TEFS

ANTI-MONEY LAUNDERING POLICY

Introduction

TEFS does not tolerate money laundering and supports the fight against money launderers. TEFS follows the guidelines set the applicable local and intergovernmental bodies whose purpose is to combat money laundering and terrorist financing.

In general, money laundering occurs when funds from an illegal/criminal activity are moved through the financial system in such a way as to make it appear that the funds have come from legitimate sources. The term "money laundering" is said to originate from Mafia ownership of Laundromats in the United States. Gangsters there were earning huge sums in cash from extortion, prostitution, gambling and bootleg liquor. They needed to show a legitimate source for these monies.

One of the ways in which they were able to do this was by purchasing outwardly legitimate businesses and to mix their illicit earnings with the legitimate earnings they received from these businesses. Laundromats were chosen by these gangsters because they were cash businesses and this was an undoubted advantage to people like Al Capone who purchased them. Al Capone, however, was prosecuted and convicted in October, 1931 for tax evasion. It was this that he was sent to prison for rather than the predicate crimes which generated his illicit income and according to Robinson this tale that the term originated from this time is a myth. He states that:

"Money laundering is called what it is because that perfectly describes what takes place - illegal, or dirty, money is put through a cycle of transactions, or washed, so that it comes out the other end as legal, or clean, money. In other words, the source of illegally obtained funds is obscured through a succession of transfers and deals in order that those same funds can eventually be made to appear as legitimate income".

Money laundering is not a single act but is in fact a process that is accomplished in three basic steps. These steps can be taken at the same time in the course of a single transaction, but they can also appear in well separable forms one by one as well. Traditionally it has been commonly accepted that the money laundering process Comprises of three main stages:

• Placement - cash or cash equivalents are placed into the financial system
• Layering - money is transferred or moved to other accounts (e.g. futures accounts) through a series of financial transactions designed to obscure the origin of the money (e.g. executing trades with little or no financial risk or transferring account balances to other accounts)
• Integration - the funds are re-introduced into the economy so that the funds appear to have come from legitimate sources (e.g. closing a futures account and transferring the funds to a bank account).

There are also common factors regarding the wide range of methods used by money launderers when they attempt to launder their criminal proceeds. Three common factors identified in laundering operations are:

• The need to conceal the origin and true ownership of the proceeds
• The need to maintain control of the proceeds
• The  need  to  change  the form  of  the  proceeds in  order  to  shrink  the  huge volumes of cash generated by the initial criminal activity.

Trading accounts are one vehicle that can be used to launder illicit funds or to hide the true owner of the funds. In particular, a trading account can be used to execute financial transactions that help obscure the origins of the funds. International Anti-Money Laundering requires financial services institutions to be aware of potential money laundering abuses that could occur in a customer account and implement a compliance program to deter, detect and report potential suspicious activity.

TEFS now has policies in place to deter people from laundering money. These policies include:

• Ensuring clients have valid proof of identification:

For the Purpose of identifying the Client, the Client will be requested to deliver to the company appropriate identification documents, that includes the Client's picture, name and other identifying documents such as proof of residence, proof of a Bank account under the Client's name, proof of credit card (last 4 digits). According to TEFS discretion, other documents might be required.

• Maintaining records of identification information
• Identifying the source of deposits, and ensuring the funds belong to the client:

Launderers often divide large amounts of cash into a number of small transactions amounts, for example of less than €10,000 by, for instance:

• Making several deposits into a single or multiple accounts on successive days
• Making deposits into a number of accounts (often opened by using false identities) at different branches of the same bank.
• Using different banks and then consolidating the accounts
• Depositing cash into accounts of third parties such as lawyers, real estate agents, brokers and security firms.
• Depositing cash with the assistance of corrupted bank staff who themselves manipulate the deposits to make them appear as if they are below the reporting threshold.
• Determining risk for money laundering, for example if the client is a Politically Exposed Person
• Determining that clients are not known or suspected terrorists by checking their names against lists of known or suspected terrorists
• Informing clients that the information they provide may be used to verify their identity
• Closely following clients’ money transactions:

Layering usually involves a complex system of transactions designed to hide  the source and ownership of the funds. Once cash has been successfully placed into the financial system, launderers can engage in an infinite number of complex transactions and transfers designed to disguise the audit trail and thus the source of the property and provide anonymity. One of the primary objectives of the layering stage is to confuse any criminal investigation and place as much distance as possible between the source of the ill-gotten gains and their present status and appearance.

• Not accepting cash, money orders, third party transactions, exchange houses transfers or Western Union transfers.
• Periodically train and refresh from time to time the procedures for preventing money laundering among the TEFS employees and suppliers
• Carry out a high-frequency control on the observance of the procedures for the prevention of money laundering, and immediate reporting to TEFS management of any suspicion of committing or attempting to commit money laundering through TEFS
• Eliminating the possibility of a client or employee or supplier or any third party to profit from a money laundering attempt, through freezing their activity or funds or account or compensation, until a decision is made by TEFS management or applicable regulator.
• Reporting suspected activity to the applicable regulators

TEFS directs funds withdrawals back to the original source of remittance, as a preventative measure.

These guidelines have been implemented to protect TEFS and its clients.

For questions/comments regarding these guidelines, contact us at [email protected].