ALKRA TECHNOLOGIES FZ-LLC

 

 

ACRONYMS USED IN THE MANUAL

AML	Anti-Money Laundering
CFT	Countering the Financing of Terrorism
MLCO	Money Laundering Control Officer
KYC	Know Your Customer
FATF	Financial Action Task Force
CDD	Customer Due Diligence
EDD	Enhanced Due Diligence

AML & CFT POLICIES AND PROCEDURES MANUAL

Who is it for? How do you use it?

The long title of the Anti-Money Laundering (AML) Act, 2013, describes the Act as one that is intended to impose certain duties on institutions and other persons, businesses and professions who might be used for money laundering purposes among others. The Act defines ‘accountable persons’ to include accountants as defined in the Accountants Act, and other independent professional accountants. The Act succinctly clarifies that these are accountants who are sole practitioners, partners or employed professionals within professional firms. It is not meant to refer to ‘internal’ professionals that are employees of other types of business nor to professionals working for government agencies.

The AML Act requires accountable persons to develop and implement policies, controls and procedures to enable the accountable person to effectively detect, manage and mitigate the identified risks in the future related to Money laundering and Terrorist Financing activities.

The Accountants Act, 2013 provides that any firm shall not be granted a license for any particular year unless Council inspects and approves the firm. The inspection is required to be conducted in accordance with the provisions of the Accountants (Practice) Regulations, 2019 and in particular in accordance with the guidelines provided for under Schedule 1. The guidelines require each Accounting firm to maintain among other documents the anti money laundering policies and procedures.

It is based on the above requirements that this sample procedures and policy document intends to give guidance on how practicing accountants can maintain sufficient response to matters of AML.

The requirements of the manual can be scalable to the size of the firm to deal with differences in the size of firms and nature of the services they provide.

1.0 GENERAL POLICY STATEMENT

ALKRA TECHNOLOGIES is committed to full compliance with all applicable laws and regulations regarding Money Laundering and Terrorist Financing. ALKRA TECHNOLOGIES has adopted and will enforce the provisions set forth in Anti-Money Laundering & Counter Terrorist Financing Policy and Procedures Manual in order to prevent and detect money laundering, terrorist financing and other illegal activities. The Partners of ALKRA TECHNOLOGIES consider Integrity as a key commitment on the part of the firm to uphold strict standards of ethical conduct and hence preservation of a stable value for society confidence. These policies endorse the strict compliance with the legal framework governing the prevention of money laundering and terrorism financing.

The firm’s commitment to this objective is set forth in this Policy which defines the guiding policies for adequate prevention and control. It includes procedures for the detection and reporting of activities possibly linked to money laundering or the financing of terrorist activities.

If ALKRA TECHNOLOGIES and/or its personnel are inadvertently used for money laundering or other illegal activities, ALKRA TECHNOLOGIES can be subject to potentially serious civil and/or criminal penalties. Therefore, the appropriate application of the Policy requires that staff of the firm be familiar with the contents herein, related procedures and norms that regulate the various activities and services of the firm as compliance with the provisions is compulsory to all the firm’s staff.

2.0 ANTI-MONEY LAUNDERING & COUNTERING TERRORIST FINANCING (AML/CFT) POLICIES, CONTROLS AND PROCEDURES

POLICY STATEMENT

It is the policy of ALKRA TECHNOLOGIES that all members of staff at all levels actively participate in preventing the services of the firm from being exploited by criminals and terrorists for money laundering purposes. This participation has its objectives as:

• Complying with all Anti - Money Laundering Act & Regulations of the jurisdictions
• Requiring all Employees to prevent, detect and report to the AML Control officer all potential instances in which ALKRA TECHNOLOGIES or its Employees, its facilities or its activities have been or are about to be used for money laundering, terrorist financing and other illegal activity;
• Providing for a Money Laundering Control Officer who shall ensure adherence to the ALKRA TECHNOLOGIES AML & CFT Policies and Procedures;
• Requiring all appropriate employees to attend anti-money laundering training sessions, so that all employees are aware of their responsibilities under ALKRA TECHNOLOGIES policies and procedures; these Guidelines and as affected by current developments with respect to anti-money laundering legislations.
• Protecting the firm and all its staff as individuals from the risks associated with breaches of the law, regulations and supervisory requirements.
• Preserving the good name of the firm against the risk of reputational damage presented by implication in money laundering and terrorist financing activities.

