IP VDX (ESCROW) LTD ANTI-MONEY LAUNDERING MANUAL February 2014

IP VDX (ESCROW) LTD
ANTI-MONEY LAUNDERING MANUAL
February 2014
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I. PURPOSE
The present document forms the anti-money laundering manual of IPVDX
(ESCROW) LTD, a limited liability company registered under the laws of Cyprus
with Reg. No. HE280383 having its registered address at 6 Demostheni Severi
Avenue, Office 22, Nicosia, Cyprus.
The Prevention and Suppression of Money Laundering Activities Law of 2007
has set up a framework for the prevention of money laundering and terrorist
financing activities.
IPVDX (ESCROW) LTD acknowledges the importance of following both the letter
and spirit of such law and all relevant directions, recommendations and
instructions and wishes not to be used by any of its Clients for the purpose of
carrying out money laundering or terrorist financing activities.
The manual is intended to provide guidance to the Members of the Company and
its MLCO, as both defined below, of the procedures to be followed so as to
prevent and fight potential anti-money laundering or terrorist financing
activities.
This manual contains comprehensive due diligence procedures in accordance
with the Law that shall be followed by the Company, its’ Members and the
MLCO, in relation to the identification of clients, record-keeping and recognition
and reporting of suspicious transactions.
II. SCOPE OF APPLICATION
This manual applies to IPVDX (ESCROW) LTD and all of its Members, as well as
the MLCO.
Compliance with the provisions of the manual and effective implementation of
the procedures contained therein is the responsibility of all Members of the
Company as well as the MLCO.
III. INTRODUCTION
What is money laundering?
Based on the definition of the Directive issued by the Cyprus Bar Association,
Money laundering is the process by which criminals attempt to conceal the true
origin and ownership of the proceeds of their criminal activities. If undertaken
successfully, it also allows them to maintain control over those proceeds and to
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ultimately provide a legitimate cover for their source of funds. In other words,
their “dirty” funds come to appear “clean”.
Why is the Company regulated for money-laundering activities?
The services provided by the Company have been identified under the Law as
services that can and may become the target of criminals wishing to legitimize
their profits. Services that are normally brought within the scope of money
laundering preventive measures include inter alia:
(i)
The exercise of professional activities by independent professionals,
with the exception of privileged information, when they participate,
either:
a. By assisting in the planning or execution of transactions for their
clients concerning the buying and selling of real property or
business entities;
b. Managing of client money, securities or other assets;
c. Opening or management of bank, savings or securities accounts;
d. Organization or contributions necessary for the creation, operation
or management of companies; creation, operation or management
of trusts, companies and similar structures; or
e. By acting on behalf and for the account of their clients in any
financial or real estate transaction.
(ii)
Consultancy services to enterprises concerning their capital structure,
industrial and related issues and consultancy services as well as
services in the areas of mergers and acquisitions of businesses.
What is the legislative and regulatory framework for money-laundering
activities?




