Anti-money laundering and compliance procedure

Velespay - Information technology platform that provides services for payments, money transfers, including cross-border money transfers, as well as companies that are part of the payment system infrastructure: Technological, financial, clearing, settlement, and issuing electronic means of payment.

Accounts – online accounts.


Customers – individuals and legal entities.

The following policy is based on general anti-money laundering principles, laws, regulations and directives and is based on national and international AML regulatory procedures.

Velespay takes security measures and adopts adequate policies, practices and procedures that promote high ethical, professional standards and prevent the intentional or unintentional use of the platform by criminal elements. Velespay has developed appropriate "Know Your Customer" (KYC) programs.

Such important elements start with risk management and control services and include:

  • Customer Acceptance Policy
  • Customer Identification
  • Continuous monitoring of high-risk accounts
  • Risk management
  • Categorizing clients based on risk

Velespay is required not only to identify its customers, but also to track account activity to identify those transactions that do not match the usual or expected transactions for that customer or account type. KYC is the main feature of risk management and service control procedures. The intensity of KYC programs beyond these core elements depends on the degree of risk.

1. Rules for accepting clients

Velespay adheres to clear rules and procedures for accepting customers, including a description of the types of customers that may pose an above-average risk to the platform. Before accepting a potential client, it is necessary to go through the KYC procedures, examining factors such as the client's history, country of origin, related accounts, business activity, or other risk indicators.

A fairly thorough check is important for a person with a high net worth, whose source of funds is unclear. New customers ' money is transferred through a reputable bank. Banks have their own anti-money laundering procedures. The decision to enter into business relationships with higher-risk clients, such as politically exposed individuals, is made exclusively at the senior management level.

2. Customer Identification

Customer identification is an important element of KYC standards. For the purposes of this article, the client is:

  • A natural or legal person who maintains an account with Velespay, or persons on whose behalf the account is maintained (beneficial owners);
  • Beneficiaries of transactions conducted by professional intermediaries;
  • Any individual or entity associated with a financial transaction that may pose a significant, reputational, or other risk to Velespay.

Velespay conducts a systematic procedure for identifying new customers and cannot enter into a relationship until the identity of the new customer is satisfactorily verified.

Velespay pays special attention in the case of non-resident customers.

The client identification process is applied at the very beginning of the relationship. To ensure up-to-date, Velespay regularly checks existing records. The appropriate time to do this is when a significant transaction occurs, when the client's documentation standards change significantly, or when there is a significant change in the way the account is managed. However, if the compliance and anti-money laundering department and/or the anti-money laundering services company becomes aware at any time through a compliance check and/or AML check that it lacks sufficient information about an existing customer, it will take immediate steps to ensure that all relevant information is obtained as quickly as possible.

Velespay may be exposed to reputational risk and should therefore apply enhanced due diligence to such transactions. Private accounts, which by their nature involve a high degree of confidentiality, can be opened in the name of an individual, a business, a trust, an intermediary, or a personalized investment company. In each case, a reputational risk may arise if Velespay does not diligently follow the established KYC procedures. All new customers and new accounts are approved by at least one person, a financial professional or a compliance specialist. In the case of a new client with a high risk, the final decision is made by the managing Director.

Special precautions have been taken to ensure the confidentiality of customers and their businesses, Velespay ensures that the same controls and monitoring of these customers and their businesses are carried out, for example, it is available for review by a compliance officer and auditors.

Velespay adheres to clear standards and policies regarding what records should be kept for customer identification and individual transactions. This practice is important in order to allow Velespay to monitor its relationship with the client, understand the client's current affairs, and, if necessary, provide evidence in the event of disputes, lawsuits, or financial investigations that may lead to criminal prosecution.

As a starting point and a natural continuation of the identification process, at least five years after the account is closed. Velespay also keeps all records of financial transactions for at least five years from the date of termination of the relationship with the customer or completion of the transaction.

General identification requirements

Velespay receives all the information necessary to fully verify the identity of each new customer, as well as the purpose and intended nature of the business relationship. The amount and nature of the information depends on the type of applicant (personal, corporate, etc.) and the expected volume of transactions on the account.

