Forexer LLC does not accept clients from Iran, North Korea and other UN sanctioned countries. Clients holding United States citizenship are subject to FATCA regulations.
Some other clients also may be asked for Advanced Clients Information (ACI) procedures and additional KYC.
This Policy represents the basic standards of Anti-Money Laundering and Combating the Financing of Terrorism (hereinafter collectively referred to as AML/CFT) procedures of FOREXer LLC, Dubai, UAE. FOREXer LLC drafted its AML/CFT policy in compliance with the Federal laws with respect to Money Laundering and Combating the Financing of Terrorism.
This policy is in effect and copies of this Policy will be distributed to all and all relevant employees must be thoroughly familiar with and make use of the material contained in this Policy.
FOREXer LLC does not accept clients from Iran, North Korea and other UN sanctioned countries. Clients from United States are subject to FATCA regulations. Some other clients also may be subject to Advanced Clients Information (ACI) procedures and additional KYC.
Money Laundering is a generic term used to describe any process that conceals the origin or derivation of the proceeds of crime so that the proceeds appear to be derived from a legitimate source.
Money Laundering is sometimes wrongly regarded as an activity that is associated only with organized crime and drug trafficking. It is not. It occurs whenever any person deals with another person’s direct or indirect benefits from crime.
The term ‘Money Laundering’ is in fact a misnomer. Often it is not money that is being laundered but other forms of property that directly or indirectly represent benefits from crime. Any form of tangible or intangible property is capable of representing another person’s benefits from crime. The main objective of the money launderer is to transform ‘dirty’ money into seemingly clean money or other assets in a way to leave as little trace as possible of the transformation.
Traditionally, Money Laundering has been described as a process that takes place in three stages as follows:
Placement – This is the first stage in which illicit funds are separated from their illegal source. Placement involves the initial injection of the illegal funds into the financial system or carrying of cash across borders.
Layering – After successfully injecting the illicit funds into the financial system, laundering them requires creating multiple layers of transactions that further separate the funds from their illegal source. The purpose of this stage is to make it more difficult to trace these funds to the illegal source.
Integration – This is the final stage in a complete Money Laundering operation. It involves reintroducing the illegal funds into the legitimate economy. The funds now appear as clean income. The purpose of the integration of the funds is to allow the criminal to use the funds without raising suspicion that might trigger investigation and pursuit.
In reality, the three stages often overlap and the benefits from many crimes including most financial crimes does not need to be ‘placed’ into the financial system. Licensees in UAE are most likely to be exposed at the layering and integration stages of the Money Laundering process.
Money Laundering is a crime that is most often associated with banking and money remittance services. Whilst banks are often an essential part of successful laundering schemes, the financial and related services that Licensees offer are also vulnerable to abuse by money launderers.
The Financing of Terrorism
The Financing of Terrorism is the act of providing financial support to acts of terror, terrorists or terrorist organizations to enable them to carry out terrorist acts. Unlike other criminal organizations, the primary aim of terrorist groups is non-financial. Yet, as with all organizations, terrorist groups require funds in order to carry out their primary activities.
This simple fact – the need for funds – is key in fighting terrorism. Follow the money. Follow the financial trail. This is the core objective of all measures that aim to identify, trace, and curb the Financing of Terrorism.
There are similarities and differences between Money Laundering and the Financing of Terrorism.
• Financing of Terrorism is an activity that supports future illegal acts, whereas Money Laundering generally occurs after the commission of illegal acts;
• Legitimately derived property is often used to support terrorism, whereas the origin of laundered money is illegitimate;
• Terrorist groups are often engaged in other forms of criminal activity which may in turn fund their activities;
• Both Money Laundering and the Financing of Terrorism require the assistance of the financial sector.
The key to the prevention of both Money Laundering and the Financing of Terrorism is the adoption of adequate CDD (Customer Due Diligence) measures by all Licensees both at the commencement of every relationship and on an on-going basis thereafter.
Customer Due Diligence Procedures to be adopted.
Identify and verify the identity of applicants for business.
