AML Policy & CFT
Metaphorised cleansing of money whereby both, the true origin and ownership of the fund, are disguised in ways to make the fund’s source look authentic. Money can be laundered by sundry methods, which vary in ramification and sophistication
Stages of Money Laundering
|Placement||Physical disposal of cash||Depositing large amount via several small transactions in BFIs|
|Layering||Creation of complex layers of transactions to disguise illicit origin||Multiple transfers and re-transfer of funds into same or various accounts|
|Integration||Showcasing legitimate sources for criminal money||Use of BFIs, Remittance Companies & Exchange Houses to clean unauthorized money|
Raising of funds from unlawful sources like grand personal donations, marginalized gains from charitable organizations/businesses, smuggling, trading etc. and deploying those in other illegitimate practices, is what we refer to as Terror Financing. Terrorists can be the perfect example of money launderers as they protect their sponsor’s identity and the ultimate receiver’s existence by eluding the authority’s scrutiny in uncanny ways.
Anti-Money Laundering & Combating Financing of Terrorism
Operating in a money service business, appropriate acknowledgment and rectification of illegal practices like money laundering and terrorism financing are two majorly ethical and essential responsibilities. Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) are then the consequent measures taken into the force to curb these criminal activities which corrupt the entire economic system by diverting the resources away from being consumed both economically and socially. Money laundering inadvertently leads to the volatility of capital flows and exchange rates due to unanticipated cross-border asset transfers. Additionally, it can cause unexplained, unusual and rapid changes in supply and demand of money To avert such negative impacts on the economic front, AML policy and CFT controls are legally amended, which work to tone down and check all the adverse effects on financial markets by numerous criminal-economic activities.
Rules and regulations in combating money laundering may vary from country to country. In Nepal, Legislature-Parliament has enacted Financial Information Unit (FIU) under the Asset (Money) Laundering Prevention Act, 2008 (2064) & it has been amended in 2011. It is designated to determine intelligence on suspected money laundering and terrorist financing activities. The Act shall be applicable throughout Nepal and to any individual or corporate body, who may be residing, remitting, transferring or sending assets from Nepal to abroad or abroad to Nepal. The Government of Nepal has formulated necessary rules for the implementation of this Act.
Akin to other financial institutions, we have prudently articulated the following AML Policy with guiding principles to overpower money laundering and financing of terrorist activities. The guidelines are aligned to protect the image and reputation of GME as a brand and its employees for any illegal repercussions. Our cooperation to our regulators is in its entirety wherein we aim to maintain the highest operating standards to safeguard the interest of our customers, our shareholders, our staff and the communities where we operate. Thus, adherence to the following are to be conducted both in letter and in spirit:
– Being educated with the full comprehensive understanding of AML/CFT guidelines in lieu of regulatory requirement and internal control mechanism of the company.
– Establishing the relationship and doing the business only with legitimate customers whose status and identity is fully known and can be acquired by the GME and validates within its requirements.
– Training employees to distinguish when and how to report and further take actions against filtered frauds, threshold, and suspicious transactions according to the set rules and in the course of their respective responsibilities.
– Having an appropriate system in place for defining and recording the identity, address, relationship, sources of income and purposes of remittance of all customers.
– Having a logical and systematic criterion in place for monitoring the transactions on a regular basis in order to ascertain any strange and suspicious transactions and to take immediate action essential to redress, regulate and to report it.
– Timely reporting all skeptically outlawed transactions and disclosure of breaches. Along with being cognizant regarding the legal accountability & its consequences while dealing with clients and customers.
– Have an applicable system at the mark, to catalog and control various risk exposures as far as the management of customer’s assets and liabilities is concerned. More importantly, scanning measures must be taken to check that the customer’s name should not be matched with the US Treasury’s OFAC (Office of Foreign Assets Control) list titled as ‘Specifically Designated Nationals & Blocked Persons’, which gets updated frequently.
– Notifying compliance department and concurrently following a code of confidentiality as the violations reported are of illegal status and have to be treated with prescribed attention.