PREVENTION OF MONEY LAUNDERING AND FUNDING OF TERRORISM POLICY STATEMENT
In response to the international community’s growing concern about the problem of money laundering and funding of terrorism, countries around the world have introduced and/or strengthened already existing laws and regulations concerning this subject.
In the area of crime prevention, Czech financial institutions must hold a policy of internal principles which are set out in accordance with Czech laws ( Prevention of Money Laundering and Funding of Terrorism Regulations Act 253/2008 – “PMLFTR”/ “Regulations”).
Following the Czech Republic’s EU accession on 1 st May 2004, the Czech legislation on anti- money laundering adopted the 2 nd and 3 rd EU AML Directives. Following the adoption of the latter Directive, combatting funding of terrorism became part and parcel of Czech’s legislation. Though not a Financial Action Task Force (FATF) member, Czech’s regulatory framework on anti-money laundering and funding of terrorism closely mirrors the FATF 40 Recommendations. Additionally, it also adheres to principles of international bodies such as those of the Basel Committee on Banking Supervision – Customer Due Diligence on Money Laundering, having been enshrined in the PMLFTR.
In 1996, the Financial Intelligence Analysis Unit (“FAU”) was set up in the Czech Republic and it became a government agency reporting directly to the Czech Parliament in 2017. It is responsible for the collection, collation, processing, analysis and dissemination of information with a view to combating money laundering and funding of terrorism. It acts as an intermediary between the credit and financial institutions and other financial and investment services operators bound by the Regulations and the police authorities. The FAU issues the Implementing Procedures to assist subject persons in understanding and fulfilling their obligations under the PMLFTR, ensuring an effective implementation of the same.
Payment Execution s.r.o. (“Institution/PE”) is licensed and regulated by the Czech National Bank (“ČNB”) as a payment institution, under the Payment Services Act 284/2009. Due to this license, the Institution is considered to be an “obliged entity” or “subject person” under the Regulations and is therefore obliged to adhere to the provisions contained in the Act, the Regulations and the FAU Implementing Procedures.
Objective of the Policy
The Institution is fully committed to remaining constantly vigilant to the prevention of money laundering and combating funding of terrorism for the purpose of risk management (reputational risk, legal risk and regulatory risk) and serious crime prevention (social duty) and it will not allow its systems to be abused in furtherance of these offences.
Payment Execution s.r.o. is dedicated to and actively participates in international undertakings and initiatives to prevent money laundering and the funding of terrorism. The Institution will, at all times, endeavour to ensure the protection of its staff and safeguard the organisation and its reputation against the threat of money laundering and/or funding of terrorism and other criminal activities.
Adherence to the Act, the Regulations and the Implementing Procedures is reflected in the Institution’s Anti-Money Laundering and Funding of Terrorism Internal Procedures.
As a minimum the Institution :
has appointed a Money Laundering Reporting Officer (“MLRO”) and a Designated Employee, both vested with a significant degree of responsibility. The MLRO’s role is to maintain controls and procedures aimed at deterring persons from using the products and services of the Institution for criminal means. He/she is also required to evaluate Unusual Transaction Reports and following an investigation, determine whether a Suspicious Transaction Report should be filed with the Regulatory law enforcement agency, namely the FAU. The Designated Employee’s role is to assist the MLRO in the fulfilment of his/her duties;
takes reasonable steps to establish the identity of persons to whom it has chosen to provide a product or service;
retains identification and transactional documentation as defined in the Institution’s Internal Procedures and in accordance with the law;
provides initial and ongoing training to ensure that all relevant staff are aware of their personal responsibilities and the prevention of money laundering and funding of terrorism procedures in respect of identifying and verifying customers, monitoring, record keeping, remaining vigilant at all times and reporting any unusual/suspicious transactions;
ensures that this Policy is developed and maintained in line with evolving statutory and regulatory obligations and advice from enforcement agency/ies;
In line with above, PE and its employees have taken a stand to comply with the following basic principles:
i) Verifying Customer Identity:
PE is required to identify a customer when entering into a business relationship, when carrying out regular transactions and when carrying out a transaction on an occasional basis. It establishes and verifies the identity of the ultimate beneficial owner/s and/or any other person who controls the customer or its assets or on whose behalf the transaction is carried out or the business relationship has been established.
ii) Establishment of Purpose of Business Relationship
Information on the purpose and intended nature of the business relationship is required in order to be in a position to establish the business and risk profile of the applicant for business.
iii) Client Account Monitoring
The Institution has implemented a permanent monitoring system of customers’ accounts to detect unusual/suspicious transactions.
iv) Risk Assessment
The Institution has procedures in place on risk assessment and risk management that are adequate and appropriate to prevent the carrying out of operations that may be related to Money Laundering and/or Funding of Terrorism.
v) Record Retention
In line with the requirements of the law, the Institution retains records, including documentation and information, for use in an investigation into, or an analysis of, the possibility of Money Laundering and/or Funding of Terrorism.
The Institution has a system in place which detects whether an applicant for business is subject to any financial sanctions issued by the European Union and the UN Security Council in relation to persons known to be involved in terrorism. PE aims to keep itself updated with all sanctions that might have an impact on business operations.
Payment Execution s.r.o. has in place a Customer Acceptance Policy setting out the parameters of its risk appetite, specifically listing the types of customers it restricts or prohibits from entering into a business relationship with the Institution. This list is not exhaustive and is also supplemented by an escalation process whereby business proposals which might not be in line with the Institution’s risk appetite are discussed and approved at Senior Management level.
This Prevention of Money Laundering and Funding of Terrorism Policy Statement has been approved by the Compliance Committee and by the Institution’s Managing Director.