RC CAPITAL SOLUTIONS LIMITED

Anti-Money Laundering, Anti-Terrorism Financing and Prevention of Crime Policy

May 2022

Version 4

Table of Content

POLICY SUMMARY

1 OVERVIEW

2 APPROACH TO AML AND COUNTERING TERRORIST FINANCING

3  CUSTOMER DUE DILIGENCE

4 REPORTING

5 RECORD KEEPIING

6 PROTECTING THE COMPANY FROM BEING A VICTIM OF CRIME

APPENDIX 1

KYC Policy and procedures is a separate policy but integral to AML procedures.

Revisions Log:

Date of Change

Author

Notes

July 10, 2019

Compliance Manager

Draft 1

July 15, 2019

Compliance Manager

Draft 2

September 11, 2019

Compliance Manager

Draft 3

May 5th,   2022

Compliance Manager

Draft 4

{Page Left Blank Intentionally}

RC Capital Solutions Limited (the “Company”) is committed to achieving a high standard of regulatory compliance in relation to preventing its services from being associated with crime and disorder. The purpose of this document is to minimise the risk of the Company being used to launder money, assisting in the financing of terrorism or being a victim of crime and sets out the Company’s policies in this area. This document allows management and staff to be aware of their obligations and the procedures that must be followed.

What is money laundering?

1.1 The term ‘money laundering’ covers wide-ranging circumstances involving any activity concerning the proceeds of any crime; these include trying to turn money raised through criminal activity into ‘clean’ money, possessing or transferring the benefit of acquisitive crimes such as theft and fraud, possessing or transferring stolen goods, being directly involved with any criminal or terrorist property, or entering into arrangements to facilitate the laundering of criminal or terrorist property, and criminals investing the proceeds of their crimes. It also includes spending the proceeds of crime, as opposed to merely concealing or converting it.

1.2 For something to constitute an offence it needs to be an offence in the country of operations. So spending proceeds of crimes committed abroad may not constitute money laundering, if the relevant crime is not an offence in the country of operations.

What is terrorist financing?

1.3 Terrorist financing is the provision or collection of funds, by any means, directly or indirectly, with the intention that they should be used or in the knowledge that they are to be used, in full or in part, in order to carry out any terrorism offences. Terrorist financing can involve funds with a legitimate origin.

What other crime might affect us?

1.4 This policy also sets out procedures to minimise the risk of us being a victim of crime. Crimes that might be perpetrated against the Company include:

a) unlawful entry to Company premises and/or unauthorised use of Company equipment;

b) criminal damage to or theft of Company property;

c) violence against members of staff; and

d) cyber crimes including hacking, data theft and theft of customer funds.

Money laundering reporting officer

1.5 The company has appointed a Money Laundering Reporting Officer MLRO, also known as a Nominated Officer as we believe this will help us to meet obligations we set out more effectively. 

1.6 The MLRO at the Company is the Richard Edward Creed.

1.7 MLRO must regularly review this policy (and in any case at least annually) to ensure it remains up-to-date and adequate. A written record must be kept of when the policy was last reviewed and any changes that were made.

1.8 The MLRO’s duties and obligations include:

a) identifying money laundering and terrorist financing risks relevant to the Company;

b) designing and implementing policies and procedures to manage and mitigate these risks and keeping these policies and procedures up to date and under review;

c) monitoring the effectiveness of the Company’s policies and procedures, with consideration to efficiency, employee adherence and system compliance and suitability;

d) liaising with and reporting on the effectiveness of the Company’s controls, policies and procedures to senior management on a regular basis;

e) record keeping;

f) training employees so that they are aware of the Company’s policies and procedures in this area and the reporting structure;

g) ensuring compliance with the relevant legislation, regulations and jurisdictional guidance; and

h) reviewing and investigating suspicious transaction reports from staff members, considering whether suspicious activity reports (“SARs”) should be submitted to the appropriate reporting government agency.

Senior management

1.9 The Company’s senior management is fully committed at all times to policies and procedures relating to anti-money laundering (“AML”) and counter-terrorist financing (“CTF”), which will reflect and promote a risk-based approach.

1.10 Senior management will fully support the MLRO and will encourage active co-operation from all employees. Senior management will ensure that the Company’s policies and procedures are clearly communicated to employees. Further, it will ensure robust mechanisms are in place to ensure the policies and procedures are carried out effectively, weaknesses are identified and improvements are made where necessary. 

