Anti-money laundering and anti-terrorism policies
WHEREASThe Rock Trading S.r.l. ("TRT"), as a provider of services relating to the use of virtual currency and in compliance with the regulations on anti-money laundering and against international terrorism financing (see Legislative Decree no. 231/2007 - "Anti-Money Laundering Decree"), implemented suitable measures to manage the relevant risk in order to prevent TRT involvement in criminal events that may have negative effects on its stability and reputation on the market.
Money laundering and terrorist financing are criminal offences, which, in view of their transnational dimension, may seriously threaten the lawful economy. These are factors that cause a great deal of damage to the entire economic system: the reinvestment of illicit profits in legal activities and the presence of economic players and entities involved in crime deeply alter market mechanisms, affect the efficiency and correctness of financial activities and weaken the economic system.
It is known that TRT provides users with services linked to blockchain technology: an internet platform that allows them to buy and sell tokens or any other existing "virtual" or "mathematical" currency, as well as allowing the conversion of virtual or cryptographic tokens between them or legal tender countervalue and vice versa. In this context, transactions are protected through encryption, potentially vulnerable, due to their anonymity, to leakage of money laundering and international terrorist financing events, as indicated by the Financial Action Task Force (FATF).
Given all this, the action to prevent and contrast money laundering and terrorism financing by TRT is carried out through the introduction of controls aimed at guaranteeing proper customer verification, traceability of financial transactions, identification of suspicious transactions and storage of customer data and documents. This document ("AML Policy"), in particular, describes the general principles and criteria - which are in turn subject to further and timely internal regulation - implemented and managed by TRT for the fulfilment of the obligations required by the AML Decree in relation to its core business, which employees, collaborators, customers, corporate representatives and business partners are required to comply with.
LEGISLATIVE GROUNDSFollowing the implementation of Directive 2015/849/EU (known as the Fourth AMLD) into our legal system, the relevant national legislation has been significantly amended, extending its scope to service providers relating to the use of virtual currency, limited to the performance of the activity of converting virtual currencies from or into legal tender currencies.
The IV AMLD has been implemented in our legal system with the Legislative Decree. 90/2017, which amended and supplemented the Anti-Money Laundering Decree. The Anti-Money Laundering Decree consists of three main pillars:
- proper customer verification;
- retention of customer data and information;
- suspicious transaction reports.
Authorities at national level called upon to supervise compliance with the regulations are the Ministry of the Economy of Finance, the Financial Information Office (FIU) at the Bank of Italy, the Supervisory Authorities of each sector where the parties required to apply the regulations operate, the Anti-Mafia Investigative Directorate (DIA) and the Tax Authorities.
DEFINITIONSIn order to clarify the terminology used in this AML/KYC Policy, the following definitions are specified:
- Client: The person, who enters into a continuous relationship with TRT, opens an account on the Website and carries out purchase and sale transactions or requests or obtains the provision of a professional service by TRT.
- Identifying data: given name and family name, place and date of birth, domicile, if different from the registered residence, the references of the identification document and, if granted, the tax number or, in the case of persons other than natural persons, the name, registered office and, if granted, the tax number.
- Agent/Trader: The person authorized to deal with the Client's name and on his/her behalf or who is in any case vested with representative powers enabling him/her to deal with the Client's name and on his/her behalf.
- Terrorist financing: Any activity carried out in any way and aimed at the provision, collection, intermediation, deposit, custody or disbursement of funds and economic resources, directly or indirectly, in whole or in part, suitable for the performance of one or more conduct aimed at terrorism, in accordance with the provisions of criminal law, regardless of the actual disbursement of funds and economic resources for the commission of the aforementioned conduct.
- Fractionated transaction: It is a single transaction in terms of economic value, for an amount equal to or exceeding thresholds set by this decree, carried out through several transactions, each lower than the above thresholds, carried out at different times and within a limited time period set at seven days, without prejudice to the existence of the fractionated transaction should there be elements to consider it as such.
- Occasional Transaction: A transaction not attributable to a continuing business relationship as such; an intellectual or commercial service, including those with the immediate execution of the transaction, rendered in favor of the customer also represents an occasional transaction
- High Risk Countries: These are countries outside the European Union whose legal systems suffer from strategic weaknesses in their national systems to prevent money laundering and terrorist financing, as identified by the European Commission.
- Politically Exposed Persons - PEPs: These are natural persons who have been entrusted or no longer have been (for less than one year), with prominent public functions, as well as their family members and those who have close links with such persons, as listed below:
1. individuals who have or have held prominent public offices, those who hold or have held the role of:
- 1.1 President of the Republic, President of the Council, Minister, Vice-Minister and Undersecretary, President of the Region, Regional Alderman, Mayor of the provincial capital or metropolitan city, Mayor of the municipality with a population of non-less than 15,000 inhabitants and similar positions in foreign states;
- 1.2 Members of Parliament, Senators, Members of the European Parliament, Regional Councilors and equivalent offices in foreign countries;
- 1.3 member of the central governing boards of political parties;
- 1.4 Judge at the Constitutional Court, Judge at the Italian Supreme Court or the Court of Auditors, State Councilor and other members of the Administrative Justice Committee for Sicily and similar positions in foreign countries;
- 1.5 member of the governing boards of central banks and independent authorities;
- 1.6 ambassador, business representative or comparable positions in foreign states, senior military officer or comparable positions in foreign states;
- 1.7 member of the administrative, management or control authorities of companies subsidiaries, even indirectly, of the Italian State or of a foreign State, companies controlled by Regions, provincial capitals and metropolitan cities and by municipalities with a total population of not less than 15,000 inhabitants;
- 1.8 General Manager of ASL, Hospital, University Hospital and other National Health Service Institutes;
- 1.9 Director, Deputy Director and member of the management board or entity performing similar functions in international organizations;
3. The following are persons whom politically exposed persons are recognized to maintain close links with:
- 3.1 natural persons linked to the politically exposed person by virtue of joint beneficial ownership of legal entities or other close business relationships;
- 3.2 natural persons who only formally control a whole entity known to be effectively established in the interest and for the benefit of a politically exposed person.