The Prevention and Suppression of Anti-Money Laundering and Terrorist
Financing Activities Law of 2007, as amended;
The Directive to the Members of the Cyprus Bar Association in relation to the
Prevention of Money Laundering and Terrorist Financing, as may be amended
from time to time.
The Fourth Directive to the Members of the Cyprus Bar Association.
The Directive to the Members of the Cyprus Bar Association issued on January
2014 in relation to the procedure for the regulatory control and the procedure
for the imposition of sanctions/fines.
What are the offences which the Law seeks to prevent?
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The Law is applicable in respect of offences which are referred to as “prescribed
offences” and which comprise of (a) laundering offences and (b) predicate
offences.
What are money-laundering offences?
Under the Law, every person who knows or ought to have known that any kind
of property is proceeds from a predicate offence is guilty of an offence if he
carries out any of the following:
(i)
Converts or transfers or removes such property, for the purpose of
concealing or disguising its illicit origin or of assisting any person who
is involved in the commission of a predicate offence to evade the legal
consequences of his actions;
(ii)
Conceals or disguises the true nature, source, location, disposition,
movement, rights with respect to property or ownership of this
property
(iii)
Acquires, possesses or uses such property
(iv)
Participates in, associates or conspires to commit, or attempts to
commit and aids and abets and provides counselling or advice for the
commission of any of the offences referred to above; or
(v)
Provides information with respect to investigations performed in
relation to laundering offences, for the purpose of enabling the person
who has gained profit from the commission of a predicate offence to
retain the proceeds or the control of the proceeds from the
commission of the said offence.
What are predicate offences or terrorist financing?
Predicate offences are:
(a) The criminal offences as a result of which proceeds or assets were derived
which may constitute offences of money laundering and which are
punishable with imprisonment exceeding one year;
(b) Terrorist financing offences, including collection of money for financing of
persons or organizations connected with terrorism; and
(c) Offences of drug trafficking as described in Section 2 of the Law;
(d) All offences, including tax crimes related to direct taxes and indirect taxes,
which are punishable by deprivation of liberty or a detention order for a
maximum penalty of more than one year.
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What are the obligations of the Company and its Members in relation to the
Law?
The Company is strictly bound by all measures provided for under the Directive
in relation to the due diligence requirements for new and existing clients and the
recognition and reporting procedures for suspicious activities.
Members of the Company are equally responsible for compliance with the above
for and on behalf of the Company. To this effect, the Company has prepared the
present manual so as to inform the Members of their obligations and assist them
with their implementation. The following section of this manual outlines all the
said procedures in detail.
Which is the Regulatory Authority under the supervision of which the Company and
its Members are included?
By virtue of s.59 of the Prevention and Suppression of Money Laundering and Terrorist
Financing Law of 2007, the Cyprus Bar Association is rendered the regulatory authority
under which lawyers and law firms as well as any direct or indirect subsidiaries of same
are included.
How is regulation by the Cyprus Bar Association conducted?
In addition to the Directives which have been and/or may be issued by the Cyprus Bar
Association in the future and which are binding on the persons regulated by the Cyprus
Bar Association, the Cyprus Bar Association may further appoint a number of
Regulatory Officers who may, following a relevant notification to the lawyer and/or law
firm and/or partnership and/or any direct or indirect subsidiary and/or the beneficial
owner of a relevant Client, conduct an on-site control of the files of the Client so as to
ensure that all requirements have been complied with.
What are the implications of non-compliance with the procedures prescribed under
the Law and the Directive?
Pursuant to the Directive to the Members of the Cyprus Bar Association issued on
January 2014 in relation to the procedure for the regulatory control and the procedure
for the imposition of sanctions/fines issued in January, 2014, the Council of the Cyprus
Bar Association may, in case where a Regulatory Officer identifies non-compliance with
the Law and/or the Directives of the CBA, all of which are specifically defined below,
and/or any other relevant directive that may be issued by the Cyprus Bar Association
from time to time, impose a fine not exceeding €200. Where non-compliance persists a
fine of no more than €1000 per day may be further imposed.
What do the anti-money laundering procedures specifically deal with?
The anti-money laundering procedures outline the measures that should be
taken in relation to the following:
 Client Identification
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
Record-Keeping