This should be done by identifying and verifying the identities of applicants for business whether they are Directors, Shareholders, Beneficial Owners, Settlers or Contributors of capital, Beneficiaries, Protectors, Enforcers, Trustees, Bank mandate and Power of Attorney holders, etc. by verifying :
In case of natural persons:
Permanent residential address:
Date of birth:
Place of birth:
Primary identity documentation for identity must be obtained and retained on these Traders. They must be pre-signed, either in an original form or must be certified appropriately – and should bear a photograph of the principal. Primary identity documentations acceptable are:
1. Current valid passports.
2. National Identity cards.
3. Current valid driving licenses.
In addition to this primary identity documentation, we must also obtain additional verification of identity information- secondary identity documentation. The secondary documentation must be, as for primary identity verification, either in an original form or must be appropriately certified. The following documentation is acceptable:
4. A recent utility bill (which is less than 3 months old);
5. A recent bank or credit card statement (as such PO Box addresses are not acceptable as permanent residential addresses of Traders. Some countries have P.O Box addresses such as in Middle East and Africa) (which is less than 3 months old);
6. A recent bank statement (which is less than 3 months old).
7. Alternative verification documentation acceptable is:
(a) Obtaining a reference from a professional person who knows the principal. The reference must show the permanent residential address of the principal;
(b) Conducting a credit reference agency search;
(c) Checking a current register of electors;
(d) Utilizing an address verification service; or
(e) Visiting the principal at the principal’s permanent residential address.
In case if Trader is not an individual but is a legal person or arrangement:
(i) Being a Private company
(a) Obtain an original or appropriately certified copy of the certificate of incorporation or registration;
(b) Check with the relevant companies’ registry that the company is validly existing;
(c) Obtain details of the registered office and place of business;
(d) Verify the identity of the principals of the company as (1)
(e) Verify that any person who purports to act on behalf of the company is so authorized, and identifying that person;
(ii) Being a Trust
(a) Obtain an original or appropriately certified copy of a trust deed or pertinent extracts thereof;
(b) Where the trust is registered – check with the relevant registry to ensure that it does exist;
(c) Obtain details of the registered office and place of business of the trustee;
(d) Verify the identity of the principals of the trustee as per (1) and or (2) above.
(iii) Being a Partnership
(a) Obtain an original or certified copy of the partnership deed;
(b) Obtain a copy of the latest report and accounts;
(c) Verification of the nature of the business of the partnership to ensure that it is legitimate;
(d) Verifying the identity of the significant partners (20% interest)
(e) Verifying that any person that purports to act on behalf of the
Partnership is so authorized, and identifying that person.
Additional Due Diligence measures for financial institutions
• Company must undertake following additional due diligence measures while establishing and maintaining correspondent relationships:
– Obtaining sufficient information about a respondent institution to avoid any relationships with “shell-banks”;
– Determining from publicly available sources of information the reputation of a respondent institution, including whether it has been subject to a Money Laundering or Financing of Terrorism investigation or other regulatory action;
– Assessing the respondent institution’s Anti-Money Laundering and Combating the Financing of Terrorism controls on a periodic basis;
Company is bound to comply with the Anti-Money Laundering regulations of Securities and Commodities Authority (SCA) of United Arab Emirates and international laws. As company is dealing with foreign financial brokerage firms we must monitor all financial transactions with utmost vigilance and must report suspicious activities to the concerned authorities.
Goals and objectives
The main purpose of the Policy is to establish the essential standards designed to prevent the Group from being used for Money Laundering and terrorism financing.
Other objectives pursued by this Policy are as follows:
• Promote a “Know Your Customer” (KYC) policy as a cornerstone principle for the business ethics and practices;
• Introduce a controlled environment where no business with a Customer is transacted until all essential information concerning the Customer has been obtained;
• Conduct self-assessments of compliance with AML/CFT policy and procedures.
Adherence to this policy is absolutely fundamental for ensuring fully comply with applicable Anti-Money Laundering legislation.
The company will not have any relationship with any shell banks.
The company is committed to examining its Anti-Money Laundering strategies, goals and objectives on an ongoing basis and maintaining an effective AML/CFT Policy.
Company is obliged to follow the 40+9 recommendations given by the FATF Financial Action Task Force.