It shall be the policy of this firm that:

• Every member of staff shall meet their personal obligations as appropriate to their role and position in the firm.
• Neither commercial considerations nor a sense of loyalty to clients shall be permitted to take precedence over the firm’s anti-money laundering commitment.
• The firm shall carry out a business-wide assessment of the risks of money laundering and terrorist financing to which the firm is subject and design and implement appropriate controls to mitigate and manage effectively the risks identified.
• The firm shall establish and maintain documented, proportionate policies and procedures, including controls, which outline the positive actions to be taken by staff to prevent money laundering and terrorist financing in the course of their work.

3.0 POLICY AND PROCEDURE FOR THE ANTI MONEY LAUNDERING CONTROL OFFICER (MLCO)

POLICY

It is the policy of the firm that a Money Laundering Control Officer (MLCO) shall be appointed and this shall be a person in a senior managerial position, possessing sufficient professional experience and competence. The firm shall notify the appointment of such a person or their cessation to the Institute during the inspection exercise and to the Authority. For avoidance of doubt, in this manual, the ‘Authority’ means the Financial Intelligence Authority, while the Institute means the Institute of Certified Public Accountants of Uganda.

PROCEDURES

3.1 The firm shall appoint a partner as the MLCO who shall from time to time coordinate AML activities and compliance responsibilities.

3.2 Any staff shall immediately notify the MLCO if he/she suspects or has any reason to suspect that any potentially suspicious activity has occurred or will occur if a transaction is completed.

3.3 Staff are encouraged to seek the assistance of the MLCO with any questions or concerns they may have with respect to the ALKRA TECHNOLOGIES Anti-Money Laundering Policies or Procedures.

3.4 Responsibilities of the MLCO include the following:

• Coordination and monitoring of ALKRA TECHNOLOGIES day-to-day compliance with applicable Anti- Money Laundering Laws and Regulations and ALKRA TECHNOLOGIES’ own Anti-Money Laundering Policy and Procedures;
• Develop and implement systems, mechanisms and procedures to ensure that the staff of the accountable person report any suspicious money laundering or financing of terrorism activity;
• Conduct staff training programs for appropriate personnel related to the ALKRA TECHNOLOGIES’ anti-money laundering policy and procedures and maintaining records evidencing such training;
• Receive and review any reports of suspicious activity from staff;
• Coordination of enhanced due diligence procedures regarding clients and respond to both internal and external inquiries regarding ALKRA TECHNOLOGIES AML/CFT policies and procedures.
• Notify the Authority of any suspicious money laundering or financing of terrorism activity.

4.0 POLICY AND PROCEDURE FOR AML TRAINING PROGRAM FOR STAFF

POLICY

It is the policy of ALKRA TECHNOLOGIES that recruitment of all staff will include adequate screening procedures to ensure high standards when hiring staff.

It is the policy of ALKRA TECHNOLOGIES that all staff who have client contact, or access to information about clients’ affairs, shall receive AML/CFT training to ensure that their knowledge and understanding is at an appropriate level, and ongoing training at least annually to maintain awareness shall be ensured.

It is the policy of ALKRA TECHNOLOGIES that all staff who have client contact, or access to personal data relating to clients, shall receive training on the law relating to data protection to ensure that their knowledge and understanding is at an appropriate level, and ongoing training at least annually to maintain awareness and ensure that the firm’s legal obligations are met.

It is the policy of the firm that all staff are required to reconfirm their awareness of the contents of this Compliance Manual by signing the acknowledgement form annually, or more frequently, as required by the MLCO.

The MLCO shall ensure that training is made available to staff according to their exposure to money laundering risk, and that steps are taken to check and record that training has been undertaken and that staff have achieved an appropriate level of knowledge and understanding.

PROCEDURE

4.1 All staff are required:

• At a time specified by the MLCO, to undertake training programs on anti-money laundering policies and procedures.
• To get trained in how to recognize and deal with transactions which may be related to money laundering.
• To timely escalate and report the matter to the MLCO.
• To get themselves acquainted and comply with Anti Money Laundering Act & Regulations.

