ENVIOS EXPRESS B.V.(SXM)

COMPLIANCE MANUAL

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Version 016. 1.3

INDEX

ENVIOS EXPRESS B.V. COMPLIANCE MANUAL..............................................................1

International cooperation................................................................................................. 3

Commitments......................................................................................................................... 3

The following are some examples of money laundering:........................................6

ANTI-MONEY LAUNDERING COMPLIANCE PROGRAM...............................................7

RECORDKEEPING.................................................................................................................. 9

SUSPICIOUS TRANSACTIONS REPORTING............................................................11-44

SUSPICIOUS ACTIVITIES................................................................................................... 14

Structuring............................................................................................................................ 15

Civil and Criminal Penalties............................................................................................ 19

ADOPTION OF ANTI-MONEY LAUNDERING COMPLIANCE PROGRAM.........24-43

RISK ASSESSMENT.............................................................................................................. 25

KNOWLEDGE OF THE CUSTOMER (KYC)..............................................................27-46

Stages of the knowledge of your customer................................................................29

PEP – Politically Exposed People...................................................................................33

SUMMARY OF THE AML/CFT MANUAL OF ENVIOS EXPRESS................................38

DESIGNATION OF A COMPLIANCE OFFICER...............................................................40

PERIODICAL REVIEW CHECK-LIST................................................................................40

HIGH AMOUNTS  COMPLIANCE FORM..........................................................................42

P O L I C Y S T A T E M E N T

ENVIOS EXPRESS B.V. falls under the scope of the AML/CFT laws for performing the follow-ing services: The transfer, sending and receipt of money on behalf of its customers to and from over-seas countries.

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INTERNATIONAL COOPERATION

Introduction

Criminals try to obscure the provenance of the proceeds of their crimes. The concealment of the pro-ceeds of drug trafficking, corruption, money laundering, tax evasion and / or related payments, tends to occur in the countries where the acts are committed and the drugs are produced, transported, and consumed. The proceeds of these crimes, on the other hand, are subsequently spent in countries with a mild (or milder) supervisory climate. This means that money laundering and ter-rorist financing can only be effectively tackled through joint efforts at the national and international level. The focus and purpose of this manual is curtailing the use of this organization by criminals to achieve their goals of moving illicit funds from one point to another.

FIU ST MAARTEN (our home base) deliberately invests in maintaining and expand-ing international cooperation with its partners, not only in the area of the operational exchange of data, but also with regard to passing on and exchanging knowledge and experience. FIU ST MAARTEN is an active member of international bodies such as the Financial Action Task Force on money laun-dering (FATF) and the Caribbean Action Task Force on Money Laundering (CFTAF) , the Egmont Group, FIU.NET, and the FIU Platform within the European Union. In addition FIU ST MAARTEN has bilateral cooperation agreements with FIUs and criminal investigation bodies worldwide.

Cooperation between regionsBesides cooperating with international partners, FIU-the Netherlands works closely together with the other parts of the Kingdom of the Netherlands: Curacao, Aruba and Sint Maarten. As of 10 October 2010, Curacao and Sint Maarten acquired autonomous status, similar to the status already enjoyed by Aruba; Service providers on the island of St Maarten are obliged to report unusual transactions to FIU ST MAARTEN and the MOT.

COMMITMENTS

ENVIOS EXPRESS commits to all the obligations falling under the AM/CFT laws and regulation in specific to:

Adopting and promoting the prevention of money laundering and terrorism financing in the business and in the widest sense of the word;

Ensuring that the risks in relation of money laundering and terrorism financing are properly assessed, managed and mitigated;

Ensuring that the Customer Due Diligence is being performed properly and according to the highest standards and in accordance with the policies and procedures as laid down by the dif-ferent local and international bodies;

Ensuring that unusual transactions are being reported to the FIU ST MAARTEN promptly and adequately;

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Ensuring that all relevant staff is regularly trained in how to recognize suspicious activity, promptly complete internal reports and communicate these with the compliance officer;

Ensuring that the compliance officer regime is kept up to date with the latest AML/CFT obliga-tions;

Ensuring that all the rules and regulations, policies and procedures laid down in this manual are strictly adhered to and carried out;

This manual gives you detailed instructions how to:

Detect and prevent money laundering and terrorist financing Comply with ENVIOS EXPRESS policies Comply with the local Supervisory Authority and Regulatory recordkeeping and reporting re-

quirements Comply with local AML/CFT regulations Identify, document and report suspicious activity and transactions Recognize the severe penalties of noncompliance

The information covered in this manual will help provide the tools needed to build and maintain an adequate AML /CFT program that meets international standards, the FIU ST MAARTEN, the Financial Regulators, the Central Bank of Curacao & St Maarten and Other International guidelines and policies regarding MTOs.

Your knowledge of the information in this Manual will help prevent our business from being victim-ized by money launderers and help us to comply with the law. In addition, our compliance with these requirements will help law enforcement agents in their efforts to track down and capture Money Launderers and Terrorists who illegally launder Money.

It is ENVIOS EXPRESS policy to follow the spirit, as well as the letter of the law. We do not allow our money transfers and / or our offices and other financial services we provide to be used for illegal purposes. The company will not do business with any person who knowingly violates the law or in-tends to violate the law. Following the instructions in this Manual will help assure that this does not happen.

ENVIOS EXPRESS promotes shared dedication with all other institutions in the fight against money laundering and terrorism.

ResponsibilitiesEmployee/sales persons:

Accepting, signing and committing to the compliance policy Being aware of the AM/CFT obligations of the company and their duty to contribute to it; Following AML/CFT training; Recognize and reporting unusual transaction to the compliance officer; Accept transactions only after having followed all of the steps outlined in this and other opera-

tional guides Accept transactions only after having fully and adequately confirmed the identification of the

customer. Accept transactions only after having fully and adequately confirmed the Ultimate Beneficiary

of the transaction4

Senior Management: Accepting, approving and committing to the compliance policy; Appointing of a compliance officer; Being aware of the AML/CFT obligations of the company and their duty to contribute to it; Following AML/ training; Approving transactions where a Politically Exposed Person is Involved Give the Compliance officer the space to work independently and to report willingly.

Compliance Officer: Implement and execute the compliance program, regime and associated activities; Organizing training sessions for staff and management on internal procedures and on various

compliance related issues; Receiving internal unusual transaction report from the staff and assessing them on their com-

pleteness correctness; Where reports are received investigating fully the UBO of the transaction; Executing closer investigation of unusual transactions and documenting them; Reporting these unusual transaction to the FIU; Contact person for the FIU; Remain informed about local and international developments on money laundering/terrorist

financing and to make suggestions to management with updates that have to be implemented or that are of importance to the company;

Write and implement the procedures to be followed after an unusual transaction has been detected or identified;

Screening new employees; Fulfilling its duties independently; Making correct risk assessments and convey the information to management; Filling out the unusual transaction report in a safe and secure place and assuring the informa-

tion is routed to its intended destination.

O V E R V I E W O F M O N E Y L A U N D E R I N G

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What is Money Laundering?

Money laundering is the process by which criminals attempt to conceal the illegal origin of the pro-ceeds of their criminal activity (drug dealing, bribes, tax evasion, weapons dealing, human trafficking, kidnapping, etc.) allowing them to maintain control over the proceeds and ultimately, providing a le-gitimate cover for their sources of income.

 Money laundering is illegal.

There are three stages in the money laundering:

Placement, layering and Integration.

The first time that the illicit funds, derived from criminal activities are used in a legiti-mate money transfer is referred to as Placement.

The fact to create a series of transactions to hide the first transaction is  referred to as s Layer-ing.

The return of funds to legitimate activities is referred to as Integration..

The placement represents the greatest risk to our business:

Transactions can be structured to avoid recordkeeping or reporting thresholds. False identification and/or information may be provided.

This definition MONEY LAUNDERING covers a wide variety of activities. You need to understand how people launder money so that you can identify money laundering and know how to help prevent it.  To help prevent money laundering and to obtain documentation that can be used to prosecute money launderers, the government requires businesses  like ours to file specific reports and maintain records on all our cash transactions.

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THE FOLLOWING ARE SOME EXAMPLES OF MONEY LAUNDERING:

Example 1

A group of tourists vacationing in St Maarten plays in a local casino and win some money. They don't want to travel with the cash they won, so they ask of the casino to send them the money for them to their home country.This situation occurs often, so the casino establishes a business relationship with an exchange house or money remittance company so that they can send the profits of the gambling to their customers in D. R. In order to avoid the reporting and record keeping requirements of for example the D. R. where the law prohibits the import of money from gambling, an employee of the casino never sends more than $3,000 and does not reveal the real origin of the funds knowing that the laws of that country pro-hibits the transfer or any amount of casino benefits without proper reporting.

Did you know that it is illegal for a D. R. citizen to receive or send money from proceeds or for funding for gambling purposes across D. R. borders, and that the Local Regulator is continually investigating this kind of activity

Example 2

Six people walk in to the business and want to send money to another coun-try. You had never seen these people be-fore and they do not seem to be related. However, each one of them sends approx-imately the same amount of US$1,481 to different people in the other country. (this

is just under the threshold of $1500 set by the company.All of these people have large rolls of twenty dollars bills which they pull out of their pockets. Local regulations requires that additional information is provided for all transactions above US$1,500.=. The transactions are sent to the other country, where the money is possibly being used to make, distribute and sell illegal drugs or another possibility is that the money was generated from some illegal activity here on the island. The possibility exists here to that the money is being sent to finance terrorist activ-ities.

