Money laundering is the process of making illegally-gained proceeds (i.e. "dirty money") appear legal (i.e. "clean"). Typically, it involves three steps: placement, layering and integration. First, the illegitimate funds are furtively introduced into the legitimate financial system. Then, the money is moved around to create confusion, sometimes by wiring or transferring through numerous accounts. Finally, it is integrated into the financial system through additional transactions until the "dirty money" appears "clean”.
In order to establish an effective Anti-Money Laundering (AML) regime in the United States and to ensure that the country shall not be used as a money laundering site for the proceeds of any unlawful activity, a responsive AML legislation was enacted and signed into law.
The key U.S. AML laws and regulations are the Bank Secrecy Act of 1970 (BSA) and the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (commonly referred to as the USA PATRIOT Act).
The BSA was the first major money laundering legislation in the United States. It was designed to deter the use of secret foreign bank accounts and provide an audit trail for law enforcement by establishing regulatory reporting and recordkeeping requirements to help identify the source, volume and movement of currency and monetary instruments into or out of the United States or deposited in financial institutions. For additional guidance on the Bank Secrecy Act, please refer to the Bank Secrecy Act section.
While w3coins does not currently fall within the coverage of the existing AML legal and regulatory framework in the U.S., the management has decided to voluntarily undertake and implement systems and procedures that meet AML regulation with the objective of preventing money laundering and the financing of terrorism.
w3coins does not deal with individuals and entities that are engaged in illegal activities or terrorist-related activities as circularized by the BSP, AMLC, and other international entities or organizations, such as the Office of Foreign Assets Control (OFAC) of the U.S. Department of the Treasury and United Nations Sanctions List
ANTI-MONEY LAUNDERING (AML) POLICY
The w3coins AML policy is designed to prevent money laundering by meeting the United States AML legislation obligations including the need to have adequate systems and controls in place to mitigate the risk of the firm being used to facilitate financial crime. This AML Policy sets out the minimum standards which must be complied with and includes:
- The appointment of a Money Laundering Reporting Officer (MLRO) who has sufficient level of seniority and independence and who has responsibility for oversight of compliance with relevant legislation, regulations, rules and industry guidance;
- Establishing and maintaining a Risk Based Approach (RBA) towards assessing and managing the money laundering and terrorist financing risks to the company;
- Establishing and maintaining risk-based customer due diligence, identification, verification and know your customer (KYC) procedures, including enhanced due diligence for those customers presenting higher risk, such as Politically Exposed Persons (PEPs);
- Procedures for reporting suspicious activity internally and to the relevant law enforcement authorities as appropriate;
- The maintenance of appropriate records for the minimum prescribed periods;
- Training and awareness for all relevant employees.