1.11 Any senior management decisions will be documented to ensure there is evidence of any decision-making processes and an audit trail.

All staff

1.12 This policy must be communicated and read by all staff. A written record must be maintained to confirm all staff have read and understood this policy. If any changes are made following the review set out in 1.7, these changes must also be communicated to staff and a written record maintained to confirm they have read and understood the changes.

Risk-based approach

1.13 The Company has adopted a risk-based approach to AML and CTF, with the aim of managing and mitigating money laundering risks in a proportionate way and understand that we are required to have policies and procedures in relation to risk assessment and management.

1.14 The risk-based approach involves a number of discrete steps in assessing the most proportionate way to manage and mitigate the money laundering and terrorist financing risks faced by the Company. These steps include:

a) identifying the risks that are relevant to the business;

b) designing and implementing policies and procedures to manage and mitigate these assessed risks;

c) continually monitoring and improve the effective operation of these controls; and

d) recording what has been done, and why.

1.15 A money laundering and terrorist financing risk assessment will be carried out and documented, which considers the risk level of the products, services, customers and geographic location of the Company’s activities. The aim of this risk assessment is to identify and quantify risks and to determine how these risks should be managed and mitigated. 

1.16 We appreciate that the risk-based approach requires the full commitment and support of senior management. Most importantly, we understand that in addition to the existence of policies and procedures, we need to ensure we have robust mechanisms to ensure that they are carried out effectively. Where weaknesses are identified, we will endeavour to make the necessary improvements.

1.17 The Company also recognises that it will have to employ a degree of flexibility in its risk-based approach, so that its efforts are focused where they are most needed and will have the greatest impact. 

Dynamic assessment of risk

1.18 The Company appreciates that its money laundering and terrorist financing risk assessment is not a one-off exercise and that its policies and procedures must be kept under regular review. 

1.19 The nature of risks and threats changes over time; it is therefore important that we adopt a continuous process to consider these, learn and adapt. Given that the risks posed to our business will continually change, it is important that we review our data management strategies and use of technology to ensure we are adopting the best systems.

1.20 The Company therefore intends to review and revise this document every 12 months, and also when there is any change to the relevant legislation and/or government guidance.

Customer risk

1.21 Customer risk is assessed using a matrix, which is not included in this document to avoid giving assistance to anyone who may hope to use the Company’s services to launder money.

1.22 Risks to which the Company might be subject include:

a) customer risk;

b) product / services risk;

c) transaction / payment risk;

d) geographical risk; and

e) behavioural risk.

Identity verification 

3.1 The Company uses the KYC validation services of GBG PLC. The following KYC is collected electronically via an app or website. The agents have the ability to communicate to the customer to correct minor issues if this is not considered a ‘tipping off’ correction.

3.2 Until such time as the customer’s identity has been verified to the Company’s satisfaction, the customer will not be permitted to deposit any funds. 

Risk assessment

3.3 All customers are allocated a risk category. The default risk category is ‘low’, however the following factors would lead to that category being reviewed:

a) high spend level (including a large number of low value transactions or a low number of high value transactions);

b) spend level which does not accord with information held as to the customer’s occupation and means;

c) whether the customer is a politically exposed person (“PEP”);

d) unusual customer behaviour;

e) unusual payment methods; 

f) unusual requests for payment of winnings or withdrawal of funds; or

g) any information gleaned about the customer which raises concerns, in particular as to their source of wealth or source of funds.

3.4 The Company will gather additional information about customers using a risk-based approach and the above factors that would trigger the gathering of further information, in order to carry out further assessment of risk.

3.5 The Company acknowledge that the risk factors indicated in the paragraphs above in this section may apply to a wide range of customers with varying social and financial positions and responsibilities. 

Enhanced due diligence / ongoing monitoring

3.6 We will perform enhanced due diligence (“EDD”), which is the ongoing monitoring of a business relationship with customers. 

3.7 EDD will be performed on a risk-sensitive basis in any circumstance which, by its nature, can present a higher risk of money laundering or terrorist financing.

3.8 At this stage, we envisage performing EDD when the following thresholds are triggered:

a) Where transaction totals, or exceeds US$10,000;

b) Where there is suspicion of money laundering or terrorist financing, regardless of any threshold outlined in point (a) above; and

c) Where there are any doubts about previously obtained identification and verification information.

