Anti-Money Laundering

Glossary

Company

UAB Rtekk Lithuania

Bank of Lithuania

the Central Bank of the Republic of Lithuania who performs supervision over financial institutions offering their services in Lithuania

Business Relationship

a business, professional, or commercial relationship between the Company and Payrnet and the Client relating to the provision of payment and e-money related services to the Client that, at the time of establishment thereof, were expected to continue for a certain period of time.

(a)      For the avoidance of doubts, the Company in relation to the Client will always act not only on its own behalf but also as an agent of Payrnet. Therefore, due to involvement of the Company in this process the Business Relationship will always form between the Company and the Client as well as between Payrnet and the Client

Client

A natural person or a legal entity with whom the Company, acting on behalf of its own name and on behalf of Payrnet (acting as an agent of Payrnet), enters into Business Relationship which enables the Client to perform Monetary Operations or enter into transactions with the Company and Payrnet.

For the avoidance of doubts, due to specifics of Business Relationship, the same Client shall always become the Client of Payrnet and the Client of the Company.

Law

the Law on the Prevention of Money Laundering and Terrorist Financing of the Republic of Lithuania

Licensed services

financial service indicated in the electronic money institution license of Payrnet which are the following:

(a)          services enabling cash withdrawals from a payment account as well as all the operations required for operating a payment account;

(b)          execution of payment transactions, including transfers of funds on a payment account with the payment service provider of the payment service user or with another payment
service provider: execution of direct debits, including one-off direct debits, execution of payment transactions through a payment card or a similar device and/or execution of credit transfers, including standing orders;

(c)          issuing and redemption of electronic money;

(d)          issuing of electronic money;

(e)          issuing of payment instruments and/or acquiring of payment.

ML

“ML” shall mean money laundering which may be performed in any of the following ways:

(b)          the legal status conversion or transfer of property, knowing that such property is derived from criminal activity or from an act of participation in such activity, for
the purpose of concealing or disguising the illicit origin of the property or of assisting any person who is involved in such activity to evade the legal consequences of this activity;

(c)          the concealment or disguise of the true nature, origin, location, disposition, movement, rights with respect to, or ownership of property, knowing that such property
is derived from criminal activity or from an act of participation in such activity;

(d)          the acquisition, possession or use of property, knowing, at the time of receipt / transfer, that such property was derived from criminal activity or from an act of participation
in such activity;      

(e)          preparation for, attempts to commit, and complicity in committing any of the activities mentioned in clauses (a) – (c) above.

MLRO

(a)          Money Laundering Reporting Officer of the Company who shall be responsible for the implementation of prevention measures towards ML / TF applied by the Company

Monetary Operation

any payment, transfer, or receipt of money

Payrnet

means UAB “PAYRNET”, a limited liability company incorporated in the Republic of Lithuania with the legal entity’s code 305264430, having an electronic money institution license No 72 issued by the Bank of Lithuania on 28 August 2020 and covering the Licensed Services.

The Company is acting as an agent of Payrnet.

Rules

these Rules for the Implementation of Prevention Measures on Money Laundering and Terrorist Financing of the Company

TF

(a)      terrorist financing, the activity considered as a felony under Article 2 of the International Convention for the Suppression of the Financing of Terrorism of 9 December 1999

Third Country

any state other than the European Union and European Economic Area Member States

1. INTRODUCTION

1.1. The purpose of these Rules is to define the ML / TF prevention measures and the enforcement thereof in the process of Company’s operations as agent of Payrnet.

1.2. The Company shall carry out its business aiming to ensure effective prevention of ML / TF as required by the Law and other applicable legal requirements and good practice. Taking this into account, all employees of the Company shall adhere to the procedure of and requirements for the implementation of the ML / TF prevention measures as outlined herein.

1.3. Managing the Company’s risks relating to ML / TF shall be an integral part of its overall risk management system. Considering the scope and nature of its business, the Company shall implement ML / TF risk identification, assessment, and management procedures, as well as effective tools to mitigate such risks.

1.4. In managing its ML / TF risks, the Company shall at all times ensure compliance with the requirements set forth in the present Rules to the maximum extent possible.

1.5. In case the Company performs certain functions related to ML / TF field (for instance, Client identification, monitoring) through third parties, the Company shall ensure that such third parties also comply with requirements established under these Rules and the Law.
1.6. These Rules together with their Annexes fully cover the key ML / TF prevention areas that are of the key importance for the Company.

2. THE COMPANY AS AN AGENT OF PAYRNET

2.1. The Company is acting as agent of Payrnet, which is an electronic money institution licensed in Lithuania whose license is passported across EEA region. The Company is also established in Lithuania and, as an agent of Payrnet, the Company will provide the following Licensed Services on behalf of Payrnet: (a) Services enabling cash withdrawals from a payment account as well as all the operations required for operating a payment account; (b) Execution of payment transactions, including transfer of funds on a payment account with the payment service provider of the payment service user or with another payment service provider: execution of direct debits, including one-off direct debits, execution of payment transactions through a payment card or a similar device and/or execution of credit transfers, including standing orders; (c) Issuing and redemption of electronic money; (d) Issuing of electronic money; (e) Issuing of payment instruments and/or acquiring of payment.

