Anti-Money Laundering (AML)
Purpose
The purpose of this Anti-Money Laundering (“AML”) Policy is to establish the framework for the prevention, detection, and reporting of money laundering activities within UNIVERSAL FINANCIAL ASSOCIATES, INC. in compliance with the relevant regulations and laws applicable in the United States, including the Bank Secrecy Act (BSA), the USA PATRIOT Act, and guidelines issued by the Financial Crimes Enforcement Network (FinCEN).
This policy applies to all employees, officers, directors, and agents of UNIVERSAL FINANCIAL ASSOCIATES, INC. as well as any third parties acting on behalf of the Company. It covers all aspects of our operations, including but not limited to customer onboarding, transaction monitoring, reporting suspicious activities, and record-keeping.
- Money Laundering: The process by which individuals or entities attempt to conceal the origins of illegally obtained money, typically by means involving foreign banks or legitimate businesses.
- Customer Due Diligence (CDD): Procedures and processes used to verify the identity of customers and assess their risk profile.
- Suspicious Activity Report (SAR): A document that must be filed with FinCEN whenever a financial institution detects a suspicious transaction that might signal money laundering or fraud.
Policy Statements
UNIVERSAL FINANCIAL ASSOCIATES, INC. shall appoint an AML Compliance Officer who will be responsible for overseeing the AML program, ensuring compliance with relevant laws and regulations, and reporting to senior management and the board of directors.
UNIVERSAL FINANCIAL ASSOCIATES, INC. will implement robust CDD procedures, including:
- Verifying the identity of all new customers using reliable, independent source documents, data, or information.
- Assessing the risk profile of each customer and applying enhanced due diligence (EDD) for high-risk customers.
- Conducting ongoing monitoring of customer transactions to identify and report suspicious activities.
UNIVERSAL FINANCIAL ASSOCIATES, INC. will conduct a comprehensive risk assessment to identify and assess the risks of money laundering and terrorist financing. This assessment will be reviewed and updated regularly to reflect changes in the Company’s risk profile.
UNIVERSAL FINANCIAL ASSOCIATES, INC. will implement automated systems and manual processes to monitor transactions for suspicious activities, including but not limited to:
- Large or unusual transactions that do not fit the customer’s normal pattern of activity.
- Transactions involving countries or entities identified as high-risk by relevant authorities.
- Transactions that appear to be structured to avoid reporting thresholds.
UNIVERSAL FINANCIAL ASSOCIATES, INC. will file SARs with FinCEN in accordance with the regulatory requirements whenever suspicious activity is detected. The Company will also maintain records of all transactions, customer identification documents, and SARs for at least five years, as required by law.
UNIVERSAL FINANCIAL ASSOCIATES, INC. will provide ongoing AML training to all employees, including senior management and the board of directors. This training will cover relevant laws and regulations, internal policies and procedures, and the identification and reporting of suspicious activities.
UNIVERSAL FINANCIAL ASSOCIATES, INC. will conduct independent audits of its AML program at least annually to ensure its effectiveness and compliance with regulatory requirements. The results of these audits will be reported to senior management and the board of directors.
All employees of UNIVERSAL FINANCIAL ASSOCIATES, INC. are responsible for complying with this AML Policy and for reporting any suspicious activities to the AML Compliance Officer. Employees must not tip off customers or other third parties about ongoing investigations or the filing of SARs.
Non-compliance with this AML Policy can result in severe consequences for UNIVERSAL FINANCIAL ASSOCIATES, INC., including legal penalties, financial losses, and reputational damage. Employees who fail to comply with the policy may face disciplinary action, including termination of employment.
This AML Policy will be reviewed and approved by the board of directors at least annually and whenever there are significant changes in the regulatory environment or the Company’s operations.
Appendix: Detailed Procedures
- Identification and Verification
- Obtain the following information for individual customers:
- Full legal name
- Date of birth
- Residential address
- Social Security Number (SSN) or other government-issued identification number
- Photographic identification (e.g., driver’s license, passport)
- For corporate customers, obtain:
- Full legal name of the business
- Principal place of business and/or registered office address
- Tax Identification Number (TIN)
- Certificate of incorporation or equivalent
- Names and identification details of principal owners and beneficial owners
- Risk Assessment
- Assign a risk rating (low, medium, high) to each customer based on:
- Nature and purpose of the account
- Anticipated account activity
- Customer’s occupation or type of business
- Geographic location
- Presence on sanctions lists or negative media reports
- Apply enhanced due diligence for high-risk customers, including:
- Obtaining additional information on the customer’s background, financial history, and business activities
- More frequent monitoring of transactions
- Approval from senior management before establishing or continuing business relationships
- Automated Systems
- Implement automated systems to monitor transactions in real-time or near real-time.
- Configure the system to flag transactions that meet specific criteria indicative of suspicious activity, such as:
- Transactions exceeding certain thresholds
- Rapid movement of funds between accounts
- Multiple transactions just below reporting thresholds
- Transactions involving high-risk jurisdictions
- Manual Processes
- Establish a team responsible for reviewing flagged transactions and conducting further investigations as needed.
- Document findings and decisions regarding whether to file a SAR.
- Filing Suspicious Activity Reports (SARs)
- File SARs with FinCEN no later than 30 calendar days after the date of initial detection of facts that may constitute a basis for filing a SAR.
- Include all required information in the SAR, such as:
- Details of the suspicious activity
- Information about the individuals or entities involved
- Description of the rationale for suspicion
- Record-Keeping
- Maintain records of all transactions, including documentation related to CDD, for at least five years from the date of the transaction.
- Ensure records are readily accessible for examination by regulatory authorities.
Training Content
- Overview of relevant AML laws and regulations
- Company’s AML policy and procedures
- Identification of suspicious activities and transactions
- Reporting procedures for suspicious activities
- Consequences of non-compliance
- Training Frequency
- Conduct initial training for new employees during onboarding.
- Provide refresher training annually for all employees.
- Offer additional training whenever there are significant changes to AML regulations or Company policies.
Audit Scope
- Evaluate the overall effectiveness of the AML program.
- Assess the adequacy of CDD procedures, transaction monitoring systems, and reporting mechanisms.
- Review the Company’s compliance with record-keeping requirements.
- Reporting
- Prepare a report detailing audit findings and recommendations for improvement.
- Present the audit report to senior management and the board of directors.
- Ensure timely implementation of corrective actions based on audit recommendations.
Conclusion
The commitment to preventing money laundering and terrorist financing is paramount at UNIVERSAL FINANCIAL ASSOCIATES, INC. This AML Policy outlines the necessary steps and procedures to ensure compliance with all applicable laws and regulations. By adhering to this policy, UNIVERSAL FINANCIAL ASSOCIATES, INC. aims to maintain the integrity of its operations and contribute to the global effort to combat financial crimes.