AMBER MARKETS LIMITED AML PROCEDURES MANUAL

PROCEDURES FOR COMPLIANCE WITH ANTI-MONEY LAUNDERING (‘AML’), COUNTER-TERRORIST FINANCING AND SANCTIONS

1. INTRODUCTION

1.1. Introduction

Money laundering is the process by which criminals attempt to hide or disguise the true origin and ownership of the proceeds of their criminal activities, thereby avoiding prosecution, conviction and confiscation of criminal funds. If carried out successfully, money laundering enables criminals to escape prosecution, maintain control over the proceeds of crime and continue their criminal activities. Money laundering also includes terrorist financing and financing of unlawful organisations.

Involvement in money laundering, whether knowingly or unknowingly, may result in criminal liability and severe reputational damage to the Firm and its Employees.

Amber Markets Limited, therefore, places the utmost importance on complying with all applicable laws and regulations to prevent money laundering and will use the policies and procedures set out in this Manual to prevent its business from being used for criminal activities.

1.2. About this manual

This Anti-Money Laundering Procedures Manual (“Manual”) applies to all Employees, which term, for the purposes of this Manual, includes the Board of Directors, all operational staff, any Employee with Customer contact, and any other Employee who might otherwise encounter money laundering in the business.

This Manual has been prepared to provide Employees with a good understanding of what they and the Firm must or must not do to comply with the laws and regulations for the prevention of money laundering and terrorism financing and how to recognise and report that such activity may be taking place.

Employees should consult with the Money Laundering Reporting Officer (“MLRO”) or the Deputy MLRO in any case of doubt.

Capitalised terms are defined in the Glossary set out in Appendix A of this Manual. Any reference to “money laundering” in the lowercase includes a reference to terrorist financing and the financing of unlawful organisations unless the context indicates otherwise.

This Manual is for internal use only and must not be distributed outside the Firm without the prior approval of the MLRO. It must be read in conjunction with the use of the Client Verification Procedures (together, the Firm’s “policy”).

The Firm’s policy shall be reviewed at least annually, taking into account legislative changes, policy implementation, and how such implementation may be improved. Any amendments will be approved by the Board prior to taking effect.

1.3. Applicable laws and regulations

The main laws and regulations applicable in Mauritius to Amber Markets Limited and its Employees are:

Financial Intelligence and Anti-Money Laundering Act 2002
The Anti-Money Laundering and Combatting the Financing of Terrorism and Proliferation (Miscellaneous Provisions) Act 2019
The Anti-Money Laundering and Combatting the Financing of Terrorism and Proliferation (Miscellaneous Provisions) Act 2020
Anti-Money Laundering (‘AML’) Module of the Financial Services Commission – Mauritius (‘FSC’) Rulebook
Resolutions and sanctions issued by the UN Security Council and other bodies
Recommendations of the Financial Action Task Force (“FATF”)
The Mauritius as “all-crimes” money laundering. Anti-Money Laundering and Combatting the Financing of Terrorism and Proliferation (Miscellaneous Provisions) Act 2020 defines money laundering as any act involving the transfer, conversion, deposit, saving, investing, exchanging or managing of any proceeds, with the intent to conceal or disguise their illicit origin, or the concealment or disguise of the true nature, origin, location or otherwise of any proceeds or the ownership thereof, or the acquisition, possession or use of proceeds derived from any offence or misdemeanor.

The FSC specifically requires Amber Markets Limited to establish and maintain appropriate policies, procedures, systems and controls to enable it to detect and deter the laundering of the proceeds of tax crimes related to both direct and indirect taxes and to comply with international obligations for the exchange of information for tax purposes.

1.4. Penalties for non-compliance

Amber Markets Limited may be criminally liable for the offence of money laundering if it intentionally commits specified acts in relation to funds it knows are the proceeds of crime, and the Firm, its Board of Directors and Employees may face FSC enforcement action in respect of any breach of any Rule in the AML Module. The FSC may impose administrative penalties for breaches of Federal AML legislation. A failure to comply with Federal AML legislation may also evidence a failure to comply with the FSC Regulatory Law, resulting in disciplinary and remedial action as set out in that Law and FSC Rules. Employees are specifically advised that:

Failure to report suspicions of money laundering;
“Tipping off”; and
Assisting in the commission of money laundering.

May each constitute a criminal offence that is punishable under the laws of Mauritius.

1.5. Summary obligations

In particular, Employees must:

Remain vigilant at all times to the possibility that the Firm may be used to launder money;
Report to the MLRO without delay if they know, suspect or have reasonable grounds for knowing or suspecting that a person may be engaged in money laundering; and
Must not alert that person to their suspicion or the fact that they have made a report.

Failure to do so may lead to the Firm taking disciplinary action, up to and including summary dismissal, against the Employee concerned.

Employees must sign and return to the MLRO within 7 days of joining the Firm a Money Laundering Undertaking (Form ED2) confirming that they will comply with the requirements set out in this Manual.

1.6. Fraud

Many of the circumstances outlined in this Anti Money Laundering Procedures Manual may also indicate that a person is engaged in fraud. Suspicions of fraud must immediately be reported to the MLRO, who will ensure the matter is properly investigated and, if necessary, reported to the criminal authorities.

2. KEY ELEMENTS OF THE FIRM’S AML PROGRAMME

The key elements of Amber Markets Limited’s policies, procedures, systems and controls for the prevention of money laundering include the following:

2.1. Risk-based approach

Identifying the money laundering risks facing the Firm and those presented by each Customer and taking a considered, risk-based approach to eliminating or managing them.

Undertaking the appropriate amount of Customer due diligence on its customers having regard to the risks that have been identified in each case rather than taking a routine, tick-the-box approach.

Ensure that higher-risk business relationships, including relationships involving politically exposed persons, their associates, or close family members, are accepted only with the SEO’s explicit approval.

Approval and understanding of the potential higher risks involved.

2.2. Staff awareness and training

Ensuring staff are aware of the money laundering risks facing the Firm, their obligations and liabilities under applicable laws and regulations, the Firm’s procedures for undertaking Customer due diligence and how to recognise and report suspicious activity.

2.3. Customer due diligence

Not only verifying the identity of Amber Markets Limited’s Customers (and their Beneficial Owners, where relevant) but also understanding their source of funds and wealth.

Taking account of government, regulatory and international findings concerning blacklisted countries and persons and checking that Amber Markets Limited’s Customers are not subject to them.