2.2. As an agent of Payrnet, the Company and its activities should be supervised and monitored by Payrnet to some extent. This is required based on applicable legal requirements the aim of which is to ensure proper and compliant provision of Licensed Services since from regulatory point of view Payrnet remains ultimately responsible for the compliance and legitimacy of agent’s / distributor’s actions in relation to provision of Licensed Services. Considering this, the following supervision and control measures will be applied by Payrnet over the Company (the list should not be considered as exhaustive):

(a) Company’s MLRO once per quarter will report to the management of Payrnet on the activity data, including number of clients onboarded by the Company during the relevant quarter, profiles of such clients (i.e. how many natural persons and how many legal entities were onboarded during the relevant quarter, from what jurisdictions they are, to which risk groups they were assigned, number of clients with whom Business Relationship were terminated, etc.);

(b) Management of Payrnet will always have a right to request information and / or documents related to activities of the Company, as Payrnet’s agent. Payrnet will respond to each enquiry within the reasonable time but not later than within 5 business days;

(c) Payrnet will have a right and will be ultimately responsible for the execution of annual internal audits covering Company’s activities’ and procedures’ compliance with applicable requirements, including but not limited to the ML / TF prevention requirements; (d) Payrnet will have a right to perform ad hoc audits over activities of the Company. For instance, to check few Clients’ files aiming to understand whether the Company properly applies these Rules and applicable legal requirements;

(e) Payrnet will acquaint the Company with its own ML / TF Prevention Rules and all subsequent changes. In case Payrnet’s ML / TF Prevention Rules establish qualitatively new or legislatively new requirements, they must be transposed also to these Rules;

(f) The Company must submit its enterprise-wide risk assessment to Payrnet within 2 weeks after the execution of the risk assessment. If, based on the Company’s enterprise-wide risk assessment, Payrnet identifies major risks, Payrnet shall have a right to note them to the Company and require application of additional control measures;

(g) Payrnet shall and remains responsible for the performance of ML / TF prevention related trainings to the Company at least once per year. Topic of such trainings will depend on the factual situation and will be decided by the MLRO or management of Payrnet;

(h) Each amendment to these Rules made by the Company should be pre-aligned and pre-confirmed with Payrnet.

3. RISK APPETITE STATEMENT

3.1. The Company has zero tolerance for financial crime, regulatory breaches and any attempt to circumvent Company’s or Payrnet financial crime policies and controls. However, being engaged in provision of Licensed Services, the Company cannot completely avoid ML / TF risks and aiming to minimize the to the lowest extent possible, the Company applies relevant control measures which are described in these Rules and which are technically ensured in real activities.

3.2. While engaging in provision of Licensed Services on behalf of Payrnet, the Company adheres to the following core principles (list not exhaustive):

(i) To show zero tolerance for facilitation of financial crime, money laundering, financing of terrorism and fraud;

(ii) To avoid knowingly conducting business with individuals or entities believed to be engaged in an inappropriate and unlawful behaviour;

(iii) To enter into Business Relationship only with those potential Clients who seem to be acceptable by the Company and Payrnet based on the potential Client’s risk profile;

(iv) To avoid risks that could jeopardize Company’s or Payrnet’s strategic plans, including activities that could make the Company or Payrnet vulnerable to any type of public or private litigation or enforcement that could be damaging to the Company’s or Payrnet’s reputation and cause deterioration of relationship with regulators;

(v) To avoid or seize any activity / service towards which Company’s management believes that Company’s control mechanisms cannot protect the Company from risks that exceed the tolerance threshold;

(vi) To regularly perform enterprise-wide risk assessment aiming to identify changes within the clients’, products’, geographics’ and distribution channels’ base and verify whether existing control measures are sufficient to make the residual risk low;

(vii) The aim of the Company is to have strong and sufficient control measures mitigating with ML / TF risks so that the residual risk would be always low; etc.

3.3. Company’s managers at all levels have a particular responsibility to evaluate their risk environment, to put in place appropriate controls and to monitor the effectiveness of those controls. The risk management culture emphasizes careful analysis and management of risk of all business processes.

Version 01.01.2021

Approach to Money Laundering and Countering of Terrorism

MuchBetter is an e-money institution authorised by the FCA and therefore compliant with all laws and regulations concerning money laundering/terrorism financing on the general and wide-ranging prevention and detection of the use of any proceeds of crime, and the prevention and detection of terrorist financing in every country where it operates. The Financial Action Task Force (FATF) is the inter-government body responsible for setting the international standards for anti-money laundering (AML) and countering terrorist financing (CTF). They issue recommendations which member countries implement via laws and regulations and along with the EU Directive(s). This translates into a robust MuchBetter internal framework designed to combat money laundering and terrorist financing which, at high level, covers the following:

1. The development of robust internal policies, procedures and controls that strive to combat any attempted use of MuchBetter products for illegal or illicit purposes and to ensure our customer’s protection under the relevant laws and regulations. This includes (but not limited to) identification customer/merchant/supplier procedures, including appropriate screening and application of enhance due diligence where applicable, keep adequate records, compliance with GDPR, Bribery and Corruption, Code of Conduct related areas, IT security, dealing with customer’s requests (including complaints), review and assessment of the internal policies and procedures, carry out ongoing monitoring and act accordingly when any illegal activity is detected.

2. The designation of an MLRO

3. An ongoing employee training program

4. An audit function to test the compliance program.

MuchBetter AML/CFT Framework includes measures to identify any customers which use our app as well as merchants and suppliers and including appropriate screening, keep adequate records, establish internal policies and procedures, appoint a Money Laundering Reporting Officer, carry out ongoing monitoring, train our staff and act accordingly when illegal activity is detected. If you have any questions regarding our AML/CFT framework, please contact us on Compliance@mirlimited.com