Anti-money laundering (‘AML’) policy

Objectives

1. 1. The purpose of this anti-money laundering (‘AML’) policy is to establish the general framework for Auctions & Collections for the fight against money laundering (‘ML’) and financing of terrorism (‘FT’). Auctions & Collections takes reasonable measures to control and to limit ML/FT risks, including dedicating the appropriate means. Auctions & Collections is committed to high standards of anti-money laundering / counter the financing of terrorism (‘AML/CFT’) compliance and requires its staff to adhere to these standards in preventing the use of its products and services for money laundering or terrorism financing purposes. The AML program of Auctions & Collections is designed to be compliant with:

• Requirements introduced by national, European and international laws, regulations and sanctions (such as Recommendations and papers from the Financial Action Task Force (FATF);
• European and Belgian laws and regulations related to AML/CFT:
  • Directive (EU) 2018/843 of the European Parliament and of the Council of 30 May 2018 amending Directive (EU) 2015/849 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing, and amending Directives 2009/138/EC and 2013/36/EU;
  • Directive (EU) 2015/849 of the European Parliament and of The Council of 20 May 2015 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing;
  • Regulation (EU) 2015/847 on information accompanying transfers of funds;
  • Various European regulations imposing sanctions or restrictive measures against persons and embargo on certain goods and technology, including all dual-use goods;
  • The Belgian Law of 20 July 2020 regarding various provisions on the prevention of money laundering and terrorism financing and limitation of the use of cash;
  • The Belgian Law of 18 September 2017 on the prevention of money laundering and terrorism financing and limitation of the use of cash.

Money laundering and terrorism financing definitions

1. 1. Money Laundering means: 

• (1) the 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 the commission of such an activity to evade the legal consequences of that person’s action;
• (2) the concealment or disguise of the true nature, source, 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 an activity;
• (3) the acquisition, possession or use of property, knowing, at the time of receipt, that such property was derived from criminal activity or from an act of participation in such an activity;
• (4) participation in, association to commit, attempts to commit and aiding, abetting, facilitating and counselling the commission of any of the actions referred to in points (1), (2) and (3).

Money laundering shall be regarded as such even where the activities which generated the property to be laundered were carried out in the territory of another Member State or in that of a third country.

1. Terrorism financing means: the provision or collection of funds, by any means, directly or indirectly, with the intention that they be used or in the knowledge that they are to be used, in full or in part, in order to carry out any terrorist act.

PREVENTIVE AML/CFT MEASURES

1. 1. 1. In accordance with the AML/CFT legislation, Auctions & Collections has appointed a responsible at the highest level among its Board of Directors for the prevention of ML/TF: Pierre De Breucker (Director of Auctions & Collections).
      2. Each major change of Auctions & Collections’ AML policy is subject to approval by the Board.
      3. Auctions & Collections will take a risk based approach to combating ML and TF. The risk assessment is a critical component of the Auctions & Collections AML/CFT compliance management program. As part of this risk-based approach, Auctions & Collections identifies and understands the risks specific to the company and its business lines. The Auctions & Collections AML risk profile is determined to identifying and documenting the risks inherent to its business lines such as the products and services it offers, the customers to whom such products and services are offered, transactions performed by these customers, delivery channels used by the company, customers and transactions and other qualitative and emerging risks. The identification of AML/CFT risk categories is based on Auctions & Collections’ understanding of regulatory requirements, regulatory expectations and industry guidance.

AML/CFT VIGILANCE – minimum standards

Auctions & Collections has established standards regarding Know Your Customer principle (“KYC”) which require due diligence on each prospective customer before entering into a business relationship via identification and verification of his identity and, as the case may be, his representatives and beneficial owners on the basis of documents, data or information obtained from a reliable and independent source compliant with the Belgian and European AML/CFT legislation and regulation. Interpretation of the KYC principle begins with identification of the customer by means of the necessary identification documents. That identification, completed by other information gathered, enables the customer acceptance policy to be applied. In addition to these objective criteria, there are subjective elements which may arouse suspicions regarding a customer and to which particular attention should be paid. Finally, as KYC does not involve static data, but dynamic data through the relationship with the customer, it also needs follow-up and ongoing monitoring of the customer.

1. Customer identification and verification (KYC)
   1. The formal identification of customers on entry into commercial relations is a vital element, both for the regulations relating to money laundering and for the KYC policy.
   2. This identification relies on the following fundamental principles:

• Each customer (= each individual person and/or each person involved in the case of a legal entity) must be identified by means of original supporting documents;
• These documents will be recorded in a centralised system;
• The identification can be completed by “face-to-face” contact or through distance identification;
• Each person identified must be registered by IT means;
• A person will not be accepted as a customer if the identification process proves to be incomplete.