Recognition of Suspicious Transactions

Reporting of Suspicious Transactions
Where may the Members obtain further guidance or consultation?
The Company, in accordance with the provisions of the Directive, appoints the
money laundering compliance officer (MLCO), who is the person responsible for
the education, training and assistance of all Members as regards their antimoney laundering obligations. Details on the relevant duties of the MLCO may
be found in the final section of this manual.
IV. CLIENT DUE DILIGENCE PROCEDURES
1. DEFINITIONS
Application Form: The Form completed by each new client seeking to obtain
the services of the Company.
Authority: The Unit for Combating Money Laundering at the Attorney General’s
Office (‘MOKAS’)
Beneficial Owner: Any natural person(s) who ultimately owns or controls the
client and/or the natural person on whose behalf a one-off transaction is being
conducted:
(a) In the case of corporate entities:
 the natural person(s) who ultimately owns or controls a corporate entity
through direct or indirect ownership or control over any percentage of the
shares or voting rights in that corporate entity, including through bearer
share holding, other than a company listed on a regulated market that is
subject to disclosure requirements consistent with Community legislation or
subject to equivalent international standards;
 The natural person(s) who otherwise exercises control over the
management of a corporate entity.
(b) In the case of legal entities, such as foundations, and legal arrangement,
such as trusts, which administer and distribute funds:
 Where the future beneficiaries have already been determined, the natural
person(s) who is beneficiary of the property or any part thereof of a legal
arrangement or entity;
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 Where the individuals that benefit from the legal arrangement or entity have
yet to be determined, the class of persons in whose main interest the legal
arrangement or entity is set up or operates;
 The natural person(s) who exercises control over the property or any part
thereof of a legal arrangement or entity.
Box File: A file opened for each client to which the Company offers its services
and which includes all data and documents received by the Company in relation
to the Client. The Box File must bear at least the name of the company and its
reference number which is taken from the Company’s index.
Business Relationship: A business, professional or commercial relationship
which is connected with the professional activities of the Company and which is
expected, at the time when the contact is established, to have an element of
duration.
Business Transaction: Includes all business relationships and one-off
transactions between the Company and its Clients and which are the subjects of
scrutiny under this manual.
CBA: the Cyprus Bar Association
Client: Any natural or legal person seeking to form a business relationship or
carry out a one off transaction.
Company: IPVDX (ESCROW) LTD, a limited liability company registered under
the laws of Cyprus with Reg. No. HE280383 having its registered address at 6
Demostheni Severi Avenue, Office 22, Nicosia, Cyprus.
Ending of Business Relationship: The business relationships is ended on the
date of a) the completion of a one-off transaction, b) the termination of the
business relationship and c) if the business relationship has not formally ended,
the date on which the last transaction was carried out and the client has settled
all fees due and/or any other liability owed to the company.
Member: An employee of the Company (or a person otherwise at its services
and/or acting under its brand and/or name) that attends to any matter involving
the commencement of a business relationship and/or carries out any act in the
course of providing a Prescribed Activity and/or Service.
MLCO: The Money Laundering Compliance Officer of the Company. Any
reference thereto herein shall include his deputy.
NCCTs: Non Co-operative Countries and Territories (NCCTs) are the countries
pronounced by the Financial Action Task Force of the G7 as high risk and
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requiring special attention to business relationships and transactions with any
person or body originating from them.
One-Off Transaction: Any transaction other than a transaction carried out in
the course of an established business relationship formed by a person acting in
the course of the activities listed in s.60 of the Law and any other activity defined
by the Council of Ministers as such by an order amending section 60 of the Law
published in the Official Gazette of the Republic.
Politically Exposed Persons (PEPs): Any natural person who is or has been
entrusted with a prominent public function and immediate family members, or
persons known to be close associates, of such person.
Privileged Information: According to s.44 of the Law privileged information
means:

Communication between an advocate and a client for the purposes of
obtaining legal advice or professional legal services in relation to legal
proceedings whether there have started or not, which would in any legal
proceedings be protected from disclosure by virtue of the privilege of
confidentiality under the law in force at the relevant time;

