INTRODUCTION
MAR INT DMCC Group and/or its affiliates (the “Company”) expects that all its employees will uphold the values, ethics and reputation of the Company when engaging with counterparties, business partners or any third party to the organization. In view of this, the Company is determined to maintain its reputation as a corporate entity, who will not tolerate fraud, bribery, corruption, or the abuse of position for personal gain, sanctions evasion, terrorism financing/money laundering or the financing of criminal activities. Furthermore, the Company prohibits its employees from engaging with any organization that engages in the afore-mentioned prohibited activities.
As such and to mitigate this risk, the Company has implemented a KYC procedure through which all counterparties must go through prior to being “on-boarded”.
I. DEFINITION OF TERMS & LEGISLATIONS
Corruption: The misuse of a public office or power for private gain or the misuse of private power in relation to business towards personal gains.
- Bribery: as defined under the UKBA, a bribe or corrupt act can be any “undue benefit” given to affect a person’s actions or decisions in order or to gain or retain an advantage. Anything of value includes cash, entertainment, political donation, charitable donations or any other gifts or courtesies that would constitute an undue benefit.
- Money Laundering: Generally, entails transferring money from illegal activities into legal activities and therefore “cleaning the money”.
- Terrorism Financing: Generally, entails using legitimate activities to Finance Terrorist activities.
- Sanctions, Trade Restrictions & Boycott: Are rules set out by international organizations and/or countries to advance this organizations or country’s geopolitical goals, such as but not limited to, the United Nations Security Council, the Office of Foreign Assets Control, the European Union, the Swiss SECO, the Arab League, etc.…
- UKBA: United Kingdom Bribery Act, which governs all forms of corruption (public/private) and applies to all United Kingdom citizens wherever located. Failing to uphold the UKBA could affect both the UK citizen who violates the UKBA as well as his/her employer.
https://www.legislation.gov.uk/ukpga/2010/23/contents - FCPA: Foreign Corrupt Practices Act governs the corruption of public officials by US Persons wherever located or any nationality who uses the United States Dollar. Failing to uphold the FCPA could affect both the violator of the FCPA as well as his/her employer.
https://www.justice.gov/criminal-fraud/foreign-corrupt-practices-act - United Nations Security Council: in charge of issuing sanctions on its own behalf and that of other UN Security Council members.
https://www.un.org/securitycouncil/sanctions/information - OFAC: is the Office of Foreign Assets Controls and is the office in charge of managing the United States sanctions regimes.
https://www.treasury.gov/about/organizational-structure/offices/Pages/Office-of-Foreign-Assets-Control.aspx - EU: the European Union oversees issuing sanctions on behalf of all EU members.
- https://data.europa.eu/euodp/en/data/dataset/consolidated-list-of-persons-groups-and-entities-subject-to-eufinancial-sanctions
- SECO: Secretariat for Economic Affairs is the office in charge of managing the Swiss sanctions regime.
https://www.seco.admin.ch/seco/en/home.html - FATF: Financial Action Task Force, a US body who sets guidance for financial institutions (which trading companies should emulate) in combatting money laundering and terrorism financing.
http://www.fatf-gafi.org/media/fatf/documents/reports/Risk-Based-Approach-Banking-Sector.pdf - Risk Based Approach: as defined under FATF, is an approach to due diligence which should focus on the specific risks associated with a transaction. In other words, when conducting KYC, trading companies should focus where risks are most likely to materialize.
- Ultra-High-Risk Countries: are countries that pose extreme compliance risk, primarily (but not limited to) because of exposure to sanctions. The Ultra-High-Risk countries when it comes to sanctions are (but not limited to): Iran, North Korea, Syria, Venezuela, Cuba, Myanmar (aka: Burma), Yemen, Afghanistan, North & South Sudan, Nicaragua, Russia/Ukraine, Belarus, Central African Republic, Democratic Republic of the Congo, Iraq, Somalia, Zimbabwe, Mali and Lebanon.
II. PURPOSE
This policy & procedure has the purpose of:
- Ensuring that the Company identifies who all its counterparties and its owners are.