ANTI-MONEY LAUNDERING COMPLIANCE PROGRAM

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Local and International Financial regulators requires that all financial intuitions including MTOs/MRC (Money Remittance Companies) and their employees adopt a written AML Compliance Program that is reasonably designed to ensure proper recordkeeping and reporting of certain transactions, and to prevent the business from being used to launder money.

ENVIOS EXPRESS must comply with very strict rules to help prevent the activities of terrorist financ-ing and money laundering. We refer to these rules as anti money laundering rules or AML.

To prevent money laundering and to obtain documentation that can be used to prosecute  money launderers, the government requires that the business and its employees submit specific reports and keep records on all cash transactions. 

 All employees and officers of ENVIOS EXPRESS are under the obligation follow this manual and program of compliance against money laundering designed to ensure the maintenance of records and the proper reporting of certain transactions and prevent the use of the business to launder money.

The compliance program of our company against money laundering includes the following:

A. Internal policies, procedures and controls for :

• Verifying customer identification Determining the UBO of all transactions• Filing reports as required by FIU ST MAARTEN • Creating and retaining records• Responding to law enforcement requests• Licensing requirements• Compliance with local regulatory requirements• Employee and Compliance Officer training

B. The procedures for the Compliance Officer responsible for ensuring that:

• Policies and procedures are followed• Procedures are updated as needed• Training and education are provided• Reports are properly filed as required by FIU ST MAARTEN

C. A training program for employees that:

• Explain the policies and procedures

• Teach how to identify suspicious activities

D. Compulsory Periodic Review of your AML program:

The review will take place every 6 months but cannot be performed by the Compliance Offi-cer.  

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The review is intended to assure that the compliance officer and the staff are following all of the policies and procedure in the manual and to assess if any additional risk prevail or may be present.

The review may be carried out by someone outside of the company but qualified to detect weaknesses in the program and its application.

The information contained in this Manual will provide the staff with the tools it needs to follow our and adhere to our AML Compliance Program that meets the standard requirements of any interna-tional financial institution.

The quality and effectiveness of this program depends on your commitment. The only opportunity to verify the information of the customer and identify suspicious activities is at the point of sale. This can only be done by knowledgeable, well- trained staff.

Files that need to be maintained

It is important that we create and maintain record keeping files for our AML program for a period of at least 5 years. These files should be readily accessed if our company is examined / audited by regula-tors. In addition to files containing the information described above, you should have files that are clearly labeled and contain at least the following:

1. A file with a copy of this Manual along with any other compliance manuals you may receive from other vendors, involvement with trade associations, accountants, financial statements and audit reports, contact information of lawyers, etc. The content in these materials can serve as a manual line for your program.

2. A file for your completed Adoption of Compliance Program, Designation of Compliance Officer, Employee Training and Periodic Review forms. You should also keep your completed Money Transfer registration or license to operate as a Money Transmitter in a visi-ble location in the business and up to date at all times.

3. A file with multiple blank copies of the Suspicious Transaction Report forms or their equivalent and High Currency Amount Transaction Report forms (if required). This is also where you should maintain copies of any completed Suspicious Activity forms or High Currency Amount Transaction Report forms that you file with the FIU ST MAARTEN, along with any supporting materials.

4. Storage of files of the forms of sending and receiving ENVIOS EXPRESS in a safe place. The forms shall be kept at least 10 years from the date of the transaction, and during the time re-quired by the FIU ST MAARTEN.

5. Files, labeled “Government Communications” containing any updated information you receive from regulators or law enforcement agencies regarding money laundering or terrorism.

RECORDKEEPING

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Record keeping Requirements for Money Transfers

 ENVIOS EXPRESS requires that both sending and receiving agents obtain, record and provide to En-vios Express specific information for money transfers transactions at specific dollar amounts, regard-less of the method of payment, before a transaction is considered completed.

Envios Express Money Transfer form

You must record information on the ENVIOS EXPRESS Money Transfer Form/Receipt or within the ENVIOS EXPRESS electronic system anytime a customer sends or receives a money transfer. The form must always be completed per the instructions on the form prior to completion of any transaction. A physical printed copy of the transactions is always required and needs to be filed in a safe location.

You must obtain all required information before you do the transaction.

You must validate and record valid identification information for the sender/receiver.

If a third party is involved, you must validate and record identification information and other details for the sender/receiver and of the third party. Anyone acting on behalf of a customer must provide a notarized power of attorney authorizing him/her to carry out the transaction on behalf of the customer.

Every transaction carried out must be signed by the customer. Compare the signature with the signature on file.

For money transfer send and/or receive transactions, you must obtain and record all of the information on the form; the dollar amount will determine the amount of information required to be filled in. By completing the form, you will have the minimum information that ENVIOS EXPRESS requires you to obtain and retain for at least five to ten (5-10) years.

If you know that the person is sending money on behalf of another person, then you must also obtain similar information that other person on whose behalf the transaction is being carried out. For exam-ple, could be a family member of an elderly or disabled person who performs the transaction for that person. If the transaction is to receive money then that person besides presenting identification of the person on whose behalf he is receiving the money he/she needs to present a legalized power of attor-ney specifically stating that he is authorized to receive the money on behalf of the third party.

ENVIOS EXPRESS Maximum Thresholds

Two customer identification including one "high amounts compliance form (APPENDIX) is required for all send transactions in amounts above $ 1000 or more than US$1500 one time or cumulative in one month. Before completing any money transfer send or receive transaction, you must verify the customer’s id by examining a valid locally accepted form of identification that contains the person’s name, address and date of birth; this may include a driver’s license, passport or other government issued document verifying nationality or residence. ENVIOS EXPRESS requires that for whichever form of identification is used, it must contain a photograph and is current/not expired. We accept as legal identification the following forms of Id: Passport, driver’s license, Local id card.

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ENVIOS EXPRESS requires additional information that includes the date of birth, occupation, includ-ing one "high amounts compliance form" and the proof of source of funds for all transactions equiva-lent to US$3,000 (USD) or higher.

ENVIOS EXPRESS requires the same verification procedure for all “Moneys Received for payout” re-gardless of the amount.

ENVIOS EXPRESS(internally) is required to retain the following records:

At least ten years

• All original Transaction Forms

• Vouchers of money transfers and payouts 1:• Save the client records in a safe place; this can include forms, copies of identification documents, government reports and statements of  ENVIOS EXPRESS.

HIGH CORRENCY AMOUNT TRANSACTION REPORTING

We are required to file reports of high currency amount transactions with the FIU ST MAARTEN a de-partment of the Judicial System to control and prosecute financial crimes any time a customer makes a transfer of over fl. 5000. The responsibility for reporting lies with the Compliance Officer, however any cashier or teller that has reported any incidents to the Compliance Officer should follow up to find out if any action was taken. In the case no action was taken the cashier or teller should report the inci-dent to management. Note that everyone in the circle of allowing money laundering to take place through the business can be prosecuted for being involved in criminal activities and management is personally liable no matter if they knew or not. Any information pertaining therefore must be for-warded to as soon as possible and at the latest during the business day it takes place. (the law stipu-lates within 48 hours)

ENVIOS EXPRESS is required to retain a copy of each of the reports on transactions for large amounts of foreign exchange for at least five 10 years from the filing date.

SUSPICIOUS TRANSACTIONS REPORTING

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“Suspicious activity” is a difficult concept to define because it can vary from one transaction to another based upon all of the circumstances surrounding the transaction or group of transactions.For example, transactions by one customer may be normal based on your knowledge of that customer and their pattern of activity, while similar transactions (the same amount of frequency) by another customer may be suspicious. Many factors are involved in determining whether transactions are suspicious including the amount, the location of your business, where the transactions are being sent to, where the transactions are received from, as well as AML concerns that may exist between your location and the send/receive location, comments made by your customer, the customers behavior, etc.

We are further required to file a Suspicious Transaction Report for any transaction or pattern of transactions that is attempted or conducted for any amount that you know, suspect or have reason to suspect: (note: even if it was not successful or was denied)

1. Involves funds derived from illegal activity or attempts to hide funds  derived from an illegal activity;

2. Is structured to avoid record keeping or reporting requirements;

3. Has no evident or apparent lawful or social purpose;

4. Seems intended to facilitate criminal activity.

Reporting procedure of unusual transactions

The reporting is done to the MOT in the Dutch Caribbean "Melding Ongebruikelijke Transacties" (Fi-nancial Intelligence Unit - FIU) on St Maarten and special forms are available in these offices. Each office should have several copies at their disposal. The compliance officer will retrieve these forms and assure that they are processed properly. Forms should be numbered as to assure chronological sequence and also to avoid that a form can be removed from file by an employee without detection. The compliance officer assembles the information and assures that the reporting is carried out as specified by that department.

The reporting procedure comprises the following stages, whereby use is made of various standard forms:

the Manual reporting file/form; the (re)confirmation letter; the request for additional information; the correction to the reported transaction; the statement of disclosure.

