Money Laundering Policy
The Money Laundering Policy represents a set of procedures and measures taken by the company to prevent money laundering activities. This policy is designed to ensure compliance with laws and legislation related to combating money laundering.
policy
As part of its corporate culture, Babil aims to prevent money laundering and any organization that promotes money laundering, terrorist financing or criminal activities. Babil is committed to complying with anti-money laundering regulations in accordance with applicable law and requires its its customers, clients and manufacturers to comply with these standards in order to prevent its products and services from being used for the purpose of money laundering. For the purposes of this Directive, money laundering is broadly defined as activities aimed at concealing or disguising the true source of of funds of criminal origin, so that the illicit proceeds appear to come from legitimate sources or are considered legitimate assets.
What is money laundering?
Money laundering is the process by which money or other assets of criminal origin (criminal possession) are exchanged for “clean” money or other assets that have no apparent connection to their criminal origin. Criminal possession can take any form, including money or cash, securities, tangible property and intangible property. This definition also includes funds, regardless of their source, used to finance terrorism.
Money laundering activities include:
- Acquiring, using or possessing criminal assets
- Processing the proceeds of crimes such as theft, fraud and tax evasion
- Intentional involvement of any kind in criminal or terrorist possession
- Intentional involvement of any kind in criminal or terrorist possession
- Entering into agreements to facilitate the laundering of criminal or terrorist money
- Investing the proceeds of crime in other financial products
- Investment of proceeds of crime in the acquisition of property/assets
- Transfer of criminal property
Money laundering is not a one-step process. Methods range from buying and selling luxury goods such as cars or jewelry to moving money through a complex network of legitimate companies. Usually, the process begins with cash, but it is important to note that the definition of money laundering is based on the concept of criminal possession. This can be ownership in any legal form imaginable, whether it is cash, rights, real estate or other benefits. If you know or suspect that these assets are the result of a criminal activity, whether directly or indirectly, and you have not reported it, make yourself a party to the process.
The money laundering process consists of three stages:
- Feeding
Depositing the original proceeds from illegal activities, for example. – into a bank account.
- Hide
Money is transferred through the system through a variety of financial transactions to hide the source of the cash and thus give it the appearance of legitimacy.
- merger
Criminals can use cash as they please after it is withdrawn from the system as supposedly “clean” money. No financial sector is immune to the activities of criminals, and businesses must consider the money laundering risks associated with the products and services they offer.
What is Counter Terrorist Financing (CTF)?
Terrorist financing is the process by which legitimate companies and individuals provide financial support to terrorist activities or organizations for ideological, political or other reasons. Companies must therefore ensure that:
(1) customers are not terrorist organizations
(2) they do not provide the means by which terrorist organizations finance themselves.
Terrorist financing does not necessarily have to come from the proceeds of crime, but rather represents an attempt to conceal the source or intended use of funds that will later be used for criminal purposes.
risk based approach
Given the level of due diligence required within a company in relation to anti-money laundering procedures, a risk-based approach should be considered. This means that the resources used to examine a risky business relationship should be proportionate to the level of risk posed by that relationship. Risks can be divided into the following areas:
- Customer Risks
Different risk levels are assigned to different customer profiles. The risk posed by a customer can be determined through a basic KYC (Know Your Customer) check. For example, small regular deposits into a savings account by individuals approaching retirement, in line with their financial capabilities, pose less risk than irregular deposits of varying amounts into a savings account by middle-aged individuals who do not match the current financial situation of the customer. The latter account should be examined in more detail than the former, since the potential threat of money laundering will be higher in the latter case. Corporate structures can be considered as an example of customers who may have a higher risk level than the one just mentioned, as criminals can use these structures to use obfuscation techniques in transactions in order to hide the source of funds. For this reason, customers can be divided into different risk categories.
- Product Risk
This is the risk posed by the product or service itself. Product risk is due to its function as a money laundering vehicle.
The Joint Money Laundering Steering Group has divided the products that businesses typically deal with into
three risk categories: low, medium and high.
As a general rule, the risks of pure protection contracts are classified as low and the risks of investments in investment funds as high. In addition, the sales process associated with the product plays a role in determining the risk category. If the transaction related to the product is carried out in the context of advice and in accordance with the principles of “know your client”, the risks are lower than in non-advisory transactions, where much less information about the client is available.
- Country Risk
The geographical location of the customer or business origin is exposed to risk. This is because different countries have different levels of risk. The company should determine the scope of its due diligence activities initially and then
on an ongoing basis using the four risk areas mentioned above.