2.4. Prohibited business

Not carrying on business with persons (e.g. a body corporate or un incorporate, trust, foundation, partnership, association, state, government, etc.) whose ultimate Beneficial Owners cannot be identified (e.g. ownership or control through bearer shares) or any other arrangement that prevents the Firm from identifying a significant beneficial owner (e.g. Nominees acting on behalf of persons whose identity has not been disclosed to the Firm). Not allowing a business relationship to commence unless the Customer’s due diligence has been completed.

Not establish or maintain an anonymous account, an account in a fictitious name or a nominee account which is held in the name of one person but which is controlled by or held for the benefit of another person whose identity has not been disclosed to the Firm.

2.5. Reliance on others

Relying on other persons to conduct Customer due diligence on the Firm’s behalf only if Amber Markets Limited is satisfied that they are properly regulated and will undertake the work to the same standard as would the Firm if Amber Markets Limited were undertaking the due diligence itself.

2.6. On-going due diligence and Customer activity monitoring

Keeping Amber Markets Limited’s information about its Customers up to date and verifying any significant changes. Monitoring the Customer’s activities and Transactions throughout the life of the relationship for signs of suspicious behaviour that may require closer scrutiny.

3. MANAGEMENT ARRANGEMENTS & RESPONSIBILITIES

3.1. Senior Management

Responsibility for Amber Markets Limited’s compliance with the policies, procedures, systems and controls set out in this Manual rests with each and every member of its Board of Directors.

Amber Markets Limited’s Board of Directors understand FSC’s expectation that they will establish a robust and effective AML/CTF and sanctions compliance culture for the business and acknowledge that they must exercise due skill, care and diligence in carrying out their responsibilities, noting that the FSC may take enforcement action against them (and against any Amber Markets Limited’s Employee) in respect of any breach of the AML Rules.

Specifically, the Board of Directors are responsible for:

Establishing and maintaining effective policies, procedures, systems and controls to prevent opportunities for money laundering in relation to the Firm and its activities;
Ensuring that Amber Markets Limited’s AML systems and controls:
include the provision to the Board of Directors of regular management information on the operation and effectiveness of its AML systems and controls necessary to identify, measure, manage and control Amber Markets Limited’s money laundering risks;
Enable it to determine whether a customer or a Beneficial Owner is a Politically Exposed Person;
Enable Amber Markets Limited to comply with all applicable laws and regulations; and
Ensuring that regular risk assessments are carried out on the adequacy of Amber Markets Limited’s AML systems and controls to ensure that they continue to enable it to identify, assess, monitor and manage money laundering risk adequately and are comprehensive and proportionate to the nature, scale and complexity of its activities.

3.2. MLRO and Deputy MLRO

Amber Markets Limited has appointed a Money Laundering Reporting Officer (“MLRO”) and a Deputy MLRO responsible for implementing and overseeing the Firm’s compliance with the Rules in the AML Module.

The MLRO and Deputy MLRO are required to deal with the FSC & FIU in an open and cooperative manner and must disclose appropriately any information of which the FSC would reasonably expect to be notified.

The MLRO and Deputy MLRO have direct access to the Board of Directors and timely and unrestricted access to all information necessary to enable them to carry out their duties.

The MLRO and Deputy MLRO have sufficient seniority and independence within the Firm to act on their own authority and to perform their duties in an effective, objective and independent manner and are fully authorised by the Board of Directors to do so.

All Employees are required to cooperate fully with the MLRO and the Deputy MLRO in the performance of their duties.

3.3. Responsibilities of the MLRO

The MLRO is responsible for the implementation and oversight of the following matters:

The day-to-day operations for compliance by the Firm with its AML policies, procedures, systems and controls;
Acting as the point of contact to receive internal Suspicious Activity Report (“SAR”) from Employees;
Following receipt of a SAR from an Employee, taking appropriate action to:
1. Investigate and document the circumstances in which such a report was made;
2. Determine and document whether, in accordance with Mauritius AML legislation SAR must be made
  to the financial intelligence unit – Mauritius
If required, making, in accordance with Federal AML legislation, a SAR to the Financial Intelligence Unit – Mauritius (‘’FIU’’) as soon as practicable and notifying the FSC immediately following its submission to the FIU that such report has been made;
Acting as the point of contact within the Firm for competent Mauritius authorities and the FSC regarding
money laundering issues;
Responding promptly to any request for information made by competent Mauritius authorities or the FSC;
receiving and acting upon any relevant findings, recommendations, guidance, directives, resolutions,
sanctions, notices or other conclusions issued by:
1. The Mauritius government, or any government department in Mauritius
2. Financial Intelligence Unit – Mauritius
3. The Financial Action Task Force,
4. Mauritius enforcement agencies,
5. The Financial Services Commission – Mauritius or
6. The United Nations Security Council concerning (a) arrangements for preventing money laundering, terrorist financing or the financing of weapons of mass destruction in a particular country or jurisdiction, including any assessment of material deficiency against relevant countries in adopting international standards or (b) the names of persons, groups, organisations or entities or any other body where suspicion of money laundering or terrorist financing or financing of weapons of mass destruction exists;
Establishing and maintaining an appropriate money laundering training programme and adequate awareness arrangements, as set out in Section 7 of this Manual.
The Firm and the MLRO will co-operate openly in all their dealings with the FSC and will disclose
appropriately any information of which the FSC would reasonably be expected to be notified and ensure
that all communications with the FSC are conducted in English.

The MLRO, with the prior approval of the Board, may delegate responsibilities, such as approval of low-risk clients, to the Compliance Department of Amber Markets Limited.

Audit The Firm will commission regular reviews and assessments of the effectiveness of its money laundering policies, procedures, systems and controls, and its compliance with them, and will specifically cover the following:

Sample testing of compliance with the Firm’s CDD arrangements;
An analysis of all notifications made to the MLRO to highlight any area where procedures or training may need to be enhanced; and
A review the nature and frequency of the dialogue between the Board of Directors and the MLRO.

Such reviews will be carried out by the Group’s Compliance Department at least annually.

3.4. Annual AML return

The Firm will complete the Annual AML Return form on an annual basis for the period 1 August to 31 July and submit it to the FSC by the end of September each year.

The Annual AML Return requires Amber Markets Limited to provide FSC with:

Its documentation as to:

Its latest business risk assessment;
The Firm’s AML Policies and Procedures;
Its Customer risk assessment template; and
the most recent AML audit report and details of any action taken.