The financial service provider who determines that a transaction was carried out or intended to be carried out in his/her institution is unusual, is obliged to report this to FIU ST MAARTEN. Reporting

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parties that do not have the electronic reporting form, can still report using the “manual” reporting form and confirmation letter.

A website has been created for FIU Sint Maarten the url is www.fiu-sxm.net . From within the website the new online reporting tool called SERT can be accessed.

Reporters need only to have access to the internet and the computer or laptop must be properly se-cured with the latest antivirus scanners. Detailed information of SERT will be given further in the doc-ument. Names of subjects at no time should be mentioned by facsimile, phone or email.

FIU ST MAARTEN acknowledges receipt of the reported data, by returning the received confirmation letter stamped, signed and dated, by facsimile (reconfirmation). This letter will confirm that the reports have been recorded in the FIU ST MAARTEN Register and also serves as an indemnification for the reporting party in a civil or criminal procedure.

FIU ST MAARTEN can request additional information concerning a reported unusual transaction. Article 12 letter allows FIU Sint Maarten to request that the reporter make corrections to the reported unusual transaction. A reporter can also authorize the FIU to make changes to already reported trans-action.

The reporting party receives a statement of disclosure from FIU ST MAARTEN if, with regard to a re-port, data has been provided to the authorities in charge of the investigation and prosecution of crimes.

Reporting file/form

The purpose of the reporting file/form is for the reporting party to furnish FIU ST MAARTEN with information concerning an unusual transaction and the pertaining natural persons and legal entities. Three ways to deliver reports to FIU ST MAARTEN is via the online reporting tool SERT, Sint Maarten Reporting Tool. SERT can be accessed by first accessing the website www.fiu-sxm.net Please find the “manual” reporting form in annex. In the event that the SERT is temporary out of service then FIU Sint Maarten will allow reporters use of the manual reporting form. All mandatory data, must be completed in the SERT, if the field are not entered then the unusual transaction will not be submitted to the FIU Database.

Confirmation letter

The purpose of the confirmation letter is to provide the reporting party and FIU ST MAARTEN with information as to the quantity of reports received/filed. This method is also used as a control mechanism, to verify transmission and registration of reports. All “electronic” or “manual” reporting forms should be accompanied by a confirmation letter. Data that the reporting party furnishes to FIU ST MAARTEN, should be accompanied by a separate confirmation letter. The confirmation letter returned by facsimile or email to the reporting party will serve as the confirmation of registration and indemnification for the reporting party in a civil or criminal procedure.

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Reporting to FIU ST MAARTEN

The delivery of reports to FIU ST MAARTEN should be done on-line using the SERT online reporting tool.As soon as you have completed the confirmation letter, you will send it immediately by facsimile to FIU ST MAARTEN. With a view to data protection, do not state information concerning the transaction information, other than the transaction number(s), and do not send completed manual report forms to FIU ST MAARTEN by facsimile! Upon registration of the reports, FIU ST MAARTEN will return to you a stamped, signed and dated confirmation by facsimile as an acknowledgment of receipt.

Correction of the reported transaction

Transfer of additional information to FIU ST MAARTEN can include a correction of an error or additional information requested by FIU ST MAARTEN. A correction of a report should be done through via the use of an Article 12 letter which indicates corrections which needs to be performed in the transaction The reference should indicated “Request pursuant Art. 12 of the National Ordinance of Unusual Transactions”

Request for additional information by FIU ST MAARTEN

The purpose of the request for additional information is to supplement and/or clarify previously obtained information concerning an unusual transaction in the interest of the financial analysis by FIU ST MAARTEN. By means of the Article 12 letter additional information can be requested, The reference should indicated “Request pursuant Art. 12 of the National Ordinance of Unusual Transactions”.

Statement of Disclosure

The purpose of the statement of disclosure by FIU ST MAARTEN is to inform the reporting party that data about (a) certain transaction(s) deemed to be suspicious has/have been provided to the authorities in charge of the investigation and prosecution of financial crimes. The statement of disclosure comprises the transaction number(s) of the unusual transaction(s) which has/have been disclosed by FIU ST MAARTEN to the authorities and officials who are in charge of the investigation and prosecution of crimes.

ENVIOS EXPRESS will retain all records on file for a period of 10 years.

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SUSPICIOUS ACTIVITIES

Never Tell Your Customer That You Filed a Suspicious Transaction Report.

 There may be times when ENVIOS EXPRESS’s compliance staff will contact you (employee) as part of their investigation of suspi-cious customer(s) transactions. You are NOT allowed to share this information with your customer(s).

ENVIOS EXPRESS is obliged to submit supporting documenta-tion along with the report on suspicious transactions.

ENVIOS EXPRESS retains all original supporting documentation or business records (including copies of instruments, receipts, photographs, surveillance audio or video tapes, etc.) with your copy of the Suspicious Transaction Report for at least ten (10) years from the date the transaction was made. All supporting documentation must be made available to appropriate authorities upon request. A Sus-picious Transaction Report must be typed or legibly handwritten.

Basic examples of suspicious activities:

A customer asks an employee how to avoid the requirement for the submission of   Reports. A client tries to bribe or threatens an employee to avoid providing information or Submission

of a report. A customer uses an apparently false identification or more than one client tries to submit the

same identification. A customer refuses to continue with a transaction when you asked for an  identification. A customer refuses to provide all the required information or seems extremely nervous or anx-

ious. A customer (or group of customers that they work together) sends or receives money transfers

in amounts just below the recordkeeping thresholds or to avoid reporting. This would include anytime a transaction requires the customer to present identification.

A customer conducts transactions that are unusually large based on their past history, em-ployment or level of income.

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STRUCTURING

Many money launderers are familiar with the minimum amounts   of dollars which require the main-tenance of records and reporting. Therefore, to remain anonymous and avoid the detection of the agents of criminal groups, "structured" their transactions so that the record-keeping requirements and reporting do not apply.

The structuring is the act of breaking a possible large transaction in several smaller transac-tions.

It is illegal for us to assist  our customers to structure transactions in order to avoid the requirements of record-keeping and or reporting. For example, if in your country requirement for the submission of this report is $2,000 and a client sends a money transfer from US$1,500 in the morning and returns later in the day to send another transfer of money from US$1,500, it is possible that they are structur-ing their transactions to avoid reporting of the transactions. This should be reported (information of the customer is already on file)

It is illegal for us to assist anyone in structuring transactions in order to avoid recordkeeping or re-porting requirements. For example, you may not tell or even imply to a customer that they can avoid providing information by conducting a smaller transaction. Some criminals may attempt to trick you into allowing them to structure transactions by splitting up transactions with several accomplices or by trying to “con” you with a hard luck story. You need to be on the lookout for structuring so that you can prevent it from occurring.

 Do all the multiple transactions are considered structuring?

No. For example, a client sends two transfers of money to different receptors, a US$ 900 and US$ 850. Each transfer is less than US $1,000 but the total amount of the transactions exceeds the minimum amount of record keeping of US$ 1,500 for his country. After discreetly investigating the matter you learns that the client is sending money to their children that attend two different schools.This does not seem to be a suspicious transaction. You should register the corresponding information of record-keeping in the back of the submission form, as well as any other information required by its regulator to comply with the record-keeping requirement and to demonstrate that there was no at-tempt to structure transactions.

Examples of structuring:

The minimum amount for additional information on your country is US$3,000 and:

A client conducts three wire transfers for US$1,200 each on the same day, instead of one trans-action for US$3,600 and refuses to provide the required information.  

A client receives 10 payments of $500 each one the same day and from different senders but from the same place, and does not provide the required information and or explanation.

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A person receives transactions of the same sender in consecutive days that added more than $3,000 and dos not provides clear explanation. In a case like this the sending agency should also provide copies of the source of funds and also of the due diligence documents from their side.

NOTE: High Currency Amount Transaction reports, Suspicious Transaction Reports, and other records and reports are only as good as the information you provide. Therefore, it is very im-portant that the information you provide on such reports is accurate and complete. This is your responsibility. The government and law enforcement agencies depend on this information as they fight against money laundering and terrorism.

Fraud prevention from Money Laundering

The staff is responsible from an economic point of view for any loss caused to the business due to fraud.  ENVIOS EXPRESS is continually striving to protect the staff and customers from fraud. Your help is crucial in stopping this activity .The collective support is vital to stop this activity. 

Terrorism Financing

Money laundering is most commonly associated with drug dealing and tax avoidance. However, other individuals, most notably terrorists may try to launder money to finance their operations.  Terrorist organizations also raise funding from legitimate sources, including the abuse of charitable entities or legitimate businesses. Terrorists use a wide variety of methods to move money within and between organizations, including the financial sector, the non-financial sector, cash couriers and the movement of goods through the trade system.

Financing of terrorism is described as behaviors as referred to in the International Treaty of New York with regard to combating terrorism financing, signed on December 9th, 1999(Tractatenblad2000, no. 12; Tractatenblad2002, no. 110)

It is essential that all staff of  ENVIOS EXPRESS remain alert for such activity, and take appropriate and immediate action if detected.