Customer Identification Program
Babil has developed a Customer Identification Program (CIP). Babil indicates that it will seek to obtain identifying information. The company collects and stores a certain minimum amount of information that identifies each customer, along with verification methods and results.
Customer Notification
Babil informs customers that it collects information from them for the purpose of confirming their identity, in accordance with applicable law.
Know Your Customer Principle
If a business relationship is established with the aim of enabling regular business activities later in the relationship, the firm must know what type of business the client intends to undertake. Once an ongoing business relationship has been established, any regular business activity undertaken on behalf of the client can be compared with the client’s expected business record. Any suspicious activity can then be investigated to determine whether money laundering or terrorist financing is suspected. Information about the client’s income, employment, source of assets and business habits, as well as the economic purpose of each transaction, is typically collected as part of the consulting activities. At the beginning of the relationship, personal information, such as nationality, date of birth and home address, is also collected. This information should also be taken into account in relation to the risks of financial crime (including money laundering and terrorist financing). For transactions that involve high risks, it may be sensible to verify customer information.
Origin of funds
When a transaction is made, it should always be clearly stated how, where and by whom the payment is made and deposited in the customer’s documentation (usually by making and depositing a copy of a cheque or direct debit authorization).
ID card
The usual identification criteria for customers classified as individuals usually depend on the circumstances of the customer and the type of product in question, i.e. the level of risk associated with the product (low, medium or high risk). With this in mind, for low and medium risk products, the following information should be obtained as standard for identification purposes:
- Customer’s full name
- Residential address
to be sure
Information obtained must be confirmed by reliable and independent sources. This may be either documents provided by the customer or documents provided electronically by the company, or both. If the transaction is face-to-face, companies must examine the originals of all documents involved in the confirmation process.
In order for a person’s identity to be established with a high degree of probability, it is usually necessary to provide, as there is a greater likelihood that documents issued by a public authority, official body or court of law will confirm the existence and characteristics of the person concerned. If an individual is unable to provide such proof of identity, the customer may provide reasonable confirmation of his identity to the company using other documents, although the company must balance this against the risks involved. If identity is established using documents, they must have the following characteristics:
An official document containing the following information:
- Customer’s full name
- Residential address
- Official photo ID card
- Valid passport
- ID card
Alternatively, the client may submit an official document that does not contain a photo but contains the client’s full name, supplemented by a second document containing the following information:
- Customer’s full name
- Residential address
At Babel there are no deadlines for submitting verification documents. However, submitting these documents is a prerequisite for paying customers. Babel seeks to review submitted documents within 24 hours of receiving them.
Monitoring and reporting
Monitoring is done on transactions within Babylon’s business lines. Monitoring of individual transactions includes, but is not limited to, transactions totaling $5,000 or more and transactions where Babylon has reason to suspect suspicious activity. All reports are documented.
Suspicious activity
There are signs of suspicious activity that indicate money laundering. These are commonly referred to as red flags. If a red flag is detected, further checks will be conducted before the transaction is executed.
If no reasonable explanation is found, the suspicious activity is reported to the Anti-Money Laundering Compliance Committee.
Examples of warning signs include:
The customer is unusually concerned about the Company’s legal reporting requirements and the Company’s anti-money laundering policies, particularly regarding its identity, the nature of its business and assets, or is reluctant to disclose information about its business activities.
The customer refuses to provide information or provides unusual or suspicious identity or business documents.
The customer wants to execute transactions that do not follow any business logic or any known investment strategy or are inconsistent with the customer’s stated business strategy.
The customer’s information indicating the legitimate source of funds turns out to be false, misleading or substantially incorrect.
When asked, the customer refuses to identify or provide a legitimate source for its funds or other assets.
The client (or any person known to be associated with the client) has a questionable background or is the subject of news reports indicating possible criminal, civil or regulatory wrongdoing. The client demonstrates a lack of concern for risk, commissions or other transaction costs. The client appears to be acting as a contractor for an undisclosed client, but refuses (without legitimate business reasons) to disclose information about that person or company, or is secretive or evasive about it.
The client has difficulty describing the nature of their business or lacks general knowledge of the industry.
The customer attempts to make frequent or large cash deposits, insists on dealing in cash equivalents, or requests exceptions to the company’s cash and cash equivalents deposit policy. For no apparent reason, the customer has created multiple accounts under one or more names and has made a large number of transactions between internal accounts or between internal and external accounts.
The customer’s account experiences significant, unexplained or unexpected activity, particularly accounts that have had little or no activity in the past.
The customer’s account contains a large number of transfers to unrelated third parties that are inconsistent with the customer’s legitimate business purpose.