An explanation of its policies and procedures for:

Ensuring that the Board of Directors exercise due, skill and care in carrying out their responsibilities under the AML module (examples should be provided);
Undertaking Customer risk assessments and assigning risk ratings;
Identifying Customers and Beneficial Owners who are PEPs;
Conducting Simplified EDD and Enhanced CDD;
Making use of UN resolutions or sanctions and government, regulatory and international findings including the checks carried out and their frequency;
Undertaking on-going monitoring of its Customers and Transactions;
Providing and delivering AML training to all relevant employees and ensuring its effectiveness; and
Monitoring and detecting suspicious activity

Information as to whether:

It has been unable to conduct or complete CDD within 30 days for any new Customer and to explain what steps were or are being taken to close the matter;
It has been unable to conduct or complete CDD for any new or existing Customer during the relevant period and the resulting action it has taken;
It relies on third parties to conduct CDD on its behalf or outsources one or more elements of its CDD obligations;

Numerical data as to:

The total number of customers as at the date of the return;
The number of customers in each risk rating;
The number of customers that have been identified as PEPs;
the number of relevant Employees that have received AML training during the year analysed between the Board of Directors, staff, etc., and the number of relevant Employees that have not received such training; and
The number of Suspicious Activity Reports that have been reported internally by staff to the MLRO and externally by the MLRO to the FIU.

The date:

Of Amber Markets Limited’s most recent business risk assessment;
That the Firm last reviewed the adequacy of the CDD information it holds on its Customers and Beneficial Owners and the details of any material findings of the review; and
Of the last internal audit of the Firm’s AML policies, procedures, systems and controls and Amber Markets Limited’s compliance with its obligations under the AML Module.

The Annual AML Return also requests details of the names of the Board of Directors, the MLRO and Deputy MLRO, whether the role is outsourced, and a description of the MLRO’s role within the Firm (including any other roles he may perform within the Firm) and the arrangements in place when the MLRO is absent.

The contents of the Annual AML Return must be acknowledged by every member of the Board of Directors prior to its submission to the FSC, each of whom must sign a declaration that, to the best of their knowledge and belief, having made due enquiry, that the information given is complete and correct.

A copy of the annual AML Return (or a report in another form specified by the FSC & FIU) will be provided to the AMLSCU, who, under Cabinet Resolution 38 of 2014, require biannual reports.

Notifications to FSC

The Firm will inform the FSC in writing as soon as possible if, in relation to its activities carried on in or from the FSC it:

Receives a request for information from a regulator or agency responsible for AML or counter-terrorism financing regarding enquiries into potential money laundering or terrorist financing;
Becomes aware, or has reasonable grounds to believe, that a money laundering event has occurred or mayhave occurred in or through its business;
Becomes aware of any money laundering or sanctions matter in relation to the Firm or a member of its Group which could result in adverse reputational consequences to the Firm; or
Becomes aware of any significant breach of a Rule in the AML module or breach of Mauritius AML legislation by the Firm or any of its Employees.

4. THE RISK-BASED APPROACH

4.1. Overview

Amber Markets Limited adopts an AML approach that is proportionate to the risks it is exposed to as a result of reviewing the nature of its business, Customers, products, services and any other matters which are relevant in the context of money laundering and ensures such risk-based assessments are:

objective and proportionate to the risks;
based on reasonable grounds;
properly documented; and
reviewed and updated at appropriate intervals

The Firm’s “risk-based approach”, involves:

Business risk assessments: periodic assessments of Amber Markets Limited’s business, which enable the Board of Directors to understand the money laundering risks facing the Firm, assess Amber Markets Limited’s vulnerabilities to those risks and take all reasonable steps to eliminate or manage them;
Customer risk assessments: assessments of the money laundering risks presented by each Customer of the Firm; and
Risk mitigation by means of Customer due diligence and ongoing monitoring that is proportionate to the risks that have been assessed.

The Firm will not do business with a client or business partner who is identified by reference to findings, recommendations, resolutions, sanctions etc. of, inter alia, the UN, any Mauritius enforcement agency as a proscribed person.

The Firm will not do business where the client’s ownership structure or control arrangements prevent it from identifying any significant beneficial owner.

Employees are referred to the Client Verification Procedures for detailed descriptions and information on higher-risk and prohibited client arrangements.

4.2. Business risk assessment

Amber Markets Limited will, at least annually, identify and assess any money laundering risks to which its business is exposed, taking into consideration the nature, size and complexity of its activities and, to the extent relevant, any vulnerabilities relating to:

Its type of Customers and their activities;
The countries or geographic areas in which it does business;
Its products, services and activity profiles;
Its distribution channels and business partners;
The complexity and volume of its Transactions;
The development of new products and new business practices, including new delivery mechanisms,
channels and partners; and
The use of new or developing technologies for both new and pre-existing products.

Amber Markets Limited will ensure that any risk identified in the business risk assessment is taken into account
in its day-to-day operations, including in relation to:

The development of new products;
the taking on of new customers; and
changes to its business profile.

Amber Markets Limited will use the information obtained in its periodic business risk assessments to develop
and maintain its AML policies, procedures, systems and controls, ensure that they adequately mitigate the risks
that have been identified, assess their effectiveness, and assist in the allocation and prioritisation of AML
resources and in carrying out its customer risk assessments.

4.3. Customer risk assessment

Before undertaking CDD on a new Customer, Amber Markets Limited will undertake a Customer risk assessment and assign the Customer a risk rating proportionate to the Customer’s money laundering risks.

When undertaking a customer risk assessment, the Firm will:

Identify the Customer and any Beneficial Owner.
Obtain information on the purpose and intended nature of the business relationship.

Take into consideration:

The nature of the Customer, its ownership and control structure, and its Beneficial Ownership, if any, i.e. its legal structure, business or occupation, location of the Customer’s business and commercial rationale for its business model and the potential of the Customer to be involved in tax crimes.
The nature of the Customer’s business relationship with the Firm, i.e. how the Customer is introduced to the Firm.
The Customer’s country of origin, residence, nationality, place of incorporation or place of business; The relevant product, service or Transaction; and take into consideration the outcomes of the business risk assessment. Amber Markets Limited will assign the Customer a risk rating of “high”, “medium”, or “low”. Note that Customers having similar characteristics may be assigned different risk ratings having regard to the product concerned and any other relevant factors relevant to the Customer risk assessment.
The customer risk assessment will be fully documented, reviewed, and approved by the MLRO and filed in the customer file. All “high” risk business relationships and any business relationship involving PEP must be approved by the SEO.
The Firm will periodically review each Customer’s risk rating to ensure that it remains up to date in light of current AML risks.

