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Virtual Currency Philippines Inc. Anti-Money Laundering and Counter Financing Terrorism (AML/CFT) Program: Compliance Policy & Procedures

1 Policy Statement

Virtual Currency Philippines Inc. (VCP) is committed to fully comply with all applicable laws and regulations regarding anti-money laundering procedures. VCP has adopted and will enforce the provisions set forth in AML/CFT Regulations in order to prevent and detect money laundering, terrorist financing and other illegal activities.

If VCP, its personnel and/or premises and/or its services are inadvertently used for money laundering or other illegal activities, VCP can be subject to potentially serious civil and/or criminal penalties. Therefore, it is imperative that every member, officer, director, and employee (each, an "Employee") is familiar with and complies with the policy and procedures set forth in this document.

This Compliance Statement is designed to ensure all customers is adhering to VCP's policy and procedures, which, if followed diligently, are designed to protect themselves, VCP, its Employees, its facilities and its activities from money laundering or other illegal activities.

To ensure that the VCP's policies and procedures are adhered to, VCP shall designate an Anti-Money Laundering Compliance Officer (the "Compliance Officer"). The Compliance Officer is responsible for establishing and conducting Employee training programs to ensure that all appropriate Employees are aware of the applicable AML/CFT Laws and Regulations, VCP's AML/CFT Policies & procedures and their responsibilities with respect to these policies.

Law of Philippines: Anti-Money Laundering Act of 2001 (RA 9160);
Requirements: Guidelines for Virtual Currency (VC) Exchanges, Bangko Sentral Ng Pilipinas Circular No. 944.

2 Objectives

The objectives of VCP’s AML/CFT Policies and Procedures are as follow:

• Comply with all AML/CFT Rules & Regulations of the jurisdictions it operates in;

• Appointment of a Compliance Officer who shall ensure adherence to the VCP's AML/CFT Policy and

  Procedures;

• Require its designated Employees to prevent, detect and report to the Compliance Officer all potential

  instances in which VCP or its employees, its facilities or its activities have been or are about to be used

  for money laundering, terrorist financing and other illegal activities;

• Require its designated Employees to attend anti-money laundering training sessions, so that the

  Employees are aware of their responsibilities under VCP's policies and procedures; and as affected by current developments with respect to anti-money laundering events.

3 What is Money Laundering?

Money laundering involves the placement of illegally obtained money into legitimate financial systems so that monetary proceeds derived from criminal activities are transformed into funds with an apparently legal source.

Money laundering has many destructive consequences both for society as a whole and for those entities involved in money laundering activities. With respect to society as whole, money laundering may provide resources for drug dealers, terrorists and other criminals to operate and expand their criminal activities.

With respect to entities, any involvement whether it be to instigate, assist, conceal, or ignore the source, nature, location, ownership or control of money laundering activities, can lead to both civil and criminal proceedings against both the individual and the entity involved.

Additionally, the adverse effects, including the adverse publicity to the Company associated with involvement in money laundering events cannot be emphasized enough.

Money laundering transactions may include:

• Advising a potential or existing customer on how to structure a transaction to avoid reporting and/or record keeping requirements;

• Engaging in any activity while wilfully or recklessly disregarding the source of the funds or the nature of the Customers transaction;

• Engaging in any activity designed to hide the nature, location, source, ownership or control of proceeds of criminal activity;

• Dealing in funds to facilitate criminal activity; or

• Dealing in the proceeds of criminal activity.

• Money laundering can involve the proceeds of drug dealings, terrorist activities, arms dealings, mail

  fraud, bank fraud, wire fraud or securities fraud, among other activities.

   

4 What is Terrorist Financing?

Terrorist financing refers to the processing of funds to sponsors involved in or those who facilitate terrorist activity. Terrorist individuals/ groups/ organization derive income from a variety of sources, often combining both lawful and unlawful funding, and where the agents involved do not always know the illegitimate end of that income. The forms of such financing can be grouped into two types:

Financial Support

In the form of donations, community solicitation and other fundraising initiatives. Financial support may come from states and large organizations, or from individuals.

Revenue Generating Activities

Income is often derived from criminal activities such as kidnapping, extortion, smuggling or fraud. Income may also be derived from legitimate economic activities such as diamond trading or real estate investment.

5 Compliance Officer Designation and Duties

VCP has appointed a dedicated Compliance Officer to oversight the Compliance function who will be reporting to the Board of Directors of the Company. Designated Employee shall immediately notify the Compliance Officer if he/she suspects or has any reason to suspect that any potentially suspicious activity has occurred or will occur if a transaction is completed. Designated Employees are encouraged to seek the assistance of the Compliance Officer with any questions or concerns they may have with respect to the VCP's AML/CFT Policy & Procedures.

