Anti-Money Laundering and Countering the Financing of Terrorism
Introduction
Match Systems Solutions Pte Ltd (hereafter referred to as “Match Systems” or “the Company”) is a service provider established under the laws of Singapore on 14 February 2022, with UEN number 202204935E and having its registered address at 10 Anson Road, #20-05, International Plaza, Singapore 079903.
Match Systems provides unique information about cryptocurrency addresses involved in illegal activities. We are a link between depersonalized addresses in the blockchain and real participants in cryptocurrency relations.
Match Systems is committed to the highest standards of integrity in the conduct of its business practices and has established an AML/CFT Policy for this purpose.
Objectives
The objective of this AML/CFT Policy is to ensure that any money laundering risks identified by Match Systems are appropriately mitigated. This means that the Company has adequate systems and controls in place to mitigate the risk of it being used to facilitate any financial crimes, as well as basic guidelines for the Company’s customers and staff regarding essential AML/CFT requirements.
This AML/CFT Policy cannot cover every possible situation that may arise in the course of conducting business. It is not intended to be an exhaustive statement of the legal or regulatory compliance requirements, but can serve as guidance to help employees carry out their professional activity.
Definitions
“AML/CFT” — means anti-money laundering and countering the financing of terrorism.
“Anti-Money Laundering (AML)” means a set of laws, regulations, and procedures intended to prevent criminals from disguising illegally obtained funds as legitimate income.
“Customer” or “Client” means any person, (whether a natural person or a legal person)who has successfully passed all risk assessment and KYC procedures established by the Company, and with whom the Company has a business relationship, offered under the scope of its activities.
“Financing of Terrorism (FT)” means the provision of funds for terrorist activity. It may involve funds raised from legitimate sources, such as personal donations and profits from businesses and charitable organizations, as well as from criminal sources, such as the drug trade, the smuggling of weapons and other goods, fraud, kidnapping, and extortion.
“Money Laundering (ML)” is the process whereby “dirty money,” produced through criminal activity, is transformed into “clean money,” the criminal origin of which is difficult to trace. Criminals do this by disguising the sources, changing the form, or moving the funds to a place where they are less likely to attract attention.
The generic term used to describe the process by which criminals disguise the original ownership and control of the proceeds of criminal conduct by making such proceeds appear to have derived from a legitimate source. Money laundering illegal activity may include (but not limited to) drug trafficking, smuggling weapons, or terrorist funding. Money laundering often involves financial institutions and money transactions to make money look as if it came from a legal source. Money laundering also requires participation in, association to commit, attempts to commit, and to aid, to abet, facilitating, and counselling the commission of any of the actions mentioned in the previous points. Failure to notify the appropriate authorities of the act or suspicion of money laundering is also considered a crime.
Money laundering is usually described as a three-stage process aimed at concealing the origin of criminal proceeds:
(1) Placement – the stage at which criminal money and/or property is introduced into the financial system.
(2) Layering – the stage at which the property is ‘washed’ and takes on a new appearance. This is designed to confuse the audit trail of the property; and
(3) Integration – the stage at which it is re-integrated into the legitimate economy. In other words, the point at which the criminal benefits from their activity.
«Policies and Procedures» mean policies, practices, and programs that 1) govern the Match Systems due diligence performance under this Policy and its use of or activities under or with respect to any other company-provided resources and systems, 2) may be updated periodically by the company at its sole discretion.
“Proliferation Financing (PF)” means the act of providing funds or financial services which are used, in whole or in part, for the manufacture, acquisition, possession, development, export, transhipment, brokering, transport, transfer, stockpiling or use of nuclear, chemical or biological weapons and their means of delivery and related materials (including both technologies and dual-use goods used for non-legitimate purposes), in contravention of national laws or, where applicable, international obligations.
“Reasonable Measures” — mean the steps taken to achieve a desired outcome, even if they do not result in the desired outcome. For example, this can include doing one or more of the following:
“Terrorist” or “terrorist group” includes anyone that has as one of their purposes or activities facilitating or carrying out any terrorist activity. This can be an individual, a group, a trust, a partnership, or a fund. It can also be an unincorporated association or organization.
“Ultimate Beneficial Owner (UBO)” means the natural person(s) who ultimately owns or controls a customer and/or the natural person on whose behalf a transaction is being conducted.