- Ongoing relationship: It is a long-term relationship, falling within the scope of the activity of an institution carried out by the responsible parties, which is not limited to a single transaction.
- Money laundering: Money laundering is defined as the following criminal offences:
- a) conversion or transfer of property, being aware that such property results from criminal activity or participation therein, for the purpose of concealing or disguising the unlawful origin of the property or helping any person involved in such activity to avoid legal effects of such activities;
- b) concealment or disguise of the true nature, source, location, disposition, movement, ownership of, or rights in respect of property, being aware that such property is the result of criminal activity or participation therein;
- c) purchase, possession or use of property, being aware, at the time of receipt, that such property resulted from criminal activities or from participation therein;
- d) involvement in, attempt to commit, aiding, abetting, or counselling someone to commit any of the activities listed in (a), (b) and (c), or facilitating the commission thereof.
- Beneficial Owner: The natural person(s), other than the client, in whose interest the ongoing relationship is ultimately established, the professional service is rendered or the transaction is carried out.
KNOW YOUR CUSTOMER (KYC) PROCESSKYC (know your customer) is an essential element of national and European legislation governing financial transactions between agents/traders and customers.
Careful customer control, in addition to being a valid tool for combating money laundering and terrorist financing, protects traders against commercial and reputational risks together with the enforcement of administrative, civil and criminal penalties and fines.
TRT carries out the appropriate customer verification and monitors the activity through the analysis of the following parameters:
- identification data/personal details;
- legal status (for corporate entities);
- prevailing activity;
- source of funds;
- conduct occurring at the time of opening the ongoing relationship or at the time of completion of the transaction;
- geographical region of origin;
- purpose for opening the relationship;
- transaction or relationship details;
- transaction amount;
- significance of the transaction and the relationship.
TRT constantly updates customer due diligence during the relationship with the same, both during the review phase (scheduled according to the risk level) and when any events occur, such as, but not limited to: anomalies detected by the IT applications used, reports by the Authorities, identification of transactions carried out by the customer not consistent with the nature of the relationship underlying the transaction.
COMPLIANCE WITH KEY AML/CFT REQUIREMENTSAML Policy adopted by TRT is based on the risk-based approach principles. In particular, TRT:
- does not enter into transactions with shell banks with no physical presence in the country where they are incorporated and authorized to engage in such activity;
- pays greater attention to and adopts enhanced measures in cases where situations involving a greater risk of money laundering arise or when verifying persons who hold or have held important public offices (PEPs);
- does not carry out transactions involving for any reason (originators or payees) persons listed within court orders;
- checks incoming and outgoing transactions ( controls on payees and originators) and assesses movements rejected due to similarities with anti-terrorist lists;
- carries out, by automated means, personal data checks and makes comparisons with the names on the lists provided by the UN and EC Regulations and other international and domestic agencies.
INFORMATION SECURITY AND CONFIDENTIALITYIn order to comply with the storage obligations, TRT has implemented an IT register, ensuring that data management is clear and complete, so that information is easy to access and readily available. TRT has entrusted the maintenance of the register to a third party.
Information and data obtained are retained for ten years as provided for by the existing Legislative Decree 231/2007.
ANTI-MONEY LAUNDERING FUNCTIONTRT has appointed a Manager of the AML Department.
TRT's internal control system, however, involves the entire corporate structure from corporate boards to control functions. TRT ensures that adequate internal controls are maintained to protect the integrity of the money laundering risk management process and the relevant reputational risk by drafting strict guidelines on the topic, as well as by means of an adequate internal organizational structure.
The Anti-Money Laundering Policy updates, as well as the assessment of the compliance with procedures and internal provisions adopted by TRT, is entrusted to the AML Department which, in partnership with other internal functions or external professions, is responsible for ensuring the effectiveness of the activities implemented to mitigate the risks related to money laundering and terrorist financing.
ORGANISATIONAL/REGULATORY SUPERVISIONTRT has implemented dedicated organizational/regulatory supervision to fulfil the obligations set out in the AML Decree. In particular, adequate internal regulatory procedures have been prepared to govern the requirements established in order to provide TRT corporate functions with internal reference and support tools useful for understanding the issues involved.
Furthermore, TRT adopted specific IT tools for the analysis of the anti-money laundering risk profiles to be attributed to customers and for the monitoring of "anomalous" transactions for which an analysis is carried out by the relevant structures in order to assess the same.
SUSPICIOUS TRANSACTION REPORTINGIn order to cooperate with the Authorities to ensure the stability of the financial system and to avoid TRT involvement in money laundering and terrorist financing, the latter has adopted a structured process for reporting suspicious transactions regarding the illicit origin of transferred funds. For this purpose, TRT has identified a reporting party responsible to report suspicious transactions, required to transmit reports to the Financial Intelligence Unit (FIU) in the form and manner required by the Authority.
TRAININGAs provided for by the Anti-Money Laundering Decree, TRT annually provides a Training Program (e-learning, specific courses) mandatory for all personnel, consultants and company representatives.
Last Update: 26-Apr-2018 12:00am