Responsibilities of the Compliance Officer include the following:

• To act as a primary contact person who represent Virtual Currency Philippines Inc. in dealing with local regulators;

• Coordination and monitoring of VCP's day-to-day compliance with applicable Anti-Money Laundering Laws and Regulations and VCP's own AML/CFT Policy and Procedures;

• To monitor adherence to money laundering deterrence procedures & controls;

• To assist line management in complying with all relevant AML/CFT regulations;

• To assemble and distribute information & policies / procedural matters regarding compliance with the

  AML/CFT;

• To ensure that staffs are aware of the principal objectives of the AML/CFT policy;

• To ensure that staffs are familiar with the monitoring, detection and reporting procedures;

• To ensure that staff education and training program on AML/CFT are in place;

• To act as a central point for the receipt & validation of suspicious transaction reports (STR);

• To investigate any suspicious transactions and advise designated staff on the next course of action;

• To monitor changes to business practices to ensure that money laundering deterrence procedures are

  adequate, including the introduction of new technology and any change in ML/TF trends;

• To ensure records in relation to AML matters are properly kept acts as the reference point for AML/CFT

  matters within Virtual Currency Philippines Inc.;

• Coordination of enhanced due diligence procedures regarding Customers; and responding to both

  internal and external inquiries regarding VCP's AML/CFT policy and procedures.

   

VCP’s Compliance Officer is the primary contact person to Anti-Money Laundering Council (AMLC) for AML/CFT related update.

In the event of changes of Compliance Officer, Senior Management of Virtual Currency Philippines Inc. will provide with contact information for the newly designated Compliance Officer, including: (1) name; (2) title; (3) mailing address; (4) email address; (5) telephone number; and (6) facsimile number by writing within ten (10) business days.

6 Anti-Money Laundering Employee Training Program

As part of the VCP's anti-money laundering program, all Employees are expected to be fully aware of VCP's AML/CFT policy and procedures.

Each Employee is required to read and comply with this Compliance policy and procedures, address concerns to the Compliance Officer and sign the acknowledgement form confirming that he/she has read and understands VCP's AML/CFT policy and procedures.

To ensure the continued adherence to VCP's AML/CFT policy and procedures, all Employees are required to reconfirm their awareness of the contents of this document by signing the acknowledgement form annually, or more frequently, as required by the Compliance Officer.

Designated Employees are required:

• At a time specified by the Compliance officer, to undertake in-house or/and external training programs on AML/CFT policy and procedures;

• To get trained in how to recognize and deal with transactions which may be related to money laundering;

• To timely escalate and report the matter to the Compliance Officer;

• To get themselves acquainted and comply with the requirements of AML/CFT Rules & Regulations.

7 Customer Due Diligence (CDD) Procedures

7.1 General

VCP’s AML/CFT policy and procedures are intended to ensure that, prior to accepting funds from Customers, all reasonable and practical measures are taken to confirm the Customers' identities via proper Know Your Customer (KYC) process.

VCP may take assistance from third parties for completing customer identification process. The assistance shall not relieve VCP for identification process to be conducted by the company.

These CDD Procedures are based on the premise that VCP will accept funds from a new and existing Customer only after:

• VCP has confirmed the Customer's identity and that the Customer is acting as a principal and not for the benefit of any third party unless specific disclosure to that effect is made; or

• If the Customer is acting on behalf of others, VCP has confirmed the identities of the underlying third parties.

The CDD Procedures should be reviewed in light of the specific characteristics presented by a Customer and in any instance the Compliance Officer may determine to apply Enhanced CDD measures for reasons other than those discussed in section below. 

As a reference tool, a CDD Checklist is used. Employees are encouraged to provide the Compliance Officer with any revisions they consider appropriate. The Compliance Officer shall retain copies of all documents reviewed or checklists completed in connection with its CDD Procedures in accordance with VCP's Customer Records Retention policy align with the local Personal Data Protection Act if applicable.

Every Customer shall be identified for establishing business relationship. For this purpose, Customers need to fill out all fields at the Registration page.

7.2 CDD for Individual Customer and Beneficial Owner

For Customer Due Diligence (CDD) purposes, at the minimum following information shall be obtained, verified and recorded on CDD form or account opening form:

• Full name as per national Registration Identity Card (NRIC) of the Applicant;

• NRIC number or passport number or reference number of any other official documents bearing the

  photograph of the customer or beneficial owner;

• Residential and mailing address;

• Date of birth;

• Nationality;

• Home, office or mobile contact number; and

• Email address

If a customer has authorized another person, then the additional documentations are required. These include:

• Attested copy of NRIC of Authorized person;

• Authorization Letter with the following minimum information:

  • Name of Authorized person and his/her Relationship with the Customer;
  • NRIC number or passport number or reference number of any other official documents bearing the photograph of the authorized person; and
  • Specimen Signature of the customer and the person so authorized.