Any other information which is not admissible in court for the protection
of public interest under the law in force at the relevant time.
The legal advice shall remain subject to the obligation of professional secrecy
unless the legal counsellor is taking part in money laundering or terrorist
financing, the legal advice is provided for money laundering or terrorist
financing purposes or the Member knows that the Client is seeking legal advice
for money laundering or terrorist financing purposes.
Regulatory Officer: the person appointed by the CBA so as to conduct on-site
regulatory controls in accordance with the January 2014 Directive.
The Directive: the Directive to the Members of the Cyprus Bar Association
pursuant to s.59(4) of the Prevention and Suppression of Money Laundering
Activities Law of 2007.
The January 2014 Directive: the Directive to the Members of the Cyprus Bar
Association issued on January 2014 in relation to the procedure for the regulatory
control and the procedure for the imposition of sanctions/fines.
The 4th Directive: The Fourth Directive to the Members of the Cyprus Bar Association.
The CBA Directives: the Directive, the January 2014 Directive and the 4th Directive
issued by the Cyprus Bar Association.
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The Law: the Prevention and Suppression of Money Laundering Activities Law
of 2007.
2.
CLIENT IDENTIFICATION
2.1
General
The Member is required to follow the present identification procedures strictly
and for all clients without exception.
The Member is required to obtain and retain copies of adequate and satisfactory
documentary evidence in relation to the Client himself and the intended business
relationship or one-off transaction with the Company, prior to establishing the
business relationship with the client or at the earliest stages of the
business relationship.
Such evidence should be sufficiently reflective of the following:
(a) The client’s identity;
(b) In the case of legal person, the identity of the beneficial owner and the
ownership chain and control structure of the client;
(c) The purpose of the intended business relationship or one-off transaction;
(d) The source of wealth of the client as well as the source of the funds
involved in the intended business transaction.
Further to the initial verification of the client’s identity, the Member is required
to conduct an on-going supervision of the business relationship, and most
importantly to inspect and keep a relevant record of the transactions carried out
by the client in the course of the business relationship and to ensure that they
are consistent with the information provided by the client.
In the case of a client refusing to provide the requested documentation in order
to verify his identity, the Member shall terminate the realisation of the business
transaction and shall immediately inform the Company and the MLCO.
All of the above apply equally to new as well as existing clients. This means that
if during the course of an existing business relationship the Member becomes
aware of any deficiency in the documentation regarding the identity, business or
financial background of that particular Client, the Member is obliged to request
the missing documentation as soon as practically possible. If the Client refuses
to provide the requested documentation, the Member is similarly obliged to
terminate the business relationship and immediately inform the Company and
the MLCO.
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2.2
Identification of natural persons
(a) Required Client Information
In order to obtain all necessary information, the Member shall ensure that the
Client properly completes and executes Section 2 of the Application Form, in
accordance with the instructions included therin.
The required client
information is as follows:

Full Name, including the first name, surname and all other names
used;

Date of Birth;

Current address at which the person may be located and/or contacted
whether residential or business address or both;

Nationality;

Profession or Occupation;

Contact details.
(b) Supportive Documentation
 Passport or ID;
(c)

Proof of current residential address, such as an original utility bill or
an original credit card statement not more than six months old;

Two original references, one from a professional (e.g. Attorney or
Accountant) and one from a Bank;

Curriculum Vitae.
Verification of required client documentation
All documents submitted must either be:

in original form, or

copies certified as true copies of the original by a Notary Public and
apostilled under the Hague Convention on the Apostille of Documents,
or
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
2.3
copies certified as true copies of the original by a Cyprus Consular
Office.
Identification of legal persons (companies, trusts, partnerships)
In the case of corporate or other entities, the objective of the identification
procedure is to identify the ownership and control structure of the client which
ultimately leads to the beneficial owner, or if the person in controlling ownership
of the client is not the beneficial owner, then the person exercising control of the
legal person. If neither the beneficial owner nor the person exercising control of
the legal person is a natural person, the Member should identify the person who
holds the position of senior manager.
In identifying the beneficial owner, the Member is required to conduct all
necessary identification procedures, described in paragraphs 2.2 and 2.3 of the
present manual, in respect of all persons, whether natural or legal, forming part
of the ownership chain or control structure of the client.
Similarly, the identification procedure for trusts or similar legal arrangements
requires the identification of all parties involved in the trust or similar legal
arrangement. For the purpose of identification of the said persons, the Member
shall conduct all necessary identification procedures described above, for both
legal and natural persons involved in the arrangement.
Due to the high popularity of the use of trust arrangements from criminals, it is
further significant for the Member to verify the following:

The source of the money put on trust;,

The nature of the transaction made;