The staff is to familiarize its self and be vigilant for the possibility of terrorist utilizing the company to finance their activities. Any transaction originating or destined to or from the countries on the watch lists or that have names that can be associated with persons from countries on the watch list should be intercepted and sent immediately for scrutiny to the Compliance Officer. No further actions should be taken until the transaction is reviewed. Note: Transaction are prohibited to countries on the watch list of being terrorist regimes and or countries that have been flagged in international treaties of which the Dutch Caribbean form part.

Together with the Netherlands and Aruba, the Netherlands Antilles take part in the work of the Finan-cial Action Task Force on money laundering, (the FATF). The FATF, as an inter-governmental organi-

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zation which sets standards, develops and promotes policies to combat money laundering and terror-ist financing. The member states are obliged to incorporate the recommendations of the FAFT and the CFAFT in their national legislation.

International co-operation including mutual legal assistance and extradition

Measures to be taken by financial institutions and non-financial businesses and professions to prevent money laundering and the financing of terrorism, including:-customer due diligence and record keeping-reporting of unusual transactions to a FIU or MOTCountermeasures are taken against member states that do not comply with the FATF’s and CFATF’s recommendations. These countermeasures include among others: warning the different sectors against doing business with non-compliant countries, because of the danger of money laundering or the financing of terror-ism and the limiting of both business relations as well as financial transactions with non-compliant countries. The objective of these countermeasures is to maintain and protect the integrity of the finan-cial system in the FATF and CFATF’s countries. Therefore Sint Maarten is compelled to uphold the in-tegrity of their financial systems. In doing this, criminal persons and/or organizations are prevented to misuse Sint Maarten’s financial system to launder money or to finance terrorism. Sint Maarten’s is also a member of the Caribbean counterpart of the FATF; the Caribbean Financial Action Task Force, the CFATF as mentioned earlier.

ENVIOS EXPRESS does not do business, no matter how legit the transaction may appear, with these persons, in keeping with the treaties of the Dutch Kingdom with the international community.

International Government Watch List

Several countries publish watch lists designed as a reference tool for businesses to assist them in com-plying with the various sanctions programs of different government organizations such as OFAC SDN, Interpol Most Wanted, European Union Terrorist, Australia Consolidated and Canadian Consolidated lists. Each country’s watch list prohibits businesses from conducting any form of activity with any en-tities or persons that are on these lists or terrorists of the European Union, consolidated lists of Aus-tralia and Canada. The list of observation of each country prohibits the business to carry out any activ-ity with entities or people that are in these lists.

The Netherlands and St Maarten by extension is part of these treaties to prevent the movement of funds through the establishments in their territories.The “Sanction Law 1977”, “Resolution for Financial Markets Dutch Kingdom” and the “Act on Preven-tion of Money Laundering and Terrorist Financing St Maarten” form the legal frame work for guaran-teeing that St Maarten conforms to the Laws related to Terrorism and Money Laundering

OFAC is part of the US Treasury Department. OFAC is responsible for enforcing US government sanc-tions against certain countries, organizations and individuals. OFAC publishes a list of these countries, organizations and individuals, commonly referred to as the Specially Designated Nationals “SDN” list. US companies and citizens are prohibited from conducting transactions with anyone on the list.

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Citizens and US companies are forbidden to perform transactions with any person that is on the list. This is important because if an American wants to send money as long as they are American Citizens they are under this law.

 ENVIOS EXPRESS reviews the names on all money transfer senders and receivers against the OFAC list as well as against many other watch lists, such as those of the European Union, Australia and Canada. Occasionally, ENVIOS EXPRESS will suspend any transaction until further information can be obtained from the sender or receiver if they appear on the list or their countries appear on the list. (http://www.fatf-gafi.org/countries/#high-risk)

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CIVIL AND CRIMINAL PENALTIES

In accordance with the latest amendments to the National Ordinance on the Reporting of Unusual Transactions (N.G1 . 1996, no. 21) (“NORUT2 ”) and the National Ordinance on Identification of clients when Rendering Services (N.G. 1996, no. 23) (“NOIS3 ”) the Centrale Bank van Curaçao en Sint Maarten (“Central Bank”) has the authority to impose sanctions on the (financial) institutions which fall under its supervision that do not (timely) comply with the obligations set forth in these legisla-tions. In addition, the Central Bank has the authority to impose sanctions on the (financial) institu-tions which fall under its supervision that do not adhere to the compulsory requirements as set forth in the Provisions and Guidelines on the Detection and Deterrence of Money Laundering and Terrorist Financing issued by the Central Bank (“Provision and Guidelines on AML & CFT”).

The Central Bank’s authority to issue the Provisions and Guidelines on AML & CFT is based on the fol-lowing provisions: • Article 22h, paragraph 3 NORUT • Article 11, paragraph 3 NOIS; and • Other supervisory legislation

The enforcement of sanctions is based on the following provisions: • Articles 22a, 22b, 22e and 23 NORUT; • Articles 9, 9a, 9d and 10 NOIS; • National Decree Penalties and Fines Reporters Unusual Transactions (“NDPFRUT5 ”); and • National Decree Penalties and Fines Service Providers (“NDPFSP6 ”)

Sanctions and actions that the Central Bank can take against violations of the NORUT, NOIS and the compulsory requirements of the Provisions and Guidelines on AML & CFT.

1. Penalty7 and administrative fine8 2. Public Notice 3. Referral for criminal investigation or prosecution 4. Other actions and (administrative) sanctions

1. Penalty and administrative fine The violations committed under the NORUT, NOIS, and the Provisions and Guidelines on AML & CFT are subject to a penalty and/or an administrative fine. These sanctions are imposed for each individual violation. This means that if, for example, 10 transactions have not been reported or a client has not been identified 10 times, there are 10 violations in the sense of the NORUT and NOIS, respectively. The scope of the penalty seeks to undo or avoid further violation and/or repetition of a violation. The penalty is a recovery sanction. Depending on the seriousness of the violation, and the relevance of undoing this as soon as possible, the Central Bank will establish the amount of the penalty. Unlike the penalty, the administrative fine has the character of a penal sanction. According to the NDPFRUT and the NDPFSP the Central Bank can amongst other things moderate the im-posed administrative fine (if in appropriate cases the imposition of administrative fines for various violations is disproportionate or failing to comply with the NORUT or NOIS is justified) 9 . The Cen-tral Bank can also impose the maximum penalty or administrative fine amount in the event the same violation occurs within one year (recidivism)10 . Listed below are the articles of the NORUT

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and NOIS under which the Central Bank may impose a penalty and/or an administrative fine and some other powers and obligations of the Central Bank in this case.

A. Penalties The violation of the obligations imposed by or pursuant to the following articles is subject to a maximum penalty of NAf. 500,000.

NORUT Article 11/11Article 12, paragraph 2/14Article 13/16Article 22h, paragraph 3/18

NOIS

Article 2, paragraph 1, 2/12, and 5/13Article 3/15Article 5, paragraph 1 through 4/17Article 6/19 Article 7/20 Article 8/21 Article 11, paragraph 3/22

juncto article 22a NORUT and article 11, paragraph 3, juncto article 9 NOIS violation of the com-pulsory requirements in the Provisions and Guidelines on AML & CFT are also subject to a maxi-mum penalty of NAf. 500,000. A list of these requirements is included in Appendix I to this Policy Rule. It concerns all the provisions that the (financial) institutions or individuals “must” comply with. The Central Bank will indicate in the Decree23 to impose a penalty the term in which the vio-lator can execute a mandate without a penalty being forfeited. The amount due can be collected by way of a writ of execution, increased by the costs of the collection. The writ of execution shall be served on the violator by means of a bailiff’s notification and will produce an entitlement to en-forcement 24 .

B. Administrative fines The violation of the obligations imposed by or pursuant to the following articles is subject to a maximum administrative fine of NAf. 1,000 .

NORUT Article 11 Article 12, paragraph 2Article 13Article 22h, paragraph 3

NOISArticle 2, paragraph 1, 2, and 5 Article 3 Article 5, paragraph 1 through 4 Article 6

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Article 7 Article 8Article 11, paragraph 3

Based on article 22h, paragraph 3, juncto article 22b NORUT and article 11, paragraph 3, juncto article 9a NOIS violation of the compulsory requirements in the Provisions and Guidelines on AML & CFT are also subject to a maximum administrative fine of NAf. 1,000. A list of these requirements is included in Appendix I to this Policy Rule. It concerns all the provisions that the (financial) institutions or individ-uals “must” comply with.

Before proceeding to imposing a fine, the Central Bank shall inform the (financial) institution or indi-vidual in writing of the intention to impose a fine, stating the grounds on which the intention is based, and shall offer him the opportunity to redress the omission within a reasonable term/26 .

2. Public Notice

In order to promote the observance of the NORUT, NOIS, and the Provisions and Guidelines on AML & CFT the Central Bank can bring to the notice of the public the fact with respect to which an order for a penalty or an administrative fine is imposed, the violated instruction and also the name, the address and the domicile of the person on whom the order for a penalty or the administrative fine is imposed/27 .

