers who are engaged directly in the provision of regulated activity
• The nominated officer
• Beneficial owners of the business
• A person who is in effect directing the business

Personal Information

Male: __  Female __

First Name: _______________  Last Name: ________________

Home Address: ______________________________________

Post Code: _______  Mobile/Telephone: ____________________

City: _________________________

Home telephone: ________________

Years living in this address: ___________  Months: ___________

If less than 3 years at this address please provide address: ____________________________________

Personal E-mail Address: ___________________________

Driving License No. (Full or Provisional): ________________  Country of Issue: ___________  Expiry Date: __________

Passport No.: ____________  Country of Issue: ___________  Expiry Date: __________

EU-national ID: __________  Country of Issue: ___________  Expiry Date: __________

Residence Permit No.: _______________  Country of Issue: ___________  Expiry Date: __________

National Insurance No.: ______________  Nationality: _______________

Country of Birth: ________________  Date of Birth(dd/mm/yyyy): _________________

I certify that the above information is correct and undersigned that any financial services offered to me or my company (sole trader, partnership, corporation or otherwise) by Hirett Limited will be conditional thereon. I (we) here- by authorize Hirett Limited and any consumer reporting agency employed by Hirett Ltd. To receive and investigate the above information and any other information obtain from me(us) or from any other person relating in any way to my (our) eligibility to act as an Independent agent of Hirett Ltd. To make inquiries on all persons mentioned above and others having knowledge of me (us) and to answer inquiries from other persons as to my (our) conduct and qualification while serving as an Independent agent of Hirett Ltd. all without causing any liability what-so-ever to arise there from.

Signed by: ___________________________                                            Date: ___ / ___  / ___

Know Your Customer and Fitness and propriety Questionnaire Please note the following guidance:

• Please include matters in the UK and/or overseas when considering and answering the questions.
• References to “Your Business/Businesses” includes business at which any of the owners, directors/partners or management of the agent hold or have held a controlling or senior management position, during the time of the relevant individual’s involvement and for one year thereafter. For the avoidance of doubt, the agent falls within the Your Business category.

Description of Business

Please describe the nature of your business in detail, including revenues, number of employees, years in operation, etc.

_________________________________________________________________________________

_________________________________________________________________________________

Criminal proceedings

1. Have you or any of your Business ever been the subject of or involved in any investigation or arrest /charge relating to a criminal offence?
   Yes __  No __
2. Are you aware of any intention to begin procedures against you, another director,or the company for a debt/ fraud?
   Yes __  No __
3. Have you or any of your Businesses ever been party to any civil proceedings (including proceedings relating to, for example, fraud, negligence, wrongful trading or a debt) which resulted in a finding against you or your business(es)?
   Yes__  No __
4. Are you or any of your Businesses currently a party to civil proceedings or are you aware of any intention to begin civil proceedings against You orYour Business(es)? Yes __  No __
5. Have you ever been dismissed, asked to resign or suspended from a position of employment or other role or appointment?
   Yes __  No __
6. Have you ever been disqualified from acting as a director or manager of a company or the subject of any allegations, investigation or proceedings of a disciplinary nature (relating to, for example, malpractice or misconduct related to business activities)?
   Yes __  No __
7. Have you ever had unspent convictions for offences of dishonesty, fraud, financial or tax crime or an offence under legislation relating to money laundering, companies, building societies, industrial and provident societies, credit unions, friendly societies, banking, other financial services, insolvency, consumer credit companies, insurance, market manipulation and insider dealing, whether or not in the United Kingdom?
   Yes __  No __

Financial soundness

1. Have you ever:

(i) filed for bankruptcy: Yes __  No __
(ii) been declared bankrupt or insolvent; Yes __  No __
(iii) made arrangements with creditors (for example, under an individual voluntary arrangements); Yes __  No __
(iv) been involved in any similar proceedings (whether or not such proceedings have completed or an order or agreement resulted from the proceedings)? Yes __  No __

2. Have any of your Business ever:

(i) been put into liquidation or wound up; Yes __  No __
(ii) had a receiver / administrator appointed; Yes __  No __
(iii) made arrangements with its creditors; Yes __  No __
(iv) Otherwise ceased trading? Yes __  No __

Regulated activities

1. Have You or any of Your Busines sever:

(i) Conducted activities (such as money transfer) without required prior authorisation or registration from a regulatory body (such as theFCA);
Yes __  No __
(ii) been investigated for the possible carrying on of activities without the required authorisation /registration;
Yes __  No __
(iii) had any outstanding financial obligations (e.g. fees payable to a regulatory body) connected with carrying out regulated activities;
Yes __  No __
(iv) had an agreement in relation to the carrying out of regulated activities terminated?
Yes __  No __