That all payments are made in accordance with the terms of the trust; and

That all payments are properly authorized in writing by the trustee.
(a) Required Client Information:
In order to obtain all necessary information, the Member shall ensure that the
Client properly completes and executes Section 1 of the Application Form, in
accordance with the instructions included therein. The required client
information is as follows:

Incorporation/Registration Number;

Name and legal form,;
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
Proof of existence including the verifying the fact that the client is
not the subject of a dissolution, strike off, or wind up process;

Main business activities;

The rules governing the client’s administration and regulation;

Source of income;

Address of registered office and/or principle place of business;

Contact details;

The Identity of the beneficial owners and/or persons involved in the
trust or other similar legal arrangement as described above.
(b) Additional Documentation:
(i) In the case of a publicly quoted company:

Evidence of listing;

Evidence as to who is authorized to bind the company.
(ii)
In the case of a limited liability company:

Certificate of Incorporation;

Certificate of Good Standing;

Certificate of Incumbency;

Memorandum and Articles of Association.
(iii) In the case of a trust

The Trust Deed;

Certificate of Registration.
(iv) In the case of a partnership

The Partnership Agreement;

Evidence of the person who can bind the Partnership.
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(c) Verification of required client documentation
All documents submitted must either be:

in original form, or

copies certified as true copies of the original by a Notary Public and
apostilled under the Hague Convention on the Apostille of Documents,
or
copies certified as true copies of the original by a Cyprus Consular
Office.

2.4
Politically Exposed Persons (PEPs)
The Member is required to investigate whether a person, whether a customer or
beneficial owner, is a politically exposed person. Once a person is determined as
such, the Member should initially obtain the approval of the Company before
establishing a business relationship with same and should follow the above
mentioned identification procedure strictly and with additional care.
2.5
Clients from NCCTs
Additional care and prudent supervision must also be carried out with regard to
clients from countries whose anti-money laundering legislation is considered to
be ineffective. The Member is required to consult the Financial Action Task
Force country evaluations (http:/www.fatf-gafi.org) for guidance on such
countries.
3.
RECORD KEEPING
The Member is required to keep a record of all data retrieved during the Client
Identification process and to review and ensure that they are updated on a
regular basis.
The Member is required to retain the said record for a period of up to ten (10)
years as of the termination of the business relationship or one-off transaction, or
where the business relationship or one-off transaction is not formally
terminated, as of the completion of the last transaction made in the course of the
relationship.
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The records kept in relation to each client shall be in both hardcopy form, filed in
the due diligence subfolder of each client’s box file and in electronic form, saved
in the due diligence subfolder of each client’s electronic folder. With regard to
the latter form, the Member shall further conduct regular back-ups.
More particularly, the Member is required to retain a record of the following:
(a) Client identification data: this includes all data collected in the process of
client identification and all additional and/or updated data collected
thereafter.
(b) Client transaction data: this includes, where possible, apart from the
client identification data, the following transaction-related data:
4.

data on the name, address, and/or other identification data of the
counter party to the transaction;

the form of instruction or authority given for the realisation of the
transaction;

the account details from which any funds were paid;

the form and destination of payments made to the client; and

Any business correspondence in relation to the transaction.
RECOGNISING SUSPICIOUS TRANSACTIONS
The Member is required to review on a regular basis the records of client
identification data and client transaction data for the purposes of recognising
transactions that may be the subject of anti-money laundering or terrorist
financing activities.
When considering a specific transaction, as guidance the Member is advised to
always bear the following in mind:

The size of the transaction as compared to the normal activities of the
client;

The plausibility of the transaction in the context of the client’s usual
business or personal activities;

The pattern of transactions usually conducted and the consistency of the
transaction under consideration with the said pattern;

