1. PURPOSE
The purpose of this Anti Money Laundering (AML) policy is to establish a framework for implementing appropriate measures to detect and report suspicious activities in compliance with applicable laws and regulatory guidelines. Apex Instruments Company Private Limited (Apex) is committed to ensuring that illegal funds are not concealed or integrated into legitimate business and the economy. We undertake to train our staff in AML procedures and maintain adequate control to counter money laundering
2. SCOPE
This policy complies with the SEBI Circulars on Anti Money Laundering (AML) and Combating Financing of Terrorism (CFT), as amended, and the Prevention of Money Laundering Act, 2002, and the Rules framed thereunder. It applies to all employees, directors, officers, or other individuals working with and associated with Apex, either temporarily or permanently, across all branches in India.
3. APPLICABILITY
This policy is applicable to all employees, directors, officers, or other individuals working with and associated with Apex, either temporarily or permanently, across all branches in India.
4. UNDERSTANDING THE PROCESS OF MONEY LAUNDERING
4.1. Money laundering is defined as engaging in acts designed to conceal or disguise the true origins of criminally derived proceeds or assets to make them appear legitimate. The Prevention of Money Laundering Act, 2002 defines the offence of money laundering as "Whosoever directly or indirectly attempts to indulge or knowingly assists or knowingly is a party or is actually involved in any process or activity connected with the proceeds of crime and projecting it as untainted property shall be guilty of an offence of money laundering."
4.2. To combat global money laundering, various laws have been enacted by different countries. It is essential to comply with AML laws, including anti-terrorism laws, and educate against possible "Red Flags" that may arise during business operations. Reporting such activities and taking appropriate steps against them is also crucial.
4.3. Money laundering typically involves the following steps:
4.4. To understand the applicability of this policy, it is important to understand the process of money laundering. Money laundering usually consists of the following steps:
4.4.1. Placement: This is the first stage in which illegal funds are disposed of, deposited into banks or other financial institutions, and converted into negotiable instruments such as money orders or traveler's cheques.
4.4.2. Layering: The funds are then moved into other accounts to hide their origin and separate them from the original source by creating layers of transactions, making them virtually untraceable.
4.4.3. Integration: The illicit funds are reintroduced into the economy and financial system, often used to purchase legitimate assets, fund legitimate businesses, or conduct other criminal activity.
5. UNDERSTANDING THE RED FLAGS
While there cannot be an exhaustive list detailing the activities and actions considered money laundering, employees, directors, and others associated with Apex should be cautious of the following 'Red Flags':
5.1. Dealing with customers or suppliers from non-cooperative countries identified by the Financial Action Task Force on Money Laundering or international organizations against money laundering;
5.2. Dealing with customers or suppliers providing insufficient, false or suspicious information, or who are unwilling to comply with Apex's KYC norms;
5.3. Dealing with customers or suppliers who act as agents for other companies or individuals but are reluctant to provide information regarding such entities;
5.4. Dealing with customers or suppliers who express concern about or seek to avoid reporting or record-keeping requirements of the company or compliance with laws;
5.5. Any product purchase or a large purchase that is inconsistent with the normal ordering pattern of
such customers followed by the absence of any legitimate business reason (such as a special price promotion);
5.6. Handling complex deal structures or payment patterns that reflect no real business purpose or economic sense;
5.7. Dealing with customers who request payment through an unrelated country or an unrelated third party;
5.8. Dealing with situations where multiple partial payments come from various parties and/or individuals on behalf of a single customer, and/or multiple partial payments come from various locations. This also includes “double-endorsed” or “third-party” cheques, where a customer endorses over to Apex, against payment for their invoice, a cheque which was originally made out to such customer;
5.9. Dealing with customers or suppliers whose address is not a physical site;
5.10. Dealing with customers who deposit funds and immediately request to wire or transfer the money to a third party or another firm without any apparent business purpose;
5.11. Dealing with customers who make payments in one form and then request a refund in another form, e.g., paying by credit card and requesting a wire transfer or cash refund.
6. ANTI MONEY LAUNDERING STANDARDS
6.1. Apex strictly prohibits any direct or indirect involvement in any process or activity related to money laundering, including but not limited to the (a) concealment; or (b) possession; or (c) acquisition; or (d) use; or (e) projecting as untainted property; or (f) claiming as untainted property. Such actions are considered a criminal offense under the money laundering laws. Any such involvement shall be guilty of offence of money-laundering if such person is found to have directly or indirectly attempted to indulge or knowingly assisted or knowingly is a party or is actually involved in one or more of the following processes or activities connected with proceeds of crime,
6.2. The process or activity connected with proceeds of crime is a continuing activity and continues till such time a person is directly or indirectly enjoying the proceeds of crime by its concealment or possession or acquisition or use or projecting it as untainted property or claiming it as untainted property in any manner whatsoever.