Monitoring and reporting of suspicious transactions/activity
• All personnel must be diligent in monitoring for any unusual and potentially suspicious transactions/activity basing on the relevant criteria applicable in the jurisdiction of United Arab Emirates;
• The reporting of suspicious transactions/activity must comply with the laws/regulations of UAE;
• Records must be kept of all documents obtained for the purpose of identification and all transaction data as well as other information related to Money Laundering matters in accordance with the applicable Anti- Money Laundering laws/regulations of the country;
• All records must be kept for at least 6 years;
• Training on Anti-Money Laundering will be provided to those new employees who work directly with customers and to those employees who work in other areas that may be exposed to Money Laundering and the Financing of Terrorism threats which includes;
Identification and reporting of transactions that must be reported to government authorities, examples of different forms of Money Laundering and internal policies to prevent Money Laundering.
• Follow-up trainings must take place not less than once a year.
We are committed to complying fully with all applicable laws and regulations relating to combating Money Laundering and any activity which facilitates the funding of terrorist or other criminal enterprises.
We are responsible for uncovering or reporting any activity that might constitute, indicate or raise suspicions of Money Laundering. To this end, we provide continuing education and training for all such persons.
FOREXer LLC is required to comply with all trade and economic sanctions imposed by OFAC against targeted foreign countries and shall cooperate fully with government agencies, self-regulatory organizations and law enforcement officials. As required by the Act, FOREXer LLC may supply information about former, current or prospective Traders to such bodies.
FOREXer LLC “the company” takes a zero-tolerance approach to bribery and corruption and is committed to acting professionally, fairly and with integrity and transparency in all our business dealings and relationships wherever we operate. Complying with all laws, rules and regulations governing anti-bribery and corruption laws in the UAE is Indispensable to us.
PURPOSE AND SCOPE
This policy applies to all employees, agents, subcontractors, consultants, business partners, and any other individual persons and bodies associated with the company or any of its subsidiaries. The purpose of this policy is to outline the company’s position on bribery and corruption and to provide information and guidance to those working for and with the company.
Bribery is an inducement or reward offered in order to gain any commercial, contractual, regulatory or personal advantage. Corruption is the misuse of public office or power for private gain, or the misuse of private power in relation to business outside the realm of government. No bribes of any sort may be paid or accepted from customers, suppliers, politicians, government advisors or representatives of a private person or company.
Bribery is a criminal offence and the penalties may be severe. Bribery and corruption are illegal and companies are liable for failing to implement adequate procedures to prevent such acts by those working for the company or on its behalf, no matter where in the world the act takes place. If the company is found to have taken part in the corruption or lacks adequate procedures to prevent bribery, it could face an unlimited fine and face damage to its reputation. Furthermore, under bribery and corruption is punishable for individuals. Any breach of this policy by an employee will be regarded as a serious matter by the company and is likely to result in disciplinary action and/or dismissal of the employee/s involved.
The presentation, detection and reporting of bribery and corruption is the responsibility of all employees in the company. Business partners, including agents, subcontractors, consultants, and any other individual persons and bodies associated with the company must be advised of the existence of, and operate at all times in accordance with this policy. Management is responsible for relationships with business partners, and in identifying and determining risk associated with any business partner, employees must:-
– Evaluate the reputation and background of the business partner;
– Evaluate the reason for engaging in business with the business partner;
– Understand what services are to be provided and the payment or compensation therefor;
– Ensure that there is a written agreement in place which acknowledges the business partner’s
– Understanding and compliance with this policy;
– Take reasonable steps to monitor the transactions of business partners appropriately.
Employees (including management) must notify the Managing Director of the company as soon as possible if they believe or suspect any bribery or corruption has occurred or may occur in the future. Such notification will be kept confidential at all times.
The company will maintain a system of internal controls sufficient to ensure that assets and transactions are accurately accounted for and that company transactions occur pursuant to management’s general or specific approval. The company’s books and records will accurately and fairly reflect the transactions and dispositions of the company’s assets and otherwise comply with applicable accounting standards. All employees are expected to appropriately record any form of gift, entertainment or hospitality given, received or offered, which records shall be provided to management immediately on request. Any such gift, entertainment or hospitality given must comply with this policy and, in the event that an impermissible form of gift, entertainment or hospitality has been accepted, the employee concerned must notify the Managing Director immediately.