3. Referral for criminal investigation or prosecutionIn case of violation of or acting contrary to the provisions in the relevant articles mentioned in article 23 NORUT, or violation of regulations set by or pursuant to the relevant articles mentioned in article 10 NOIS, and the compulsory requirements in the Provisions and Guidelines on AML & CFT the Central Bank may immediately refer the violation to the Public Prosecutor for further (criminal) investigation and prosecution. An example of a case where the Central Bank may immediately refer the violation to the Public Prosecutor for further (criminal) investigation and prosecution is that the Central Bank, during an on site examination, takes notice of serious or grave violation of the NORUT, NOIS or the compulsory requirements in the Provisions and Guidelines on AML & CFT.

Furthermore, if the supervised (financial) institution or individual does not comply with its obliga-tions, even after an increased penalty or administrative fine, the Central Bank shall report such to the Public Prosecutor, while transferring the relevant documents related to the case in view of (criminal) prosecution/28.

4. Other actions and (administrative) sanctionsAlthough the Central Bank has the authority to impose the sanctions as referred to in paragraph III, under 1, 2 and 3, this Policy Rule reflects that the Central Bank will consider other actions and (admin-istrative) sanctions, before determining the appropriate enforcement response to a violation. This has to do with the Central Bank’s realization, that there are aggravating or mitigating factors that may play a role.

Based on other supervisory legislation listed in Appendix II to this Policy Rule, the Central Bank can impose the following, non exhaustive, actions or (administrative) sanctions on the supervised (finan-cial) institutions or individuals.

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1. Issuance of an order /direction/instruction/ 29

If a supervised (financial) institution is found not to satisfy the requirements, rules, restrictions or instructions laid down by or pursuant to the relevant supervisory legislations, the Central Bank can issue an instruction specifying that the supervised (financial) institution must satisfy such re-quirements, rules, restrictions or instructions within the time specified by the Central Bank. In some cases the Central Bank can also make public the issuance of the instruction/30 .

2. The appointment of a trustee/administrator /31In case the Central Bank is of the opinion that its request stated in an order has not or not ade-quately been complied with within the term specified by the Central Bank then the Central Bank can by registered letter serve notice to the supervised (financial) institution that, with effect from the date stipulated by the Central Bank, all or particular organs of the supervised (financial) insti-tution may only exercise their powers after approval by one or more persons appointed by the Central Bank and with due observance of the instructions of said persons. The Central Bank may also take this action if special circumstances threaten an adequate functioning of certain super-vised (financial) institutions.

3. Penalizing of violation /32If the (financial) institution fails to satisfy its obligations resulting from the relevant supervisory legislations or fails to satisfy such obligations in time, the Central Bank can impose an administra-tive fine on the (financial) institution. In some cases the Central Bank can also impose a penalty.

4. Revocation of the license or dispensation /33In case the supervised (financial) institution or individual refuses to comply with or is in violation of the provisions and the compulsory requirements as stipulated in the relevant supervisory legis-lation and the Provisions and Guidelines on AML & CFT, respectively, the Central Bank can revoke the license or dispensation of the supervised (financial) institution or individual.

5. Public Notice /34The Central Bank can bring to the notice of the public the fact with respect to which an order for a penalty or an administrative fine is imposed, the violated instruction and also the name, the ad-dress and the domicile of the person on whom the order for a penalty or the administrative fine is imposed.

6. Referral for criminal investigation or prosecution /35In case of violation of regulations set by or pursuant to the relevant articles mentioned in the penal provisions of the supervisory legislation, the Central Bank may immediately refer the violation to the Public Prosecutor for further (criminal) investigation and prosecution. An example of a case where the Central Bank may immediately refer the violation to the Public Prosecutor for further (criminal) investigation and prosecution is that the Central Bank during an onsite examination takes notice of serious or grave violation of the NORUT, NOIS or the compulsory requirements in the Provisions and Guidelines on AML & CFT.

These rules are

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Criminal violations may result in prison terms. As a matter of fact this law establishes that prison term may part of the sentence for anyone convicted of this offense, which is considered a crime under the law and or be penalized to pay a fine of the 4th degree if the act was intentional.

If the act was unintentional, and to be very clear what this means the following illustration; Because you did not pay attention and carry out due diligence as is dictated in this manual and someone is de-tected laundering money through our company by any means and you dealt with this person or per-sons without you being consciously aware of what they were doing, but by merely neglecting these guidelines you may be jailed for up to 6 months and or fined to amount as decreed of the 4th degree.

The managing director and directors of the company and the compliance officer will always be impli-cated in these cases as they are the ones responsible for the adherence to AML/CFT compliance in the company and adherence to the laws that govern financial companies, even if they had no knowledge of the crime the law stipulated unintentional is punishable.

In addition, the government may seize property involved in criminal violations of these laws; this may include your business, your bank account, or any other assets the government can link to criminal vio-lations. Under certain circumstances, the government may hold businesses criminally liable for the acts of their employees. It is important that your employees are trained on AML compliance. It is equally important that your business has a program to ensure that your employees are complying with the laws and regulations.

ENVIOS EXPRESS will also immediately terminate the contract with any person who knowingly or negligently fails to comply with the policy and procedures of this manual and the laws and regulations outlined in this manual.

Non-compliance with the law is not worth the risk.

ADOPTION OF ANTI-MONEY LAUNDERING COMPLIANCE PROGRAM

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DESIGNATION AND DUTIES OF THE COMPLIANCE OFFICER

The Compliance Officer is responsible for coordinating the day to day compliance of the AML program and has the authority to administer it.

The duties and obligations of the Compliance Officer among others shall include, inter alia, to make sure that:

1. Implement and execute compliance regime and associated activities;2. Organizing training sessions for the staff and management on internal procedures and on vari-

ous compliance issues;3. Receiving internal unusual transaction reports from the staff and assessing them on their com-

pleteness and the correctness;4. Execute closer investigation of unusual transactions and document them;5. Reporting these unusual transaction reports to the FIU;6. Contact person for the FIU;7. Remain informed of local and international developments on money laundering terrorist fi-

nancing and to make suggestions to management;8. Write a procedure to follow after unusual transactions has been detected;9. Screening new employees;10. Fulfilling its duties independently;11. Making correct risk assessments12. Filing the unusual transaction report in a safe and secure place13. A Periodic Review is conducted to verify the effectiveness of the Compliance Program14. Updating the Compliance Program as necessary due to changes in laws or regulations

Time period allotted by the FIU for reporting 

The time period between the execution of the unusual transaction (or the intention to execute an un-usual transaction) and the moment the Compliance Officer receives the report, should not exceed24 hours. This is for Tellers and Cashiers, including front office personnel.

As of the moment that the Compliance Officer receives the transaction report, the Compliance Officer will have 10 workdays to complete the relevant research with regard to a possible case of Money Laundering / Terrorist Financing ( ML/TF). If after the research period (maximum 10 workdays), there is a suspicion of ML/TF, the Compliance Officer must report the transaction within 48 hours to the FIU.  ENVIOS EXPRESS is committed to prevent itself actively from being misused by money launderers, criminals or terrorists. In order to achieve this company has adopted the following policies where it concerns risk assessment:

RISK ASSESSMENT25

ENVIOS EXPRESS is committed to preventing itself actively from being misused by money launder-ers, criminals or terrorists. In order to achieve this the company has adopted the following policies where it concerns risk assessment:

Categories

A: Country and Location Risk

Risk related to the origin of the customer, intermediate party, third person, beneficiary, product, transaction or institution involved.

B: Customer Risk (KYC )

Risk factor related to the conduct, identification and characteristic of a customer. KYC is explained in detail later in this manual.

C: Product Risk

All companies that offer financial services businesses, especially remittance companies, banks, credit unions, are at risk of becoming victims of money launderers and other criminal activities. Both the multiple services such as emitters/multiple vendors increase the capacity of a money launderer and other criminals to structure transactions in order to avoid detection requirements and record keeping.

The risk also increases because of the characteristics and nature of the product.

D: Transaction Risk

These are risks related to the nature and the establishment of the transaction its self. The chosen mode of payment and/or the payment construction and the source of payments funds in the transac-tion and/or the chosen method of deliver can all be indicators of something suspicious taking place.

Risk related to the Country and or Location

Law enforcement agencies and government regulators have identified areas that are more prone to be victims of money laundering, financial crimes related and drug trafficking.

You must be aware of these areas in order to pay special attention if any transaction is being pro-cessed originating from any one of these areas.

A vulnerable zone is a geographic area of high risk for the conduct of operations of money laundering. The idea of criminal organizations is to look for areas less controlled by the authorities, to comply with its ultimate goal to give appearance of legality to the resources obtained in illicit operations.

Hence, there are areas that beforehand have a higher risk than others and that we can identify how vulnerable these areas are for money laundering. 

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The most vulnerable areas for money laundering are the following:

Free trade zones  Border Areas  Areas covered with exchange rate regimes, or special customs tax.

Note: Please review our Risk Assessment and Mitigation Manual which is a intrinsic part of this man -ual and should be considered an integral part of the overall policies and procedures of Envios Express.

KNOWLEDGE OF THE CUSTOMER (KYC)

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THE BASICS 

The first line of defense against allowing people to use ENVIOS EXPRESS for their criminal activities is the knowledge of who you are dealing with.

For many people the knowledge of the customer is the obligation to identify their clients and the ban on providing services to persons who are identified. However, the authorities in different countries, in development of the international recommendations, have gone beyond and require additional con-trols such as the development of the policy of customer knowledge. For this reason, it is important that you are aware of the scope of this policy and its usefulness in combating criminal activity.