1. The legal obligations contained in the Law of 18 September 2017 require account to be taken of increased due diligence being extended to politically exposed persons (PEP) who are Belgian residents. Concrete application at Auctions & Collections is reflected by a specific identification procedure for customers referenced as PEP, whatever their place of residence. 

1. Risk profile calculation
   1. To assist in determining the level of AML/CFT due diligence to be exercised with regard to the customer, a “compliance” risk profile is calculated first of all on entry into relations (low, medium, high), and is then recalculated every three months.
2. Customer acceptance policy
   1. Several elements require the establishment of a customer acceptance policy, in particular:

• Accepting as customers only persons and entities with which Auctions & Collections may and wishes to develop commercial relations, and who correspond to the company’s current business model, ambitions and means;
• Ensuring that Auctions & Collections has a good knowledge of the customer (KYC) and can exercise the due diligence appropriate to their level of risk from the start of the customer relations;
• Avoiding Auctions & Collections entering into business relations with persons who might involve it in money laundering or terrorism financing transactions;
• Meeting a legal / regulatory requirement;
• Applying the risk-based approach run by Auctions & Collections in categorizing customers in relation to risk criteria.

• Principles

The acceptance policy is applied to any person or entity asking for a product or service from Auctions & Collections (or its subsidiaries). As a general rule, customers who may be accepted by Auctions & Collections are persons or entities:

• Fully identified in accordance with the company’s procedures, and
• With a significant link with Belgium by their establishment or by a sustainable source of income, and
• Where the reality of that significant link can be checked by the relationship manager or on the basis of credible external sources, and
• When such commercial relations will be active, diversified and over the long term.

Auctions & Collections will not accept customer relations with persons or entities not meeting the above acceptance criteria, or whose legitimate intentions do not immediately appear to be sufficient, or included in the Belgian or European Union lists of persons or entities under financial sanction, or carrying on a commercial activity which is considered by Auctions & Collections as particularly at risk.

1. Ongoing customer due diligence
   1. For some dedicated higher risk customer categories, a periodically risk-based review is carried out to ensure that customer-related data or information is kept up-to-date. The current KYC review process regarding the other customer categories is essentially based on an “awareness principle” following the examination of a dedicated file by the AML team. This awareness principle consists in asking the customer’s relationship manager henceforth to closely perform a periodic KYC review of the customer.
2. Ongoing transaction monitoring
   1. AML-compliance ensures that an “ongoing transaction monitoring” is conducted to detect transactions which are unusual or suspicious compared to the customer profile.
3. Embargos and sanctions screening
   1. To ensure compliance with the applicable sanctions against persons and entities, Auctions & Collections has put in place a list matching system in order to compare the names of its customers with official lists from Belgium, the European Union, the OFAC or the UN. Transactions are also filtered through an online matching system in order to ensure compliance with sanctions obligation for fund transfers with foreign banks.
   2. In addition to the above and in order to provide all business lines with up-to-date information related to jurisdictions under embargo, Auctions & Collections internally edits and maintains a Country Watchlist (“CWL”) including the following jurisdiction:

• Jurisdictions subject to EU export sanctions (including the sanctioned goods);
• Jurisdictions subject to EU import sanctions (including the sanctioned goods);
• Jurisdictions subject to US sanctions (including the sanctioned goods or transactions);
• Jurisdictions designated by officials (like FATF) as subject to a higher money laundering risk;
• Jurisdictions considered as fiscal paradise by the Belgian authorities.

REPORTING OBLIGATION

1. 1. Suspicious transactions reporting
      1. In its internal procedures, Auctions & Collections describes in precise terms, for the attention of its staff members, when it is necessary to report and how to proceed with such reporting. Reports of atypical transactions are analysed within the AML team in accordance with the precise methodology fully described in the internal procedures. Depending on the result of this examination and on the basis of the information gathered, the AML team:

• Will decide whether it is necessary or not to send a report to the Financial Intelligence Processing Unit (FIU), in accordance with the legal obligations provided in the Law of 18 September 2017;
• Will decide whether or not it is necessary to terminate the business relations with the customer.

1. Procedures
   1. The AML/CFT rules, including minimum KYC standards, have been translated into operational guidelines or procedures that are available for Auctions & Collections’ staff.
2. Record keeping
   1. Records of data obtained for the purpose of identification must be kept for at least ten years after the business relationship has ended. Records of all transaction data must be kept for at least ten years following the end of the business relationship.
3. Training
   1. Auctions & Collections has developed different ways of training and awareness in order to keep its staff aware of the AML/CFT duties.
4. Auditing
   1. Internal audit regularly establishes missions and reports about AML/CFT activities.

Questions? Contact: info@auctionsandcollections.com.