AML / CTF Policy
Terms and abbreviations
Act – Estonian Money Laundering and Terrorist Financing Prevention Act (in force from 11.12.2019);
AML/CTF – Anti-Money Laundering and Counter-Terrorism Financing;
AML/CTF legal regulation – Estonian, European Union and International legal AML/CTF legal acts, including the Act;
Beneficial Owner - a natural person in the meaning of the Act (§ 9);
Borrower – a legal entity, Member State resident, which using the Services applies for and receives the financing for its development project;
Business relationship - relationship between the Company and Customer during provision of the Services by the Company;
Company – FUNDAUS OÜ, registration number: 14643807, legal address: Harju maakond, Tallinn, Nõmme linnaosa, Tina tn.9, 10126, an operator of the Platform;
Compliance officer – the Company appointed employee, whois responsible and ensures the Company compliance with AML/CTF legal regulation requirements as well as with this Policy;
Customer – Borrower or Investor;
Due diligence – research of Customer in compliance with AML/CTF legal regulation requirements;
FIU (Financial Intelligence Unit) - an independent structural unit of the Estonian Police and Border Guard Board that analyses and verifies information about suspicions of money laundering or terrorism financing, takes measures for preservation of property where necessary and immediately forwards materials to the competent authorities upon detection of elements of a criminal offence;
GDPR - Regulation (EU) 2016/679 of the European Parliament and of the Council of 27 April 2016 on the protection of natural persons with regard to the processing of personal data and on the free movement of such data, and repealing Directive 95/46/EC (General Data Protection Regulation);
High-risk third country - countries or territories, where in the opinion of an international organization or an organization setting the standards in the field of AML/CTF, is no efficient system for the AML/CTF in place, including countries or territories which have been determined by the European Commission as having strategic deficiencies in the regimes for the prevention of money laundering and terrorist financing, posing significant threats to the financial system of the European Union;
Investor – an individual or legal entity, who has passed registration on the Platform, has been identified and accepted by the Company and receives the Services – uses the possibility to lend the funds to the Borrowers;
Investment funds – Investor funds credited to the Company account for further investment to the Borrower’s development projects;
Member state – a European Union and European Economic area state, including UK and Norway;
ML/TF – Money Laundering and Terrorism Financing;
PEP - Politically Exposed Person in the meaning of the Act ( 3), it’s family member and close associate;
Platform – an electronic platform, placed on homepage www.fundaus.com, operated by the Company;
Policy – this Anti-Money Laundering and Countering- Terrorism Financing Policy;
Sanction lists –EU, ANO and OFAC list of persons, organizations and countries with high level of money laundering and terrorism financing risk and prohibited for cooperation fully or partly with the view to prevent the involvement in terrorism activity, or protect national security interests, international law and international peace and security;
Services - crowdfunding services that are provided by the Company, which connect via the Platform those who can give, lend or invest money (the Investors) with those who need financing for a specific Project (the Borrowers);
Shell bank - a credit institution or financial institution, or other institution in the meaning of the Act (§ 18);
Tax residence - obligation to taxation in a particular country;
Unacceptable risk –ML/TF risk factors, which give basis for refusal or termination of Business relationship.
The Policy is adopted by the Company in compliance with the Act. The main goal of the Policy is to reveal and prevent involvement of the Company, its employees and Customers into ML/TF, to ensure the Company in compliance with requirements of AML/CTF legal regulation.
The Company has established the Policy to ensure that all new and existing Customers are identified and verified to a reasonable level of certainty and ML/TF risk is assessed. There by the Policy establishes main measures of ML/TF prevention:
New Customers Due diligence upon establishment of Business relationship, including:
- Customer identity verification
- Identification of Beneficial owner
- ML/TF risk assessment, including determination of Unacceptable risk level
- Gathering information about origin of wealth
Excising Customers Due diligence during Business relationship, including:
- Data updating
- Business relationship ongoing monitoring
- Customers ML/TF risk assessment, including determination of Unacceptable risk level
- Identification of source of funds
Reporting if suspicions of ML/TF occur;
Business relationship termination with non-compliant Customers.
