Sunday 22 Dec 2024Fa
AML and CFT

Anti-Money Laundering& Countering Financing of Terrorism Statement

1.Introduction

Money Laundering and Financing Terrorism are ominous undertaking and have turned into a troubling dilemma for international economies. Therefore, the international community is determined to confront them and deal with their damaging consequences.
Devising international standards, establishing legal support (including laws and regulations), the introduction of the best methods and procedures to combat these two problems, application of the latest technologies, extended international cooperation are evidence of the importance, countries have placed on the issue.
Overcoming these challenges and the global resolve to confront them requires the enactment of legislations to combat money laundering and financing terrorism as steps to joining the global movement against such menacing acts.
In an accord to the international community, Islamic Republic of Iran has taken measures that make such undertaking to be treated as criminal acts and has developed and approved the required laws and regulations accordingly.

2.Governance Framework

Bank Mellat, as a pioneer international banking concern, has taken the initiative to implement the anti-money laundering legislation and the related directives issued by Central Bank of Iran to the local banks.
The resolve and efforts exercised by Bank Mellat management and employees in the prevention of money laundering transactions and blocking access to such funds by ill-intended people have created the required ground for the implementation of the anti-money laundering regulations and recommendations by international bodies. Such initiative has effectively heightened the belief for wider internal collaboration and elevated resolve for action.
In an attempt to take part in an international movement to prevent money laundering and financing terrorism, Bank Mellat has taken the initiative to implement measures for clear identification of customers, fund’s origin, and fund circulation in the banking network.
Bank Mellat is obliged to report to Central Bank of Islamic Republic of Iran as the supervisory authority of the banking system as well as to Iranian Financial Intelligence Unit (IRIFIU) as the supervisory authority for the implementation of anti-money laundering regulation and directives.

3.Policies and Procedures

Bank Mellat has undertaken actions in compliance with the national regulations and directives related to anti-money laundering and financing terrorism. Such actions are devised to meet the requirements of the national regulation and directives as well as international recommendations.  The related activities are subject to annual reviews by supervisory authorities to ensure that they continue to comply with the current regulations and directives.
Bank Mellat has developed a complete set of internal guidelines related to anti-money laundering and financing terrorism in full compliance with the pertaining enacted legislations and the directives issued by Central Bank of Iran. The development process has also considered the recommendations made by various international bodies including Basel Committee, Financial Action Task Force (FATF) and Wolsberg Group. The intention has been to ensure full compliance with the established regulation and standards. Bank Mellat reviews and revises its internal guidelines on an annual basis to make sure that they comply with the latest regulations and standards.
Bank Mellat has taken the following initiatives in this regard:
3.1- Full identification of bank customers and updating their information
3.2- Risk assessment of customers and their banking transactions
3.3- Continuous monitoring of high-risk customers
3.4- Refusal to open no-name and/or numbered accounts
3.5- Monitoring transactions with the correspondent banks
3.6- Restricting business relations with Shell banks
3.7- Continuous account monitoring and suspension of transaction with black-listed, high risk, or sanctioned entities
3.8- Assigning proper risk categories to Politically Exposed Persons (PEPs)
3.9- Continuous monitoring of bank and internet transactions.
3.10- Reporting suspicious transactions or transactions that are above the designated threshold to the supervisory authorities
3.11- Providing continuous anti-money laundering training to bank employees and retain records of its training sessions
3.12- Implementation of internal measures in domestic branches 
3.13- Risk assessment of money laundering activities on bank operations

4.Know Your Customer Program (KYC)

Bank Mellat has developed a plan for adequate identification of bank customers including individual and legal entities as well as its correspondent banks. Bank customers are, then, classified according to their risk rating and their transactions are monitored accordingly.
KYC program includes all bank transactions ranging from basic services to walk-in customers to services provided to permanent customers in an ongoing relationship. The program identifies bank customers as well as banks' shareholders (Ultimate Beneficial Owners).
Politically Exposed Persons (PEPs) and their family members along with high-risk customers are under continuous monitoring and control. 

5.Prohibited Business Relationships (Red Lines)

Bank Mellat is committed to refrain from entering into a business relationship with any potential customer before verifying customer’s identification, Business types, and business activities.
Bank Mellat refuses to:
5.1-Accept assets that are known or suspected to be the proceeds of criminal activity;
5.2-Enter into/maintain business relationships with individuals or entities known or suspected to be a terrorist, or member of such or listed on sanction lists
5.3-Open anonymous and/or numbered accounts or establish relationships with virtual or shell banks;
5.4-Enter into relationship with new high-risk customers and maintains a continuous monitoring on the existing potentially high-risk customers.

6.Suspicious Transaction Report (STR) and Suspicious Activity Report (SAR)

Bank Mellat employees are obliged to report any suspicious activity of the customers as per legal requirements and based on the training they have received. Such reports are confidentially sent to the anti-money laundering division for analysis. Then if applicable, the reports are sent to the competent authorities. 

7.Risk Based Approach in Combating Money Laundering

Bank Mellat maintains a risk-based approach to combat money laundering activities. It uses risk sensitive anti-money laundering policies and procedures. These policies and procedures are so designed to establish a balance between customer’s risks, the scope of standard, customer identification, and continuous monitoring.

8.Correspondent Banking Relationships

Bank Mellat adheres to the following guidelines when establishing correspondent banking relationship with the international banks:
8.1-Obtain sufficient information on the correspondent bank to fully understand the nature of its banking business and activities, its reputation, management and ownership structure, and the anti-money laundering regulations of the correspondent banks' country;
8.2-Assess the correspondent bank's compliance to regulations and supervision, legislations enacted to combat money laundering and terrorism financing;
8.3-Obtain approval from senior managements before entering into a relationship with the prospective bank.

9.Maintain Customer Information

The information obtained in the process of verifying customer identification when opening an account as well as the updated information received later are recorded and maintained.
Financial transaction documents are maintained according to the directives issued by Central Bank of Iran. Bank Mellat has employed new digital recording technologies (Electronic Archive System) to improve information accessibility.

10.Auditing and Internal/External Controls 

Anti-money laundering measures at Bank Mellat are subject to annual reviews and control. The measures are reviewed once a year as part of the internal auditing and control. They are also reviewed externally by the related authorities.

11.Training Programs

As part of the plan to participate in the national program to prevent money laundering and financing terrorism, Bank Mellat has developed the relevant employee training programs. Both the line staff and employees who have direct contacts with individual/legal customers, banks, financial institutions, as well as correspondent banks are required to participate in the training programs.
The anti-money laundering training programs are offered on annual basis so that employees learn about the latest policies and procedures in this area. The training department regularly evaluates the effectiveness of the training programs. It is mandatory for all bank employees to pass the training programs. 

12.Reliability of Staff

Bank Mellat has implemented processes to ensure that only honest, trustworthy, and reliable staff are employed. It strongly believes that its employees have committed themselves to be in the forefront of combating money laundering and financing terrorism. Bank Mellat employees are keen to maintain a close monitor on customer activities in order to uncover and report any suspicious activities to the Anti-Money Laundering Division.