Anti- Money Laundering Compliance

1.Introduction

Money laundering is a process whereby the origin of funds generated by illegal means is concealed (drug trafficking, gun smuggling, corruption, etc.).In the process of money laundering, identity of illegally possessed money is changed so that it appears to have originated from a legitimate source. It involves transactions intended to disguise the true source of funds; disguise the ultimate disposition of the funds; eliminate any audit trail and make it appear as though the funds came through legitimate sources and evade taxes and inserting it into economic circulation. The source may include terrorism organized crime, fraud, drug trafficking, human trafficking etc. The money earned from the above source is called the dirty money. In other words, dirty money is made to look clean by the criminals attempt to hide and disguise the true origin and ownership of the fund.

Money laundering erodes the integrity of a nation’s financial system by reducing tax revenues through underground economies, restricting fair competition with legitimate businesses, and disrupting economic development. Ultimately, laundered money flows into global financial systems where it could undermine national economies and currencies. Thus, money laundering is not only a law enforcement problem, but poses a serious national and international security threat as well. It has been recognized as a major social problem and crime by the governments around the world.

2.The process

It can basically involve three different steps that can occur simultaneously. They are:

Placement: The process of placing through deposits or other means, unlawful cash proceeds into traditional financial institutions.

Layering: The process of separating the proceeds of criminal activity from their origin through the use of layers of complex financial transaction, such as converting cash into traveler’s cheque, money orders, wire transfers, Letter of Credit, stocks, bonds, or purchasing valuable assets, such as art or jewelry.

Integration: The process of using an apparently legitimate transaction to disguise the illicit proceeds, allowing the laundered funds to be dispersed back to the criminal. Different types of financial transactions, such as sham loans or false import/export invoices, can be used.

3.Anti-Money Laundering Policy Statement

The Exchange will conduct its business in conformity with high ethical standards and will adhere to all Madagascar, laws and regulations pertaining to financial institutions. While it is accepted that the Exchange may not always be able to determine whether a transaction originates from, or is part of, any unlawful activity, the Exchange will conduct its business in compliance with the following general principles:

• Will take reasonable steps to determine the true identity of all members and client, and beneficial owners of the Exchange’s products and services.
• Will not knowingly accept funds from, or do any type of business with any individual/company whose money the Exchange believes, is derived from any unlawful activity.
• Will not ignore indications that a client’s money originated from unlawful activities or other money laundering activities, and will take appropriate actions consistent with all applicable laws.
• Will avoid providing support or assistance to clients seeking to deceive MEX MADAGASCAR laws enforcement authorities through the provision of false, altered, incomplete or missing information.
• Will report all identified instances of suspicious activity to the relevant authorities as provided under all applicable laws.
• Will cooperate fully with laws enforcement and regulatory authorities in executing their duties under all applicable laws.