4.2 The MLCO will, evaluate alternative AML/CFT training methods, products and services in order to make suitable training activities available to all members of staff who have client contact, or access to information about clients’ affairs.

4.3 The training programme will include means of confirming that each individual has achieved an appropriate level of knowledge and understanding, whether through formal testing, assessment via informal discussion, or other means.

4.4 The MLCO will keep records of training completed, including the results of tests or other evaluations demonstrating that each individual has achieved an appropriate level of competence.

4.5 The MLCO will assess the effectiveness of the programme completed and update the training information to match with the changes in laws, regulations, guidance and practice as a way of considering relevant continuity of the training programme.

5.0 POLICY AND PROCEDURE FOR CLIENT IDENTIFICATION

POLICY

It is the policy of ALKRA TECHNOLOGIES’ anti-money laundering policies and procedures that, prior to accepting funds from Clients, all reasonable and practical measures are taken to confirm the clients’ identities and to verify that any third party upon whom ALKRA TECHNOLOGIES relies for client identification, such as a bank and other financial intermediary, or any other third party adheres to the same standards. GENERAL PROCEDURE

5.1 These Client Identification Procedures are based on the premise that the ALKRA TECHNOLOGIES will accept funds from a new and existing Client only after:

• ALKRA TECHNOLOGIES has confirmed the client’s identity and that the client is acting as a principal and not for the benefit of any third party unless specific disclosure to that effect is made; or
• If the client is acting on behalf of others, ALKRA TECHNOLOGIES has confirmed the identities of the underlying third parties.

5.2 The Client Identification Procedures should be reviewed in light of the specific characteristics presented by a client and in any instance the MLCO may determine to apply Enhanced Due Diligence (EDD) measures for any other justifiable reasons.

5.3 As a reference tool, an Individual Client KYC Checklist is used. Staff is encouraged to provide the MLCO with any revisions they consider appropriate.

5.4 The MLCO shall retain copies of all documents reviewed or checklists completed in connection with its Client Identification Procedures in accordance with ALKRA TECHNOLOGIES’s Client Records Retention policies.

5.5 The member of staff conducting verification of identity will complete the process by checking that the client is not the subject of sanctions or other statutory measures, using the screening methods set out by the MLCO.

5.6 The firm’s MLCO will maintain a list of acceptable documents or information obtained from a reliable source which is independent of the client.

5.7 In cases where a client cannot produce acceptable documents, the responsible staff will make a risk-based decision on accepting the documents that are available, consulting with the MLCO if appropriate.

5.8 Where the client is not the beneficial owner of assets involved, the responsible staff will take the necessary steps to determine who the beneficial owner is, and take reasonable measures to verify their identity accordingly.

5.9 The MLCO will prepare a format for use by the responsible staff in requesting verification of identity and beneficial ownership information from relevant corporate entities and trustees, and a procedure for following up when requests are not met within the statutory period.

5.10 If all possible means of identifying the beneficial owner of a client entity have been exhausted without success, and recorded, the responsible staff will seek the approval of the MLCO, to be given on a risk-sensitive basis, to treat as its beneficial owner the natural person who exercises ultimate effective control over the client entity.

5.11 In all cases assessed as presenting a higher money laundering risk, where enhanced client due diligence is required, the MLCO will consult with the Managing Partner to decide on additional steps to verify the client’s identity.

5.12 All verification of identity processes as well as actions taken to verify the identity of corporate entities will be recorded. This will include keeping photocopies of documents produced, or in exceptional cases with the approval of the Managing Partner, recording information about where copies are held and can be obtained.

 

6.0 CLIENT IDENTIFICATION PROCEDURES FOR NATURAL PERSONS

6.1 ALKRA TECHNOLOGIES shall take reasonable steps to ascertain satisfactory evidence of an individual client’s name, details of the residential address, the telephone contact including the mobile telephone, e-mail address, date and the source of the client’s funds.

6.2 In order to confirm the identity of the client, copies of the following documents will be obtained and retained for ALKRA TECHNOLOGIES’s records:

• the client’s national identification card or an alien’s identification card, whichever is applicable;
• an introductory letter from the employer or a senior government official attesting to the identity of the person;
• in the case of a student, an introductory letter from the school and a copy of the student’s identity card;
• a summary of the nature of business activities the person is engaged in;

6.3 Additional information which may be requested for includes:

• utility bills including electricity and water bills;
• details on occupation or employment;
• details of source of income;
• income tax identification number, where applicable

7.0 PROCEDURES FOR CORPORATIONS, PARTNERSHIPS, TRUSTS AND OTHER LEGAL ENTITIES

ALKRA TECHNOLOGIES shall take reasonable steps to ascertain satisfactory evidence of an entity client’s name and address, its authority to make the contemplated investment.