Whether the transaction is unusually complex compared to the nature
and pattern of the client’s earlier transaction;
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
In the case of an international transaction, the expectedness of an
international transaction by the client and the reasonableness of
transacting with the other country involved.
The Member must be additionally prudent in relation transactions connected to
NCCTs.
Further guidance and training will be regularly provided by the MLCO, based
amongst others on a record of all documented reports already made in the
context of the anti-money laundering reporting procedures described below.
5.
REPORTING SUSPICIOUS TRANSACTIONS
Once the Member becomes aware or suspects that a Client is involved in moneylaundering or terrorist activities, in the performance of his duties as a Member of
the Company, he is obliged to immediately disclose all information, out of which
his knowledge or suspicions arise, directly or as soon as reasonably practical to
the Company’s MLCO.
The obligation to report to the MLCO extends to any knowledge or suspicion that
may arise after the transaction is completed or the business relationship is
terminated.
Any report made and all information in connection therewith must be submitted
to the MLCO in documented form. In urgent cases an initial telephone report
should be made, but shall immediately be followed by a written report.
The report shall comprise of all details of the client in possession of the Company
and as accurate a statement as possible of all the information that gave rise to the
knowledge or suspicion.
Following the report, the Member shall be in constant communication with the
MLCO and shall provide such assistance as the MLCO may require including any
further documentation needed.
The Member is strictly prohibited from communicating any information in
relation to the knowledge or suspicion of anti-money laundering or terrorist
financing activities to any other person other than the MLCO.
Most importantly, the Member must not make the client aware of his suspicions
and must not give any indication to the client that a report may be submitted to
the authorities or that an investigation is currently being carried out by the
authorities.
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6. RESPONDING TO THE CYPRUS BAR ASSOCIATION’S REGULATORY CONTROLS
The Member shall promptly respond to any notification by the Regulatory Officer in
relation to the conducting of an on-site regulatory control.
The Member shall not prevent or obstruct in any manner the duties of the Regulatory
Officer during the on-site control and shall give access to such files as may be requested
by the Regulatory Officer in the course of the on-site control.
The Member shall not disclose to the Regulatory Officer any privileged information or
any other correspondence between the Company and any of its Clients.
Where the Regulatory Officer identifies and addresses to the Member elements of noncompliance with the provisions of the Law and/or the CBA Directives, in relation to the
records of any of the Clients, the Member shall immediately take all necessary actions to
rectify the incidences of non-compliance and shall notify the Regulatory Officer
accordingly.
The Member shall keep a record of all on-site controls taking place in the Company and
shall at all times provide the MLCO and the Company of an updated copy of the said
record.
The Member shall in particular record a summary of the on-site control, including the
notification by the CBA regarding the on-site control, the name of the Regulatory Officer,
the date of the on-site control, the box files and/or electronic files that have been
reviewed and a copy of the Regulatory Officer’s report, and where recommendations
have been made the Member shall provide details of all errors located and all actions
taken to rectify same.
The Member shall not allow the conducting of an on-site control by the CBA and/or a
Regulatory Officer unless a notification has been given to the Company in advance,
informing of the date and time of the onsite-control, its purpose and the provision of the
Law and/or the CBA Directives by virtue of which the on-site control will be conducted.
7.
EDUCATION AND TRAINING
The Company wishes to ensure that all of its Members are properly educated and
updated with the national regulatory anti-money laundering framework. The
person responsible for training the Members is the MLCO who shall conduct
relevant training sessions or seminars and prepare reports on a regular basis, in
accordance with the duties imposed on him by the present manual. The
Members are advised to invariably attend all seminars and to examine
thoroughly any new instructions issued by the MLCO.
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Further to any training sessions, all Members are encouraged to contact the
MLCO at any time in relation to any enquiries regarding the due diligence
procedures contained herein. In addition to that, the Members shall not hesitate
to consult the MLCO in relation to any suspicious transaction they become aware
of regardless of any doubts they may have as to the grounds of their suspicions.
III.
THE MONEY LAUNDERING COMPLIANCE OFFICER
1.
THE ROLE OF THE MLCO
The Law requires that the Company appoints an MLCO and the Company
appoints at least one person to be MLCO.
The MLCO is the primary responsible towards the implementation of the
Directive, any other subsequent Directives issued under the Law and all other
relevant instructions and recommendations. The MLCO is a person with good
knowledge of the Law and the requirements of the Directive and is competent to
receive by the Member and consider information that gives rise to knowledge or
suspicion of engagement in money laundering activities and to perform the
duties set out in this manual.
The Company may appoint a person to be the Deputy MLCO who shall perform
the duties and obligations set out by this manual for the MLCO in his/her
absence and generally assist the MLCO when needed.
2.
THE DUTIES OF THE MLCO
2.1
General Duties
The MLCO shall act honestly and reasonably. The MLCO must report to the
Company any instances of non-compliance on behalf of any Member with the
provisions of the Law and/or the Directive and/or this manual and/or any other
instructions given to him/her and the Company by MOKAS or the CBA.
The MLCO is empowered to obtain from all partners and employees of the
Company all relevant information in connection with any suspicion of money
laundering or terrorist financing.
The MLCO is liable for any errors and/or omissions regarding his/her duties as
MLCO, including validation of reports he/she receives on suspicions of money
laundering and reporting them to MOKAS. He/she will not be liable if he/she
acts in good faith.
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All reports to MOKAS upon commencement of and during investigation should
be made by the MLCO.
All requests from MOKAS for information or documents must be passed to the
MLCO, who shall provide assistance to and fully cooperate with MOKAS.
The MLCO should acquire the knowledge and skills required and continually
monitor and improve the company’s Procedures for recognising and reporting
money laundering suspicions. The Company acknowledges that on-going
monitoring is an essential aspect of effective money laundering preventive
procedures.
The MLCO is required to prepare an Annual Report within two months from the
end of each calendar year and submit it to the Company. The Annual Report
should deal with money laundering preventive issues pertaining to the year
under review and include at least the following information:








2.2
Information on changes in the Law, the Directive or any other relevant
legislation, guidelines or regulation that affect the Due Diligence
Procedures which took place during the year and measures taken and/or
introduced for securing compliance with such changes;
Information regarding the application of this manual and on the ways by
which the effectiveness of the clients’ identification and due diligence
procedures have been managed;
Details of all on-site controls conducted by the CBA and all
recommendations given thereafter, as well as all actions taken in
accordance with the said recommendations;
Details of all suspicious cases reported to MLCO and their evaluation;
Details of all suspicious cases reported to MOKAS and all communications
with MOKAS;
Details of seminars and training courses arranged for the employees of
the company, including attendance list;
Information regarding seminars and training courses attended by the
MLCO and any other education material received;
Recommendations for additional human and technical resources which
might be required.
Duties in relation to suspicious transactions
Immediately upon being informed of knowledge or suspicion of money
laundering the MLCO must gather and validate or the relevant facts and consider
all the relevant issues. The MLCO should consult the reporting person, and, if
appropriate, the reporting person’s superior(s).
The evaluation of the
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information reported to the MLCO must be recorded by the MLCO and retained
on a special file opened for this purpose.
If, after considering all evidence and circumstances, the MLCO concludes that the
initial suspicions were justified he/she must submit a written report to MOKAS
without delay. A specimen of such a report is attached as Appendix A. The
report shall be accompanied by copies of all client identification documents in
possession of the Company as well as all documentation related to the suspicious
transaction(s) and/or activity(ies).
The MLCO is responsible for the preparation of any set of
documents/information/report that would be submitted to MOKAS.
In
particular, sufficient information should be disclosed in order to be
understandable by MOKAS and if a particular offence is suspected this should be
specified. Where additional relevant evidence could be made available, the
nature of the evidence should be indicated in the report.
If, on the other hand, after considering all evidence and circumstances, the MLCO
concludes that the initial suspicions were unfounded he/she must fully
document and justify in writing the reason(s) for coming to that conclusion.
The legislation protects those reporting suspicions of money laundering from
claims in respect of any alleged breach of client confidentiality. However, the
protection extends only to disclosure of the suspicion or belief that funds derive
from money laundering, and to matters on which that suspicion or belief is
based. If in doubt, both Members and the MLCO should insist in the law
enforcement agencies obtaining a court order before disclosing information
beyond that contained in their initial report. Privileged information as
prescribed above is protected.
The MLCO acts as the first point of contact with MOKAS upon commencement of
and during an investigation as a result of filing a report to MOKAS. The contact
details for delivery of reports to MOKAS are as follows:
Unit for Combating Money Laundering (MOKAS)
Law Office of the Republic
27 Katsoni Street
CY-1082 NICOSIA
Tel: 22446 004 Fax: 22 317063
E-mail: mokas@mokas.law.gov.cy
2.3
Duties in relation to the training of Members
The MLCO is responsible for the education and training of Members and for
ensuring that they are always updated with any changes in the Law, the Directive
or any other relevant legislation, recommendation or instruction
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In particular, the MLCO is required to:

To carry out regular training sessions so as to ensure that all Members are
well informed and up-to-date with the requirement of the Law, the
Directive or any other relevant legislation, recommendation or
instruction;

To provide advice, answering any questions, giving directions and
supervising the Members in any matter relating to the due diligence
procedures

To individually inform each new Member of the provisions of the Law and
the Directive and the procedures adopted by the present manual as well
as the duties imposed on them as a result thereof;

To individually inform each new Member of the implications of noncompliance with the Law and the Directive as well as the regulatory
procedures prescribed under the January 2014 Directive and all
implications of non-compliance;

Be informed at all times of all changes or updates in the Law, the Directive
or any other relevant legislation, guidelines or regulation that affect the
Due Diligence Procedures, and to inform and educate all Members
accordingly;

To review the nature of the activities of the clients and assess potential
suspicious transactions and to communicate same to the Members so as
to assist them in the implementation of the recognition of suspicious
transactions procedure described above;

To keep a record of all recommendations provided by the Regulatory
Officer and to use same so as to provide further assistance in the form of
examples in relation to the client identification procedures;

To keep a record of all suspicious cases reported to MLCO and their
evaluation, as well as of all suspicious cases reported to MOKAS, and to
use same so as to provide further assistance in the form of examples in
the recognition of suspicious transactions;
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APPENDIX A
Money Laundering Compliance Officer’s Report to the
Unit for Combating Money Laundering (MOKAS)
I.
GENERAL INFORMATION
Name of reporting firm:
Contact details:
Address:
Telephone number(s):
Fax number(s):
E-mail address:
Date when a business relationship started or a one-off transaction was carried
out:
Types of services offered to client:
II. DETAILS OF NATURAL PERSON(S) AND/OR LEGAL
ENTITY(IES)
INVOLVED
IN
THE
SUSPICIOUS
TRANSACTION(S)/ACTIVITY(IES)
(A)
Natural persons
Name:
Residential address:
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Business address:
Occupation:
Date and place of birth:
Nationality and passport number:
(B)
Legal persons
Company’s name:
Jurisdiction:
Registration number:
Business address:
Main activities:
Registered Shareholder(s) (please provide (if known) the following: name,
surname, nationality and passport number, date of birth, residential address,
occupation and employer):
1.
2.
3.
Beneficial owner(s) (please provide (if known) the following: name, surname,
nationality and passport number, date of birth, residential address, occupation
and employer):
1.
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2.
3.
Director(s) (please provide (if known) the following: name, surname, nationality
and passport number, date of birth, residential address, occupation and
employer):
1.
2.
3.
III. FULL DESCRIPTIONS AND DETAILS OF
TRANSACTIONS/ACTIVITIES AROUSING SUSPICTION:
IV.
REASONS FOR SUSPICION:
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V.
OTHER INFORMATION:
Client’s accounts with domestic, international or foreign banks (if known)
Other information the MLCO wishes to bring to the attention of MOKAS (if
any)
___________________________________________
MONEY LAUNDERING COMPLIANCE
OFFICER’S SIGNATURE
Date:
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