Facilitation payments are payments or gifts made to government officials to secure or speed up actions such as obtaining permits, immigration controls or providing services. The company takes the view that facilitation payments are illegal and will work to ensure those employees, business partners and others associated with the company or any of its subsidiaries will not make facilitation payments. Should any employee be unsure whether certain payments which resemble facilitation payments are permissible, they should contact management immediately.
In the event that a facilitation payment is being extorted, or an employee is forced to pay under duress or faced with potential safety issues or harm, such payment may be made, provided certain steps are followed. If an employee is placed in such a situation, he/she must contact the Chief Executive Officer as soon as possible and record the payment within the company’s records to reflect the substance of the underlying transaction.
GIFTS, ENTERTAINMENT AND HOSPITALITY
Gifts, entertainment and hospitality include the receipt and offer of gifts, meals or tokens of appreciation, invitations to events, functions or other social gatherings in connection with matters related to the company’s business. These activities are acceptable, provided they fall within reasonable bounds of value and occurrence. In determining whether a gift, entertainment or hospitality is “acceptable”, an employee should look at:
– The intent behind it – i.e. is it to build a business relationship, or for something else?
– Is the gift, entertainment or hospitality being given in return for something?
– If details of the provision thereof were made public, would it cause embarrassment to the company?
There are some circumstances in which it is usually permissible to accept gifts, entertainment or hospitality. These include:
– Occasional meals with someone with whom the company does business;
– Occasional attendances at cultural and social events;
– Gifts of nominal value such as small promotional items.
The following are circumstances in which it is never permissible to accept a gift, entertainment or hospitality:
– Gifts in the form of cash or cash vouchers;
– Entertainment of an inappropriate nature;
– A “quid pro quo” (offered for something in return).
POLITICAL AND CHARITABLE DONATIONS
The company does not make contributions of any kind to political parties. No charitable donations are made by the company for the purpose of gaining any commercial advantage.
Appropriate training on this policy will be given to employees on their commencement of employment with the company. Any modifications or reviews of the policy will be communicated to employees of the company and further training on such modifications or reviews will be provided as and when necessary. Such modifications and reviews will be carried out regularly to ensure the effectiveness of the policy. This policy and any modifications thereto will be provided to all employees, and a copy thereof posted on the company’s website.
MONITORING AND REPORTING
The company is committed to ensuring that all persons subjected to this policy have a confidential way of reporting any suspicious activity. If anyone has a concern regarding a suspected instance of bribery and corruption, they are advised to speak up – any information and assistance can only help the company. Should anyone be concerned that a corrupt act of some kind is being considered or carried out, please report the issue/concern to a manager or, in the event that that is not possible, to the Managing Director.
For the purposes of this policy:-
Managing Director means: Jayaprakash Rajendran
The provisions commonly known as the Foreign Account Tax Compliance Act (FATCA) became law in March 2010.
FATCA targets tax non-compliance by U.S. taxpayers with foreign accounts
FATCA focuses on reporting:
By U.S. taxpayers about certain foreign financial accounts and offshore assets
By foreign financial institutions about financial accounts held by U.S. taxpayers or foreign entities in which U.S. taxpayers hold a substantial ownership interest
The objective of FATCA is the reporting of foreign financial assets; withholding is the cost of not reporting.
Revenue Procedure 2014-38 provides an updated FFI Agreement for Participating FFI and Reporting Model 2 FFI.
International Data Exchange
Under FATCA, to avoid being withheld upon, foreign financial institutions (FFIs) may register with the IRS and agree to report to the IRS certain information about their U.S. accounts, including accounts of certain foreign entities with substantial U.S. owners
FFIs that enter into an agreement with the IRS to report on their account holders may be required to withhold 30% on certain payments to foreign payees if such payees do not comply with FATCA
The FATCA regulations exempt many categories of FFIs from the requirement to register and report, including
- Most governmental entities
- Most non-profit organizations
- Certain small, local financial institutions
- Certain retirement entities
FFIs include, but are not limited to:
- Depository institutions (for example, banks)
- Custodial institutions (for example, mutual funds)
- Investment entities (for example, hedge funds or private equity funds)
- Certain types of insurance companies that have cash value products or annuities
Unless otherwise exempt, FFIs that do not both register and agree to report face a 30% withholding tax on certain U.S.-source payments made to them.