ALKRA TECHNOLOGIES will obtain certainity of the following, as appropriate under the circumstances:

• the name of the entity, and where applicable its registered name and registration number;
• a copy of the deed;
• details of the registered address or principal place of business or office;
• the names, date and place of birth, identity card number or passport number, tax identification number and address of persons managing the entity;
• the financial statements of the immediate last year in case of partnerships and
• the full name of the trustee, beneficiaries or any other natural person exercising control over the trust; and the founder or sponsor of the trust in case of a trust

Where the client is a corporate entity such as a private limited company, the responsible staff will check that the entity is appropriately incorporated and registered, and take the necessary steps to determine who are the principal beneficial owners, and the people with significant control, and their identity will be verified according to this procedure.

The firm shall follow identification requirements as prescribed by the Regulations to establish the identity of foreign nationals, entities and local entities and other bodies.

8.0 POLICY AND PROCEDURE FOR MONEY LAUNDERING RISK ASSESSMENT

POLICY

It is the policy of the firm to identify and assess the money laundering and terrorist financing risks represented by the business the firm conducts so that the firm can mitigate that risk by applying appropriate levels of client due diligence.

It is the policy of the firm that the MLCO will from time to time update a list of the types of clients that the firm considers to be of ‘high risk,’ such that enhanced due diligence procedures are warranted compared to the routine client identification procedures.

PROCEDURES

8.1 The firm shall assess the money laundering risk represented by our clients and the business conducted according to three levels:

• the range normally dealt with by the firm, requiring the firm’s normal level of client due diligence
• an exceptionally high level of risk requiring an enhanced level of client due diligence
• a negligible level of risk requiring only simplified or reduced due diligence measures.9 Appendix I demonstrates the risk rating for the firm

8.2 The firm shall identify and maintain lists of risk factors (including those required by the Regulations) relating to our clients, products or services, transactions, delivery channels and geographic areas of operation.

8.3 The firm shall update the risk assessment annually to ensure new and emerging risks are addressed, and new information supplied by our regulatory authority is reflected.

8.4 The money laundering or terrorist financing risk represented by each client will be assessed:

• during the new client acceptance process and/or during client continuance process for continuing clients;
• whenever the firm’s process of ongoing monitoring indicates that a change in the business or operating environment of an established client may represent a change in money laundering risk.

8.5 Client risk assessment shall be carried out by the responsible staff who will determine appropriate due diligence measures in respect of each client based on:

• the firm’s business-wide risk assessment
• assessment of the level of risk arising in any particular case.

8.6 A record must be made of the assessment of individual client relationships, confirming that the firm’s business-wide risk assessment has been taken into account, and any other relevant factors considered.

8.7 The following are the examples of clients who pose a high money laundering risk:

• A Political figure, any member of a Political Figure’s Immediate Family, and any Close Associate of a Senior Political Figure;
• Any client resident in, or organized or incorporated under the laws of, a NonCooperative Jurisdiction;10 and/or high risk countries.
• Any client who gives the MLCO any reason to believe that its funds originate from, or are routed through, an account maintained at an “offshore bank”, or a bank organized or chartered under the laws of a Non-Cooperative Jurisdiction; and
• Any client who gives the MLCO any reason to believe that the source of its funds may not be legitimate or may aid terrorist activities.