When an account is opened, but there are verification issues that cannot be resolved, Velespay can close the account and return the money to the source from which it was received. Although the transfer of the initial balance from the account to the client's name in another organization subject to the same KYC standard will be considered, however, we will perform our own KYC procedures, as we should consider the possibility that the previous account manager may delete the account due to concerns about questionable actions.

Naturally, customers have the right to move their business from one organization to another. However, if Velespay has any reason to believe that the applicant is being denied the services of another organization, it applies extended due diligence procedures to the customer.

Velespay will never agree to open an account or conduct ongoing business with a customer who insists on anonymity or gives out an assumed name. Confidential numbered accounts should also not function as anonymous accounts, and should be subject to the same KYC procedures as all other customer accounts. While a numbered account may provide additional protection for the identity of the account holder, this identity must be known to a sufficient number of employees to conduct proper verification.

Special customer due diligence and identification procedures

Customer identification should be carried out as soon as possible. Velespay regularly checks the accuracy and adequacy of the information identifying the customer that is at its disposal.

Notwithstanding the foregoing and taking into account the degree of risk, if at any time during the course of the business relationship it is realized that Velespay lacks sufficient or reliable evidence (data) and information about the identity and financial profile of an existing client, Velespay immediately takes all necessary actions using identification procedures and due diligence measures to collect the missing data and information as quickly as possible, as well as to identify and create a comprehensive financial profile of the client.

In addition, Velespay monitors the adequacy of the available information, as well as the identity and economic profile of its customers, when and where one of the following events occurs:

  • Conducting a significant transaction that appears to be unusual and significant than the usual type of trade and economic profile of the client;

Significant change in the situation and legal status of the client as:

  • Change of Directors/Secretary
  • Change in registered shareholders and/or actual beneficiaries
  • Changing the registered office
  • Change of Trustees
  • Change of company name and/or trademark
  • Change of major trading partners and/or substantially new business

Significant changes in the way and rules of the client account, such as:

  • Change of persons authorized to maintain an account
  • Request to open a new account to provide new investment services and/or financial instruments

In the case of client transactions by Internet, telephone, facsimile or other electronic means, when a customer is not present to authenticate your signature, or the person who actually owns the account, or authorised to the account that Velespay established reliable methods, procedures, and practices to control access to electronic means to ensure that he was dealing with the actual owner or an authorized signer for an account.

If the customer refuses or does not provide Velespay with the necessary documents and information to identify and create an economic portrait before entering into a business relationship or during the execution of a separate transaction without proper justification, Velespay will not enter into a contractual relationship or will not perform the transaction, and may also inform an AML employee about this. This may lead to suspicion that the client is engaged in money laundering and terrorist financing.

If during the business relationship the client refuses or does not provide all the necessary documents and information within the appropriate time, Velespay has the right to terminate the business relationship and close the client's accounts. The Compliance department is also investigating the damage to report the case to the AML officer.

Personal data of clients

1. Email

2. Phone number

3. True name and/or used names

4. Current permanent address, including postal code

5. Date of birth

The names should be verified by a link obtained from an authoritative source that has a photo on it, for example:

  • Valid international passport
  • National identity card

In addition to verifying the customer's name, the current permanent address must be verified (by originals) by obtaining any of the following documents:

  • A copy of a recent utility bill
  • Bank statement
  • Monthly credit card statement

Corporate customer accounts:

  • Velespay also checks other sources to make sure that the applicant has not been or is in the process of liquidation or termination.
  • The identity check should be aimed at identifying
    • Company
    • Directors
    • All persons duly authorized to manage the account
    • Main beneficial shareholders
    • The profile of the company in terms of the nature and scope of its activities

The following documents are required:

  • Original or certified copy of the Registration Certificate
  • Memorandum and Articles of Association of the joint-stock company
  • Decision of the Board of Directors on concluding transactions with the Company
  • Where appropriate, search for the file in the company registry
  • The identity of the persons who are associated with the company

Creating an economic portrait

Velespay must make sure that it is dealing with a real person, and for this purpose receives a sufficient number of identity documents.