An FFI that registers on the “FATCA Registration Website” (“Website”), upon approval, will receive a Global Intermediary Identification Number (GIIN) from the IRS, unless the FFI is treated as a Limited FFI.
- An FFI may also register on paper, but this is not recommended
The Website is a secure online web application that provides paperless FATCA registration accessible from anywhere in the world, 24 hours a day. Visit the FATCA Registration Resources page for registration instructions, user guide, frequently asked questions and other helpful tools.
IRS will publish a list of registered and approved FFIs and their GIINs every month. The list of FFIs that have completed registration and obtained a global intermediary identification number (GIIN) is available using the FFI List Search and Download Tool.
An FFI uses its GIIN to identify that it is registered and approved to:
- Withholding agents and
- The IRS
Withholding agents may rely on the IRS published list or FFI list search and download tool to verify an FFI’s GIIN and not withhold on payments made to the FFI.
The treatment of an FFI established in a jurisdiction with an intergovernmental agreement treated as in effect may differ from the treatment described above. An FFI in such a jurisdiction should refer to the applicable intergovernmental agreement.
REMINDER: For withholdable payments made prior to January 1, 2015, verification of a GIIN is not required with respect to payees that are reporting Model 1 FFIs. As a result, reporting Model 1 FFIs will have additional time beyond July 1, 2014 to register and obtain a GIIN in order to ensure that they are included on the IRS FFI list before January 1, 2015.
U.S. financial institutions (USFIs) and other types of U.S. withholding agents are required to withhold 30% on certain U.S. source payments made to foreign entities, if they are unable to document such entities for purposes of FATCA.
USFIs and U.S. withholding agents must also report to the IRS information about certain non-financial foreign entities with substantial U.S. owners.
USFIs are also eligible to submit a FATCA Registration application via the FATCA Registration Website for the following reasons:
- A USFI with a foreign branch in a Model 1 IGA jurisdiction to obtain a GIIN for the branch.
- A USFI with a foreign branch that is a qualifying intermediary (QI) to renew the branch’s QI agreement.
- A USFI may register as a sponsoring entity for FFIs and agree to perform, on behalf of the FFI, all the FATCA activities that the FFI otherwise would have to do.
A USFI may register as a Lead FI to manage the FATCA registration process for members of its Expanded Affiliated Group of FFIs.
U.S. citizens, U.S. individual residents, and a very limited number of nonresident individuals who own certain foreign financial accounts or other offshore assets (specified foreign financial assets) must report those assets
Use Form 8938 to report these assets
Attach Form 8938 to the annual income tax return (usually Form 1040)
Taxpayers with a total value of specified foreign financial assets below a certain threshold do not have to file Form 8938
- If the total value is at or below $50,000 at the end of the tax year, there is no reporting requirement for the year, unless the total value was more than $75,000 at any time during the tax year
- The threshold is higher for individuals who live outside the United States
- Thresholds are different for married and single taxpayers
Taxpayers who do not have to file an income tax return for the tax year do not have to file Form 8938, regardless of the value of their specified foreign financial assets.
Penalties apply for failure to file accurately
Alert: The reporting requirement for Form 8938 is separate from the reporting requirement for the FinCEN Form 114, Report of Foreign Bank and Financial Accounts (“FBAR”) (formerly TD F 90-22.1). An individual may have to file both forms and separate penalties may apply for failure to file each form.
Third-party reporting: Foreign financial institutions may provide to the IRS third-party information reporting about financial accounts, including the identity and certain financial information associated with the account, which they maintain offshore on behalf of U.S. individual account holders.
Application to domestic entities: The IRS anticipates issuing regulations that will require a domestic entity to file Form 8938 if the entity is formed or used to hold specified foreign financial assets and the total asset value exceeds the appropriate reporting threshold. Until the IRS issues such regulations, only individuals must file Form 8938.