3.9 We will perform EDD by:

a) scrutinising transactions undertaken throughout the course of the relationship (including, where necessary, the source of funds) to ensure that the transactions are consistent with the relevant person’s knowledge of the customer, his business and risk profile;

b) keeping the documents, data or information obtained for the purpose of applying EDD measures up-to-date; 

c) performing checks on third party databases;

d) conducting open-source checks such as social media websites and Google;

3.10 Dependent on how frequently we form a business relationship with a customer we may apply ongoing monitoring more widely. Therefore, regular customers are likely to be subject to closer scrutiny. Ongoing monitoring will include reviewing historical information and, where necessary, additional information will be collected and retained about the customer’s source of funds. EDD will also include open source checks such as on social media websites and Google.

Politically exposed persons 

3.11 A Politically Exposed Person,“PEP” is:

a) a customer who is or has, at any time in the preceding year, been entrusted with a prominent public function, including:

· heads of state, heads of government, ministers and deputy or assistant ministers; 

· members of parliaments or similar legislative bodies; 

· members of supreme courts, of constitutional courts or of any judicial body the decisions of which are not subject to further appeal except in exceptional circumstances; 

· members of courts of auditors or of the boards of central banks; 

· ambassadors, chargés d’affaires and high-ranking officers in the armed forces; and 

· members of the administrative, management or supervisory bodies of state-owned enterprises.

b) an immediate family member of a person referred to above (includes spouse, partner, child, spouse or partner of child or parent), or

c) a known close associate of a person referred to above (includes a person with joint beneficial ownership of a legal entity or a person with sole beneficial ownership of a legal entity set up for the benefit of the person referred to).

3.12 Customers who are found to be PEPs will be subject to the EDD and ongoing monitoring procedures set out above. 

3.13 PEP status is not a reason for refusing to do business with a customer, nor for subjecting them to any discriminatory treatment.

3.14 PEPs will be monitored on an ongoing basis.

Suspicious activities

4.1 Report should be submitted to the appropriate government agency, namely where the Company:

a) has knowledge of money laundering.  This is a subjective test, which means that we actually know something is true.  Knowledge can be inferred from surrounding circumstances, but it must have come to us in the course of business.

b) suspects a person has engaged in money laundering.  Again, this is a subjective test.  There is no requirement for the suspicion to be clear or firmly grounded on specific facts, but there must be a degree of satisfaction.  Therefore, if the Company suspect a customer is laundering the proceeds of crime it must report regardless of the basis for the suspicion.   

c) has “reasonable grounds to suspect or know”.  This is an objective test, which means that we have to ask whether a reasonable person had specific knowledge or specific suspicion, or had knowledge or suspicion of criminal activity.

4.2 The Company acknowledges and understands that a variety of factors can lead someone either to know or suspect that they are dealing with the proceeds of crime. For instance, this may range from knowledge of a customer’s spending habits to an awareness of the source of their funds. 

Internal reporting - suspicious transaction report

4.3 Any employee who suspects money laundering activity mustreport their suspicions promptly to the MLRO using a Suspicious Transaction Report (“STR”). This is an internal report only.

4.4 A standard template STR is available at Appendix 1. It must include full details of the customer who is the subject of concern, details of game play transactions, details of source of funds (if available) and details giving rise to the grounds for knowledge, suspicion or reasonable grounds to know or suspect.

4.5 All STRs and associated correspondence will be documented and electronically recorded at all times. 

4.6 It is important that the customer is not notified as any discussion of this nature would put the Company at risk of committing the offence of tipping off. Care must be taken in discussing a suspicion and discussions should generally only be held with the MLRO.

4.7 In considering whether there are grounds for knowledge or suspicion, the MLRO may also require further information to be obtained and if necessary, do so from the customer.

4.8 It is the MLRO’s responsibility to decide whether or not to make an external report. In this respect, the Company and the MLRO also acknowledge that there is no too trivial or minor threshold for management and reporting of money laundering activity and that an amount considered being low-level does not remove the possibility of the money being attributable to crime. 

External reporting - suspicious activity report

4.9 Once the STR has been received, the MLRO will review it and consider whether or not, in his/her view, the activity is at risk of money laundering. If necessary, the MLRO will discuss with the internal reporter or customer service any further information that should be obtained from the customer. Any requests will be handled sensitively and discretely. 