Velespay must verify the identity of the beneficial owners of the accounts. For legal entities, it obtains data and information to understand the structure of the client's control. Regardless of the type of client (for example, an individual or a legal entity, a partnership or an individual entrepreneur), we collect relevant data and information about the client's business activities.

The identity of all clients is verified on the basis of reliable data and information provided or obtained from independent and reliable sources, that is, data and information that is difficult to forge or obtain illegally.

Home address and work is considered a key element of a person's personality

All data and information must be collected prior to entering into a business relationship in order to create a financial profile of the client and at a minimum include the following:

  • Purpose and justification (reason) for entering into a business relationship;
  • Expected account turnover, the nature of transactions, the expected source of money to be credited to the account, and the expected destination of outgoing payments;
  • The size of assets and annual income, a clear description of the main types of business/professional activity/work.

The data and information that make up the financial profile of the client-a legal entity, includes:

  • Company Name
  • Country of registration
  • Headquarters address
  • Names and identities of the beneficial owners
  • Directors, authorized signatories
  • Financial data
  • Information for the group that may belong to the company (Country of incorporation of the Parent Company, subsidiaries and associates, main activities, financial results).

All of the above data and information will be recorded in a separate form, which is stored in the client's file along with all other documents and internal notes. This form is updated at regular intervals or whenever there is new information about any changes or additions that make up the client's financial profile.

Enhanced due diligence measures

Velespay applies enhanced due diligence and customer identification procedures in the following cases:

  • If the client was not physically present for identification purposes,
  • In relation to cross-border correspondent banking relations with credit institutions-customers from third countries.
  • In relation to transactions or business relations with politically exposed persons residing in a country within the European Economic Area or in a third country.
In all other cases, enhanced customer due diligence measures are in place, which by their nature entail a higher risk of money laundering or terrorist financing.

Working with third parties

Velespay may engage third parties to enforce customer identification procedures and customer due diligence measures, provided that all data and information held by a third party for customer identification purposes are certified copies of the originals.

Continuous monitoring of accounts and transactions

Continuous monitoring is an important aspect of effective KYC procedures. Velespay can only effectively monitor and mitigate risk if it understands the normal and reasonable activity of its customers in relation to accounts, so it has the means to identify transactions that are outside of the normal activity of the account. Without such knowledge, Velespay will not be able to report suspicious transactions to the relevant authorities in cases where they are required to do so. The degree of monitoring should be risk-sensitive.

For all accounts, Velespay has systems in place to detect unusual or suspicious activity by setting limits for a specific class or category of accounts. Special attention is paid to transactions that exceed these limits.

Certain types of transactions alert you to the possibility that the client is performing unusual or suspicious activities. They may include transactions that do not appear to make economic or commercial sense (large transactions), or that involve large amounts of cash deposits that do not correspond to the client's usual and expected transactions.

There is enhanced monitoring for higher-risk accounts. Velespay has established key indicators for such accounts, taking into account customer information, such as the country of origin and source of funds, the type of transactions performed, and other risk factors.

Record keeping

Velespay is required to keep records for at least 5 years.

The 5-year period is calculated after the transaction or termination of the business relationship.

The following entries should be saved:

  • Copies of the client's identity.
  • Relevant evidentiary material and details of all business relationships and transactions, including documents for recording transactions in the books.
  • Relevant documents of correspondence with clients and other persons with whom they maintain business relations.

All documents and information are available quickly and without delay to the authorities in order to fulfill the duties assigned to them by law.

The anti-money laundering officer should be able to compile a satisfactory audit trail. Documents may be stored in original documents or certified true copies and stored in hard copy or in another format, such as electronic form, if they are available at any time and without delay.

When setting up document storage policies, Velespay takes into account legal requirements and the potential needs of the business unit. The documents and information must be original or correct copies. In cases where the documents are certified by another person, and not by Velespay or a third party, the documents must be apostilled or notarized.

Risk management

Effective KYC procedures include procedures for proper governance oversight, systems and controls, separation of responsibilities, training, and other relevant policies. Velespay's Board of Directors is fully committed to and ensures an effective KYC program and procedures. Within Velespay, there is a clear responsibility to ensure that policies and procedures are effectively managed and aligned with local oversight practices. The channels for reporting suspicious transactions are clearly defined and communicated to all staff.

