Money Laundering is the process of converting funds received from illegal activities (such as fraud, corruption, terrorism, etc.) into other funds or investments that appear to be legitimate in order to hide or distort the real source of funds.
The money laundering process can be divided into 3 consecutive stages:
- Placement. At this stage, the funds are converted into financial instruments such as checks, bank accounts, and money transfers or can be used for purchasing high-value goods that can be resold. They can also be physically deposited in banks and non-bank institutions (e.g., currency exchangers). To avoid suspicion on the part of the company, the launderer may as well make several deposits instead of depositing the whole sum at once; this form of placement is called smurfing.
- Layering. Funds are transferred or moved to other accounts and other financial instruments. It is performed to disguise the origin and disrupt the indication of the entity that made the multiple financial transactions. Moving funds around and changing their form makes it difficult to track money being laundered.
- Integration. The funds are returned to circulation as legitimate for the purchase of goods and services.
Wisemarket, like the majority of companies providing services on the financial market, adheres to Anti-Money Laundering principles and actively prevents any actions aimed at or facilitating the process of legalization of illegally gained funds. AML policy means preventing the use of the Company's services by criminals for the purpose of money laundering, terrorist financing, or other criminal activities.
For this purpose, the Company introduced a strict policy on detecting, preventing, and warning the corresponding bodies of any suspicious activities.
Moreover, the Company has no right to report Clients that the law enforcement bodies are informed of their activity. A complex electronic system for identifying every Company's Client and conducting a detailed history of all operations has also been introduced.
To prevent money laundering, the Company neither accepts nor pays cash under any circumstances. The Company reserves the right to suspend any Client's operation that can be regarded as illegal or may be related to money laundering in the opinion of the staff.
The Policy must be communicated to all Company employees that manage, monitor, or control in any way customers' transactions and are responsible for applying the practices, measures, procedures, and controls that have been determined herein. This Policy also applies to all company officers, designated contractors, agents, products, and services the Company offers. All business units within the Company will cooperate to create a cohesive effort to fight against money laundering.
This Policy's appropriateness, effectiveness, and adequacy are the subject of an independent Internal Audit.
The Company will ensure that it is dealing with a real person or legal entity. The Company also performs all required measures following applicable laws and regulations issued by the monetary authorities. AML policy is being fulfilled within the Company through the following:
- Know Your Customer Policy and Due Diligence;
- Monitoring of Client Activity;
- Record Keeping.
The Company assesses and evaluates the risks it faces based on the customer's nature, customer's behavior, customer's initial communication with the Company, as well as the risks based on the Company's services and securities.
Know Your Customer and Due Diligence
Due to the Company's commitment to the AML and KYC policies, each Company's Client must complete the verification process. Before the Company commences any cooperation with the Client, the Company shall ensure that satisfactory evidence is produced or other measures are taken that will produce satisfactory evidence of the identity of any customer or counterparty. The Company also applies enchased scrutiny to Clients who are residents of the countries identified by credible sources as countries having inadequate AML standards or may pose a high risk of crime and corruption and to beneficial owners who reside in and whose funds are sourced from named countries.
Each Client provides personal information during the registration process, specifically: full name, date, place of birth, residential address, business address, phone number, and city code.
Individual Client sends the following documents (if the documents are written in non-Latin characters, to avoid any delays in the verification process, it is necessary to provide a notarized translation of the document into English) due to KYC requirements and to confirm the indicated information:
Identity should be verified by:
- Valid Passport; or
- National ID Card; or
- Current driver's license with a photo; or
- Any other government-issued identification document.
The indicated documents must contain: the full name, date of birth, photo, and citizenship of a customer, and also, where applicable: confirmation of the document validity (issue and/or expiry date), and holder's signature.
The indicated documents must be valid for at least 6 months from the filing date.
For the purposes of the provisions relating to identification procedures and CDD requirements, proof of identity is satisfactory if:
- it is reasonably possible to establish that the customer is the person he claims to be; and,
- the person examining the evidence is convinced, in accordance with the procedures followed under the relevant legislation and regulations, that the customer is actually the person he claims to be.
The current residential address will be verified by one of the followings:
- A recent utility bill; or
- Bank statement; or
- Credit card statement (monthly); or
- Tax identification numbers, Social Security number or Government Service and Insurance System number.
The utility bill, bank statement, and credit card statement should not be older than 3 months from the filing date. Whereas a copy of the customer's tax identification number, Social Security number, or Government Service and Insurance System number should be apostilled in the country of origin upon the Company's request.
Where the certification is required, the documents must be certified by either one of the followings:
- a Judge;
- a Magistrate;
- a notary public;
- a barrister-at-law;
- a Solicitor;
- an attorney-at-law; or
- a Commissioner of Oaths.
Both sides of the submitted document are required where applicable (for example, ID or Driver's License). The document image must be a color, high-resolution photo, or scanned copy with no blurs, light reflections, or shadows. The four edges of the document should be visible. All information must be clearly readable, free of any watermarks, etc.
For each account, the Company shall also make a reasonable effort, before the settlement of the initial transaction, to obtain the following information to the extent it applies to the account:
- Occupation of customer;
- The customer's investment objective and other related information concerning the customer's financial situation and needs;
- Annual income, Assets or net worth.