9.0 CLIENT IDENTIFICATION PROCEDURES FOR ‘HIGH-RISK’ NATURAL PERSONS

9.1 Enhanced Client Identification Procedures shall be conducted for ‘high risk’ natural persons and such procedures shall include, but are not limited to, the following:

• Assessing the client’s business reputation through review of financial or professional references, generally available media reports or by other means;
• Considering the source of the client’s wealth, including the economic activities that generated the client’s wealth and the source of the particular funds intended to be used to make the investment;
• Reviewing generally available public information, such as media reports, to determine whether the client has been the subject of any criminal or civil enforcement action based on violations of anti-money laundering laws or regulations or any investigation, indictment, conviction or civil enforcement action relating to financing of terrorists;

9.2 The enhanced due diligence procedures undertaken with respect to ‘high risk’ clients must be thoroughly documented in writing, and any questions or concerns with regard to a ‘high risk’

10.0 POLICY AND PROCEDURE FOR KNOWING THE CLIENT’S BUSINESS AS PART OF CUSTOMER DUE DELIGENCE (CDD)

POLICY

It is the policy of this firm to obtain information enabling us to assess the purpose and intended nature of every client’s relationship with the firm.

It is the policy of the firm to keep any information obtained during a CDD for a minimum period of five years from the date the relevant business or transaction is completed with the client.

It is the policy of this firm not to offer its services, or to withdraw from providing its services, if a satisfactory understanding of the nature and purpose of the client’s business with us cannot be achieved.

PROCEDURES

10.1 The responsible staff will obtain Know Your Client’s business information from clients:

• on acceptance of a new client
• on receipt of a new instruction from a client whose arrangements are of a one-off nature
• on any significant change in the client’s arrangements such as the size or frequency of transactions, nature of business conducted, involvement of new parties or jurisdictions
• as an ongoing exercise throughout the client relationship.

10.2 Know Your Client’s information sought from clients will include, but not be limited to:

• the client’s reason for choosing this firm
• the purpose and business justification behind the services the client is asking the firm to provide
• the provenance of funds introduced or assets involved in the client’s arrangements
• the nature, size, frequency, source and destination of anticipated transactions
• the counter-parties and jurisdictions concerned.

10.3 The information will be obtained by interview between the firm’s staff and the client’s representative and this information shall be recorded on the client file, to assist with future monitoring of the client relationship.

10.4 The information volunteered by the client shall be corroborated for consistence with any publicly accessible information to the best extent possible.

10.5 Where answers given by the client are implausible, or inconsistent with other information, or where the client is unwilling to provide satisfactory answers to due diligence enquiries, the responsible staff will consider whether the firm should withdraw from the relationship.

11.0 POLICY AND PROCEDURE FOR INTERNAL REPORTING OF SUSPICIOUS TRANSACTIONS

POLICY

It is the policy of this firm that every member of staff shall remain alert for the possibility of money laundering, and shall pay attention to and report all complex, unusual or large transactions, whether completed or not, and to all unusual patterns of transaction which have no apparent economic or lawful purpose and every suspicion for which they believe there are reasonable grounds, following the firm’s procedure.

It is the policy of the firm that every member of staff shall pay attention to and report to the MLCO:

• any transactions made on behalf of a person whose identity has not been established;
• business relations and transactions with persons in jurisdictions that do not have adequate systems to prevent or deter money laundering or the financing of terrorism; and
• electronic funds transfers that do not contain complete originator information.

The expectation placed on each individual member of staff in responding to possible suspicions shall be appropriate to their position in the firm.

PROCEDURES

11.1 Every member of staff must be alert for the possibility that the firm’s services could be used for money laundering purposes, or that in the course of their work they could become aware of criminal or terrorist property.

11.2 A member of staff becoming aware of a possible suspicion shall gather relevant information that is routinely available to them and decide whether there are reasonable grounds to suspect money laundering. Any additional CDD information acquired, in particular any explanations for unusual instructions or transactions, should be recorded on the client file in the routine manner, but no mention of suspected money laundering is to be recorded in any client file.

11.3 The requirement to gather relevant information does not extend to undertaking research or investigation, beyond using information sources readily available within the firm.

11.4 If after gathering and considering routinely available information, the member of staff is entirely satisfied that reasonable grounds for suspicion are not present, no further action should be taken otherwise where there reasonable grounds for suspicion, the staff shall raise the matter with the MLCO.

 11.5 Where a member of staff based on their own observations decides that there are reasonable grounds to suspect money laundering, he or she shall submit a suspicion report to the MLCO, in the format specified by the MLCO for that purpose. Such internal suspicion report does not breach client confidentiality.

11.6 A member of staff who forms or is aware of a suspicion of money laundering shall not discuss it with any outside party, or any other member of staff unless directly involved in the matter causing suspicion.