2. Have You or any of Your Business ever:

(i) been refused or had restricted any authorisation / registration from a regulatory body;
Yes __  No __
(ii) been criticised, investigated and / or penalised for failure to comply with regulatory obligations (including termination of an authorisation / registration); Yes __  No __
(iii) been required to produce information to any regulatory body;
Yes __  No __
(iv) received a warning from any regulatory body relating to possible disciplinary action;
Yes __  No __
(v) decided to withdraw an application for authorisation/registration after submitting the application?
Yes __  No __

3. Have You or any of Your Business ever contravened any of the requirements and standards of HMRC or other regulatory authorities (including a previous regulator), clearing houses and exchanges, professional bodies, or government bodies or agencies?
Yes __  No __

Further information

3. If you have answered Yes to any of the above questions or if there is anything else that Hirett Ltd should be aware of in relation to this application and the assessment of you as a fit and proper person to obtain payments cards, conduct money transfer activities and receive other services from Hirett Ltd. please give full details below:

_______________________________________________________________

_______________________________________________________________

_______________________________________________________________

_______________________________________________________________

I certify that the above information is correct and understand that any financial service offered to me or my company (sole trader, partnership, corporation or otherwise) by Hirett Ltd. will be conditional thereon I (we) hereby authorize Hirett Ltd and any consumer reporting agency employed by Hirett Ltd to receive and investigate the above information and any other information obtained from me(us) or from any other person relating in any way to my (our) eligibility to act as an independent agent of Hirett Ltd. to make inquiries or all persons mentioned above and of others having knowledge of me (us) and to answer inquiries from other persons as to my (our) conduct and qualifications while serving as an Independent agent of Hirett Ltd. all without causing any liability what-so-ever to arise there from

Signature _____________  Date _________

Previous experience Money Transfer Services

1. Have You or Your business ever been registered or licensed by FCA, HMRC or any other regulatory body to perform operations as a money transfer agent? Yes __  No __

If Yes:

2. Have you or your Business at any moment been rejected by the FCA, HMRC or any other regulatory body to perform operations as a money transfer agent? Yes __  No __  If Yes, please explain _________________________

3. have you or the money transfer business terminated the contract for any reason?
Yes __  No __  If Yes, please explain _________________________

Work Experience

1. Please provide detailed information regarding your last two years experience

2. What is the highest degree you obtained?
High School __  Bachelor’s Degree __  Postgraduate Certificate __  Other __

Languages

1. Can you please give an indication of your language skills:

SIGNATURE  ________________      Date:  ___________

APPENDIX 7:

DECLARATION OF HAVING READ THE AML POLICY

I, _______________________________ , the undersigned, declare that I have read the AML Policy (includes

whistle blowing, anti-bribery and corruption) of Hirett Limited, understand its relevance to my role and its meaning. I do hereby agree to work in accordance with the policy.

Signature ___________________     Date: ___________

Declarant Name (print): __________________________

Position in theorganisation: ________________________

Name of theorganisation: __________________________

Please complete, this form and return to the MLRO as soon as possible.

APPENDIX 8:

New Individual Customer KYC Questionnaire

It must be completed per each individual applicant for payments cards, accounts andservices

Personal Infoemation

Male: __  Female __

First Name: _______________  Last Name: ________________

Home Address: ______________________________________

Post Code: _______  Mobile/Telephone: ____________________

City: _________________________

Home telephone: ________________

Years living in this address: ___________  Months: ___________

If less than 3 years at this address please provide address: ____________________________________

Personal E-mail Address: ___________________________

Driving License No. (Full or Provisional): ________________  Country of Issue: ___________  Expiry Date: __________

Passport No.: ____________  Country of Issue: ___________  Expiry Date: __________

EU-national ID: __________  Country of Issue: ___________  Expiry Date: __________

Residence Permit No.: _______________  Country of Issue: ___________  Expiry Date: __________

National Insurance No.: ______________  Nationality: _______________

Country of Birth: ________________  Date of Birth(dd/mm/yyyy): _________________

I certify that the above information is correct and undersigned that any financial services offered to me or my company (sole trader, partnership, corporation or otherwise) by Hirett Limited will be conditional thereon. I (we) here- by authorize Hirett Limited and any consumer reporting agency employed by Hirett Ltd. To receive and investigate the above information and any other information obtain from me(us) or from any other person relating in any way to my (our) eligibility to act as an Independent agent of Hirett Ltd. To make inquiries on all persons mentioned above and others having knowledge of me (us) and to answer inquiries from other persons as to my (our) conduct and qualification while serving as an Independent agent of Hirett Ltd. all without causing any liability what-so-ever to arise there from.

