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Bank Secrecy Act and Anti Money Laundering Compliance Program


On October 26, 2011, President Bush signed in to law H.R. 3162, the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT) Act, which contains measures to prevent, detect and prosecute terrorism and international money laundering. Title III of the Act is the International Money Laundering Abatement and Anti-Terrorist Financing Act of 2011.

Section 326 of the USA PATRIOT ACT requires all financial institutions to obtain, verify, and record Personal Information that identifies each person who opens an account. This federal requirement applies to all new customers. This Personal Information is used to assist the United States government in the fight against the funding of terrorism and money-laundering activities. What this means for you: when you open an account, we ask you for your name, address, date of birth, and other identifying Personal Information.

Xchanged Inc (“XCHANGED”, “we” or “our”) has developed a Bank Secrecy Act and Anti-Money Laundering Compliance Program (“BSA/AML Program”) for our money service business, foreign currency exchange and money transmittal, (collectively, “XCHANGED”), in an effort to maintain the highest possible compliance with applicable laws and regulations relating to anti-money laundering in Guam and the United States and other countries where we conduct business.

This includes, but is not limited to:

  1. Establishing robust internal policies, procedures and controls that strive to combat any attempted use of XCHANGED for illegal or illicit purposes and to ensure our customers basic protections under consumer protection laws;
  2. Complying with the reporting requirements by the Financial Crimes Enforcement Network (“FinCEN”);
  3. Filing Suspicious Activity Reports (“SARs”);
  4. Maintaining comprehensive records of orders and other transfers;
  5. Designating an officer of XCHANGED as Chief Compliance Officer (“CCO”) who is responsible for the implementation and oversight of our BSA/AML Program;
  6. Executing Know Your Customer (“KYC”) procedures on all customers;
  7. Performing regular, independent audits of our BSA/AML Program;
  8. Following record retention requirements; and
  9. Implementing a formal and ongoing compliance training program for all new and existing employees.

POLICIES AND PROCEDURES
Our BSA/AML Program has been reviewed and approved by our Board of Directors (the “Board”). Our BSA/AML Program is regularly reviewed and, if necessary, revised in an effort to comply with applicable rules, regulations and policies.

INTERNAL CONTROLS
We have developed robust internal policies, procedures, and controls designed to comply with applicable BSA/AML laws and regulations, some of which are outlined here on this page including, but not limited to, our Customer Identification Program (“CIP”), the filing of SARs and CTRs, as well as other reporting requirements and audits.

TRAINING
All of our employees and officers will receive BSA/AML training, as well as position-specific training. They must repeat this training at least once every twelve (12) months to ensure they are knowledgeable and in compliance with all pertinent laws and regulations. New employees receive training within thirty (30) days of their start date. All documentation related to compliance training including materials, tests, results, attendance and date are maintained. In addition, our compliance training program is updated as necessary to reflect current laws and regulations.

COMPLIANCE OFFICER
Our CCO is responsible for developing and enforcing the policies and procedures of our BSA/AML Program. Our CCO is required to report any violations of our BSA/AML Program directly to our CEO and our Board. In addition, our CCO is responsible for recording and filing SARs, CTRs and performing a BSA/AML Program audit at least annually.

WE IMPLEMENT eKYC

What is eKYC?

eKYC or Electronic Know Your Customer is the electronic process of filing documents that relate to a customer’s identification and enables an entity to know the customer. These services enable a customer to share his/her necessary demographic and personal information in a secure and transparent manner. A customer has to furnish details such as identity details, contact details, address details, DOB, gender, SSN and these MUST match the information in the submitted identity documents such as driver’s license, passport or any applicable and accepted photo identification.

Applicability of eKYC
eKYC is mandatory for customers or clients of banks, financial institutions and Money Service Business Providers or as stipulated by the US Department of Treasury through circulars from time to time. eKYC applies to or can be used for the following (that have regulatory compliance):
  1. Banks
  2. Financial Institutions
  3. Money Service Business
  4. FI's situated abroad
  5. Mobile Service Projdier and Telecom
  6. Utility connections (Gas, water and electricity)
  7. Apps that deal with financial transaction such as XCHANGED web remit software or android or IOS app