11.7 No member of staff shall at any time disclose a money laundering suspicion to the person suspected, whether or not a client, or to any outside party. If circumstances arise that may cause difficulties with client contact, the member of staff must seek and follow the instructions of the MLCO. 

12.0 POLICY AND PROCEDURE FOR ONGOING MONITORING OF CLIENTS’ ACTIVITIES

POLICY

It is the policy of this firm to put in place policies, controls and procedures for monitoring the implementation of policies, controls and procedures to address the risks relating to money laundering and terrorism financing, and where necessary, enhance them on a regular basis.

It is the policy of the firm to maintain a system of regular, independent reviews to understand the adequacy and effectiveness of the Money Laundering and Terrorist Financing systems and any weaknesses identified.

It is the policy of this firm to monitor clients’ instructions and transactions to ensure consistency with those anticipated and with the client risk profile.

PROCEDURES

12.1All staff will maintain alertness for clients’ instructions and transactions which represent a significant divergence from those anticipated for the client and feedback shall be communicated to the MLCO.

12.2The firm shall employ a suitable mechanism for monitoring clients’ transactions, according to their number and the involvement or otherwise of members of staff in their execution.

12.3 Where a client’s instruction or transaction is not consistent with what is anticipated: an explanation will be sought, if appropriate by contacting the client.

12.4 The involvement of unexpected jurisdictions or organisations will be checked with the firm’s MLCO for possible alerts or sanctions

• if a satisfactory explanation is found, the client file will be updated to record that explanation and to reflect the change in anticipated client activities
• if no satisfactory explanation is found, the matter will be brought to the attention of the MLCO, who will consider whether there are grounds to suspect money laundering

12.5 The MLCO will consider whether there is cause to carry out a re-assessment of money laundering risk, and if so, will carry this out.

12.6 Irrespective of whether specific incidents have caused a re-assessment of money laundering risk, every client file will be reviewed periodically to check that:

• the information held is still adequate, correct and up to date
• the level of client due diligence being applied is still appropriate.

12.7 Periodic review of client files will be conducted at the following intervals:

• for high-risk clients – every six months
• for all other clients – annually.

12.8 As part of their improvement efforts the firm shall monitor publicly-available information on best practice in dealing with Money Laundering and Terrorist Financing risks.

13.0 POLICY AND PROCEDURE FOR KEEPING RECORDS OF CLIENT DUE DILIGENCE INFORMATION

POLICY

It is the policy of this firm to establish and maintain systems to keep records of enquiries made and information obtained while exercising client due diligence for AML purposes, and to ensure that these records are retrievable as required for legal and regulatory stipulations.

It is the policy of this firm to ensure that principles of customer due diligence are adhered to at the start of a new business relationship; at appropriate points during the lifetime of the relationship and when an occasional transaction is to be undertaken.

PROCEDURES

13.1 When information is being collected for AML client due diligence, the responsible staff will ensure that:

• information collected is recorded in a consistent manner in the client file, or other appropriate place.
• all instances are recorded where information requested has not been forthcoming, or where explanations provided have not been satisfactory.

13.2 The firm shall have systems to routinely archive CDD records along with the firm’s accounting records to ensure their availability for a minimum of ten years from the date of the completion of the transaction or enquiry.

13.3 The firm shall have data retrieval systems which facilitate full and rapid retrieval of all relevant CDD records by authorised staff, in order to respond fully to enquiries from financial investigators.

13.4 The firm shall have procedures to ensure that any personal data obtained for CDD purposes is processed only for the purposes of preventing money laundering and terrorist financing.

13.5 The firm shall provide new clients with the statement prior to establishing a business relationship that any personal data received from the client will be processed only for the purposes of preventing money laundering and terrorist financing.

13.6 The firm shall have a procedure to earmark relevant personal data for deletion at the end of the ten year retention period unless:

• it is required for court proceedings
• the data subject has given express consent to the retention of that data.

13.7 For clients who have been the subject of a suspicion, relevant records will be retained separately from the firm’s routine archives, and not destroyed, even after the ten year period has elapsed, without confirmation from the MLCO that they are no longer required as part of an enquiry.

13.8 In recording and documenting money laundering suspicion reports, the MLCO shall at all times protect the firm’s position with regard to the Data Protection Act, 2019. 