Velespay maintains an ongoing employee training program to ensure that staff are properly trained in KYC procedures. The terms and content of training for various personnel sectors are adapted to their own needs. Training requirements should have a different focus for new employees, front-line employees, compliance employees, or employees working with new clients. New staff should be aware of the importance of the KYC policy and the basic requirements.

Employees who deal directly with customers are trained to verify the identity of new customers, exercise due diligence when processing existing customers ' accounts on an ongoing basis, and identify patterns of suspicious activity. Regular refresher training is conducted to ensure that employees know their responsibilities and are aware of new developments. It is imperative that all relevant employees fully understand the need and consistently implement the KYC policy. A culture within the services that promotes this understanding is key to successful implementation.

Special customer due diligence and identification procedures

  • Individuals:
    • True name and/or used names based on an official identity card or passport.
      • A document issued by an independent and reliable source, which has a photo of the client
    • Full permanent address, including postal code, provided (up to 3 months) phone bill, electricity bill, municipal taxes, bank statement, or similar documents specified above.
    • Phone number, Landline, Mobile, Fax
    • Email address
    • Date and place of birth
    • Nationality
    • Information about the profession, including the name of the employer/business organization
    • In addition to the above, if the client was represented by a trusted Velespay employee or other trusted existing client or a third party known personally to the Board of Directors, the details of these recommendations must be provided and stored in the client file.
  • Shared accounts
    Shared accounts are prohibited
  • Accounts of trade unions, societies, clubs, charitable foundations, and charitable institutions
    • Memorandum and Articles of Association
    • Registration documents
    • Certificate of registration
    • List of members of the Board of Directors/Management Boards
    • The decision of the Board of Directors on the conclusion of transactions in the Forex market and the granting of authority to those who will act on behalf of the client
    • Identity of all authorized persons
    • Follow the identification procedures for the above persons as defined in Part A
  • Accounts of unincorporated enterprises, partnerships, and other non-legally binding entities
    • The identity of the Directors/Partners (Part A)
    • The identity of the beneficiaries (Part A)
    • The identity of the authorised persons (Part A)
    • In the case of partnerships, the original or certified copy of the certificate of registration of the partnership
    • Business address
    • The nature and scope of its activities
    • Financial portrait of a legal entity
      • personal information
      • the identity of the beneficiaries
      • in the case of legal entities (ownership and control structure, customer)
      • information about business operations and the expected structure and level of transactions
      • place of residence and business address
      • purpose and reason for establishing a business relationship
      • expected account turnover, the nature of transactions, the expected origin of incoming funds to be credited to the account, and the expected purpose of outgoing transfers/payments
      • the amount of the client's wealth and annual income, as well as a clear description of the main activity/professional activity
      • company name, country of incorporation, head office address, names and identity of beneficial owners, directors, authorized signatories, financial information, ownership structure of the group that the company may belong to (country of incorporation of the parent company, subsidiaries and associates, main activities, financial information)
    • If there is a formal partnership agreement, it must be provided, as well as a mandate from the partnership, authorizing the opening of an account and confirming the authority for the specific person who will be responsible for its operation.
  • Accounts for legal entities
    • Registration number - certificate of registration
    • The registered name and trademark is used
    • Full corporate registered address and managers
    • Phone number, fax, and email address
    • Members of the Board of Directors
    • Persons authorized to manage the account and act on behalf of
    • Real beneficiaries of private and public companies that are not registered in the regulated market of a European Economic Area country or a third country with equivalent disclosure and transparency requirements.
    • Registered shareholders who act as candidates of actual beneficiaries
    • Financial portrait of a legal entity
      • personal information
      • the identity of the beneficiaries
      • in the case of legal entities (ownership and control structure, customer)
      • information about business operations expected structure and transaction level
      • place of residence and business address
      • purpose and reason for establishing a business relationship
      • expected account turnover, the nature of transactions, the expected origin of incoming funds to be credited to the account, and the expected purpose of outgoing transfers/payments
      • the amount of wealth and annual income of the client, as well as a clear description of the main business / professional activity / name of the operating company, country of incorporation, head office address, names and identity of the beneficial owners, directors, authorized signatories, financial information, ownership structure of the group of which the company may be a part (country of incorporation of the parent company, subsidiaries and affiliates, main activities, financial information)
    • Certificate of registration
    • Certificate of good quality
    • Certificate of registered address
    • Certificate of Director and Secretary
    • Memorandum and Articles of Association
    • Certificate of registered shareholders in the case of private and public companies that are not registered in the regulated market of a country of the European Economic Area or a third country with equivalent disclosure and transparency requirements.
    • Resolution of the Board of Directors on opening an account and granting authority to those who will manage it.
    • In the case of nominee shareholders of the actual beneficiaries, a copy of the trust agreement signed between the nominee shareholder and the beneficial owner, by virtue of which the shares were registered in the name of the nominee shareholder on behalf of the real beneficiary.
    • Documents and data for establishing the identity of persons authorized by the legal entity to maintain the account, as well as registered shareholders and beneficial owners of the legal entity.
    • If necessary, a copy of the latest audited financial statements (if available) and/or copies of its latest management statements.
    • It should be noted that at any time during the course of the business relationship, Velespay may obtain additional documents and information, if necessary.
  • Account for legal entities (companies or legal entities)
    • All documents and information as specified in Part F above must be provided
    • Velespay can conduct research and receive information from companies
    Register or an equivalent body in the country of incorporation (legal entity) abroad and/or request information from other sources to ensure that the company (legal entity) is not in the process of liquidation or removal from the register.