Benefits of eKYC?
Benefits of eKYC to the Government, to the public and to institutions are:
  1. Consent Based
    eKYC is consent-based in the sense an individual can share data based on any approved authentication for verification. An individual that requires a service or utility must file for eKYC of his or her own accord and consent. This protects the individual’s right to privacy which is a fundamental right bestowed upon us by our constitution.
  2. Paperless System
    eKYC is a paperless system that replaces the need for document management with paper-based documents. This enables a company, state or country to reduce their carbon footprints by going eco-friendly and using a cloud-based online system. Not only does going paperless save the planet, it also helps in reducing costs associated with normal KYC compliance.
  3. Instantaneous
    The eKYC service is completely automated online. This means that KYC data can be transferred in real-time without the need for any manual intervention. The paper-based KYC process can take days up to weeks to get verified, but the eKYC process takes just a few minutes or hours to verify and issue.
  4. Transparency Of Transactions Or Usage
    eKYC enables all records and data to be stored permanently online. Any misuse, illicit gain or illegal activity can be traced back to the individual or parties involved in such transactions or usage of services.
  5. Regulator friendly
    All eKYC requests are recorded on the system and all submitted Personal Identity documents are secured for each customer for future use and reference as needed by law enforcement agencies.
  6. Secure System
    A customer’s account, data and information are secure because the entire process is online. Identity theft, fraud, loan scams, money laundering, the flow of black money, etc. are all minimized with a secure online digital system of KYC.
  7. Efficient Communication
    Effective information can be relayed in an efficient and timely manner. Generally, with any automated system, there is no need to constantly go back and forth because most details are published automatically, unlike having to fill in a KYC form manually.
  8. ‘Free of Cost’ Process
    Usually, customers that opt to undergo eKYC aren’t required to pay any additional amount for doing so. A company or institution may have to undergo automation costs officers installing verification devices and systems which are beneficial in the long-run.

ACCOUNT OPENING PROCESS
In order to open an account and use XCHANGED, your identity must be verified, authenticated,and checked against government watchlists, including the Office of Foreign Assets Control (“OFAC”). Failure to complete any of these steps will result in your inability to use XCHANGED.

Individual customer — Prior to opening an account for an individual customer, we attempt to collect, verify, and authenticate the following information:

  • Email address;
  • Mobile phone number
  • Full legal name
  • Social Security Number ('SSN') or any comparable identification number issued by governament;
  • Date of birth ('DOB')
  • Proof of identity (e.g., driver’s license, passport or government-issued ID);
  • Home address (not a mailing address or P.O. Box); and
  • Additional information or documentation at the discretion of our Compliance Team.

COMPLIANCE OFFICER
If you successfully meet and complete our CIP requirements and do not appear on the OFAC or any other government watchlist, then we will provide you with account opening agreements electronically.

Institutional customer — Prior to opening an account for an institutional customer, we attempt to collect, verify, and authenticate the following information:
  • Institution legal name;
  • Employer Identification Number (“EIN”) or any comparable identification number issued by government;
  • Full legal name (of all account signatories and beneficial owners);
  • Email address (of all account signatories);
  • Mobile phone number (of all account signatories);
  • Address (principal place of business and/or other physical location);
  • Proof of legal existence (e.g., state certified articles of incorporation or certificate of formation, unexpired government-issued business license, trust instrument or other comparable legal documents as applicable);
  • Contract information of owners, principals, and executive management (as applicable);
  • Proof of identity (e.g., driver’s license, passport or government-issued ID) for each individual beneficial owner that owns 10% or more, as well as all account signatories; and
  • Identifying information for each entity beneficial owner that owns 10% or more (see individual customer information collected above for more details).
  • If your institution successfully meets and completes our CIP requirements and neither it nor any of its owners, principals, executive, or managers appear on OFAC or any other governmental watchlist, we will provide you with account opening agreements electronically.

SUSPICIOUS ACTIVITY / CURRENCY TRANSACTION REPORTS
We file SARs if we know, suspect or have reason to suspect suspicious activities have occurred on XCHANGED. A suspicious transaction is often one that is inconsistent with a customer’s known and legitimate business, personal activities or personal means. We leverage our compliance department, which performs transaction monitoring to help identify unusual patterns of customer activity. Our CCO reviews and investigates suspicious activity to determine if sufficient information has been collected to justify the filing of a SAR. In addition, all currency transactions over a determined USD value are be reported to FinCEN via a CTR filing. Our CCO maintains records and supporting documentation of all SARs and CTRs that have been filed.

REPORTING REQUIREMENTS
All records are retained for seven (7) years and are readily available upon official request by an applicable examiner, regulator, or law enforcement agency.