14.0 POLICY AND PROCEDURE FOR FORMAL DISCLOSURES TO THE AUTHORITIES

POLICY

It is the policy of this firm that the Money Laundering Control Officer (MLCO) shall receive and evaluate internal suspicion reports, and decide whether a formal disclosure is to be made to the authorities. If so deciding, the MLCO will make the formal disclosure on behalf of the firm, using the appropriate mechanism.

PROCEDURES

14.1 On receipt of a money laundering suspicion report from a member of staff, the MLCO shall acknowledge its receipt in writing, referring to the report by its date and unique file number, without including the name of the person(s) suspected. This confirms to the member of staff that their legal obligation to report has been fulfilled.

14.2 The MLCO shall open and maintain a log of the progress of the report. This log shall be held securely and shall not form part of the client file.

14.3 Following receipt of a report, the MLCO shall gather all relevant information held within the firm, and make all appropriate enquiries of members of staff anywhere in the firm, in order properly to evaluate the report. The MLCO shall then decide whether they personally believe there are reasonable grounds for suspicion, and make a decision on the firm’s obligation to make a formal disclosure to the authorities.

14.4 All members of staff, anywhere in the firm, shall respond in full to all enquiries made by the MLCO for the purposes of evaluating a suspicion report. Information provided to the MLCO in response to such enquiries does not breach client confidentiality/professional privilege, and no member of staff shall withhold information on those grounds.

14.5 If deciding that a formal disclosure to the authorities is required, the MLCO shall make such disclosure by the appropriate means.

14.6 The MLCO shall document in the report log the reasons for deciding to make or not to make a formal disclosure.

14.7 The MLCO shall where appropriate inform the originator of the internal report whether or not a formal disclosure has been made.

14.8 The MLCO shall inform all those, and only those, members of staff who need to be aware of the suspicion in order to protect them and the firm from possible money laundering offences in connection with any related business.

14.9 Following a formal disclosure, the MLCO shall take such actions as required by the authorities in connection with the disclosure.

15.0 POLICY AND PROCEDURE FOR STOPPING/CONTINUING WORK FOLLOWING A SUSPICION REPORT

POLICY

It is the policy of this firm that from the moment a suspicion of money laundering arises, no further work will be carried out on the matter that gave rise to the suspicion. Neither commercial considerations nor the difficulty in responding to the client’s enquiries on the matter shall be permitted to take precedence over the firm’s legal obligations in this regard.

In such circumstances the MLCO shall act with all possible speed to enable work to continue, or if appropriate to withdraw from the client relationship, and assist staff in any communications with the client affected.

PROCEDURES

15.1 As soon as a member of staff forms or becomes aware of a suspicion of money laundering, no further work is to be done on the matter giving rise to suspicion.

15.2 If there is any likelihood of the client becoming aware that work has stopped, for example because an anticipated transaction has not gone through, the member of staff concerned must contact the MLCO for instructions on how to handle the matter with the client.

15.3 On receipt of a suspicion report, the MLCO shall:

• instruct the originator of the report and any other staff involved to cease work on the matter giving rise to suspicion
• decide in the shortest possible time whether all work for the client concerned should be stopped, or whether other work that is not the cause of suspicion may continue, and advise relevant staff accordingly
• assist all affected staff in handling the matter with the client so that no tipping off offence is committed.

15.4 When work for a client has been stopped, the MLCO shall carry out the evaluation of the suspicion report as quickly as possible to decide whether a disclosure must be made to the authorities or not. 

16.0 POLICY AND PROCEDURE FOR THE MONITORING AND MANAGEMENT OF COMPLIANCE

POLICY

It is the policy of this firm to monitor our compliance AML/CFT with legal and regulatory requirements and conduct an annual independent AML/CFT compliance audit, the findings of which are to be considered and appropriate recommendations for action set out.

The firm’s owner shall provide the necessary authority and resources for the ongoing implementation of a compliant AML regime.

PROCEDURES

16.1The MLCO will monitor continuously all aspects of the firm’s AML/CFT policies and procedures, together with changes and developments in the legal and regulatory environment which might impact the firm’s business-wide risk assessment.

16.2 Any deficiencies in AML/CFT compliance requiring urgent rectification will be dealt with immediately by the MLCO, who will report such incidents to the firm’s owner when appropriate and request any support that may be required.