    Shareholder - another person
    In the case of a client-a legal entity applying for a business relationship or an accidental transaction and whose sole or direct shareholder is another legal entity, before proceeding to the next one:

    • All documents provided for in Part F
    • Ownership structure
    • The identity of individual beneficial owners and/or control of another legal entity
    • The identity of the persons who ultimately control the business and assets of the legal entity, as described in Part A
    • In cases where final control is in the hands of persons who have the right to dispose of the funds, accounts or investments of the legal entity, without the need for additional authorization, and who will be able to override internal procedures, we need the identity of the persons exercising effective control as defined in Parts A and B, even if they do not have a direct or indirect interest or an interest of less than 10% in the authorized capital or voting rights of the legal entity.

    If the beneficial owner of the legal entity is a trust, the following documents are required:

    • Name/title;
    • Date of creation;
    • Guardian's identity (Part A);
    • Identity of the beneficial owners (Part A);
    • The nature and purpose of the establishment and activity (the founding agreement and the charter);
    • The origin of the money, extracts from the trust agreement, and other relevant information from the trustees are required.

  • Investment funds, mutual funds, and firms that provide financial or investment services:
    • License or authorization from the competent supervisory / regulatory authority of the country of registration and activity to provide these services
    • Evidence that is subject to supervision for the prevention of money laundering and the financing of terrorism.
    • If a person is registered and/or works in a third country, you must obtain the following:
      • all documents as specified above in Part H
      • A copy of the license or permit provided by the competent supervisory / regulatory authority of the country of registration and activity.
      • Sufficient data and information to fully understand the structure of control and management of business activities, as well as the nature of the services and actions provided by the client.
    • In the case of investment funds and mutual funds, the Financial Institution must provide the following:
      • Identity of the beneficial owners
      • Information regarding their objectives and control structure, including documentation and information for the review of investment managers, investment advisors, administrators and custodians
  • Nominees or third party agents
    The following information is required:
    • Verify the identity of the nominees or the third party agent (Part A and B)
    • Confirm the identity of any third party on whose behalf the candidate is acting (Part A and B)
    • A copy of the authorization agreement concluded between the interested parties
  • Shell Bank Policy
    Shell Bank – A Bank that does not have a physical presence in the country in which it is registered and licensed, and that is not associated with a regulated financial group that is subject to effective general supervision. A physical presence is a presence in a country performing a managerial function, the very existence of a local agent or non-managerial staff is not a physical presence.
    • Velespay:
      • does not enter into any banking relationship with shell bank.
      • must not conduct transactions with shell banks on behalf of and on behalf of the shell bank through any of its accounts or products.