- Ensuring that none of the counterparties to the Company are involved in Bribery & Corruption, Money Laundering, Terrorism Financing, Sanctions evasion or any other activity that would negatively impact the Company’s image.
- Ensuring that the risk appetite of the Company’s Shareholders is respected.
III. ROLES & RESPONSIBILITIES
Senior Management: to empower and to provide the resources necessary to allow the compliance department to perform checks on business partners.
Traders: to provide contact details to the compliance department in order to launch the KYC process and to act as a first line of defense for the organization. Each submitting trader is ultimately responsible for the suitability of his counterparties.
Compliance Department: to collect KYC documentation from prospective business partners, perform checks following a Risk Based Approach on new business partners in compliance with the Company’s KYC procedure and maintaining records of the checks. In addition, compliance has the responsibility to reject counterparties that pose an issue from a compliance perspective.
If disagreements arise between trading and compliance, the decision to proceed or not with the new counterparty will ultimately fall on senior management.
IV. SCOPE
Included: All Counterparties, Joint Ventures, or any other entity with whom MAR INT DMCC will engage.
Excluded: Vessels, Vessel Owners, Agents, Brokers of Physical Products, Derivative Brokers, Inspectors, Port Agents, Banks, Derivative Brokers, and MAR INT DMCC Group Companies.
V. THE PROCEDURE
Before entering into a new business relationship, an email request to perform KYC must be sent to: trade@mar-int.com
Phase I. Document Collection:
Upon receipt of this email, compliance will email the new business partner and request the following:
- Certificate of Incorporation or equivalent.
- Memorandum and Articles of Associations or equivalent.
- List of Ultimate Shareholders/Beneficiaries and ownership structure.
- Passport copies of all Ultimate Beneficial Owners.
- Full list of Management board of the Company with contact details (name, function, address, phone, fax, email, etc.);
- Bank references from a reputable First-Class Bank/Financial Institution acceptable to MAR INT DMCC Group;
- MAR INT DMCC KYC Form filled out.
- Any other documents which compliance deems necessary on a case-by-case basis.
Once all these documents have been received and reviewed, the compliance department will determine if what was provided was sufficient material for the KYC.
Phase II Background check:
The aim of this exercise is to know beyond any reasonable doubt and to ensure that:
- We know who the Ultimate Beneficial Owners and associated group of companies are.
- The reputation of the Company could not be negatively impacted by entering into a relationship with the new business partner, his Group of companies or his UBO(s).
- The Company does not engage with business partners that are prohibited by law, Sanctions and/or Boycotts.
The risks that are the focus of the KYC process are as follows:
- Bribery & Corruption
- Money Laundering & Terrorism Financing
- Financing/Enabling of Criminal Activities
- Sanctions & Trade Restrictions
The Compliance department will always keep in copy the kyc@MAR INT DMCC-int.com email address when discussing with traders and counterparties.
The tools that the compliance department will use to run checks on the new business partners are, but not limited to, Lexis Nexis, Open-Source Databases and Google Searches.
When necessary and requested by senior management, compliance may use the services of a third-party KYC provider to ensure that all risks are known and understood beyond any reasonable doubt.
The compliance department will apply a risk-based approach and can, at its sole discretion, waive certain requirements set out in this procedure (I.e., no passports required if listed company).
Once the new business partner has been approved by compliance, this new business partner will then be entered into the Company’s information systems.
VI. KYC RENEWAL
Each KYC performed by compliance will have a validity of up to 1 (one) year, following which the KYC will have to be renewed by compliance.
Compliance will monitor the expiring KYCs and start the renewal 1 (one) month prior to the KYC expiring.
VII. RECORD KEEPING
Compliance shall maintain a record of all KYCs performed and retain:
- All company documents are provided by the business partner.
- All results of searches performed on the partner.
- All communications relating to the KYC of the new business partner.
Conclusion:
Regardless of the origin of the company, its long standing, or the assets under its management, compliance is required to perform KYC on each new business partner to the Company.
Any disregard for this policy will be considered as a breach of company policy. Those in breach will bear the full responsibility of having engaged with a new business partner in this manner.