August 3, 2020

Introduction

This “Anti-Money Laundering” (AML) policies, procedure and controls has been designed, approved and implemented by Lion Faith International Limited (LFI). LFI is constantly working to improve its policies and practices to offer security and reliability to its clients. LFI confirms to British Virgin Island (BVI) primary legislation to combat money laundering, terrorist financing and proliferation financing under and in accordance with the Drug Trafficking Offences Act, 1992 (the “DTOA”), the Proceeds of Criminal Conduct Act, 1997 (the "PCCA"), the Anti-Money Laundering Regulations, 2008 (the "AML Regulations") and the Anti-Money Laundering and Terrorist Financing Code of Practice, 2008 (the "AML/TF Code") - each as amended from time to time (and together, the "BVI AML/CFT Regime"). To ensure that, this AML Compliance Program has been developed with a reference to Anti-Money Laundering and Combatting Terrorist Financing Guidelines (AML/CFT Guidelines), issued by the BVI Financial Services Commission (the "FSC").

The term “money laundering” (ML) is not a single act but is generally defined as “the processing of criminal proceeds to disguise their illegal origin”. Essentially, it is engaging in acts designed to conceal or disguise the true origins of criminally derived proceeds so that the proceeds appear to have originated from legitimate sources or constitute legitimate assets. (AML/CFT Guidelines)

The term “Terrorist Financing” (TF) is described as the use of funds, or the making available of funds, for the purposes of terrorism; or the acquisition, possession, concealment, conversion or transfer of funds that are, directly or indirectly, intended to be used or made available for the purposes of terrorism. TF may not involve the proceeds of criminal conduct, but rather an attempt to conceal either the origin of the funds or their intended use, which could be for criminal purposes. (AML/CFT Guidelines)

1 - Policy Statement

LFI’s principle is not to enter into business relationships with any criminals and/or terrorists, not to process transactions with result from criminal and/or terrorist activity and not to facilitate any transactions involving criminal and/or terrorist activity including the financing of terrorism. LFI undertakes to implement policies and procedures necessary to prevent the money laundering and to comply with applicable legislation in this regard.
LFI adopts a risk-based approach (RBA) in the design and implementation of its AML programs with a view to preventing and mitigating ML and TF risks. Procedures and controls based on RBA is described in 1.3.

1.1 Senior Management Oversight

To ensure effective risk management, the Directors of LFI should have a clear understanding of ML/TF risks. They also make certain that the risks are adequately managed. Any issues regarding ML/TF risks and AML Compliance Program should be communicated to them in a timely and accurate manner through the “Compliance Officer” (CO).

The senior management appoints a CO at the management level to have him/her the overall responsibility for the establishment and maintenance of the LFI’s AML Compliance Program.

In order that the CO can discharge his/her responsibilities effectively, the senior management should, as far as practicable, ensure that the CO is:
(a) appropriately qualified with sufficient AML/KYC knowledge;
(b) subject to constraint of size of LFI, independent of all operational and business functions;
(c) normally based in BVI;
(d) of a sufficient level of seniority and authority within LFI;
(e) provided with regular contact with, and when required, direct access to senior management to ensure that the senior management is able to satisfy itself that the statutory obligations are being met and that the business is taking sufficiently effective measures to protect itself against the risks of ML/TF;
(f) fully conversant with the LFI’s statutory and regulatory requirements and the ML/TF risks arising from the LFI’s business
(g) capable of accessing, on a timely basis, all available information (both from internal sources such as “customer due diligence” (CDD) records and external sources such as circulars from the FSC).

1.2 Requirements to Clients

Most importantly, our clients are required to understand our AML Compliance Program.
The clients should read this AML Compliance Program carefully as it will influence clients’ use and the provision of our services. LFI identifies and assesses ML/FT risks based on an overall understanding of our products and services, transaction types, countries and geographic areas, and clients’ attributes to implement mitigation measures proportionate with such risks.
LFI may amend, update, replace this AML Compliance Program from time-to-time, it is client’s responsibility to keep apprised with the latest information, practices, and procedures. LFI will send out the update information when appropriate.
If verification cannot be completed within the reasonable timeframe, LFI should terminate the business relationship as soon as possible.
The clients may be also asked to provide relevant contact details, such as a phone number and e-mail address etc. if needed.
CDD is carried out when LFI identifies the needs in conducting transactions. We shall:
1) verify the client’s ID;
2) verify an ID of the beneficial owner of the client;
3) understand the purpose and nature of the business relationship;
4) understand the structure of the company and the provider of funds, principal owner(s) of the shares, those who have control over the funds.
If a client is unable to comply with LFI’s CDD requirements, LFI should terminate business relationship with that client as soon as reasonably practicable.