16.3 The MLCO will facilitate and assist the Regulatory review team when conducting mandatory inspections on the firm. 

17.0 POLICY AND PROCEDURE FOR REVIEW OF THE MANUAL

POLICY

It is the policy of this firm to review the manual to keep it updated with the amendments in laws and regulations and also accommodate best practices

PROCEDURE

17.1 A regular review of the program should be undertaken to ensure that it is functioning as designed. Such a review could be performed by external or internal resources, and should be accompanied by a formal assessment or written report.

17.2 If and when regulations are amended concerning reporting of suspicious activities, the firm will amend this Manual to comply with those regulations. 

APPENDIX I: RISK FACTORS

High risk factors

Customer risk factors, including whether—

1. the business relationship is conducted in unusual circumstances;
2. the customer is resident in a geographical area of high risk (see below);
3. the customer is a legal person or legal arrangement that is a vehicle for holding personal assets;
4. the customer is a company that has nominee shareholders or shares in bearer form;
5. the customer is a business that is cash intensive;
6. the corporate structure of the customer is unusual or excessively complex given the nature of the company’s business;

Product, service, transaction or delivery channel risk factors, including whether—

1. the product involves private banking;
2. the product or transaction is one which might favour anonymity;
3. the situation involves non-face-to-face business relationships or transactions, without certain safeguards, such as electronic signatures;
4. payments will be received from unknown or unassociated third parties;
5. new products and new business practices are involved, including new delivery mechanisms, and the use of new or developing technologies for both new and pre-existing products;
6. the service involves the provision of nominee directors, nominee shareholders or shadow directors, or the formation of companies in a third country;

Geographical risk factors, including—

1. countries identified by credible sources, such as mutual evaluations, detailed assessment reports or published follow-up reports, as not having effective systems to counter money laundering or terrorist financing;
2. countries identified by credible sources as having significant levels of corruption or other criminal activity, such as terrorism, money laundering, and the production and supply of illicit drugs;
3. countries subject to sanctions, embargos or similar measures issued by, for example, the African Union, European Union or the United Nations;
4. countries providing funding or support for terrorism;
5. countries that have organisations operating within their territory which have been designated by the government of Uganda as proscribed organisations under the second Schedule to the Anti-Terrorism Act 2002;
6. (countries identified by credible sources, such as evaluations, detailed assessment reports or published follow-up reports published by the Financial Action Task Force, the International Monetary Fund, the World Bank, the Organisation for Economic Co-operation and Development or other international bodies or non-governmental organisations as not implementing requirements to counter money laundering and terrorist financing that are consistent with the recommendations published by the Financial Action Task Force in February 2012 and updated in October 2016.

Low risk factors

Customer risk factors, including whether the customer—

1. is a public administration, or a publicly owned enterprise;
2. is an individual resident in a geographical area of lower risk(see sub section below);
3. is an institution required to oblige by provisions of the AML Act;
4. is a company whose securities are listed on a regulated market, and the location of the regulated market;

Product, service, transaction or delivery channel risk factors, including whether the product or service is—

1. a life insurance policy for which the premium is low;
2. an insurance policy for a pension scheme which does not provide for an early surrender option, and cannot be used as collateral;
3. a pension, superannuation or similar scheme which satisfies the following conditions— - the scheme provides retirement benefits to employees; - contributions to the scheme are made by way of deductions from wages; and - the scheme rules do not permit the assignment of a member’s interest under the scheme;

Geographical risk factors, including whether the country where the customer is resident, established or registered or in which it operates is—

1. an EAC member state;
2. a third country which has effective systems to counter money laundering and terrorist financing;
3. a third country identified by credible sources as having a low level of corruption or other criminal activity, such as terrorism, money laundering, and the production and supply of illicit drugs;
4. a third country which, on the basis of credible sources, such as evaluations, detailed assessment reports or published follow-up reports published by the Financial Action Task Force, the International Monetary Fund, the World Bank, the Organisation for Economic Co-operation and Development or other international bodies or nongovernmental organisations—
   • has requirements to counter money laundering and terrorist financing that are consistent with the revised Recommendations published by the Financial Action Task Force in February 2012 and updated in October 2016; and
   • effectively implements those Recommendations.

 
June 2021