Anti-Money Laundering policy
Anti-Money Laundering & Combating the Financing of Terrorism (AML/CFT) Policy
Introduction
LocalRamp Anti-Money Laundering and Know Your Customer Policy (hereinafter - the “AML/KYC Policy”) is designated to prevent and mitigate possible risks of LocalRamp being involved in any kind of illegal activity.
Both international and local regulations require LocalRamp to implement effective internal procedures and mechanisms to prevent money laundering, terrorist financing, drug and human trafficking, proliferation of weapons of mass destruction, corruption and bribery and to take action in case of any form of suspicious activity from its Users.
AML/KYC Policy covers the following matters:
Verification procedures
Transaction monitoring
Compliance officer
Risk assessment
1. Verification procedures
One of the international standards for preventing illegal activity is customer due diligence (“CDD”). According to CDD, LocalRamp establishes its own verification procedures within the standards of anti-money laundering and “Know Your Customer” frameworks, including enhanced due diligence for customers presenting a higher risk, such as Politically Exposed Persons (PEPs).
LocalRamp’s identity verification procedure requires the User to provide LocalRamp with reliable, independent source documents, data or information (e.g., national ID, international passport). For such purposes LocalRamp reserves the right to collect User’s identification information for the AML/KYC Policy purposes.
LocalRamp will take steps to confirm the authenticity of documents and information provided by the Users. All legal methods for double-checking identification information will be used and LocalRamp reserves the right to investigate certain Users who have been determined to be risky or suspicious.
LocalRamp reserves the right to verify User’s identity in an on-going basis, especially when their identification information has been changed or their activity seemed to be suspicious (unusual for the particular User). In addition, LocalRamp reserves the right to request up-to-date documents from the Users, even though they have passed identity verification in the past.
User’s identification information will be collected, stored, shared and protected strictly in accordance with the LocalRamp’s Privacy Policy and related regulations.
Once the User’s identity has been verified, LocalRamp is able to remove itself from potential legal liability in a situation where its Services are used to conduct illegal activity.
LocalRamp is prohibited from transacting with individuals, companies and countries that are on prescribed sanctions lists. LocalRamp will therefore screen against sanction lists in all jurisdictions in which we operate.
2. Transaction Monitoring
Customers are known by verifying their identity (information on who they are) and by analyzing their transactional patterns (information on what they do). Thus, LocalRamp relies on data analysis as a risk assessment and suspicious detection tool. LocalRamp performs transaction monitoring of AML/FT risks in accordance with LocalRamp's risk-based approach.
LocalRamp conducts a variety of compliance related tasks, including capturing & updating customer data, filtering, transaction investigation reporting and management. Transaction monitoring includes: a. Daily screening against recognized "Blacklists", aggregating transfers by multiple data points, placing Users on watch and service denial lists, opening cases for investigation where needed, sending internal reports, and filing statutory reports, if applicable. b. Wallet related transactions screening. c. Customer risk profile to ensure transactions/activities. d. investigation report management.
A daily ongoing screening and scrutiny of transactions is conducted as part of LocalRamp's transaction monitoring procedure to ensure that each transaction is consistent with the knowledge of the customer, their business, the nature of the transaction, red flags in LocalRamp's AML/KYC policy and source of funds where necessary.
All Employees endeavor to avoid carrying out a transaction which they know or suspect or have reasonable grounds to suspect to be related to money laundering. All suspicious/unusual transactions, such as personal data changes, payments or withdrawals, or activities potentially linked to money laundering, which are identified by employees are immediately escalated to the Compliance Officer for further investigation and filing of statutory reports to the appropriate authorities, if applicable.
Internal reports are done by an internal suspicious/unusual transaction report which includes full details of the person or institution involved, full details of transaction and nature of each person's involvement, suspected type of money laundering activity with exact basis for the suspicion, dates of the transaction, amount involved and any other information that may be useful for the investigation of the report.
The Compliance Officer shall maintain an internal log with information on unusual transactions, the investigations carried out for each report received and the outcome of such investigation, including whether the instance was reported to the Financial Transactions and Reports Analysis Center ("FINTRAC") or any other regulatory authority or not.
3. Compliance Officer
The Compliance Officer is duly authorized by LocalRamp to monitor and enforce compliance with the AML/KYC Policy. It is the Compliance Officer's responsibility to develop and execute mitigation actions in respect of all AML/FT issues arising from a particular customer/transaction,
including but not limited to:
a) Monitoring customers identification and virtual currency wallet addresses against recognized virtual currency wallet associated with recognized sanctions.
b) Monitoring transactions and investigating unusual activities which significantly deviate from normal activity.
c) Ensure compliance with all relevant laws, regulations, rules, and professional standards set by Regulators with the support from the Board and Employees.
d) Advice the Board of emerging statutory and regulatory compliance issues to guide LocalRamp in the establishment of control to mitigate risks.
e) Develop, implement, and administer all aspects of LocalRamp's statutory and regulatory compliance program.
f) Ensure training of employees on AML/FT framework while ensuring compliance with all AML reporting requirements of varying Regulatory agencies.
g) Review and approve escalated suspicious transactions with a view to escalating to the appropriate authorities (if required).
h) Review of LocalRamp's AML/KYC Policy.
i) Regularly update the risk assessment framework.
4. Risk assessment
LocalRamp adopts a risk-based approach towards assessing and combating financial crime risks arising from any transaction it has with a customer. It uses all available data when reviewing customer activity. Thus, LocalRamp proactively performs a risk based due diligence to identify and assess a customer's risk profile by collecting necessary information and documentation on each prospective customer before entering a customer relationship.
A risk assessment is to be conducted on customers to confirm that the identity of the customer does not match with a known blocked virtual currency asset address, criminal background, sanctioned institutions or banned entities such as terrorist organizations. Enhanced due diligence is required for customers who are determined to be high risk, particularly those for whom the nature (source of funds) is unclear, and for unusually large transactions with high frequency which can be determined by LocalRamp at its discretion.
As far as reasonably possible, all unusual patterns of transactions, which have no apparent economic or lawful purpose are examined to determine whether those transactions or activities appear suspicious. For identification, assessment and examination of risks related to its activities, LocalRamp has established a risk assessment, considering the customer risk profile, geographical risk, and delivery channel risk.
The risk profile of an existing customer is revised periodically upon acquiring more knowledge of the customer, its transactions, and its activities.
LocalRamp reserves the right to refuse to onboard a customer where requested identification documents are not supplied, impose terms under which a customer may conduct transactions while LocalRamp attempts to verify a customer's identity, close an account after attempts to verify a customer's identity fail and determine whether it is necessary to file a report to the appropriate authorities in accordance with applicable laws and regulations. LocalRamp equally reserves the right to cease, suspend or block transactions made to exchange a virtual currency where it actively attempts to hide the nature of the transaction, the beneficiary, or the source of funds for the transaction.