Knowledge of the Customer in General

There are many ways to know the client. From the point of view of marketing (commercial), it can es -tablished about a customer when they know their consumption habits, preferences and other charac-teristics that describe its relative position compared to other customers. From the social point of view, it is when you have had any type of relationship with him, for example when the client is a well-known or a friend. The information you possess is to be used cautiously however you must not allow ENVIOS EXPRESS at no time to be used for illegal activities.

For the purposes of the prevention of money laundering, the knowledge of the customer from the point of view of the market and from the social point of view is useful but not sufficient. The policies of customer knowledge in any company should be an organized effort to collect the relevant information that enables us to detect and analyze suspicious transactions. All the effort of the MTO by knowing their clients has two general purposes:

Serve as a disincentive to zoom in to the launderers of the company.  Allow for the detection of unusual operations and the determination of suspicious transactions,

which should be reported to the authorities. 

Notwithstanding the foregoing, we must understand the politics of knowledge of the customer for the purposes of the prevention money laundering as integral part of our business and to integrate the other efforts being made by the customer in other areas. In this way, the knowledge of the customer from the point of view of marketing serves as a manual for the prevention policy to money laundering and , in turn, the work of prevention to the laundering of assets can shed valuable information that translates to better service to customers.

Relevant Information 

You can have easy access to plenty of information about the client without being relevant to prevent and control money laundering.

The relevant information for this purpose is that it serves to establish the following aspects:

Complete Identification  Economic Activity, source or origin of the funds  Volume and characteristics of financial transactions  The persons associations with others

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Careful observation and comparison of how the customer behaves, acts and looks over time

Difference between customer and user

In general terms, there are two broad categories of people: customers and users. This distinction re -sponds to the need to exercise different kinds of controls, according to the legal and real possibility that individuals have obliged to get to know the person to which it provides the service. It is important to note that for certain laws, there is no such division or categorization. This division has been more the result of the experience of some supervisors of banks and financial institutions to give a practical application to the policy of "know your customer".

Client

It is understood as a client, the natural person (physical) or legal (moral), which have a contractual relationship of a financial nature. This relationship may be occasional or permanent. This person is usually a regular customer and known to the institution.

 User

The user is the natural person or legal company, which has access to a limited number of services of the company, therefore there is no contractual relationship or, if it exists, this does not generate a sig -nificant risk. This person makes occasional use of the institution but has not detectible pattern of use.

The differentiation between customer and user has as purpose to establish obligations to tighten con-trols over the customers, because these have a more meaningful relationship with the company, but maintaining adequate controls for users.

Following is a graph of the client account creation procedures;

Prospective clients approaches the Front Office to open account for money remittance. The sequence of procedures are as follows;

1. FRONT OFFICE DOCUMENTATION: Initial information gathering2. ID and Verification (Depending on client profile 2 ID is required)3. Proof of Address4. General Profile Questions (where do you work?, Do you work extra jobs or extra income (could

be from rental property etc.) and what type of jobs)29

5. Proof of Income (Salary slips, Deposit slips etc)6. Request remittance profile information (What is the average amount planned to send

monthly?)7. Request references information8. CLIENT INTAKE PROCEDURE: Information is evaluated and client risk profile is assigned 9. Form filled out, signed by client10. Client risk profile assigned11. If client is low risk (determined from information gathered in the previous points) an account

pending final approval may be opened at this point by the front desk clerk and first transaction can commence (smaller than $ 500) pending final management or compliance officer approval.

12. CUSTOMER DUE DILLIGENCE (within 48 hours): Information back check and reference checks follows when the form with the information is forwarded to management or compliance offi-cer. (Note; this is internal procedures and is not the reporting of a suspicious transaction)

13. Back office check information provided and final approval from management takes place at this stage.

14. Check references for additional information and validity of information received15. ENHANCED DUE DILLIGENCE: Depending on information gathered and results of customer due

diligence checks high risk assigned customers are subject to more profound checks to assure that they are within the norms or acceptability. If a customer is determined, as a result of the initial intake information to be high risk then no account is opened until final management and compliance officer approval.

16. OPEN CUSTOMER ACCOUNT: Once the above steps, procedures and due diligence has been satisfied then and only then is a permanent account opened for the client.

Types of clients

Foreign Customers

Foreign customers generate an additional difficulty for their identification, since most of the docu-ments come from other countries and this makes them difficult to verify. It is well known in the mid -dle of the existence of jurisdictions law compared to the monitoring and the constitution of societies. Companies from these countries can submit original documentary information, apparently satisfac-tory, but misleading as to the true appreciation of the seriousness and strength of these people.

 Performances by means of proxy

Legally there is the possibility of appointing attorneys to perform action, including transactions, on behalf of another person. These guardians may legitimately come to the obligors on behalf of a cus-tomer and perform operations. In accordance with the policies of customer knowledge of the com-pany, this type of operation requires a double identification, therefore it is necessary to identify both your customer and your proxy. In addition, there is a need to corroborate the validity and authenticity of the power or the document in which consists the designation of the proxy.

STAGES OF THE KNOWLEDGE OF YOUR CUSTOMER

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Knowledge of the customer is not simply a timely obligation that is met with the completion of a few formats. It is a policy that involves a planned and coordinated action between several areas of our company, work which takes place in five instances: preparation and design, customer loyalty, analysis of the information, service delivery and updating of data.

To develop a policy for effective knowledge of the client, we must make a continuous and organized effort that can be described through the following stages:

Preparation and design

Under the guiding criterion of the existing legislation and the instructions of the supervisor, the sub-jects monitored should establish procedures to comply with the obligation to know the client. At the same time, you must design and develop the corresponding formats and establish systems for the storage, maintenance and consultation of the information.

Linking the Customer 

The most important moment in this process is the linking of customer. This is your first relationship with the company, in which the client presents its documentation and the company decides on their linkage. This opportunity is very valuable to develop the policy of customer knowledge and preven -tion of money laundering. For operational purposes and your own control of the service, the entities they request basic information such as records of signatures, photocopies of id company documents, addresses of correspondence, references, etc. to its time, the policy of customer knowledge entails the application and analysis of additional information that has as its sole purpose is to prevent the com -pany to be used for washing or legitimize capital assets.

The legislation establishes procedures and specific mechanisms for the preservation and organization of such information. In any case, it is important to bear in mind that when analyzing unusual sus -pected transactions, the best source of information for the purpose of this study is that supplied by the customer at the time he linked to the company. In consequence, a mechanism that allows easy consul -tation of this information is vital for the agile development of the policy of prevention to money laun -dering.

Change in behavior patterns (customer usually sends $ 150 to this family and suddenly starts to send $ 1000 monthly), associations (circle of friends or relatives now includes persons known to be in-volved in criminal activities or is now close with PEP individuals), lifestyle and , look (displaying ex-pensive jewelry, new vehicle, purchase of new home without plausible explanation) can all be indica -tions that the client could be involved in illicit activities.

 Analysis of the information provided

The knowledge of the client is not a passive activity, in which the obligor requests the information and the customer or user supplies it. This is a work in which the obligor, requesting the information, en-sures that this complete, additional information is requested or explanatory, verifies certain data and, finally, stipulates that all the information is meaningful and coherent.

Provision of the service

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Once formally linked to the company, in the case of customers, or at any time, for the case of users, the people go to the financial institutions to carry out their transactions. In all these events, the company must identify the persons performing these operations, without the need to repeat the process that was carried out at the time of the linking of the customer.

When a service is provided to a customer already linked, on which it is practiced the policy of cus-tomer knowledge, it is simply intended to confirm that the person who performs the transactions is actually the client of the company. The foregoing with several purposes within which are: 

Compare the operation with the customer profile and the segment of the market. 

Consolidate operations regular customer for the purposes of analysis and control. 

Confront the special listings (customer lists that should not be linked. For example, persons included in the lists of the OFAC). 

Data Update

It is normal and predictable that the customers of financial institutions change some of their personal characteristics and financial status for the duration of the contractual relationship with the company. Individuals and companies change of economic activity, domicile, etc. For this reason, it is important that you update regularly and systematically the data supplied by customers. To the contrary, con -frontation of the operations carried out with the out-of-date information of the customer can lead one to believe that there are suspicious transactions where there are none or otherwise.

Aspects that imply knowledge of the Customer

Know your customer involves collecting and analyzing of relevant information about the customer id company and economic activity. This information comes from different sources, both public and pri-vate, and makes up a set of data that you gather in which you can know the relative risk of each of your customers against money laundering operations. At the same time, all the documents and the data collected in development of this policy will serve as sustenance to identify suspicious transac -tions and find justification to operations that appeared as such at first sight. For these reasons of weight, the entities must collect the relevant information about their customers, in accordance with certain manual lines that are described below. This work depends on the success of the control that with which such information can be exercised.