4.4. Politically exposed persons

Politically exposed persons (“PEPs”), members of their immediate families and close associates and others having a high-profile or position of influence can pose a higher money laundering risk as their position may make them vulnerable to corruption.

The FSC considers that:

Whilst “PEP” status does not of itself incriminate the individual concerned or any entity with which it is associated, the FSC considers that it puts the Customer, or the Beneficial Owner, into a higher risk category.
Generally, a foreign PEP presents a higher risk of money laundering because there is a greater risk that such person, if he were committing money laundering, would attempt to place his money offshore where the Customer is less likely to be recognised as a PEP and where it would be more difficult for law enforcement agencies in his home jurisdiction to confiscate or freeze his criminal property.
After leaving office, a PEP may remain at a higher risk for money laundering if such person continues to exert political influence or otherwise poses a risk of corruption.
PEPs will be identified by the Firm via GB Group If a PEP is identified, the MLRO will advise on how to proceed. If the PEP is a beneficial owner, it may be necessary to take further steps to establish the person’s source of wealth and source of funds and to monitor the person’s conduct during the business relationship.
The MLRO will maintain a PEP Register in which to record all PEPs that have been identified within
the Firm’s client base and their connection with the client concerned.

PEP’s will be monitored at least annually by the MLRO for evidence of adverse media comments. Any significant
issues arising will be reported to the SEO with a recommendation as to what action should be taken.

5. CUSTOMER DUE DILIGENCE

5.1. Customer due diligence

Customer due diligence (“CDD”) is the process of:

On a risk assessed basis, verifying the identity of the Customer and any Beneficial Owner on the basis of original documents, or data or information issued by or obtained from a reliable and independent source;
Understanding the Customer’s Source of Funds1 and Source of Wealth2, e.g., by reference to published accounts or application form; and
Undertaking ongoing due diligence of the customer’s business relationship.

For the purposes of this manual, the term “Customer” includes any of the following:

A client for the Firm’s products or services; and
Business partners that assist in delivering services, such as introducers, lawyers, accountants and other regulated financial institutions involved in the transaction.

It is important to identify a customer, understand the customer’s ownership and control structure and to assess the probity of all parties involved, including the directors, shareholders and any other persons with significant involvement in the business or transaction in question. Equally, it is important to establish the purpose and nature of the customer’s intended business relationship with the Firm, the nature and source of the funds or other assets involved, and whether the business or transaction in question is consistent with the Firm’s understanding of the nature and scale of the customer’s business, objectives and strategy.

The level of CDD to be undertaken, both initially and for the duration of the business relationship, must be determined by reference to the Customer’s risk rating assigned under the Customer risk assessment. If the Customer Risk Assessment indicates that Normal CDD will not be sufficient in relation to the higher money laundering risk perceived to be associated with the business relationship in question, the Firm should obtain and verify additional information about the customer, its beneficial owners and the purpose of the transaction. The additional measures are referred to as Enhanced CDD.

The Firm’s due diligence procedures for establishing and verifying the identity of the Customer and Beneficial Owners are set out in the Client Verification Procedures.

Understanding the customer’s “source of funds” means understanding where the customer will find the money to finance the business or transaction in question.

Understanding the customer’s “source of wealth” means understanding how the customer’s global wealth or net worth was acquired or accumulated.

5.2. Identification and Verification of Beneficial Owners

When determining whether to verify the identity of a Beneficial Owner, Amber Markets Limited will take a riskbased approach with regard to all the circumstances of the case, including, in particular, the Customer’s ownership and control structure, the size of the individual’s legal or Beneficial Ownership in the customer, whether the Beneficial Owners are associated or connected in some way, and the money laundering risks of the Customer and the product or service involved.

If Amber Markets Limited decides not to verify a particular Beneficial Owner or to adopt a threshold below which the verification of Beneficial Owners will not be carried out, it will document the reasons for its decision in the Customer risk assessment.

A threshold for verification may be appropriate in cases where the Customer-specific risks are lower, e.g.:

A low-risk corporate Customer undertaking business involving lower-risk products or services; or
A widely held collective investment fund whose members’ funds derive from low-risk sources, e.g. employee pension contributions.

Conversely, in the case of a fund with a small number of investors, each with a large shareholding or other interest, identification and verification of each Beneficial Owners would be appropriate unless significant mitigates are identified (and documented in) the Customer risk assessment.

In respect of actual and potential Beneficial Owners of a trust, the identification and verification should include the trustee, settlor, protector, enforcer, beneficiaries, other persons with power to appoint or remove a trustee and any person entitled to receive a distribution, whether or not such person is a named beneficiary.

Under Federal AML legislation, if the customer is a legal person, Amber Markets Limited must obtain information identifying the names and addresses of partners and shareholders who each hold more than 5% of the capital of the legal person, i.e. it applies a specified threshold.

This does not affect the approach that should be taken to verify the identity of beneficial owners where no threshold is specified. As a result, under the Federal AML legislation, Amber Markets Limited will need to obtain information identifying partners and shareholders who hold more than 5% of the capital of the legal person. Then, in accordance with the risk-based approach, Amber Markets Limited should also determine whether it is necessary to identify other people who may be beneficial owners and verify their identity.

5.3. Name Screening and Google searches

When undertaking due diligence, the Firm will carry out screening checks via ID3 checks, C6 ongoing screening tool and Google searches to establish whether the proposed relationship with the client will involve politically exposed persons (PEPs) or other higher-risk persons such as individuals, groups, organisations, entities, etc., where suspicion of money laundering or terrorist financing exists, and persons under sanctions or resolutions issued by the UN Security Council and/or by other bodies.

These background checks must be carried out on the client entity, its directors, and any relevant authorised signatories and on its ultimate beneficial owners. In the case of a private company, for example, screening checks and Google searches will be carried out on the company, its directors, any person who will sign the Engagement Letter, and any shareholder who has significant influence over the company.

The names of all persons checked and the results obtained must be recorded on the CDD Checklist.

