Anti-Money Laundering (AML) and Compliance Policy

Anti-Money Laundering (AML) and Compliance Policy
Effective Date: 1 JULY 2024
Last Updated:  11th JULY 2024
 

1. Introduction

Digital Cap FX Ltd (“we,” “our,” “us”) is committed to maintaining the highest standards of anti-money laundering (AML) compliance in accordance with applicable Canadian laws, including the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA) and regulations set out by the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC). As a digital remittance service provider, we take a robust approach to detecting, preventing, and reporting money laundering activities, terrorist financing, and other financial crimes. Our AML and Compliance Policy sets out the principles and measures we follow to protect the integrity of our services and promote trust and transparency in our business operations.
 

2. Scope of the Policy

This policy applies to all employees, officers, directors, and agents of Digital Cap FX Ltd, as well as to our clients and customers. It governs the collection, management, and reporting of all transactions conducted through our digital remittance platform, in compliance with both federal and provincial regulations.
 

3. AML Framework and Objectives

The key objectives of our AML policy are to:

• Detect and report suspicious transactions that may involve money laundering or terrorist financing.
• Implement processes for the verification of customers’ identities (Know Your Customer, KYC).
• Comply with reporting obligations under Canadian AML laws and FINTRAC requirements.
• Safeguard our platform from being used as a conduit for illegal financial activities.
• Ensure all employees and third parties are trained and aware of their AML obligations.

4. Risk-Based Approach

At Digital Cap FX Ltd, we employ a Risk-Based Approach (RBA) to AML compliance. This means that we assess the level of AML risk presented by our customers, transactions, and geographies and apply appropriate levels of due diligence. Customers or transactions that present a higher risk of money laundering are subject to enhanced due diligence measures. Factors considered in our risk assessment include:

• The origin and destination of funds.
• The nature and volume of transactions.
• Geographical regions involved, especially jurisdictions with higher risk ratings.
• Customer profiles and behavior patterns.

5. Customer Due Diligence (CDD) and KYC

Customer Identification Program (CIP): We are required to verify the identity of our customers before initiating a remittance transaction. This is in line with KYC requirements mandated by Canadian law. To meet our CIP obligations, we may collect the following information from customers:

• Full legal name
• Address and contact information.
• Date of birth
• Government-issued identification numbers (e.g., passport, driver’s license)
• Proof of funds for higher-value transactions

Enhanced Due Diligence (EDD): For customers identified as posing a higher risk (due to transaction size, unusual activity, or other risk factors), we implement EDD measures, including collecting additional information and performing more rigorous identity verification. Ongoing Monitoring: We continuously monitor customer accounts and transactions to detect suspicious behavior, unusual patterns, or other indicators of potential money laundering or terrorist financing.

6. Record-Keeping

We maintain records of all transactions, customer identification documents, and communications related to our AML obligations. These records are kept for a minimum of five years, as required by Canadian law, and are securely stored to protect customer privacy. The following records are maintained:

• Customer identification information
• Copies of government-issued ID
• Transaction details (amount, date, currency, recipient, etc.)
• Suspicious transaction reports (STRs) filed with FINTRAC

7. Reporting Obligations

As a regulated entity, Digital Cap FX Ltd is required to report certain transactions to FINTRAC. These include:

• Suspicious Transaction Reports (STRs): Filed when we have reasonable grounds to suspect that a transaction is related to money laundering or terrorist financing.
• Large Cash Transaction Reports (LCTRs): Filed when we conduct or receive $10,000 or more in cash in a single transaction.
• Electronic Funds Transfer Reports (EFTRs): Filed for international electronic funds transfers of $10,000 or more in a single transaction.

Our Compliance Officer oversees the filing of all mandatory reports and ensures that we comply with applicable deadlines and reporting standards.

8. Training and Awareness

All employees of Digital Cap FX Ltd are required to undergo AML training upon joining the company and on a periodic basis thereafter. This training includes:

• Awareness of AML laws and regulatory obligations.
• Identification and escalation of suspicious activities.
• Proper handling of customer due diligence and record-keeping.
• Procedures for filing reports with FINTRAC.

Third-party service providers and agents who assist us in delivering our remittance services are also required to comply with our AML policies and undergo training when necessary.

9. AML Compliance Officer

We have appointed an AML Compliance Officer responsible for the implementation and oversight of our AML program. The Compliance Officer’s responsibilities include:

• Ensuring the company adheres to all applicable AML laws and regulations.
• Conducting internal audits to test the effectiveness of the AML program.
• Acting as the point of contact for FINTRAC and other regulatory authorities.
• Overseeing the filing of required reports and maintaining necessary records.

10. Methods and Technologies Employed

Digital Cap FX Ltd utilizes cutting-edge technology to support its AML efforts, including:

• Automated Transaction Monitoring Systems: These systems help us identify and flag unusual or suspicious transactions in real-time, ensuring prompt investigation and reporting when necessary.
• Identity Verification Software: We use robust KYC tools to verify customer identities quickly and accurately, ensuring compliance with AML regulations.
• Data Analytics: Our platform integrates real-time data analytics to identify trends and potential risks across different customer profiles and transaction types.

11. Regular Review and Updates

We regularly review and update our AML and Compliance Policy to reflect changes in the regulatory landscape, emerging risks, and best practices in the financial services industry. We are committed to continuously improving our AML program to stay ahead of evolving threats and maintain the highest standards of compliance.

12. Contact Information

For any questions or concerns about this AML and Compliance Policy or to report suspicious activity, please contact our AML Compliance Officer at: Digital Cap FX Ltd Address: Unit 64 Oakville, Ontario, L6M0L6 Canada. Email: compliance@digitalcapfx.com