The aspects or work that make up the knowledge of the customer are: 

Customer Identification Form Completion Request for Support Documents  Data Verification Special Consultation Lists  Allocation of the profile and location in the segment of the market  Customer Selection  Services and Movements Anticipation Request an affidavit  Preservation and Organization of the Information 

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Consolidation of Operations  Updating Data and Documents 

Identification of the Customer

Commonly people are identified with the name and document number of id of the issuing country or institution. In simple terms, identify is to make sure that the person who is about to do business with the company is not another, that is, it is not spoofed or is acting under a false pretences. Financial in-stitutions and trade, employ various methods to identify the people and put on record that were actu-ally them who conducted the operations or transactions. This work is based, usually in the collation or comparison of the signature, the photograph and fingerprint in documents that are presumed authen-tic, compared to the documents submitted by the customer or user. 

At Envios Express B.V. we accept the following forms of identification;

Driving License Passports Picture Id issued by a government institution Any other form of Id. needs to be approved by management

To identify the legal persons and entities (business or corporations) these are some of the documents commonly used : social contracts, statutes, mercantile registry, notaries acts, tax identification docu -ments, licenses or special registers like the chamber of commerce.

As an additional mechanism we might request personal references, labor, or commercial banking that have the purpose of determining the actual profile of the person, linking it with other individuals or companies, and facilitate the verification of the basic data.

PEP – POLITICALLY EXPOSED PEOPLE

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The resolution “Financial Markets ” outlines the areas where emphasis must be placed to identify and track PEPs.

A PEP is defined by FATF as being a person who is or that has been entrusted with a prominent posi-tion.

Of particular importance are the politically exposed persons (PEP) because of the facilities they have to be involved in corruption and illicit activities through their positions. The provisions and manual for financial institutions state that the company has to be specifically alert for transactions being car-ried out by politically exposed people, their relatives, associates and friends. Politically exposed peo -ple are not only people that hold government offices but also controllers and managers of Government owned companies. ENVIOS EXPRESS will assemble a list in which the names of all of the known PEPs are recorded and whenever any transaction is carried out on behalf of one of these persons a note will be made and forwarded to the compliance officer. Note: be aware not to prejudge since it is not be-cause a person is a PEP this means that all transactions that they carry out are suspicious however, because of the nature of their position they are more susceptible to be involved in shady business. The world's largest PEP database is found at : http://www.accuity.com/compliance/pep-due-diligence-database/?cmD0000000KzwY&gclid=CjwKEAjwlsSoBRDoid2ihqnjjlISJABZoG9-t_NivwUs7q-wOr0qKx6L7z65c-puB2A7PnnPdy9e2vxoCqujw_wcB

Please review it.

The PEP are divided into the following ranks:

Foreign PEP: Individuals who are or have been entrusted with prominent public functions by a foreign country, for example Heads of State or of government, senior politicians, senior govern-ment, judicial or military officials, senior executives of state owned corporation of Non Govern-ment Owned Companies and Government Owned Companies and important political party offi-cials.

Domestic PEP: Individuals who are or have been entrusted with prominent public functions by a foreign country, for example Heads of State or of government, senior politicians, senior gov-ernment, judicial or military officials, senior executives of state owned corporation of Non Gov-ernment Owned Companies and Government Owned Companies and important political party officials locally.

International Organizations PEP: Persons who are or have been entrusted with a prominent function by an international organization, refers to members of senior management or individ-uals who have been entrusted with equivalent functions, i.e. directors, deputy directors and members of the board or equivalent functions.

Family members are individuals who are related to a PEP either directly (consanguinity) or through marriage or similar (civil) forms of partnership. The following are in the all cases clas -sified as immediate family members: the spouse, partner who is the equivalent to a spouse in terms of national law, children and their spouses or partners, brothers/sisters and parents.

Close associates are individuals who are closely connected to a PEP: either socially or profes-sionally.

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The service provider should be required to take reasonable risk management measures to determine whether a customer or ultimate beneficiary is a domestic or foreign PEP or a person who is or has been entrusted with a prominent function by an international organization.

There are various way to determine whether someone is a PEP, such as consulting public sources (Google, Digital footprints, online news papers etc. and subscription sources (e.g. www.transparan-cy.org, www.world-check.com and www.info4C.net). In many cases however, the information may be found from whatever details are provided by the customer in response to questions that are generally asked before the business relationship is established. The front office operators of Envios must be aware of the risks involved with dealing with PEP and are obliged to at least ask strategic questions aimed at determining whether the client falls under the category of PEP.

It’s easy to see how the list of potential PEPs is huge and continually in flux as people move into new roles, family members change, regulations and  recommendations from the FATF get updated on a local level, and the international landscape continually alters.

There is another category of red flag people you need to beware of and that is mentioned in the “Reso -lution Financial Markets” and that is the category of people whose actions and intentions create a feel -ing of doubt or are questionable.

The law says that the Authority will assess the reliability of a person, of the law of the Resolution Fi-nancial Markets the basis of his intentions, actions and antecedents.

The supervisory authority shall take the assessment referred to in the first paragraph, at least the an-tecedents referred to in Annex 1 into account, as well as:

a. The interrelationship between an antecedent underlying conduct or behavior and other circum-stances of the case;

b. the interests which is intended to be protected by the law;

c. the other interests of the financial institution and the person concerned.

Resources for the reliability test are obtained:

a. from the data and information submitted by the concerned;

b. from data from information from the judicial records office which the Attorney General has pro-vided

c. from data and information obtained from the Tax Authorities;

d. from data and information obtained from Dutch or foreign government bodies or from Dutch or foreign government-appointed bodies responsible for the supervision of financial markets or persons working in those markets;

e. from official reports of the Public Ministry;

f. from information obtained by the person concerned given references;

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g. from data from public sources;

h. from information obtained from liquidators or administrators regarding bankruptcies, moratori -ums, debt restructuring, administration or emergency regulations .

i. from information obtained from organizations of current or former profession of the person con-cerned;

j. from data and information obtained from other sources designated by regulation of Our Minister.

Politically Exposed Risk Chart

Employee selection

Before anyone is employed by Envios Express the company must carry out a complete back ground check and due diligence to assure that the candidate is suitable for the position. This responsibility lies primarily with the Compliance Officer. Keen attention has to be paid to the person's background, environment, friends and family. A police record is a must but also an ample interview in which the focus should be on the persons character and integrity is imperative. References (at least three) should be contacted to assure that the person has high standards and character. Employees should be monitored and at least once a year each employee should be evaluated and a report of this evaluation kept in their file for future reference. Always bear in mind that the first defense against preventing our business from being used for money laundering purposes and as an accomplice in criminal activities are its employees. Therefore Envios Express is always vigilant and will take great care to guard its employees against the temptations that this line of work brings along with it.

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Clients Categorization Software

The money transfer platform to utilized by Envios Express is equipped with a client categorization module. This module allows Envios Express to easily categorize each and every client into the follow-ing classes. Every new client needs to be registered and categorized before they can use the service. The platform will not allow transactions to go through if the categorization procedure has not been completed for the new client.

A. Low Risk: Client is well known - has an ordinary 9-5 job - sends almost the same amount peri-odically

B. Medium Risk: Client is well known - owns a business - sends almost the same amount periodi-cally

C. High Risk: Client is not well known - Activities not clear - send varying amounts not periodi -cally

D. PEP: Politically Exposed PersonsE. Black List: Any client refusing to cooperate with the client identification procedures. Any client

that has been involved with the law or that is a known offender. Any client that is known to be involved in criminal activities or associated with criminal elements. Any client that after inves-tigation proved to be involved with structuring, money laundering, terrorist financing, drug smuggling or peddling.

Levels of filters

There are several levels of filters that are installed in the system.

Besides the teller, who is responsible for the first layer of defense during the initial contact and intake of the customer there is a set sequence of procedures and questioning that should be applied to each client during the intake. However the money transfer platform has several automated levels of filter installed that will auto-matically bounce transactions that are either suspicious in nature or over a certain amount ($ 1500) unless the required approval and documentation is accompanying the transaction and the transaction has been physically given the green light. This automatic control system will also detect if a specific threshold has been surpassed over a certain period and automatically stop the transaction and send it for vetting by the compliance officer. Since each client during intake is designated a certain risk factor this also is upgraded periodically by friendly conversation with the client aimed at finding out if any changes has taken place in his status that may be reason for a change in his risk allocation factor.

The first level is on receiving the transfer. The system will not allow transfers of over $ 1500 to go through without the Manager or the Compliance Officer assuring that it is vetted, approved and accompanied by the proper documentation and then giving the green light.

The second level is that once the transfer is made the name of the sender and the receiver is automatically checked against the OFAC lists and International terrorist lists including local known criminal that are on the local crime fighting lists.

The amount is automatically checked for structuring, amounts exceeding maximums over a specific period, and frequency of transfers within a certain period.

The third level is on the side of the intermediary (CORRESPONDENT AGENT). The transaction is further vetted to assure compliance. (US based)

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The fourth level is on the side of the payout agents where an independent filter will automatically pull transac-tions over $ 1500 and request to be checked off by the compliance officer on that side for relevant documenta-tion that should be accompanying the transaction in electronic format. The transfer will not be paid out until all of the above conditions have been met and satisfied.

The payout agents also check the names of the senders and receivers against their own data bases of criminal, PEP, convicted felons and suspicious by nature people to assure that these persons are not on their own black lists.

The agents on the payout side are also highly skilled and trained and they are also vigilant for structuring and other types of attempts at obscuring monies coming into the country from criminal proceeds or intended for criminal activities and terrorism.

