Money laundering is defined as the process where the identity of the proceeds of crime is so disguised that it gives an impression of legitimate income. Criminals specifically target financial services firms through which they attempt to launder criminal proceeds without the firms’ knowledge or suspicion.
In response to the scale and effect of money laundering, the European Union has passed Directives designed to combat money laundering and terrorism. These Directives, together with regulations, rules and industry guidance, form the cornerstone of our AML/CTF obligations and outline the offenses and penalties for failing to comply.
This Anti-money Laundering Policy (hereinafter referred to as "AML Policy") outlines the procedures and mechanisms used by INTERNETCASHBANK for the purpose of preventing money laundering. INTERNETCASHBANK adheres to the following policies:
Money Laundering – is a set of activities with the property aimed to:
Terrorist Financing – acts of financing of terrorism as defined in § 2373 of the Penal Code of Estonia.
International Sanctions – list of non-military measures decided by the EU, the UN or Estonian government, which is aimed to maintain or restore peace, prevent conflicts and follow the rule of law, human rights and international law.
Compliance Officer or CO – representative appointed by the Management Board responsible for the compliance with the Rules & serving as contact person of the FIU.
FIU - Financial Intelligence Unit of the Police and Border Guard Board of Estonia.
Business Relationship – a relationship of the Service Provider with the Client.
Transaction – cash flow or payment order or cryptocurrency wiring form a Client to the Provider of service.
Client – a natural or legal person using services of Service Provider.
Beneficial Owner – is a natural person, who:
Equivalent Third Country – a country, which is not a Member State of European Economic Area but applying an equivalent regime to the EU corresponding (AML) framework.
Virtual currency - a value represented in the digital form, which is digitally transferable / tradable, and which persons accept as a payment instrument, but that is not the legal tender of any country or funds.
Customer Due Diligence (CDD) - identification and verification of the identity of the client and any beneficial owner of the client, as well as obtaining information about the objectives of the intended nature of the business relationship.
Advanced Customer Check (EDD - Enhanced Due Diligence) - an additional measure customer due diligence to be applied if:
Transaction - customer asset management. The transaction is performed through the customer account.
Risk Client Profile - an illustration of the risks and threats that may be encountered by an organization when working with the Client. This may include the probability of negative consequences and a plan of potential costs and the level of violation for each risk. It is in the company's best interest to be proactive when it comes to its risk management systems. Some risks can be minimized if properly taken into account. Compliance with risk accounting requirements ensures that the company and its employees comply with regulatory and ethical processes.
Accounting system - the company's internal electronic system for storing information on customers.
Proof address – utility bill, property tax receipt and etc.
The Service Provider offers services of exchanging of virtual currencies against virtual currencies, a virtual currency against a fiat currency, and vice versa. The Service Provider is a subject to authorisation by the FIU.
The MB shall appoint a CO to monitor the compliance with the Rules & relevant laws, compile & keep updated the data regarding countries with low tax risk, high and low risk of Money Laundering and Terrorist Financing and economic activities, instruct the Representatives, report to the MB on compliance with the Rules, process the data on suspicious activities, report to the FIU on events of suspected ML or TF, respond to FIU enquiries; make proposals on remedying deficiencies.
Tasks of the CO can be performed by a department
The Service Provider shall determine and take due diligence (DD) measures using results of conducted risk assessment / provisions of national risk assessment, published on the web-page of the Ministry of Finance of Estonia.
Identifying the Client and verifying its identity, including e-identifying, Identifying and verifying the Client’s representative and the right of representation, Identifying the Client's Beneficial Owner, Assessing and obtaining information on the purpose of the Business Relationship and the Transaction, Conducting ongoing DD on the Client's business to ensure the Transactions being carried out are consistent with the Provider of service’s knowledge of the Client and its source of funds, Obtaining information whether the Client is a PEP or PEP’s family member / close associate.
request appropriate identity documents to identify the Client and its representatives, request Proof address, request documents and information regarding the Client’s activities / legal origin of funds, request information about Beneficial Owners of a legal person, screen the risk profile of the Client/Transaction, assess the risk whether the Client or another person linked with the Transaction may become involved in ML or TF, re-identify the Client / its representative, in case of any doubts regarding the correctness of the information, refuse to participate in or carry out the Transaction if there is any suspicion that the Transaction is linked with ML or TF, or that the Client / another person linked with the Transaction could be involved in ML or TF. The objective of the continuously applied DD measures is to ensure on-going monitoring of Clients and Transactions.
Updated data shall be recorded in the Provider of service’s Client database.
Upon implementing DD measures the following person shall be identified:
Client – a natural or legal person, Representative of the Client – an individual who is authorized to act on behalf of the Client; · Beneficial Owner of the Client, PEP – if the PEP is the Client or a person connected with the Client.
Upon establishing the relationship with the Client and when carrying out a Transaction, the Service Provider shall identify and verify the Client while being present at the same place as the Client or by using information technology means.
For identification of a Client and verification of the identity of a Client by using information technology means, the Provider of service shall use:
*The documents (Republic of Estonia) to be used for identification: https://www2.politsei.ee/en/teenused/inquiries/
Legal person and its passive legal capacity shall be identified and verified on the basis of an extract of a registry card of commercial register, foreign legal persons shall be identified on the basis of an extract of the relevant register / a transcript of the registration certificate / an equal document issued not earlier than six months before submission.