The authorized person is only allowed to register on behalf of the customer; all payments or receipt of funds must be made to or from the customer’s own accounts.

7.3 CDD Procedures for Corporations, Partnerships, Trusts and Other Legal Entities

VCP shall take reasonable steps to ascertain satisfactory evidence of an entity Customer's name and address, its authority to make the contemplated transaction.

For CDD purposes, at the minimum following information shall be obtained, verified and recorded on CDD form or account opening form:

• Company registration /Incorporation number;

• Date and country of Incorporation;

• Date of Business Commenced;

• Type of Business;

• Name of parent Company;

• Email, website and contact numbers;

• Registered and mailing address;

• Details of Contact Person and authorized person to operate the account;

• Details of Bank Account; and

• Normal or expected mode of transaction.

 

VCP will obtain the following documents for the purpose of independent verification, as appropriate under the circumstances:

• Certified true copies of Memorandum & Articles of Association, Certificate of Incorporation, and Certificate of Commencement of Business;
• Certified true copy of list of Directors/Trustee;
• List of Nominated persons operating the account;
• Attested copies of NRIC/Passports of the nominated person operating the account.

 

7.4 Name Screening

Compliance officer shall perform name screening to check on a name-screening database or internal blacklist to determine if a customer poses a risk to VCP. Typically, the objective is to ascertain if the customer is one of the following profiles:

• Politically Exposed Persons (PEPs);
• Criminals;
• Terrorist; and
• Reported in media to be involved in any activity that is adverse in nature.

 

7.5 Enhanced CDD Procedures

When the customer has been evaluated to be at high risk profile to the organization, or a transaction excessed of P500,000.00 within one business day, Enhance Customer Due Diligence (ECDD) shall be performed.

During ECDD, VCP will obtain the following documents, as appropriate under the circumstances:

• CDD information under 7.2 for individual or 7.3 Corporations, Partnerships, Trusts and Other Legal Entities;

• Additional information on the customer and beneficial owner (e.g. volume of assets and other information from public database);

• Inquiring on the source of wealth or source of funds. In the case of PEPs, both sources must be obtained; and

 

VCP shall verify this document(s) against the earlier submitted information made during registration.

Part of the process of conducting ECDD is to obtain senior management approval before establishing a relationship and take reasonable measures to establish the source of wealth and the source of funds.

 

7.6 Ongoing CDD Procedures

VCP shall, on regular basis, take all reasonable steps to ensure that the customer’s profile is updated, transactions and account activity should be scrutinized for suspicious activity and that the behaviour of the transaction and accounts are in line with the expectation. This is an ongoing responsibility as clients’ risk profiles may change over time. To better perform ongoing monitoring, a compliance officer must take into consideration on the customer’s account activity and ensure that CDD documents are kept up-to-date.

 

8 Suspicious Transactions Reporting

8.1 Suspicious Transaction Report (STR)

A Suspicious Transaction Report (STR) will be lodged with the Financial Intelligence and Enforcement

Department of Bank Negara Malaysia when we know, suspect, or have reason to suspect that:

1. the transaction involves funds derived from illegal activities or is intended or conducted in order to hide or disguise funds or assets derived from illegal activities as part of a plan to violate the AMLA or to avoid any transaction reporting requirement under the AMLA,
2. the transaction has no business or apparent lawful purpose or is not the sort in which the client would normally be expected to engage, or

3. the transaction involves the use of our firm to facilitate criminal activity.

 

8.2 Reporting Procedure

The Compliance Officer will be responsible for submitting the STR. The reporting procedure will be as follows: [Workflow diagram]

8.3 Confidentiality

VCP shall not notify any person involved in the transaction that the transaction has been reported. We will classify all STRs and any other supporting documentation as confidential.

9 Record Keeping

VCP shall ensure proper documentation of all documents and information provided by our clients, together with the methods used, results of verification, and the resolution of any discrepancy in the identifying information. Records will be maintained for up to five (5) years from transaction dates. In the event of termination of the business relationship or transaction, the records shall be kept for five (5) years after the termination of business relationship.

The Compliance Officer will be responsible for ensuring that AML records are maintained properly and that STRs are filed as required. Copies of any STR, together any supporting documentation filed will be maintained for six years from the date of filing the STR.

All records will be stored securely and will be capable of being retrieved without undue delay.

10 Compliance with AMLA

The Board of Directors has the ultimate responsibility in ensuring with compliance with the provisions of the AMLA.

VCP’s AMLA policies and practices will be reviewed and updated as and when necessary.