After all has been satisfied then the transaction will be paid out.

At this point the information related to the receiver is faxed back to Envios for completion of the compliance cycle and the file regarding the transaction.

Note: Employees should inform any client sending more than $ 1500 that there will be waiting period while the transfer is checked and sanctioned.

SUMMARY OF THE AML/CFT MANUAL OF ENVIOS EX-PRESS

Envios Express and their employees who conduct money transfer transactions must comply with all AML/CFT laws and regulations that apply to them, as well as Envios Express policies and procedures. Additionally the condition, and guideline as seth forth in the CFAT should also be known and followed.

1. Money Laundering Overview

Money laundering is the attempt to conceal or disguise the nature, location, source, ownership, or control of illegally obtained money. Envios Express is required to file reports and maintain proper records of all transac-tion and report any suspicious activities to the proper authorities.

2. AML Compliance Program

As an employee or officer of Envios Express you must adhere to this AML / CFT Compliance Program

3. Recordkeeping

You must record and retain all information regarding Envios Express money transfer transactions based on our local regulations as well as Envios Express requirements. Envios Express requires additional recording and information for all transactions of US$1500 or more.

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4. High Currency Amount Transaction Reporting

You must file reports for High Currency Amount Transactions as indicated in this manual.

5. Structuring

Structuring is the illegal act of breaking up a larger transaction into smaller transactions in order to avoid the record keeping or reporting requirements. Any suspicion of this activity is to be noted and reported immedi-ately to your superiors and the Compliance Officer.

6. Suspicious Transaction Reporting

Suspicious activity involving transactions that appear to be structured or do not have any identifiable legitimate purpose must be reported. You must file a Suspicious Transaction Report as required by this manual on the suspicious activity. The FIU is the institution that handles these reports on the BES islands.

7. Training

Before conducting any Envios Express transactions, employees are required to review all of the information in this Manual and sign a copy of the acknowledgment form that will be retained in their personnel file or the busi-ness’s AML files.

8. Civil and criminal penalties

Governments can impose stiff penalties for individuals and businesses for violating the regulations and the laws of money laundering. According to their location, the criminal penalties for a person may include a large sum of money in fines and/or 6 months to two  years in prison, and the loss of business. You as an employee of our company is the first defense for protecting the company from being used for criminal activities and our com-pany will not hesitate to immediately terminate anyone remotely engaged in not following the policies and pro-cedures outlined in this manual.

9. UBO

It is important to always investigate with the goal of determining who the Ultimate Beneficial Owner is for each and every transaction. For example as a MTC we are not allowed to carry out any corporate transfers. A corpo-rate transfer is a transfer from a business to another business, a business to a person or a person to a business except in the case the money is meant to be deposited in a savings account of a private person and that person is also the UBO in which case the money is being deposited in a bank where the UBO has a personal account.

DESIGNATION OF A COMPLIANCE OFFICER

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The Compliance Officer responsible for coordinating the day to day compliance of the AML program and has the authority to administer it shall be Luly de La Cruz.

The Following pages relates to the forms and the signed designation of the compliance office for En-vios Express B.V.

PERIODICAL REVIEW CHECK-LIST

Periodic Reviews needs to be performed at least annually by all Money Transfer Business Services.

When an employee of our business conducts the review, it should be an employee who is familiar with our Compliance Program and the AML requirements that apply to our business.

This form shall not replace any requirements for internal, independent or third party audits that our business is required to perform periodically by your government’s authorities.

Periodic Review Form

Business Information

Business Name:____________________________________________________

Business DBA:__________________________________________________________

Address: _________________________________________________

Phone Number: ____________________________________________________

Owner/manager:________________________________________________________

Compliance Officer: _________________________________________________

Circle YES or NO for each question:

Is the business registered or licensed as a Money Transfer Organization or Money Transmitter and area all of its legal operating documents up to date?

YES NO

If yes, is the Money Transfer Business Service`s registration available and current?

YES NO

If no, indicate the reason:

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______________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

HIGH AMOUNTS  COMPLIANCE FORM 

For international transactions of $1, 500 onwards to St. Maarten, Rep. Dom. St. Eustatius.For international transactions of $3.000 and upward to United States Puerto Rico. 

No. of Agency: _________________No. Transaction: _________________________Date:_____/_____/_____ 

Agency Name: _________________________________________________Amount: $________________________ 

Sender Name: _____________________________________________________________________________________  

Type of identification: 

License to handle: ___________________________________City #______________________________________ 

Issue date : ________________________________Expiration date______________________________________ 

Passport:____________________________City: ___________________________Country:____________________ Other Identification (specify): __________________________________________________________________ 

Issue date: ____________/__________/________ Expiration date: ___________/___________/___________ 

Date of birth:_____________/_____________/___________ 

Source of funds: __________________________________________________________________________________(please attach evidence of funds)

Company Name: __________________________________________________RNC: __________________________ 

Address : ____________________________________________________________________________________________

Tel No.: (______) __________________Occupation: ___________________________________________________  

 Reason to send money: __________________________________________________________________________ 

Relationship with the recipient: _______________________________________________________________ 

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For more information, call the Compliance Department (599-318-2565)(721- 522-5479)  

Prepared by: ____________________________________________ 

I certify that the information provided in this form is true. 

Sender Signature : _________________________________________________ 

PERSON WHO IS RESPONSIBLE FOR THE REPORTING/COMPLIANCE OFFICER

THIS IS THE PERSON WHO WILL ALSO GET THE LOGIN DETAILS FOR THE BES-ISLAND ELECTRONIC REPORT -ING TOOL (BES-ERT) PORTAL

Company detailsNAME

BRANCH (IF APPLICABLE)

Address

Country

Telephone

Person who is responsible for the reporting/ compliance officerFirst name

Last name

Date of birth

Nationality

ID document type*

Function

Email address

*Please attach the following document: A copy of the ID document of the person who is responsible for reporting/compliance officer

-------------------------------------- ---------------------------------------

Signature Compliance officer / Signature Director

Person responsible for reporting

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Company stamp

PLEASE NOTE:

- MAKE SURE THE FORM IS SIGNED BY THE COMPLIANCE OFFICER/PERSON WHO IS RESPONSIBLE FOR REPORTING AND THE DIRECTOR. - MAKE SURE THE FORM IS STAMPED.- AFTER FILLING IN THE FORM PLEASE HAND DELIVER TO THE FIU OFFICE.

Internal reporting form

DateTimeLocationEmployee name

Transaction0 Executed transaction (transaction/deal/sale closed)☐ Intended transaction (transaction/deal/sale not closed)

Type of unusual transaction☐ Objective: Cash transaction of more than NAF 4,500,- ( fill out if desired $ … ., € … . ) or above☐ Objective: Reported something to the law enforcement☐ Subjective: Suspicious/fishy☐Other :

Amount of transaction/deal/saleDescription of goods/service

Type of client☐ Natural person☐ Company☐ UBO

Description of circumstances (describe the situation that led to the reporting of this unusual transaction)

PLE A S E N O TE : Enclose a copy of the identification papers of the client to this report.

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-----------------------------Sig-nature employeeDate:

FOR COMPLIANCE OFFICER FOR COMPLIANCE OFFICER FOR COMPLIANCE OFFICER

Date receipt internal reportDate internal report completeMissing details/documents (if applicable)

Signature compliance officerDate:

Subjective assessment compliance officer

Date start of Time

Date end of Time

AssessmentRed flags applicable:

Description of outcome assessment/steps taken:

Conclusion (the decision whether to report to the FIU or not)☐ Unusual Transaction Report (UTR) to FIU☐ No Unusual Transaction Report to FIU (in this case, the senior management also has to sign below)

Date UTR (if applicable) TimePLE A S E N O TE : Enclose the confirmation letter if reported!

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Signature compliance officer Signature senior managementDate: Date:

ENVIOS EXPRESS ( KYC FORM)

Date:_________________

Agent Number:_________________________________

Agent's Name:__________________________________

Sender Number:__________________________________:

Invoice Number:__________________________________

Amount (including commission):____________________

SENDER'S INFMATIONSender's Name:__________________________________Type ID:__________________

Sender's Address:_______________________________ ID Number:________________

Sender's City: ___________________________________Country Issue:______________

Sender's State:__________________________________ Exp Date ID:________________

Sender's Phone1:________________________________ D.O.B:_____________________ :

ADDITIONAL INFORMATION

NATIONALITY:_________________________

EMPLOYEER:__________________________

EMPLOYEER`S ADDRESS:_________________________________________________

EMPLOYEER`S PHONE:__________________

SENDER OCCUPATION:___________________

SOURCES OF FUNDS:______________________

REASON OF TRANSACTION:______________________

RELATIONSHIP TO RECEIVER:_____________________

RECEIVER`S INFORMATIO

RECEIVER`S NAME:__________________________

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legitimate

RECEIVER`S ADDRESS:______________________________________________

RECEIVER`S CITY & COUNTRY:____________________

RECEIVER`S NATIONALITY:_______________________

ADDITIONAL INFORMATION

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I certify that all the information provided in this form is true and accurate and the documentation attached is

Prepared by

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WELFARE ROAD 1-B, COLE BAY * ST. MAARTEN, DUTCH CARIBBEAN * TELEPHONE 721-522-5479