The customer’s account shows transfers that have no apparent business purpose, where funds are transferred to or originate in a country that is at risk of money laundering or is considered a banking haven.
The customer’s account contains large or frequent transfers that are withdrawn immediately by check or debit card without any apparent business purpose.
The customer makes a deposit, followed immediately by a transfer or transfer to a third party or to another company, without any apparent business purpose.
The customer makes a deposit to purchase a long-term investment, followed shortly thereafter by instructions to exit the position and withdraw the proceeds from the account.
The customer is instructed to execute the transaction in a manner that bypasses the company’s usual documentation requirements.
Know Your Customer Principle - The Basis for Recognizing Suspicions
A suspicious transaction is often inconsistent with the known and legitimate business or personal activities of the customer or with the usual business activities of that type of customer. Therefore, in order to identify suspicious transactions, it is necessary to first gather sufficient information about the customer’s business to determine whether one or more transactions are unusual. To determine whether a current customer’s transactions are suspicious, you should ask yourself the following questions:
- Is the transaction amount consistent with the customer’s traditional activities?
- Does the reason for the transaction fit within the context of the client’s business or private activities?
- Has the customer interaction pattern changed?
Suspicious scenarios
Situations you should be suspicious of include:
Customers who are reluctant to provide proof of identity; Customers who are reluctant to provide proof of identity; Customers who don’t recognize their real identity or the identity of their company (they may leave behind documents that don’t recognize their real identity or the identity of their company)
of their company) to make inquiries related to cash transactions, e.g. asking whether it is also possible to make investments in cash or indicating that funds will be available for cash investments
Monitoring and reporting
If the source of funds allocated for investment is not transparent and the amount of funds available does not clearly correspond to the client’s life circumstances (i.e. the origin of the asset allocation is not clear)
Examples include students or young people investing large sums of money and if the transaction does not make sense in the context of the client’s business or personal activities.
In this context, pay special attention to customers whose interactions with you change without any meaningful explanation when the transaction pattern changes.
A client conducting international transactions has a clear reason for doing business with these countries (e.g., why the client is depositing funds
in the country to which the funds are being transferred or from which the funds are being repatriated? Does the client’s circumstances suggest this?
with their money in such countries?) Clients who do not wish to share personal or financial information with you without a clear and logical reason.
(It should be noted that not all online transactions should be categorized as suspicious, as they usually have legitimate reasons.
Suspicion is usually based on several suspicions and not just isolated incidents.)
If the source of funds for investment is not transparent and if the amount of funds available does not clearly correspond to the client’s life circumstances (i.e. the origin of the asset allocation is not clear).
Examples include students or young people investing large sums of money and if the transaction does not make sense in the context of the client’s business or personal activities.
In this context, pay special attention to customers whose interactions with you change without any meaningful explanation when the transaction pattern changes.
A client conducting international transactions has a clear reason for doing business with these countries (e.g., why the client is depositing funds
in the country to which the funds are being transferred or from which the funds are being repatriated? Does the client’s circumstances suggest this?
with their money in such countries?) Clients who do not wish to share personal or financial information with you without a clear and logical reason.
(It should be noted that not all online transactions should be categorized as suspicious, as they usually have legitimate reasons.
Skepticism is usually based on several suspicions and not just isolated incidents.)
Suspicion Reporting
If, for any reason, we suspect that a Client or a person acting on their behalf may conduct (or intend to conduct) a transaction involving the proceeds of crime, this suspicion must be addressed as soon as reasonably practicable and reported in writing. Reports must be made internally, regardless of whether the transaction has actually taken place or whether there is an intention to do so.
Realization
After notifying the Anti-Money Laundering Compliance Committee, an investigation will be initiated to determine whether the incident requires reporting to law enforcement or regulatory authorities.
The investigation shall include, among other things, an evaluation of all available information, e.g. b. Payment history, dates of birth and address.
If the results of the investigation warrant it, the AML Compliance Committee is recommended to submit a SAR to the relevant law enforcement agency or supervisory authority.
The AML Compliance Committee of the organization is responsible for all notifications or reports to law enforcement or regulatory authorities.
Test results will not be published and will only be shared with those who need to know them for legitimate business reasons. Under no circumstances may any officer, employee or authorized representative disclose or discuss
any SAR concerns, investigations, notices or information with the person or persons to whom they are subject. This
also applies to other persons, including family members of directors, employees or authorized representatives.
Freezing accounts
If we determine that the funds in the account have been obtained through criminal activity or through fraudulent instructions, the account must be frozen.
If we believe that the account holder may be involved in the reported fraudulent activity, the account may need to be frozen.