4.10 The Company must consider whether it should temporarily suspend or permanently close a customer’s account. The Company will not be tipping off the customer by closing his/her account; it is free to terminate its business relationship with the customer if it wishes and provided this is handled sensitively there will be risk of tipping off. To avoid the offence of tipping off, the Company must not indicate to the customer that it is considering an external report.

4.11 The MLRO will document his/her reasoning in full.

4.12 If the MLRO decides to submit a SAR externally, they will complete the necessary external reporting forms guided by the country or jurisdiction. As a basic guide, the SAR will include full details regarding the activities (including relevant dates, deposit and withdrawal amounts) that led the Company to be suspicious and how/why the Company became suspicious. The Company will provide as much detail as possible even if it seems irrelevant, as it could be a valuable piece of information.

Appropriate consent

4.13 If the Company handles any proceeds of crime, they may commit one of the principal money laundering offences. However, if the MLRO makes an external report this can amount to a defense. This defence includes the statutory mechanism which allows the external party either to agree to the transaction going ahead, or to prevent the suspect money laundering going ahead. This is called “appropriate consent”. 

Avoiding “tipping off”

4.14 As set out above, it is essential that all staff understand the importance of not informing or warning customers that their transactions have been noted and/or reported, either internally or externally. 

Annual report

4.15 To ensure robust mechanisms are in place to confirm AML policies and procedures are carried out effectively, weaknesses are identified and improvements are made where necessary. The MLRO will compile an annual report to assist senior management with this task and it will cover the operation and effectiveness of the Company’s AML policies and procedures. The annual report will also include information relating to the number of internal/external reports, any training requirements and any weaknesses.

Importance of record keeping

5.1 It is essential that proper records are kept on due diligence carried out on customers, evidence gathered, the decisions that are reached and the reasons for those decisions.

Supporting documents to be retained

5.2 The following records will be kept: 

a) Transaction documents;

b) Due diligence information;

c) Information relating to suspicious transactions;

d) MLRO reports;

e) Training on AML matters; and

f) Policies and procedures.

5.3 The source of any information obtained will be recorded along with the information.

Retention period

5.4 Records will be retained for at least 5 years from the date of the relevant transaction, report being made or person ceasing to be a customer. 

Format

5.5 Records will be kept in either electronic, photocopy, scanned or computerised form.

Security measures

6.1 The Company has implemented measures to protect it from cyber crimes including hacking, data theft and theft of customer funds and ensure the physical safety of its employees and protect its premises and equipment from unlawful access, damage and misuse.

Richard Creed

Compliance Officer

RC Capital Solutions Limited
 

TEMPLATE SUSPICIOUS TRANSACTION REPORT (STR)

FOR INTERNAL COMPLETION ONLY

CONFIDENTIAL

Employee details:

From

Position

Contact details

Date of report

Customer details:

Full name

Customer ID

Full address

Date of account opening

Nature, value and timing of activity   involved:

[Please include full details eg   what, when, where, how etc.]

Nature of suspicions regarding such   activity:

[Please include full details]

Has any investigation been undertaken (as far as you are aware)?  

Yes  No

If yes, please include details below:

Have you discussed your suspicions with anyone else?

Yes  No

If yes, please specify below, explaining why such discussion was necessary:

Other information:

Signed:_________________________ Dated: _________________

Please do not discuss the content of this report with anyone you believe to be involved in the suspected money laundering activity described. To do so may constitute a tipping off offence.

FOR COMPLETION BY THE MLRO

Date report received: ___________________________

Date receipt of report acknowledged: ___________________________

Consideration of STR:

Does the Company have knowledge of money laundering?

Yes  No

Does the Company suspect money laundering?

Yes  No

Are there reasonable grounds for suspecting or knowing money laundering activity?

Yes  No

If yes, please provide full details: 

If yes, please confirm date of report to any third party agency: __________ and complete the box below:

Details of liaison regarding the report:

Is consent required from the third party agency to any ongoing or imminent transactions that would otherwise be prohibited acts? 

Yes  No

If yes, please confirm full details in the box below:

Date consent received: ________________________

Date consent given by you to employee: ________________________

If there are reasonable grounds to suspect money laundering, but you do not intend to report the matter, please set out below the reason(s) for non-disclosure:

Date consent given by you to employee for any prohibited act transactions to proceed: ______________________________

Other relevant information:

Signed: ____________________ Dated: ___________________

THIS REPORT TO BE RETAINED FOR AT LEAST FIVE YEARS