For a natural person:
For a legal person:
INTERNETCASHBANK shall establish its own procedures for determining compliance with the anti-money laundering standards and Know Your Customer (KYC) policy.
INTERNETCASHBANK may also request a second Customer identification document: a bank statement or utility bill no older than 3 months, which includes the Customer's full name and current address.
INTERNETCASHBANK shall verify the authenticity of documents and information provided by Customers and reserves the right to request additional information on Customers who have been identified as dangerous or suspicious.
If the Customer's identification information has been changed or their activity appears suspicious, INTERNETCASHBANK is entitled to request updated documents from the Customer, even if they have been authenticated in the past.
The Anti-Money Laundering Officer is a INTERNETCASHBANK employee who is responsible for ensuring compliance with the AML Policy, such as:
In order to screen out suspicious or unusual Transactions and the purpose and actual substance of a Transaction, the Representative can take the following actions:
ask the Client to provide (additional) information about the professional or economic activities, ask the Client explanations about the reasons for the Transaction and documents evidencing the origin of the assets and/or source of wealth, being particularly attentive to Transactions, which are linked with natural or legal persons, whose country of origin is a state, wherefrom it is particularly difficult to receive information about the Client and/or transactions with persons, who originate from such states, which do not contribute sufficiently int prevention of ML.
If it is necessary to obtain additional documents or information from the Client on the source of virtual assets, a request is sent to the Client.
The monitoring of the Customer's transactions and the analysis of the obtained data is also a tool for risk assessment and the detection of suspicious transactions. If money laundering is suspected INTERNETCASHBANK shall monitor all transactions and reserves the right to:
The above list is not exhaustive. The AML Policy Compliance Officer monitors the Customers' transactions every day to determine whether to report them and treat them as suspicious.
In accordance with international requirements, INTERNETCASHBANK applies a risk-based approach to anti-money laundering and financing of terrorism. Thus, measures aimed at the prevention of money laundering and financing of terrorism are commensurate with the identified risks, allowing resources to be effectively dedicated. Resources are used on a priority basis. The greatest attention is given to the greatest risks.
The Representative will establish a risk profile of a Client based on information gathered under the Rules.
For search regarding financial sanctions imposed against a person , INTERNETCASHBANK uses automatic tools provided by API partners, or follow the link: https://www.sanctionsmap.eu/#/main
When establishing the risk category of a Client being a natural person, the country of residence of the Client, the beneficiaries of the Transaction, the region where the Client operates, and status of PEP shall be taken into account.
When establishing the risk category of a legal person, assessment shall be based on the country of location of the legal person, its area of activity, the transparency of ownership structure and the management.
Suspicious and unusual Transactions and Transactions with characteristics of ML and TF.
The Representative shall decide whether a Transaction is unusual, having regard to the entire information known about the Client and the Transaction.
Upon assessing a Transaction, it is necessary to establish whether the unusual circumstance or change is understandable / whether the Transaction has characteristics pointing to ML or TF.
Any Transactions and activities of Clients, which have no clear economic or legal reason, and which cannot be considered normal economic activity of a Client shall be regarded as suspicious.
Among other aspects, particular attention must be paid to the following Transactions/circumstances:
Client makes single and/or consecutive large Transactions outside the schedule,a third person makes payments on behalf of the Client, Exists any of characteristics of suspicious transactions as provided by guidelines of FIU.
In all the cases referred to above, the Client shall be asked for explanation and necessary documents evidencing of the legal origin of the funds.
Prior to beginning a cooperation with a client, an initial verification of clients shall take place, the questionnaire form is to be filled on the site, and the identification document (passport, ID card) is to be provided. Passports and ID cards shall be checked via the sources described in the procedure.
The Transaction may be carried out only with the consent of the MB if:
The Client does not have sufficient authorizations to carry out the Transaction, or the authorizations are unclear, the Client’s need to carry out the Transaction has not been reasonably justified, the management, ownership and control structure of the Client being a legal person is unclear and/or it is structured in an unreasonably complicated way from the economic point of view, or it has changed frequently without justification, Economic activities of a legal person or its accounting or payment practices are not transparent, the Client may be a fictitious company or a fictitious person, The Beneficial Owner of the Client being legal person cannot be established, The Client being a legal person uses an agent or another legal person as its representative without clear authorizations (i.e. during pre-contract negotiations),The Client or the representative of the Client refuses to provide information for the purposes of establishing the substance of the Transactions and assessment of the risks, The Client has not presented sufficient data or documents to prove legal origin of the assets and funds, after having been asked to do so, The Client, the Beneficial Owner of a Client being a legal person, or another person associated with the Client is or has been linked with organized crime, ML or TF, The Client, the Beneficial Owner of a Client being a legal person, or another person associated with the Client is or has been linked with traditional sources of income of organized crime, International Sanctions are being applied against the Client, the Beneficial Owner of a Client being a legal person, or another person associated with the Client, The Client has nominee shareholders or shares in bearer form.