Signed by: ____________________                Date: __ / __ / __

Know Your Customer (KYC) Questionnaire

Please include matters in the UK and/or overseas when considering and answering the questions.

Politically Exposes Person(s)

1. Are you a Politically Exposed Person (PEP)
   Yes __  No__
2. Are you related to Politically Exposed Persons (PEPs)
   Yes __  No__

Criminal proceedings

1. Have you or any of your Business ever been the subject of or involved in any investigation or arrest /charge relating to a criminal offence?
   Yes __  No__
2. Are you aware of any intention to begin procedures against you, another director,or the company for a debt/ fraud?
   Yes __  No__
3. Have you or any of your Businesses ever been party to any civil proceedings (including proceedings relating to, for example, fraud, negligence, wrongful trading or a debt) which resulted in a finding against you or your business(es)?
   Yes __  No__
4. Are you or any of your Businesses currently a party to civil proceedings or are you aware of any intention to begin civil proceedings against You orYour Business(es)?
   Yes __  No__
5. Have you ever been dismissed, asked to resign or suspended from a position of employment or other role or appointment?
   Yes __  No__
6. Have you ever been disqualified from acting as a director or manager of a company or the subject of any allegations, investigation or proceedings of a disciplinary nature (relating to, for example, malpractice or misconduct related to business activities)?
   Yes __  No__
7. Have you ever had unspent convictions for offences of dishonesty, fraud, financial or tax crime or an offence under legislation relating to money laundering, companies, building societies, industrial and provident societies, credit unions, friendly societies, banking, other financial services, insolvency, consumer credit companies, insurance, market manipulation and insider dealing, whether or not in the United Kingdom?
   Yes __  No__

Financial soundness

8. Have youever:
   a. filed for bankruptcy: Yes __  No__
   b. been declared bankrupt or insolvent; Yes __  No__
   c. made arrangements with creditors (for example, under an individual voluntary arrangements); Yes __  No__
   d. been involved in any similar proceedings (whether or not such proceedings have completed or an order or agreement resulted from the proceedings)? Yes __  No__
9. Have any of your Business ever: Yes __  No__
   (i) been put into liquidation or wound up; Yes __  No__
   (ii) had a receiver / administrator appointed; Yes __  No__
   (iii) made arrangements with its creditors; Yes __  No__
   (iv) Otherwise ceased trading? Yes __  No__

Regulated activities

10.Have You or any of Your Business ever:

a. Conducted activities (such as money transfer) without required prior authorisation or registration from a regulatory body (such as the FCA);
Yes __  No__
b. been investigated for the possible carrying on of activities without the required authorisation /registration;
Yes __  No__
c. had any outstanding financial obligations(e.g. fees payable to a regulatory body) connected with carrying out regulated activities;
Yes __  No__
d.had an agreement in relation to the carrying out of regulated activities terminated?
Yes __  No__

11.Have You or any of Your Business ever:

a. been refused or had restricted any authorisation / registration from a regulatory body;
Yes __  No__
b. been criticised, investigated and / or penalised for failure to comply with regulatory obligations (including termination of an authorisation / registration); Yes No been required to produce information to any regulatory body;
Yes __  No__
c. received a warning from any regulatory body relating to possible disciplinary action;
Yes __  No__
d. decided to withdraw an application for authorisation/registration after submitting the application?
Yes __  No__

12. Have You or any of Your Business ever contravened any of the requirements and standards of HMRC or other regulatory authorities (including a previous regulator), clearing houses and exchanges, professional bodies, or government bodies or agencies?
Yes __  No__

Further information

13. If you have answered Yes to any of the above questions or if there is anything else that Hirett Ltd. should be aware of in relation to this application and the assessment of you as a fit and proper person to conduct money transfer activities please give full details below:

____________________________________________

____________________________________________

____________________________________________

____________________________________________

I certify that the above information is correct and understand that any financial service offered to me or my company (sole trader, partnership, corporation or otherwise) by Hirett Ltd. will be conditional thereon I (we) hereby authorize Hirett Ltd and any consumer reporting agency employed by Hirett Ltd to receive and investigate the above information and any other information obtained from me(us) or from any other person relating in any way to my (our) eligibility to act as an independent agent of Hirett Ltd. to make inquiries or all persons mentioned above and of others having knowledge of me (us) and to answer inquiries from other persons as to my (our) conduct and qualifications while serving as an Independent agent of Hirett Ltd. all without causing any liability what-so-ever to arise there from

Signature _____________                Date: __ / __ / __      Work Experience: ________________________

14. Please provide detailed information regarding your last two years’ experience

15. What is the highest degree you obtained?

___  High School      ___  Bachelor’s Degree      ___  Postgraduate Certificate      ___  Other

Languages

16. Can you please give an indication of your language skills:

NOTES

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