The implementation process of the defined measures is governed by Company’s AML/CTF procedures.
The Policy is binding to the all Company employees involved in Customer service and implementation of AML/CTF and compliance measures. The Policy shall be revised and updated once in twelve (12) months or immediately after the Act is amended and the amendments come into force.
Money Laundering and Terrorism Financing
Money laundering means following actions:
the conversion or transfer of property derived from criminal activity or property obtained instead of such property, knowing that such property is derived from criminal activity or from an act of participation in such activity, for the purpose of concealing or disguising the illicit origin of the property or of assisting any person who is involved in the commission of such an activity to evade the legal consequences of that person’s actions;
the acquisition, possession or use of property derived from criminal activity or property obtained instead of such property, knowing, at the time of receipt, that such property was derived from criminal activity or from an act of participation therein;
the concealment or disguise of the true nature, source, location, disposition, movement, rights with respect to, or ownership of, property derived from criminal activity or property obtained instead of such property, knowing that such property is derived from criminal activity or from an act of participation in such an activity;
the participation in, association to commit, attempts to commit and aiding, abetting, facilitating and concealment the commission of any of the above mentioned activities.
Money laundering is regarded as such also where a criminal activity which generated the property to be laundered was carried out outside of the Republic of Estonia, also where the details of a criminal activity which generated the property to be laundered have been identified.
Terrorism financing means the financing or knowing and supporting of an act of terrorism as well as terrorism organization or a person whose activities are directed against international security, the person or the environment while posing a threat to life or health, against foreign states or international organizations, or of a criminal offence dangerous to the public, or manufacture, distribution or use of prohibited weapons, illegal seizure, damaging or destruction of property to a significant extent, or interference with computer data or hindrance of functioning of computer systems as well as threatening with commission of such acts, if committed with the purpose of forcing the state or an international organization to perform an act or omission, or seriously interfering with or destroying the political, constitutional, economic or social structure of the state, or seriously interfering with or destroying the operation of an international organization, or seriously terrorizing the population.
Money Laundering and Terrorism Financing prevention measures
Due diligence upon the establishment of Business relationship.
Upon Customer’s identity verification the Company ascertains and verifies natural person identity on the basis of the personal and personalized information contained in in passport or identity card. The Company and identifies and verifies the legal entity by collecting data on the name, registration number, address, names of management and communication details. Ascertaining and verifying the Customer’s representative’s identity the Company ascertains the scope and the nature of the rights of representation, there by the document proving rights of representation should be submitted. Results of identity verification are valid within 3 months before establishing Business relationship. If during determined time limit the decision on establishment of Business relationship is not taken the identification process should be implemented repeatedly.
Upon the process of Due diligence upon establishment of Business relationship, the person, who controls and benefits from the Customer’s activity, i.e. Beneficial Owner should be identified.
Upon ML/TF risk assessment the Company determinates Customer’s ML/TF risk level, assessing potential Customer ML/TF risk factors and determining Unacceptable risk.
The Company verifies origin of wealth gathering relevant documents and information, which might be requested form the Customer.
Due diligence measures during Business relationship
The Company on a regular basis ensures updating and verification the data and documents collected during Customers Due diligence. Data updating period is at least six months.
During on-going monitoring of Business relationship, the Company monitors whether the Investment funds amount and Customer’s activity corresponds to the Company knowledge about the relevant Customer, its business activity, ML/TF risk level, and ascertains, whether the fact of criminal activity, ML/TF is probable, and assesses ML/TF risk increasing factors.
The Company identifies source of funds invested via the Platform using the questionnaires, requesting confirming documents and the Customer’s explanations, where the Company considers it is necessary.
