1. Anti-Money Laundering/Counter Financing of Terrorism (AML/CFT)
Group Compliance

2. Money Laundering Money laundering is defined as:
- Any act or attempted act to conceal or disguise the identity of illegally obtained proceeds with the aim of making those proceeds appear to have been generated legitimately.
- Process by which criminals make “dirty” money appear “clean”
JNBS, as a regulated entity, has a legal and moral obligation to ensure that our business is not used by money launderers to ‘wash’ illegal money; OR
To Finance Terrorist Activities

3. Money Laundering
Responsibility for overseeing compliance with the law resides with the Competent Authority (JNBS - Bank of Jamaica).
Investigation of money laundering is the responsibility of the “Designated Authority”: i.e. the Chief Technical Director of the Financial Investigation Division (FID). Threshold and Suspicious transaction reports are filed with the FID to facilitate such investigations.

4. REGULATOR’S MICROSCOPE
Competent authorities:
1.Bank of Jamaica (BOJ)
2.Financial Services Commission (FSC)
Designated Authority:
1. Financial Investigation Division (FID)

5. JNBS AND THE LAW
The “Nominated Officer” is the person responsible for making reports to the Designated Authority.
The Nominated Officer for JNBS is Ms. Tasha Manley
The Nominated Officer is also known as the Chief Compliance Officer for the purpose of the Proceeds of Crime Act.

6. Why is Preventing Money Laundering Important?
The objectives of the anti-money laundering legislation include:
preventing persons from profiting from criminal conduct and thereby making crime less attractive.
protecting financial institutions from inadvertent involvement in money laundering, which could damage the business.
encouraging foreign direct investment and economic growth through successful capital market development and better positioning Jamaica in the global financial marketplace

7. APPLICABLE LAWS AND REGULATIONS
The laws, regulations and guidance applicable to AML/CFT in Jamaica are as follows:
The Proceeds of Crime Act (POCA) 2007;
The Proceeds of Crime (Amendment) Act, 2013;
The Proceeds of Crime Regulations, 2007 (POCR);
The Proceeds of Crime (Money Laundering Prevention) Regulations, 2007 PC (MLP) R;
The Terrorism Prevention Act (TPA) 2005;
The Bank of Jamaica 2004 (Revised 2009) Guidance Notes on the Detection and Prevention of Money Laundering and Terrorist Financing Activities (“BOJ Guidance Notes”); and

8. Money Laundering – the three stages
PLACEMENT (“Immersion/Soaking”) - The physical disposal of cash proceeds derived from illegal activity into financial institutions. Eg. Lotto scamming where persons target older persons in developed countries.
LAYERING (“Soaping/Scrubbing”) - Separation of illicit funds from their source by creation of complex transactions which attempts to obscure the initial entry point.
Eg. The gains from this illegal activity are then lodged into the financial institution to different accounts or to one account in small tranches.
INTEGRATION (“Repatriation/Spin Dry”) - Re-injecting laundered proceeds into the legitimate economy so they re-enter the financial system as normal business funds (eg. The use of the proceeds of crime to purchase assets and to pay everyday living expenses). At this stage, the laundering process has succeeded and “dirty” money has been legitimized.

9. RESPONSIBILITIES OF THE SOCIETY & ITS EMPLOYEES
AML/CFT compliance is not just the responsibility of the Group Compliance function but rather, the responsibility of the Board of Directors, officers, senior management and staff at all levels, all of whom must be engaged in the ongoing measures implemented by the compliance function to detect and curtail money laundering and terrorist financing activities.

10. RESPONSIBILITIES OF THE SOCIETY & ITS EMPLOYEES
In general terms, all employees must adhere to the Society’s three (3)
Golden Rules for detecting and preventing money laundering and terrorist financing:
An employee MUST NOT assist anyone whom he/she knows or suspects to be laundering money that has been derived from any serious crime and MUST contact the Nominated Officer to determine whether it is appropriate to continue to serve those customers who are under suspicion.
An employee MUST report any transaction which he/she suspects might be related to drugs, terrorism or other serious crimes.
An employee MUST NOT reveal to anyone, except to the Nominated/Chief Compliance Officer or a designated compliance personnel, that a customer/employee is being investigated, or going to be investigated, or that they have been the subject of a suspicious transaction report “Tipping off”.

11. REPORTING REQUIREMENTS OF FINANCIAL INSTITUTIONS
Financial Institutions have a duty to report:
1. Threshold Transaction - cash transactions involving the prescribed amount:
Money transfer and remittance agent or agency, five thousand dollars ($5,000) or more;
Cambios, and bureaux de change, eight thousand dollars ($8,000) or more;
- Any other financial institution, fifteen thousand dollars ($15,000) or more,
In US currency or its equivalent in Jamaican or any other currency.

12. “Tipping Off” Offence The offence of tipping off addresses:
unauthorized disclosures that can either prejudice an investigation or
unauthorized disclosures made with the knowledge or belief that a money laundering investigation is about to take place or is taking place;

13. REPORTING REQUIREMENTS OF FINANCIAL INSTITUTIONS
2. Suspicious Transactions – requires knowledge or belief that another person has engaged in a transaction that could constitute or be related to money laundering. Pay attention to:
–all complex, unusual or large business transactions carried out by that customer with the business; and
–unusual patterns of transactions, whether completed or not, which appear to the person to be inconsistent with the normal transactions carried out by that customer with the business.