1.3 Procedures and Controls

1.3.1 Verification of ID before/during establishing a business relationship
LFI shall understand the purpose and intended nature of the business relationship. And the purpose and nature should be commensurate with the risk profile of the client and the nature of the business relationship.
All staff have an obligation to report information which comes to their attention to their manager or CO, which gives rise to knowledge or suspicion or reasonable grounds for knowledge or suspicion of money laundering. Knowing its clients is LFI’s most important line of defense in preventing or detecting ML/TF activities.

1.3.2 Monitoring during conduction transactions
A suspicious transaction will often be one which is inconsistent with a client’s known legitimate business or actions. Emphasis will therefore be placed on knowing the client’s business and his/her requirements and usual transactions. It is the responsibility of all staff to report knowledge or suspicion of ML/TF to the CO.
Reporting a suspicion is a defense to a claim for breach of confidence. Confidentiality whilst an investigation is ongoing is of the utmost importance and employees are reminded of the offense of tipping-off. Tipping-off, a person suspected of money laundering that (a) he/she or someone else has made a lawful disclosure or (b) there is a money laundering investigation taking place, is likely either to prejudice any investigation arising from the disclosure or to prejudice the investigation disclosed to the person suspected of money laundering.

1.3.3 Examination of a suspicious transaction
When a suspicious transaction takes place, LFI may hold the transaction until it is able to verify the identity of the entity, and the purpose and legality of the transaction. LFI will take appropriate steps to identify if there are any grounds for suspicion.
These steps include:
-Examining the background and purposes of the transactions;
-Making appropriate enquiries to a client;
-Obtaining additional CDD information from a client.
If it is concluded that there are grounds for suspicion, a “Suspicious transaction report” (STR) will be made to “Joint Anti-money Laundering and Terrorist Financing Advisory Committee” (JALTFAC). The CO is in charge of filing an STR.

1.3.4
LFI will keep all records for at least 5 years from the date of completion of the transaction. These should include records verifying the identity of user and a record of transactions with or for that user. Also, the findings and outcomes of steps above-mentioned, as well as the rationale of any decision made after taking these steps, are properly documented in writing and be available to the FSC, other competent authorities and auditors.

2 - Designation of a Compliance Officer

CO can be appointed at a meeting of the Directors. The CO should have the overall responsibility for the establishment and maintenance of LFI’s AML Compliance Program. The CO acts as the central reference point within LFI for suspicious transaction reporting. The CO provides support and guidance to the senior management to ensure that ML/TF risks are adequately identified, understood and managed. If any emerging issues identified, the CO should communicate them with the senior management in a timely and accurate manner. The CO of LFI serves as a central reference point for reporting suspicious transactions.

3 - Employee Training

To implement its AML Compliance Programs, LFI conducts constant training for all of officer and employees to foster an understanding and awareness of the importance of AML/CFT regarding its internal policies and relevant regulations throughout the entire organization.

4 - Independent Audit Function

LFI establishes an independent audit function, which should have sufficient expertise and resources to enable it to carry out independent reviews of the LFI’s AML Compliance Program.
The audit function should regularly review the AML Compliance Programs to ensure effectiveness. The review should include, but not be limited to:
(a) adequacy of the LFI’s AML Compliance Program, ML/TF risk assessment framework and application of RBA;
(b) effectiveness of suspicious transaction reporting systems;
(c) effectiveness of the compliance function;
(d) level of awareness of staff having AML-KYC responsibilities.

5 – Glossary

AML/CFT Anti-Money Laundering and Combatting Terrorist Financing
AML/CFT Guidelines Guidelines issued by FSC on Anti-Money Laundering and Combatting Terrorist Financing
AML Compliance program AML-KYC policies, procedures and controls
AML-KYC Anti-money laundering and know your customer
AML Regulations The Anti-Money Laundering Regulations, 2008
AML/TF Code Anti-Money Laundering and Terrorist Financing Code of Practice, 2008
BVI British Virgin Islands
CDD Customer due diligence
CO Compliance officer
DTOA Drug Trafficking Offences Act, 1992
FSC The British Virgin Islands Financial Service Commission
JALTFAC Joint Anti-money Laundering and Terrorist Financing Advisory Committee
LFI Lion Faith International Limited
PCCA The Proceeds of Criminal Conduct Act, 1997
ML/TF Money laundering and terrorist financing
RBA Risk-based approach
STR Suspicious transaction report