If the screening and Google searches reveal adverse media comments or identify PEPs, sanctioned persons or other issues giving cause for concern, the MLRO will advise the SEO on how (and whether) to proceed and what further CDD should be obtained.

In particular, the MLRO will notify FSC immediately on the Firm becoming aware that it is providing, is about to provide, or has provided a service to any person in contravention of a relevant sanction or resolution issued by the United Nations Security Council.

5.4. Authenticity of documents obtained

All verification must be based on original documents or certified copies thereof or data or information issued by or obtained from reliable, independent sources. All documents should be checked for reasonableness. The Firm must not be blind to the possibility of forgery, fraud and identity theft as well as simple human error. Ideally, documents should be inspected in their original form and photocopied by any Amber Markets Limited employee who has physical possession of the document concerned.

Where this is not possible, for example, because the Firm has no physical contact with the person concerned, then the Firm should obtain a first-generation photocopy certified as a true copy of the original document by a person of good standing,such as a registered lawyer or notary, a chartered accountant, a police officer, embassy or consular official, or other similar person.

The certified photocopy must:

bear language attesting that the photocopy is a true copy of the original document;
show the date on which the photocopy was made and certified; and
Show the name, occupation and business address of the person who certified the photocopy.

Note that the requirement for a “first generation” photocopy means that copies of photocopies are not acceptable.

Other acceptable sources of CDD are (a) publicly available information downloaded from government and regulator’s official websites, (b) reputable companies or information-reporting agencies, (c) banking references, and (d) on a risk-sensitive basis, information found on the internet or commercial databases.

For higher-risk situations, identification information should be independently verified using both public and non-public sources. For lower-risk situations, not all of the relevant identification information would need to be verified.

5.5. Enhanced CDD

If the Customer has been assigned a “high” risk rating following the Customer risk assessment, the Firm must undertake Enhanced CDD.

Enhanced CDD involves, to the extent necessary, as determined on a case-by-case basis:

Obtaining and verifying additional Identification information on the Customer and any Beneficial Owner;
Information on the intended nature of the business relationship;
Information on the reasons for a Transaction;
Updating more regularly the CDD that Amber Markets Limited holds on the Customer and any Beneficial Owners;
Verifying information on the Customer’s Source of Funds and Source of Wealth;
Increasing the degree and nature of monitoring of the business relationship in order to determine whether the Customer’s Transactions or activities appear unusual or suspicious; and
Obtaining a member of the Board of Directors’ approval to commence a business relationship with the Customer.

Where applicable, and if the Firm is not satisfied with the results of the due diligence overall, requiring that any first payment made by a Customer in order to open an account must be made through a bank account in the Customer’s name with a Bank; Regulated Financial Institution whose entire operations are subject to regulation and supervision, including AML regulation and supervision, in a jurisdiction with AML regulations which are equivalent to the standards set out in the FATF recommendations; or a Subsidiary of a Regulated Financial Institution referred to above if the law that applies to the Parent ensures that the Subsidiary also observes the
same AML standards as its Parent.

Where appropriate, the Enhanced CDD measures may include:

Obtaining documentary evidence as to the source or circumstances that gave rise to the Customer’s funds and wealth.
Getting a better understanding of the Customer’s business and business structures, the Customer’s use of the Firm’s products and services and the nature and level of business to be expected from the Customer.
Taking steps to be satisfied that a customer’s use of complex legal structures and/or the use of trust and private investment vehicles have a genuine and legitimate purpose and to properly understand the chain of title, authority or control leading to the ultimate Beneficial Owner, settlor and beneficiaries, if relevant.

To the extent that the assets belong to the Beneficial Owner and not the Customer, enquiring into the Beneficial Owner’s source of funds and Source of Wealth.

Verifying the Source of Funds by obtaining independent corroborating evidence such as, for example, proof of dividend payments connected to a shareholding, bank statements, salary/bonus certificates, loan documentation and proof of a Transaction which gave rise to the payment into the account. A Customer should be able to demonstrate and document how the relevant funds are connected to a particular event which gave rise to the payment into the account or to the source of the funds for a Transaction.

Verifying the Source of Wealth by obtaining independent corroborating evidence such as, for example, for corporates, share certificates, publicly available registers of ownership, bank or brokerage account statements, probate documents, audited accounts and financial statements, news items from a reputable source and other similar evidence.

Commissioning a third-party vendor report to obtain further information on a Customer or Transaction or to investigate a Customer or Beneficial Owner in high-risk cases. Such reports may be particularly useful where there is little or no publicly available information on the Person concerned.

5.6. Simplified CDD

If the Customer has been assigned a “low” risk rating following the Customer risk assessment, the firm may undertake Simplified CDD. The Simplified CDD must be proportionate to the money laundering risks identified and may include any of the following:

Verifying the identity of the Customer and identifying the Beneficial Owner after the establishment of the business relationship;
Reducing the frequency of, or as appropriate, not undertaking Customer identification updates;
Deciding not to verify an identified Beneficial Owner;
Deciding not to verify an identification document other than by requesting a copy;
Not enquiring about a Customer’s Source of Funds or Wealth.
Reducing the degree of ongoing monitoring of Transactions based on a reasonable monetary threshold or the nature of the Transaction; or
Do not collect specific information or carry out specific measures to understand the purpose and intended nature of the business relationship but infer such purpose and nature from the type of transactions or business relationship established.

Not with standing that the risks may be low for all such Customers, the Firm will not adopt a one-size-fits-all approach for all its low-risk Customers and will undertake CDD that is proportionate to the risks identified on a case-by-case basis. For example, where the money laundering risks are very low, the Firm may simply identify the Customer and verify such information only to the extent that this is commercially necessary, whereas in the case of a complex Transaction, a more comprehensive simplified CDD might be required.

For the avoidance of doubt, Amber Markets Limited is always required to ‘identify’ beneficial owners, except for retail investment funds, which are widely held, and investment funds, which are investments where the investor invests via pension contributions. However, the Firm may decide not to ‘verify’ beneficial owners of a low-risk customer.

The Firm might reasonably reduce the frequency of or eliminate Customer identification updates where the money laundering risks are low, and the service provided does not offer a realistic opportunity for money laundering.

