Anti Money Laundering (AML) and Counter-Terrorism Financing (CTF) Policy
As with any exchange platform, there is a risk of Nauticus services being used to launder money and finance terrorism. Australian law and applicable local laws in the jurisdictions in which we operate, requires us to put training, processes and systems in place to identify, manage and mitigate this risk. All company entities are required to comply with the policy principles irrespective of their geographic location. Where the laws of a particular jurisdiction are of a higher standard, then the higher standard must be applied.
Nauticus platform is committed to:
· Meeting its international regulatory obligations in the identification, treatment and management of ML/TF risk;
· Protecting the company from reputational risk and breaches of regulatory requirements that may lead to severe fines and penalties; and
· Safeguarding the company, its customers and employees from becoming a victim of, or unintentional accomplice to, ML/TF activities.
Our AML/CTF policy
· Sets out how the Nauticus complies with its legislative obligations
· Applies to all business divisions, employees and third party providers working in Australia, New Zealand and overseas.
Money laundering is the process of hiding or disguising the source of illegally obtained (“dirty”) funds to make them appear legitimate (“clean”), e.g. by filtering them through the financial system.
Money laundering reduces the risk of detection and confiscation by authorities. It is just as serious as the criminal activity behind it – and preventing it can help reduce crime.
Terrorism financing differs from money laundering in 3 main ways:
· Its primary purpose is to disguise the ultimate use of the funds, as opposed to their origin
· It can involve relatively small sums of money, which can have a huge impact in terms of death, destruction and disruption
· Although terrorists may finance their activities through crime, legitimate funds can also be misappropriated to finance terrorism.
The AML/CTF Act provides a list of ‘designated services’, such as opening an account or making a deposit. Before receiving any of these designated services, customers will be required to provide proof of identity or similar documentation.
Nauticus is required to collect and verify this information from all types of customers:
· Personal - an individual person of any nationality
· A sole trader - a person who trades in their own legal right without the use of a company structure, incorporation or partners and who, alone, has full liability for the activities of the business
· Domestic company - incorporated in Australia, including proprietary, public and listed public companies
· Foreign company incorporated outside Australia
· Partnership - a relationship between persons (the partners) carrying on business in common, under a partnership agreement, with a view to profit
· Trust - a relationship where the trustee holds property or assets for a beneficiary. The trustee can be an individual, a group of individuals or a company.
· Association - a group of persons who have agreed to join together in pursuit of one or more common objectives. An association can be incorporated or unincorporated.
· Registered co-operative - a legal entity owned and controlled by the people for whom it was established and who benefit from using its services
· Government body - can be domestic (e.g. Commonwealth, State, Territory) or foreign government body.
Money laundering and terrorism financing (ML/TF) are sometimes detected because a user acts or behaves in a suspicious way.
For a ‘suspicion’ to be valid, we must have reasonable grounds to believe ML/TF activity may be occurring. To support this, employees receive training in identifying and reporting suspicious matters.
Nauticus's 4 key AML/CTF principles
· All clients must undergo a verification check to confirm identity before being allowed to trade
· Fiat currency withdrawals can only be made to a bank account held in the same name as the Nauticus account
· Fiat currency deposits can only be accepted from a bank account held in the same name as the Nauticus account
· Nauticus is obliged to report any suspicious activity to the relevant authorities
Policy roles and responsibilities
The Nauticus Founders and Senior Management have ongoing oversight of our AML/CTF policy and procedures. All permanent and temporary employees must comply with these, attend training specific to their role, and report suspicious matters or behaviours.
Nauticus 's AML/CTF program
The design and implementation of the program was tailored to our ML/TF risk profile, applying specific systems and controls, including:
· ML/TF risk assessment
· Employee training
· Employee and customer due diligence
· Transaction monitoring.
Monitoring and reporting
Nauticus reports any transactions or other activities regarded as suspicious to AUSTRAC, Australia’s AML/CTF regulator.
Nauticus also keeps currency exchange records for 7 years.