Uberstate has developed an anti-money laundering policy that meets legislative requirements and reflects managements’ principles on managing money laundering and terrorist financing risks.
1. The Proceeds of Crime (Money Laundering) and Terrorist Financing Deterrence Act(“PCMLTFA”)
In accordance with the prescribed legislative requirements, our Company has certain record keeping, identification and reporting requirements. Our Company has chosen to implement and maintain a compliance regime which includes:
The appointment of a Chief Compliance Officer ;
The development and application of compliance policies and procedures. Executing Know Your Customer (“KYC”) procedures on all customers; An assessment of our risks as it relates to money laundering and terrorist financing; Monitor transactions for potentially suspicious and attempted suspicious activities for purposes of filing Suspicious Transaction Reports (a “STR”); Maintaining and providing written, on-going compliance training for our employees; and A regular review of our compliance regime to test its effectiveness related to money laundering and terrorist financing every 2 years.
2. Appointment of a Chief Compliance Officer
Under the PCMLTFA requirements, Uberstate has a Chief Compliance officer (“CCO”), who is responsible for the implementation of our compliance regime. The CCO has the authority and the resources to ensure the on-going compliance of our organization as it relates to money laundering and terrorist financing identification and prevention.
3. Ongoing Monitoring of Business Relationships
Business relationships are defined as clients who conduct two or more financial transactions within a five year period in which the Company has to:
Ascertain the identity of the individual; or Confirm the existence of a corporation or other entity.
Uberstate considers all accounts/wallets to be business relationships and accordingly, follows the regulatory requirements of:
Risk rating all our business relationships;
Conducting ongoing monitoring of the business relationship at a frequency commensurate to our clients’ risk; and
Keeping a record of the measures that we have taken to monitor the relationship and the information we obtained as a result.
If necessary we may require our clients to provide additional documentation or information to confirm source of funds or the purpose of the transaction. We may also amend their risk rating if the need arises.
Uberstate’s compliance staff will review any transactions that trigger an alert and determine if the transactions are within the clients’ stated activity before being released or completed. In some cases, Uberstate will require additional information such as the client’s source of income, proof of employment, nature of the client’s business, as well as review of client transaction history.
4. Record Keeping
As a registered MSB with FINTRAC, we are required to keep certain types of records depending on the transaction type. We must keep a record of any suspicious transaction reports submitted to FINTRAC. There is no threshold (that is, no dollar amount) for a suspicious transaction. When we have to send a suspicious transaction report to FINTRAC, we must take reasonable measures, before the transaction is reported, to ascertain the identity of the individual who conducted or attempted to conduct the transaction.
5. KYC Processes
5.1 When and how do we have to identify clients?
In general, prior to Uberstate performing a transaction for a client, we must identify that client. Uberstate has a policy of requiring all customers to be “verified” prior to being able to undertake any form of transactions through our trading platform. Accounts are only made available to Canadian residents with Canadian bank accounts in order to mitigate against the risk of money laundering and terrorist financing activities.
Customer may be verified by way of:
5.2 Instant Verification (Single Process Method)
We ascertain the identity of a client by referring to a Canadian credit file that has been established with Equifax. To be verified, the credit file details must match the name, date of birth and address provided by an individual client. If any of the information does not match, the individual will need to use another method to ascertain client identity.
5.3 Manual Verification (Dual process method)
This method involves referring to information from reliable and independent sources which can be submitted by the individual in original paper form or in electronic form. As part of the account sign up process, our clients are asked to upload to our site the original electronic or paper documents they received or downloaded. All documents must appear to be valid and unaltered in order to be acceptable. If any information has been redacted, it is not acceptable.
5.4 How to Identity Corporations and Other Entities
For corporate clients, we are required to confirm the existence of the entity, and the entity’s beneficial ownership.
We confirm the existence of a corporation as well as the corporation’s name and address, by referring to the following documents:
Power to bind the corporation – Articles of incorporation (with Full names of all Directors and at least 3 Authorized Signatories (if any)
Proof of existence:
Certificate of Corporate Status (if incorporated within the previous 12 months);
Corporation Profile Report
A record that has to be filed annually under provincial securities legislation; corporation’s published annual report signed by an independent audit firm; or a letter or a notice of assessment from a municipal, provincial, territorial or federal government.
Proof of address (utility bill, bank statement or any government record) – if not in the first or second bullet above
Trade name registration, if applicable
Beneficiary ownership attestation (BOA) form and ID on the ultimate beneficiary. Also, names and addresses of the individuals who are the beneficial owners, for example directors or shareholders, i.e. any actual person who owns or controls, directly or indirectly, 25% or more of the corporation’s shares, if nobody controls – information confirming that there is no actual person.
Signed Corporate Resolution
Completed the Uberstate signup form (including the nature of business, source of funds and estimated monthly volume parts)
Entities other than corporations
We confirm the existence of an entity other than a corporation by referring to a partnership agreement, articles of association or any other similar record that confirms the entity’s existence.
In confirming an entity’s existence, we must be able to refer to a paper or electronic record and retain a copy of it. Verbal confirmation is not sufficient. Electronic records must be from a public source and we must record the type and source and corporation’s registration number.
If the entity is a not-for-profit organization, we also have to do the following:
Determine whether or not the entity is a registered charity for income tax purposes.
If that entity is not a registered charity, determine whether or not it solicits charitable financial donations from the public.
Beneficial Ownership Records
In addition to confirming the existence of a corporation or other entity, we also must determine and confirm the accuracy of the entity’s beneficial ownership through the following:
If the entity is a corporation:
The name and occupation of all directors of the corporation; and The name, address and occupation of all individuals who directly or indirectly own or control 25% or more of the shares of the corporation.
If the entity is other than a corporation:
The name, address and occupation of all individuals who directly or indirectly own or control 25% or more of the entity.
5.5 Keeping Client Identification Information Updated
We must keep our client information up to date. For clients that have a customer file with us, we will, at a minimum, update the client identification at least every two years. This is to be done by reviewing original identity documents and recording the identification details for our files as appropriate.
6. Record Maintenance
We are required to maintain an effective recordkeeping system to enable FINTRAC to have access to the records in a timely fashion. Our records have to be kept in such a way that they can be provided to FINTRAC within 30 days of a request to examine them.
7. Suspicious Transaction Reports
The Company must report any transactions or attempted transaction that we suspect relates to money laundering or terrorist activity financing regardless of the amount. There is no monetary threshold for submitting a Suspicious Transaction Report.
The CCO has the authority to file STRs with FINTRAC and is required to maintain a log of all reports filed.
Tax evasion is also considered a predicate offense for money laundering; accordingly, if we suspect transactions are being undertaken to avoid or evade paying income taxes we need to report the transactions as suspicious to FINTRAC.
8. Terrorist Property Reporting
Knowing that property is owned or controlled by or on behalf of a terrorist or terrorist group; and Believing that a property is owned or controlled by or on behalf of a listed person.
9. Ongoing Monitoring of Business Relationships
If in the course of reviewing and monitoring, we identify unexplainable, unusual activity, patterns or have any questions, we will work to obtain further information so that these questions are satisfactorily answered and/or we will report the activity internally to the CCO who is required to maintain a record/log of all internally reported and perform a review to determine if an STR is to be filed with FINTRAC. If we have not reached a clear understanding of the sources and movement of funds, it may result in the account being permanently closed. This will be followed by terminating the relationship with the de-marketed account owner and placing them on the de-market list without the right of re-opening a new account unless authorized by the senior management and the CCO.