5.7. Timing of Customer due diligence

Amber Markets Limited will ensure that appropriate CDD is, or has been, undertaken when:

It proposes to establish a business relationship with a new Customer;
It has not undertaken a transaction for the Customer in over 12 months;
it doubts the veracity or adequacy of CDD documents, data or information it has obtained, e.g. where there is a material change in the way the account is operated which is not consistent with the Customer’s business profile or where it appears that the Customer is not the real Customer;
It suspects money laundering; or
There is a change in the risk-rating of the Customer, or it is otherwise warranted by a change in the Customer’s circumstances.

Generally, the CDD must be completed by or prior to the time at which any business relationship is formalised, e.g. by the signing of a client agreement or the acceptance of terms of business. Exceptionally, however, subject to the SEO’s approval, the CDD may be completed after that time if:

Deferral of the verification of the Customer or Beneficial Owner is necessary in order not to interrupt the normal conduct of a business relationship to execute a time critical Transaction, which, if not executed immediately, would or may cause a customer to incur a financial loss due to price movement or loss of opportunity; and
There is little risk of money laundering occurring and the Firm can effectively manage any such risks identified; and
The verification is completed as soon as reasonably practicable and, depending on the nature of the Customer relationship, ideally within 30 days.

Where the Firm is not reasonably able to comply with the 30-day rule above, it must, prior to the end of the 30-day period, document the reason for its non-compliance, complete the verification as soon as possible and record the non-compliance event in its Annual AML Return. Note that the FSC may specify a period within which the verification must be completed, failing which the FSC may direct the Firm to cease any business relationship with the Customer.

The Firm’s policy is not to establish a business relationship with any Customer until CDD has been completed.

The Introducing Broker Agreement must contain the following language and must be signed by the client to signify its confirmation:

“This Agreement is subject to you providing Amber Markets Limited with information requested by Amber Markets Limited, at its absolute discretion, to enable Amber Markets Limited to satisfy any and all obligations it may have under the legislation and regulations applicable in the FSC for the prevention of money laundering, terrorist financing and other financial crimes. Amber Markets Limited may be obliged to terminate this Agreement if the information requested to satisfy these obligations is not submitted or is insufficient. By signing this Agreement, you warrant that you are acting on your own behalf and not on behalf of any third party.”

5.8. Failure to complete Customer due diligence

If the Firm is unable to conduct or complete the CDD, it will apply one or more of the following measures as may be appropriate in the circumstances:

Not carry out a Transaction with or for the Customer in cash;
Not open an account or provide a service;
Not otherwise establish a business relationship or carry out a Transaction;
Subject to (2) terminate or suspend any existing business relationship with the Customer;
Subject to (2) return any monies or assets received from the Customer; and
Consider whether the circumstances necessitate making a SAR to the FSC.

Where CDD cannot be completed, it may be appropriate not to carry out a Transaction pending completion of
the CDD. Where CDD, or a material part of it, such as identifying and verifying a:

Beneficial Owner cannot be conducted, and the business relationship with the Customer should not be established.

In the case of a new Customer, it may be appropriate to terminate the business relationship before a product or service is provided. In the case of an existing Customer, however, while termination of the business relationship should not be ruled out, suspension may be more appropriate depending on the circumstances. In either case, the Firm must be careful not to tip off the Customer.

The Firm is not obliged to terminate or suspend any existing business relationship with the Customer or return any monies or assets received from the Customer if:

To do so would amount to “tipping off” the Customer; or
The FSC & FIU directs Amber Markets Limited to act otherwise.

Note that failure to comply with (b) above would constitute a significant violation of the AML Rules which may lead to FSC enforcement action.

5.9. Monitoring the Customer relationship

When undertaking ongoing CDD the Firm must using the risk-based approach:
Monitor Transactions to ensure they are consistent with the Firm’s knowledge of the
Customer, his business and risk rating;
Pay particular attention to any complex or unusually large Transactions or unusual patterns of Transactions that have no apparent or visible economic or legitimate purpose;
Enquire into the background and purpose of the Transactions;
periodically review the adequacy of the CDD information it holds on Customers and Beneficial Owners to ensure that the information is kept up to date, particularly for Customers with a higher risk rating; and
Periodically review each Customer’s risk assessment to ensure that its risk rating remains
appropriate in light of current money laundering risks.
In monitoring the Customer relationship, the Firm will undertake a periodic review to ensure that Customer identity documentation, such as passport number and address and, for a Legal Person, its share register or list of partners, etc., is accurate and up-to-date.

In particular such reviews will be carried out when:

The Firm changes its CDD documentation requirements;
An unusual Transaction with the Customer is expected to take place;
There is a material change in the business relationship with the Customer; or
There is a material change in the nature or ownership of the Customer.

The degree of ongoing CDD to be undertaken will depend on the Customer risk assessment. The Firm will use manual or automated systems, or a combination thereof, depending on, amongst other things, the size and nature of the Firm’s business and Customer base, as well as the complexity and volume of Transactions.

Amber Markets Limited will also review its customers, their business and Transactions against UN Security Council sanctions lists and against any other sanctions list, such as EU, U.K. HM Treasury, U.S. OFAC, etc., that may be relevant.

5.10. Reliance on a third party to undertake CDD on the Firm’s behalf

Subject to certain conditions, Amber Markets Limited, may rely on the CDD obtained by a third party if it has reasonable grounds for believing that the third party will undertake the CDD in a manner that is consistent with FSC Rules and that there are no bank secrecy or data protection laws that would prevent the Firm from having access to any relevant information upon request without delay. In all such cases, however, the Board of Directors acknowledges that Amber Markets Limited remains responsible for compliance with and liable for any failure to meet the relevant CDD requirements. Accordingly, all such arrangements must be referred to the MLRO for pre-approval.

Amber Markets Limited may rely on any third party listed below to conduct one or more elements of CDD on its behalf or rely on information previously obtained by them:

An Authorised Person;
A law firm, notary, or other independent legal business, accounting firm, audit firm or insolvency firm, or an equivalent person in another jurisdiction; or
A Financial Institution.

However, Amber Markets Limited will rely on that person only if and to the extent that the third party. Immediately provides Amber Markets Limited with:

All relevant CDD information.
Written confirmation that, if they are required, certified copies of the CDD documents will be provided to Amber Markets Limited upon request, without delay.
Is subject to regulation, including AML, by a Financial Services Regulator or other competent authority in a country with AML regulations which are equivalent to the standards set out in the FATF Recommendations and is supervised for compliance with such regulations.
Has not relied on any exception from the requirement to conduct any relevant elements of CDD which Amber Markets Limited seeks to rely on.
Ensures that any information previously obtained remains up to date.

