Anti-Money Laundering and Counter-Terrorist Financing Policy
Legal and Regulatory Framework
Money Laundering and Terrorist Financing
Money Laundering (ML) refers to an act intended to have the effect of hiding or disguising the true origin and ownership of the proceeds from criminal activities thereby evading prosecution, conviction and confiscation of illegal funds. ML generally consists of three common stages:
- Placement – the physical disposal of cash proceeds derived from illegal activities into the financial system, or conversion of funds already in the financial system into the proceeds of crime;
- Layering – the separation of illicit proceeds from their source by creating complex layers of financial transactions, often with no legitimate commercial purpose, designated to disguise the origin of funds, subvert audit trails and provide anonymity; and
- Integration – the return of laundered proceeds into the general financial system in a way so that they appear to be the result of, or connected to, legitimate business activities.
Terrorist Financing (TF) occurs when funds from either legitimate or criminal sources, or a combination of both, are used to plan, encourage, organize or commit an act of terrorism, participate or threaten to participate in terrorist activities, or to otherwise benefit a terrorist organization.
In TF, the focus is on the end use of funds in question; In ML, the focus is on the origin of funds.
This Policy describes procedures adopted by Targray to mitigate the risk of becoming directly or indirectly involved in actual or potential ML or TF activities which include without limitation:
- Identifying the risk of ML and TF to which it could be exposed;
- Assigning such risk in accordance with its internal risk categorization methodology; and
- Defining and implementing appropriate measures to mitigate the identified risk.
In Targray’s risk-based approach to manage and mitigate its exposure to ML and TF offences, we consider the nature and size of its activities and the risk factors related to:
- The type of counterparties and ultimate beneficial owners (UBOs);
- The type of envisaged products exchanged with counterparties;
- The type of envisaged services exchanged with counterparties;
- The proposed delivery channels;
- The type of business activities to be transacted; and
- The countries and geographical locations of the counterparties’ offices and operations.
Targray will conduct a comprehensive risk assessment to identify and evaluate the potential ML and TF risks associated with its trade-based activities. The risk assessment will be reviewed annually or whenever there are significant changes to the business environment.
Counterparty Due Diligence (CDD)
Consistent with its risk-based AML and CTF due diligence objectives and prior to the establishment of a business relationship or the fulfillment of a transaction, Targray will initiate the KYC process in accordance with its internal policy which involves the following:
- Review and verification of the identity of all counterparties based on documents, data and information obtained from reliable and independent sources;
- Identification of all UBOs and take reasonable steps to verify its identities including individuals, corporations, trust, fiduciaries and similar legal arrangements, adopting measures to understand the ownership and control structure of the counterparty;
- Analysis of risk with consideration to the factors on which risk level of a counterparty will be assigned; and
- Determine the intensity of the AML and CTF Counterparty Due Diligence (CDD) to be invoked seeking guidance, where necessary, from the Risk Director, Legal team, or Finance team, as appropriate.
The following is a non-exhaustive list of variables that Targray considers in determining to what extent it will apply CDD measures:
- The purpose of the account and transaction amount;
- The intended regularity or duration of the business relationship;
- The risk profile of the counterparty; and
- The finding of Politically Exposed Persons (PEPs) results or financial sanctions or negative media screening.
Monitoring and Reporting
As part of the ongoing relationship with the counterparty, transaction monitoring will continue where needed or otherwise required based on AML and CTF risk in order to identify and report suspicious activity. In cases where unusual transactions, such as data changes or activities potentially linked to ML or TF are identified, a prompt investigation will be carried out. Transactions or activities inconsistent with the initially declared purpose or nature of the relationship may be further investigated.
Suspicious Activity Reporting
Any employee or agent of Targray will avoid carrying out a transaction which they know or suspect or have reasonable grounds to believe that it could be linked to ML or TF. Unusual transactions must be escalated to Risk and Compliance which will maintain an internal log documenting all escalations. The in investigations will assess the risk and report on the outcome, including whether the instance was reported to relevant authorities.
Training and Awareness
Cooperation with Authorities
Penalties for Non-Compliance
By adhering to this Anti-Money Laundering and Counter-Terrorist Financing Policy, Targray aims to foster a secure and transparent business environment while fulfilling its obligations to combat financial crime.