6.3. It is important to note that the process or activity connected with the proceeds of crime is an ongoing activity that continues until the person involved directly or indirectly enjoys the proceeds of crime by concealing, possessing, acquiring, using, projecting, or claiming it as untainted property in any manner whatsoever.
6.4. Therefore, all employees, directors, and others associated with Apex are expected to comply with anti-money laundering laws and regulations, as well as Apex's internal policies and procedures related to anti-money laundering. Failure to comply with these standards may result in legal action and severe consequences
7. ANTI- MONEY LAUDERING MEASURES
7.1. Maintenance of the record:
7.1.1. All employees, directors, management, and others associated with Apex must ensure that the following records are appropriately maintained in compliance with the law:
7.1.1.1. All cash transactions or their equivalent valued at or above Rupees Ten Lakhs.
7.1.1.2. All series of cash transactions or their equivalent that are connected to each other and have a value below Rupees Ten Lakhs.
7.1.1.3. All cash transactions or their equivalent that involve the use of forged or counterfeit currency notes or banknotes as genuine, including transactions involving forgery of a valuable security;
7.1.1.4. All suspicious transactions, whether made in cash or not, including credits or debits to or from any non-monetary account (such as a demat account or security account), which may give rise to suspicion of a crime or suggest a malicious intent by a person acting in good faith.
7.1.2. The records shall contain the following information:
7.1.2.1. The nature of the transactions;
7.1.2.2. The amount of the transaction and the currency in which it was denominated;
7.1.2.3. The date on which the transaction was conducted;
7.1.2.4. The parties to the transaction, including their names, addresses, and any other identifying information collected as part of Apex's KYC procedures.
7.1.3. Retention of Records:
Apex shall maintain and preserve records containing the identity of its clients for such period as it considers necessary in compliance with applicable laws and regulations. However, in situations where the records of an ongoing investigation or transaction are the subject of a suspicious transaction report, the records should be retained until it is confirmed that the case has been closed
7.2. Internal Audit:
The Internal Audit team is responsible for ensuring that Apex complies with policies, procedures, and controls related to the prevention of money laundering and terrorist financing. They are also responsible for testing the systems for detecting suspected money laundering transactions.
7.3. Employee’s Hiring /Employee’s Training / Investor Education:
Apex conducts annual training sessions to raise awareness among its employees, directors, and others associated with the company. The training covers identifying signs of money laundering that may arise during the course of employment, actions to take when the risk is identified, employee roles in the company's compliance efforts, the company's record retention policy, and the disciplinary consequences for non-compliance with the policy. Additionally, Apex provides investor education to its clients to ensure they understand their obligations under the policy and to help prevent money laundering activities.
8. VIOLATIONS
8.1. Any person who becomes aware of any instance and/or information suggesting a violation that has occurred or is about to occur under this Policy is required to report it to the Compliance Officer, in writing, at Kolkata Main Office. Any such information which is reported by any person, shall be kept confidential on a ‘Need-to-know’ basis.
8.2. Apex prohibits retaliatory action against any person who raises a concern in good faith.
8.3. Apex reports of violation under this policy made before the Compliance officer shall be look into deeply by the Designated Officer and the management, in strict compliance with the laws and guidelines issued by the Government.
9. PUNISHMENT FOR VIOLATION
The disciplinary action commensurate with the nature and gravity of the offense shall include, but not be limited to-
9.1. An opportunity of being heard- Apex shall provide an opportunity for the accused to be heard against whom the allegation has been raised to comply with the due process of law.
9.2. Cancellation of specific work Assignment- In case the offense pertains to a particular assignment given to the offender, Apex may suspend and/or withdraw the assignment assigned to the offender completely or for a period of time.; and/or
9.3. Cost- Apex may seek from such offender cost pertaining to the loss of reputation of the company, the loss of clientele, the loss of assignment(s), etc.
9.4. Suspension- Apex may suspend the employee for such a period as it may deem fit; and/or
9.5. Dismissal- Apex may dismiss the offender in case of grave and/or continuous offense, and such an offender shall not be recruited by any branch office of Apex at any position at all. Apex may also take any legal action before the proper forum as it deems fit and proper.
10. NON- WAIVER OF STATUTORY RIGHTS
Nothing contained in this Policy shall prejudice any right of Apex to prevent them from seeking any legal remedy under applicable law in relation to the breach committed. Non-compliance with the Policy may result in criminal or civil penalties that will vary according to the offense. Acting in contravention of this Policy will also face disciplinary action, up to and including dismissal.
11. DISPLAY OF THIS POLICY
11.1. Apex shall display this Policy on the Apex website as well as display the same conspicuously on the notice boards of each of its offices in English.
11.2. Each employee shall view and confirm to these policies upon joining and/or upon the same being enforced by Apex.