Risk-Based Approach (RBA)
Match Systems manages its affairs reflective of the inherent business risk and in consideration of the effectiveness of the controls in place to manage these risks. This risk-based approach takes systematic steps in assessing the most efficient and proportionate way to manage and mitigate the ML/FT faced by the company:
The risk-based approach enables Match Systems to employ a realistic assessment of the threat of the company being used in connection with ML or FT. The broad objective is that Match Systems knows its customers (KYC), what they do and the risk of potential involvement in criminal activity. The profile of the customers’ financial behaviour builds up over time, allowing the company to identify transactions or activity that may be suspicious.
With clear communication of policies and procedures across the company, the RBA mechanism ensures that they are carried out effectively, weaknesses are identified and improvements are made where necessary.
The risk assessment carried out by the company has resulted in a categorisation of ML/FT risk, on a scale of low, medium and high. Criteria has been assigned to each category to assist in allocating customers and products to the risk categories, to determine the different treatments of identification, verification, additional customer information and monitoring for each category. It has been designed in such a way as to minimise complexity.
Customer Due Diligence
Customer Due Diligence (CDD) involves detailed analysis and assessment of a new client from an ML/FT risk perspective, as set out in this policy. In the customer onboarding process identity verification typically comes first, followed by further due diligence. If a customer’s identity cannot be verified, a relationship with them will not be established. The Company seeks to determine whether a particular customer and business relationship pose a higher risk and the potential impact of any mitigating factors, and applies a risk rating accordingly. This risk score is then used to identify those customers who must be more closely monitored for potential ML/FT activity. Because it is not feasible to monitor every single customer in-depth, a risk score allows for targeting of those customers who present a higher risk potential.
Simplified Customer Due Diligence (SCDD) may be performed if the customers are identified and verified to fall within a low-risk rating, which are potentially of lower ML/MT risks. This involves certain leniency in identification and verification procedures, such as exemption from verifying UBOs and less frequent periodic reviews in terms of ongoing monitoring.
Standard Customer Due Diligence(CDD) is applied where the customer exhibits neither any low-risk qualities nor any high-risk potential, i.e., it is applied to medium-risk customers. The measures involved here are listed in the Identification and Verification of Customer’s Identity chapter.
Enhanced Customer Due Diligence (ECDD) measures are performed where the customer is determined to be of potentially high risk. In addition to the standard CDD documents, Match Systems obtains confirmation of SOF and/or SOW. Where it is not possible to obtain reliable supporting documents from high risk customers (e.g. salary slips, audited financial statements, documentary evidence of sale of assets, etc.), the Company is required to validate their SOF/SOW confirmation against independent checks via publicly available sources of information (e.g. salary benchmarking reports from HR consultancy firms, publicly available financial performance data for businesses of similar scale or nature), and document the assessment of the plausibility of the customer’s wealth.
Risk Assessment
Match Systems details client risk categories in the following manner:
Low risk ratings are typically applied to the types of customers mentioned below, who are either listed or regulated, and where Simplified Due Diligence can be applied. Listed and regulated entities are subject to regulatory disclosure requirements and Financial Institutions are subject to and supervised for compliance with AML/CFT requirements consistent with standards set by the FATF. The Company takes the approach that these entities would be vigilant to be compliant so as to safeguard their regulatory status and mitigate any reputational risk. Additionally, any significant UBO would have also been rigorously screened with robust due diligence measures undertaken by the regulatory authority or bank or stock exchange.
The following categories of customers can be identified as potentially low ML/FT risks:
Medium Risk, where customers are likely to pose an inconsequential amount of risk to the Company and will comprise the bulk of its customer base, where Standard CDD may be applied.
High Risk implies enhanced due diligence (ECDD) measures for those customers, where the following factors indicate that they are more likely to be exposed to ML/FT risks:
PEP
A PEP (Politically Exposed Person) generally presents a higher risk for potential involvement in bribery and corruption by virtue of his or her position and the influence that the person may hold. A risk-based approach helps in determining whether to perform ECDD measures or the extent of measures to be performed for PEPs of varying backgrounds, that is:
A Domestic or Foreign PEP may be an individual who is or has been entrusted with a prominent public function and includes a head of state, head of government, senior politician, senior government or member of a legislature, deputy minister or equivalent rank, ambassador, or attaché or counsellor of an ambassador judicial or military officer with a rank of general or above, judge of a supreme court, constitutional court or other court of last resort senior executive of a state-owned corporation or bank and an important political party official.