As the Company accepts payments only from Member State banking and payment institutions it gives additional certainty on the Investor’s acceptability in accordance with the Act, as the previous Due diligence of the Customer has been already made by the respective AML/CTF compliant institution. The payments from Member State payment institutions should be followed by the confirmation issued directly by respective payment institution to the Company confirming the person owning the transferred funds if this is not clear from the respective payment details.
Whenever in case of any suspicious about Customer’s trustworthiness, the Customer will be asked to identify and verify source and origin of wealth and funds in a way requested by the Company.
All the documents for Due diligence shall be provided in a language of any Member State, but the Company keeps the right to request the official (certified) translation of the documents to English.
If the Company cannot verify the identity of the Customer with reasonable certainty or to receive reliable information on the origin and source of wealth and funds it will not establish Business relationship or proceed with providing of services. If the Customer refuses to provide necessary information upon the Company’s request or delays the term specified in the Company’s request for provision of the requested information, or provides misleading information, the Company is entitled to refuse or terminate Business relationship and report to the FIU where it is required by the Act.
Risk-based approach and determination of Unacceptable risk
The Company uses risk-based approach during performing of Customers Due diligence, analyzing the risk of involvement in ML/TF, assessing ML/TF risk characteristics and determining ML/TF risk level.
The Company does not accept Customers that possess following Unacceptable risk signs:
- PEP, PEP family members and PEP close associate
- Cash-intensive business, gambling, trade in precious metals and gemstones, trade in arms and ammunition, reinsurance, except licensed and supervised, foreign exchange service, adult entertainment, investments services, providing a cross-border cash and securities transportation service, dual-use items trading or manufacturing, services which provision is difficult to confirm documentary(marketing, IT-services);
- Low tax territory;
- Shell banks;
- Bearer shares capital;
- Complex ownership structure appears unusual or excessively complex, given the nature of the company’s business with potential to conceal underlying Beneficial Owner;
- Subject to sanctions, embargos or similar measures;
- High-risk third countries;
- USA citizenship, residence or seat address;
- Suspicions of ML/TF or other crimes.
The Company does not accept:
- Investors outside the Member State unless the payments are made using the accounts opened with the banking or payment institution licensed in the Member State;
- Borrowers outside the Member state;
- Payments from banking or payment institutions outside the Member State.
Duty to report
Where the Company identifies in economic or professional activities, a professional act or provision of a professional service an activity or facts whose characteristics refer to the use of criminal proceeds or terrorism financing or to the commission of related offences or an attempt thereof or with regard to which the Company suspects or knows that it constitutes ML/TF or the commission of related offences, the Company reports it to the FIU immediately, but not later than within two working days after identifying the activity or facts or after getting the suspicion in accordance with the Act.
Control and responsibility
The Company appoints the Compliance officer for performance of AML/CTF duties and obligations. Compliance officer controls the fulfilment of the Company procedures and organizes all necessary actions, including revision and updating of internal documents, Customers Due diligence, monitoring of the investment transactions and training of the employees in order to comply with AML/CTF regulation.
All the Company’s employees involved in provision of Service and performance of AML/CTF measures and compliance are responsible for fulfilment of AML/CTF obligations and shall inform the Compliance officer about all the situations where ML/TF may occur.
The Company is responsible for implementation of international sanctions in force. The Compliance officer is liable for sanction risks assessment and mitigation.
The Company ensures that all employees involved in provision of Service and performance of AML/CTF measures and compliance are provided with training connected with performance of duties and obligations arising from the Act. Such training is provided when the employee commences performance of the specified employment duties, and thereafter regularly or when necessary.
The Company registers and retains the information obtained through the Customers’ Due diligence and the records on transactions, for five years after the end of Business relationship or of an occasional transaction. The Company implements all GDPR rules regarding to protection of personal data upon application of the requirements arising from the Act.
Version 3. In force from the 1st of March, 2020
© 2018 – 2020, Fundaus OÜ