If Amber Markets Limited is not reasonably satisfied that a Customer or Beneficial Owner has been identified and verified by the third party in a manner that is consistent with FSC Rules, it will immediately perform the CDD itself with respect to any deficiencies identified.

Before appointing an outsourced service provider to undertake CDD, Amber Markets Limited will follow its inhouse outsourcing procedures and in particular will undertake appropriate due diligence to assure itself of the service provider’s suitability and ensure that the service provider’s obligations are clearly documented in a binding agreement.

6. SANCTIONS AND OTHER FINDINGS Relevant United Nations resolutions and sanctions

A firm must exercise due care to ensure that it does not provide services to, or otherwise conduct business with, any person engaged in money laundering, terrorist financing or the financing of weapons of mass destruction. Amber Markets Limited will, therefore, ensure it is informed as to and takes appropriate measures to comply with relevant resolutions or sanctions issued by the United Nations Security Council.

Amber Markets Limited will immediately notify the FSC upon becoming aware that it is:

Carrying on or about to carry on an activity;
Holding or about to hold money or other assets; or
Undertaking or about to undertake any other business whether or not arising from or in connection with (a) or (b); For or on behalf of a person in contravention of a relevant sanction or resolution issued by the United Nations Security Council.

The MLRO will ensure that any notification made to FSC in accordance with (3) above includes details of the relevant activity and the action taken or proposed to be taken by Amber Markets Limited with regard to the matters specified in the notification.

6.2. Government, regulatory and international findings

Governments in many countries have enacted legislation to make money laundering and terrorist financing criminal offences and have legal and regulatory processes in place to enable those engaged in these activities to be identified and prosecuted. Internationally, the FATF has done much to encourage governments to adopt minimum standards, including, in particular, making their national regulators require financial services firms in their jurisdictions to follow specific due diligence procedures in relation to customers.

Generally, the member countries of the FATF are regarded as having arrangements for the prevention of money laundering that are at least equal to those in the FSC.

Amber Markets Limited will ensure it is informed as to, and take appropriate measures to comply with (including
by undertaking further due diligence on, or by not carrying out a Transaction for or on behalf of, any person
who is the subject of) any findings, recommendations, guidance, directives, resolutions, sanctions, notices or
other conclusions issued by:

The government of the Republic of Mauritius or any government department in Mauritius.
The Financial Services Commission – Mauritius (FSC)
Financial Intelligence Unit – Mauritius (FIU)
Financial Action Task Force (FATF)
Mauritius enforcement agencies
The FSC, concerning:
- Arrangementsfor preventing money laundering, terrorist financing or the financing of weapons of mass
  destruction in a particular country or jurisdiction, including any assessment of material deficiency
  against relevant countries in adopting international standards; and
- The names of persons, groups, organisations or entities or any other body where suspicion of money
  laundering or terrorist financing or the financing of weapons of mass destruction exists.

Amber Markets Limited will examine and pay special attention to any Transaction or business relationship with persons located in such countries or jurisdictions (including countries or jurisdictions which are no longer identified as deficient or which have been relieved from special scrutiny) and ensure that it is aware of the background against which the assessments, or the specific recommendations have been made.

Note, however, for the avoidance of doubt, that the MLRO is not obliged to report Transactions from these countries or jurisdictions to the FSC & FIU if they do not qualify as suspicious pursuant to Mauritius Law. Amber Markets Limited must immediately notify the FSC in writing if it becomes aware of non-compliance by a person with a finding and provide the FSC with sufficient details of the person concerned and the nature of the non-compliance.

6.3. Being informed and taking reasonable measures to comply with sanctions and other finding

The Firm will obtain and take appropriate measures to comply with sanctions and other national and international obligations. This includes undertaking further due diligence on, or by not carrying out a Transaction for or on behalf of, any person who is the subject of any sanctions and whose details are available on a national and international list, including suspect lists such as those provided by the Eastern and Southern Africa Anti Money Laundering Group (ESAAMLG), the Anti-Money Laundering and Combatting the Financing of Terrorism and Proliferation- MAURITIUS, and the Office of Foreign Assets Control (OFAC) of the US Department of Treasury, Financial Intelligence Unit – Mauritius and other credible sources, to perform initial and on-going checks on its Customers and their Transactions.

The Firm will maintain a list of the countries and jurisdictions referred to in 6.2(3)(e)(i) and will use G B Group and such other sources as may be appropriate to identify any person of a kind referred to in 6.2(3)(e)(ii).

The sources mentioned in (2) above will be referred to at the Customer onboarding stage and subsequently, as appropriate, as part of ongoing Customer monitoring. If an apparent match is found, the MLRO must be notified immediately for guidance on how to proceed.

Regarding (2) above, the Firm will continue to give special attention to Transactions with counterparties located in countries or jurisdictions that are no longer identified as deficient or have been relieved from special scrutiny.

7. MONITORING AND REPORTING OF SUSPICIOUS ACTIVITY

7.1. Overview

Amber Markets Limited maintains:

Policies, procedures, systems and controls with which to monitor and detect suspicious activity or Transactions in relation to potential money laundering or terrorist financing; and
An AML training and awareness programme that enables Employees to recognise when they have reasonable grounds to suspect that money laundering or terrorist financing is taking place and the means by which suspicions must be reported.

7.2. Examples of suspicious activity

Money laundering and terrorist financing operations may take many forms: there is no unique set of circumstances or pattern of behaviour by which they can be recognised. The key to recognising suspicious activity is knowing enough about the Customer and the Customer’s normal expected activities to recognise when their activity is abnormal.

By way of example, circumstances that might give rise to reasonable grounds for suspicion at the Customer take-on stage might be where the Customer:

Refuses without reasonable explanation to provide information requested; and/or
Makes extensive use of offshore accounts, companies or structures in circumstances where its economic needs do not support such arrangements.

Subsequently, during the course of a business relationship with a Customer, circumstances that might give rise to reasonable grounds for suspicion might be:

Transactions which have no apparent purpose, which make no obvious economic sense, or which are designed or structured to avoid detection;
Transactions requested by a person without reasonable explanation, which are out of the ordinary
range of services normally requested or are outside the Firm’s experience in relation to that particular Customer;
Transactions of a size or pattern that, without reasonable explanation, are out of line with previous experience or are deliberately structured to avoid detection;
The Customer uses the relationship for a single Transaction or for only a very short period of time;
Unnecessary routing of funds through third-party accounts; or
Unusual Transactions without an profitable motive.

