Like many other countries, Estonia has introduced a law into its legal system, which is aimed at preventing money laundering and financing of terrorism. The provisions of the law, along with the provisions of other international regulations of which Estonia is a signatory to, define the rules and obligations on prevention of money laundering. The issue on preventing money laundering and financing of terrorism is regulated in the Law of October 26, 2017 on combating the laundering of proceeds from crime and financing of terrorism.
The Law on anti-money laundering and combating the financing of terrorism is aimed at improving the reliability and transparency of the business environment, countering the use of the financial system and economic space of the Republic of Estonia for laundering of illicit funds.
Going by international and local regulations, CryptoSystems OÜ is required to implement effective internal procedures and mechanisms aimed at preventing money laundering, terrorist financing, drug and human trafficking, proliferation of weapons of mass destruction, corruption and bribery, and taking measures in the event of any suspicious activity by customers.
A thorough customer due diligence for AML/KYC is one of the international standards on prevention of illegal activities. In this regard, CryptoSystems OÜ has developed and approved its own verification procedures within the framework of standards on anti-money laundering and combating the financing of terrorism and within the "Know Your Customer" framework.
The AML/KYC policy covers the following areas:
CryptoSystems OÜ has developed its internal verification procedures such that when establishing a business relationship, the customer provides a minimum package of documents and information. The procedures ensure that CryptoSystems OÜ does not violate the laws of the Republic of Estonia.
Before establishing a business relationship, CryptoSystems OÜ identifies and verifies the identity of an individual. This the company does by checking the identity document and a document confirming that individual’s place of residence (if his residential address differs from his registered address indicated in the identity document).
The document submitted to CryptoSystems OÜ for identification is assessed as follows: validity of the document based on the expiry date; external similarity and age correspond to the appearance of the person in the document; personal identification code corresponds to the applicant's sex and age.
In addition to identifying a person, his address, work profile, profession, field of activity, purpose and characteristics of establishing business relationship, and other similar information needed to establish a business relationship are indicated (questionnaire).
After receiving the necessary documents and information from the customer, CryptoSystems OÜ conducts risk assessment in accordance with the risk category.
CryptoSystems OÜ undertakes to:
* Risk assessment takes into account four risk categories associated with the person involved in the transaction:
After assessing these risks, each risk category is evaluated on a three-point scale:
|Low risk||There are no risk factors in each category, the customer's transactions are transparent and do not deviate from normal transactions, the customer is a sane person conducting his business in the relevant field. Therefore, there is no reason to suspect that risk factors in general could lead to money laundering or terrorist financing|
|Medium risk||One risk factor or several risk factors in categories that differ from normal activities of a person who does business in the relevant field, but the transactions are still transparent. Thus, there is no reason to suspect that risk factors could generally trigger a threat of money laundering or terrorist financing|
|High risk||One feature or several features in a category that, in general, undermine the transparency of a person and his transactions, as a result of which these persons differ from a person working in the relevant field. Thus, there is possibility of the risk of money laundering or terrorist financing|
If the amount of a single transaction or a set of transactions is above €15,000 (or an equivalent amount in another currency), or the customer falls under a high risk category, then the customer will be asked to provide a notarized copy of his passport and a video call will be made.
** Non-FATF member countries not complying with FATF guidelines on prevention of money laundering and terrorist financing. A list of these countries can be found here: http://www.fatf-gafi.org/countries/#high-risk
*** Countries that, according to the Estonian Financial Intelligence Unit, are under a big threat of terrorism: Afghanistan, Algeria, United Arab Emirates, Bahrain, Bangladesh, Egypt, Indonesia, Iraq, Iran, Yemen, Jordan, Qatar, Kuwait, Lebanon, Libya, Malaysia, Mali, Morocco, Mauritania, Nigeria, Oman, Pakistan, Palestine, Saudi Arabia, Somalia, Sri Lanka, Sudan, Syria, Tunisia, Turkey, ethnic groups of the Caucasus belonging to the Russian Federation (Chechens, Lesgi, Ossetians, Ingushs, etc.).
CryptoSystems OÜ reserves the right to collect additional customer identification data for the purposes of the AML/KYC policy.