Family members of a PEP may be a spouse or common-law partner, a partner, a child, a parent or a parent of a spouse or common-law partner of an individual falling within the above-mentioned individual, or a spouse or a partner of a child of such individual.
A close associate of a PEP can be an individual who is a beneficial owner of a legal person or trust that is set up for the benefit of the above-mentioned individual, or an individual who has close personal or business relations with the above-mentioned individual.
Know Your Customer (KYC)
Screening constitutes an essential stage of onboarding process and ongoing monitoring. The Company employs a third-party screening system which automatically screens all companies and their representatives against numerous lists of sanctioned entities, terrorist groups, blacklists, PEP lists, adverse media, etc.
Match Systems applies the following KYC measures:
The company carries out KYC in relation to a customer:
Match Systems identifies and verifies the identity of customers using reliable, independent source data, documents or information. The Company may use official company registers, various commercial trade platforms for customer identification and verification, for the purposes of verifying the customer’s name, unique identification number, date of birth, nationality and residential address.
Source of Funds
Source of funds (“SoF”) checks are performed on all high-risk customers. SoF refers to the origin of the particular funds or other assets which are the subject of the establishment of business relations (e.g., the amounts being invested, deposited, or wired as part of the business relations). Examples of appropriate and reasonable means of establishing SOF are information such as salary payments or sale proceeds. The Compliance Function may perform corroboration for customers who have provided clear KYC information or when there is sufficient public online information without the need to request for documentary evidence.
Source of Wealth
Source of wealth (“SoW”) checks are performed on high-risk customers as well. SoW is requested during the process of onboarding and upon assessment that the customer is of higher risk. SoW generally refers to the origin of the customer’s and beneficial owner’s entire body of wealth (i.e., total assets). This relates to how the customer and beneficial owner of the customer have acquired the wealth which is distinct from identifying the assets that they own. Examples of appropriate and reasonable means of establishing SoW are information and documents such as evidence of title, copies of trust deeds, audited accounts, salary details, tax returns and bank statements. The Compliance Function may perform corroboration for customers who have provided clear KYC information or when there is sufficient public online information without the need to request for documentary evidence.
Beneficial Owner Exemption
Inquiry for any existence of beneficial owners for the following group of customers is not required unless there are doubts the credibility of the CDD information, or suspicion that the customer, business relations with or transaction for the customer, may be connected to ML/FT:
CDD Measures for Non-Face-to-Face (“NFTF”) Business Relations
In the event that verification of identity is performed without face-to-face contact, Match Systems carries out additional checks to manage risks arising from establishing business relations with such customers. Examples of such additional checks are:
Reliability of Information and Documentation
Match Systems is acceptable of documents that are certified by an approved certifier. An approved certifier includes a suitably qualified person, such as: a notary public, a lawyer, or a certified public/professional accountant; a director of a regulated company; or a member of staff of the Company, who can sight the original document and sign the copy.
AML Training
The AML Policy is distributed to all employees. It must be ensured that all employees understand and adhere to the AML Policy, particularly those who work in areas relating to client identification and record keeping. Additionally, all employees receive training upon hiring, refresher trainings on an annual basis, and each time there are changes in AML regulations.
Employees are made aware of circumstances where an enhanced level of caution is required, such as those involving countries or territories that have not yet established adequate anti-money laundering or anti-terrorist financing regimes consistent with international standards.
Ongoing Monitoring
Match Systems may review client documents on a risk-sensitive basis, according to their risk rating. This ensures that all client information is accurate and up to date as well as ensuring that there are no discrepancies between a client and the risk rating. The periods for reviewing the profile and records of high-risk clients every 12 months, medium risk clients every 24 months, and any low-risk clients every 36 months. The main role of ongoing monitoring or periodic review, as it is often called:
Trigger Events / Red Flags
It is not possible to detail all potential red flags in relation to suspicious activity. Each situation will involve a particular set of circumstances. The list below contains common warning signs:
Reliance on Third Parties
The following requirements are to be fulfilled when relying on a third party to perform CDD measures:
Restricted Industries
Match Systems does not initiate business relationships with clients involved in the following industries:
Internal Audit
The Compliance Function’s work procedures, as well as compliance reports / reviews / updates are subject to the review and approval by the senior management, thereby constituting internal audit. The frequency of the internal audit is dependent upon a variety of factors, such as, but not limited to: number of high-risk customers, number of red flags noted, number of rejected clients.