These examples are not exhaustive, and employees must use their reasonable judgment to determine if the circumstances they observe should be regarded as suspicious.

7.3. Obligation to make further enquiries

A Transaction that appears unusual is not necessarily suspicious. Even customers with a stable and predictable transaction profile may have periodic transactions that are unusual to them. Customers may, for perfectly good reasons, have an erratic pattern of Transactions. So, the unusual is, in the first instance, only a basis for further inquiry, which may, in turn, require judgment as to whether it is suspicious. A Transaction or activity may not be suspicious at the time, but if suspicions are raised later, an obligation to report then arises.

If you have reasonable grounds to suspect, you must not ignore a possibly valid suspicion by willful blindness, negligence (i.e. wilfully and recklessly failure to make adequate enquiries) or by failing to assess adequately the facts and information that is either presented or available.

7.4. Obligation to report

Any Employee who knows or suspects or who has reasonable grounds for knowing or suspecting that a person is engaged in money laundering has a personal obligation to make an Internal SAR to the MLRO. This obligation applies even in situations when no business relationship was developed if the circumstances were suspicious.

Knowledge means actual knowledge such as that gained from a person’s admission that he is involved in a particular criminal activity, for example, tax evasion. Suspicion, on the other hand, is a personal and subjective assessment that falls short of belief but which must be more than mere speculation and which should be based upon some foundation that money laundering has occurred or is about to occur.

Note, however, that an Employee who considers a Transaction to be suspicious would not be expected to know the exact nature of the criminal offence or that the particular funds were definitely those arising from money laundering or terrorist financing.

The requirements mentioned above do not preclude an Employee from consulting with his line manager or other Employees in deciding whether or not the circumstances merit the sending of an Internal SAR to the MLRO. However, notwithstanding such consultation, the Employee must decide for himself whether the MLRO should be notified and the Employee should not be prevented or dissuaded from doing so if he knows, suspects or has reasonable grounds for knowing or suspecting that a person may be involved in
money laundering.

Employees should be aware that Mauritius Law specifically provides that a person who makes a SAR shall be immune from any liability, including breach of client confidentiality unless such reporting is proved to have been in bad faith.

Employees are also reminded that failure to make an Internal SAR may result in disciplinary action by the Firm against the Employee and may also constitute a criminal offence punishable under the laws of Mauritius.

Notwithstanding that all External SAR’s should be made only by the MLRO or Deputy MLRO (as set out in 8.7), the Firm’s policy is that it will not prejudice an Employee who discloses any information regarding money laundering to the FSC or to any other relevant body involved in the prevention of money laundering including, the FIU or other Financial Intelligence Unit.

7.5. Reporting procedures

Any knowledge, suspicion or reasonable grounds for knowing or suspecting that a person is attempting money laundering or terrorist financing must be reported to the MLRO. This includes suspicious activity or behaviour of any kind, including customers or potential customers. In the first instance, the Employee may report informally, by telephone or in person but, subsequently, he must submit an Internal SAR which he must also date and sign.

The Internal SAR provides documentary evidence that the Employee has fulfilled his personal obligation to report suspicious circumstances and creates a permanent record of what those circumstances were.

The template for the Internal SAR form is shown at Appendix 7A.

7.6. Inquiry by the MLRO

On receipt of an Internal SAR, the MLRO will promptly:

Inquire into and document the circumstances in relation to which the report was made;
Determine whether in accordance with Mauritius AML legislation, a corresponding External SAR must be made to the Financial Intelligence Unit – Mauritius (FIU) , and document such determination;
If required, make an External SAR to the FSC & FIU as soon as practicable; and
Notify the FSC immediately that such a report has been made.

If no External SAR is made the MLRO must record his reasons for not doing so. Note that the decision whether or not to make an External SAR is the MLRO’s alone and is not subject to the consent or approval of any other person.

If Amber Markets Limited knows or assumes that the funds which form the subject of the report do not belong to a Customer but to a third party, the MLRO must include this fact, and the details of the Firm’s proposed course of further action in relation to the case, in the report

7.7. Reporting to the FIU and the FSC

The Financial Intelligence Unit – Mauritius acts as the national reception point for all External SARs. The primary role of the FIU is to make the External SARs available to the law enforcement agencies to facilitate their investigations.

The template for the External SAR is shown on the FSC website.

The External SAR will be completed by the MLRO and must be emailed or faxed to the FSC & FIU at the address shown below. Immediately following its submission, the MLRO will notify the FSC that such report has been made.

FIU	FSC
The Manager-in-charge Anti-Money Laundering Suspicious Cases Unit	FSC Supervision

The external SAR should be accompanied by any supporting information, and any additional information which would help the FIU to further its investigations, or which could link the SAR to other SARs and other investigations if possible.

The MLRO must request and be sure to obtain a formal acknowledgement from the FIU that the External SAR has been received, e.g., by way of a successful fax transmission report or email confirmation.

Following the submission of an external SAR, the FIU may establish an ongoing dialogue with the MLRO as the investigation continues, and more information may be requested. The FIU will provide the MLRO with a final outcome when a conclusion is reached.

7.8. Clearance of Transactions by the FIU

Assisting in the commission of money laundering may constitute a criminal offence punishable under the laws of Mauritius. Accordingly, Amber Markets Limited must not carry out any Transaction which it knows or suspects or has reasonable grounds for knowing or suspecting to be related to money laundering until
it has:

Submitted an External SAR to the FSC & FIU; and
Received instructions from the FIU on how to continue its business relationship, including effecting any Transaction with a person.

If the Customer in question expresses his wish to move the funds before the Firm receives instruction from the FSC & FIU on how to proceed, the MLRO should immediately contact the FIU for further instructions.

7.9. Tipping off

Informing any person that he is being scrutinised for or that any competent authority is investigating his possible involvement in suspicious activity related to money laundering is a criminal offence under Mauritius AML legislation.

Employees must, therefore, be sensitive to these issues when considering CDD measures and take all reasonable care to avoid “tipping off”.

Accordingly, if the Firm reasonably believes that performing CDD measures will tip off a customer or potential Customer, it may choose not to pursue that process and should file an External SAR instead.

Date: 22 August 2024