14. REPORTING REQUIREMENTS OF FINANCIAL INSTITUTIONS
When to Report to the Designated Authority (FID)
-Threshold Transaction should be filed quarterly
- Suspicious Transaction – Once a staff members makes a determination that a transaction is suspicious, this should be reported within 15 days

15. Your duty to report
If any staff member witnesses any evidence of activities related to money laundering, where the victim is JNBS, a subsidiary company, or a staff or customer of a JN Group company, they must report it immediately to the Compliance Department, either:
In person
By telephone
In writing By

16. KNOW YOUR CUSTOMER (KYC)
At a minimum KYC procedures should address:
Proper identification for customers and beneficiaries
The nature and purpose of the customer’s business
Source of funds
Continuous transaction monitoring
Adequate record retention (seven year minimum applies)
KYC review of existing records (update customer information every five years)

17. KNOW YOUR CUSTOMER
Where the applicant is a company:- - the reporting entity shall carry out reasonable due diligence procedures concerning the identification of the body corporate and transaction verification.

18. POLITICALLY EXPOSED PERSONS (PEPs)
PEP DEFINED
“Politically exposed persons means persons who are or have been entrusted with prominent public functions and immediate family members, or persons known to be close associates, of such persons.”

19. Examples of PEPs –Heads of government and ministers
–Members of parliament
–Members of the supreme court and of other constitutional courts
–Members of the Boards of central banks
–Ambassadors and high ranking officers in the armed forces
–Members of the administrative, management or supervisory bodies of state-owned enterprises
Immediate family members of the above:
-The spouse
-Any partner considered by national law as equivalent to the spouse
-The children and their spouses or partners
-The parents

20. KNOW YOUR EMPLOYEE (KYE)
What is “KYE” for money laundering purposes?
The process of making reasonable efforts to screen potential employees and appropriate monitoring of current employees to determine if they pose a risk for money laundering or fraud involving the institution.
Varying degree of scrutiny depending on the institution and the nature of the job

21. KNOW YOUR EMPLOYEE (KYE)
Pre-Employment Screening
Obtain police report
Conduct “fit and proper” test (To be “fit and proper” the person should not be convicted of an offence involving dishonesty or be an undischarged bankrupt)
Verify the identity of staff members
Conduct background checks
Verify the completeness and veracity of the information and references provided
Identify and obtain explanation for periods of unemployment
Establish the financial history of the employee

22. KNOW YOUR EMPLOYEE (KYE)
KYE “Red Flags”
Staying late and not taking vacations
Absenteeism and lateness
Continuous stress
Lavish lifestyle
Sudden change in lifestyle
Association with criminals or disreputable places
Increases in cash deposits to staff members accounts
Frequent exchange of cash into other currencies

23. Training
The Act and Money Laundering Prevention Regulations under POCA requires that systems be implemented to ensure that all members of staff are properly and regularly trained in the recognition and handling of transactions carried out by, or on behalf of, any person who is, or appears to be, engaged in money laundering.

24. Willful Blindness
“Willful blindness” is the deliberate act of a person who intentionally fails to be informed about matters that would make someone criminally liable. Willful blindness is not accepted as a defense and where it can be proven that there was willful blindness on the part of that person, the individual is liable for prosecution. This could include individual criminal penalties and disciplinary action.

25. POCA AMENDMENTS Amendments made to POCA in 2013:
- Limit of $1 million on cash transactions This means that cash transactions of over $1 million cannot be undertaken by anyone other than a “permitted person,” such as a bank or licensed financial institution.
- Requirement for regulated entities to establish a risk profile regarding its business relationships and one-off transactions, with a view to determine those customers which are high risk.

26. Offences under POCA OFFENCES PENALTIES Individual Staff The Society
Engaging in or facilitating transactions that involve criminal property (‘criminal property’ is a direct or indirect benefit derived from criminal conduct)
Resident Magistrate Court: Maximum fine of $3 Million and maximum imprisonment of 5 years.
Circuit Court: fine and/or maximum of 20 years imprisonment
Resident Magistrate Court: Maximum fine of $5 Million
Circuit Court: Fine
Concealing, disguising or disposing of or bringing criminal property into or out of Jamaica or facilitation the aforementioned acts
Failure by the Nominated Officer or any other person to make requisite disclosure within the stipulated time frame to the relevant authorities knowledge or suspicion that property is the proceeds criminal of activities.
Resident Magistrate Court: Maximum fine of $1 Million and/or maximum imprisonment of 12 months.
Circuit Court: Fine and/or maximum imprisonment of 10 years
Tipping-off (i.e. disclosing to a person, information that is likely to prejudice anti-money laundering investigations)
Resident Magistrate Court: Maximum fine of $1 Million and/or 12 months in prison
Circuit Court: Fine and/or 10 years imprisonment

27. GUIDANCE - DO’S & DON’TS
Consult AML/KYC Policy Manuals
Do not be willfully blind
Be vigilant
Do not “tip -off “ customers
Ask appropriate questions
Dont’s
Do not sacrifice your reputation or integrity
Consult your Chief Compliance Officer when in doubt
Do not discuss the filing of an STR with anyone
Know your colleagues

28. Question/Comments
If you have any questions, please contact the compliance unit at ext or 2102.