Bank Pasargad (BANK) is committed to comply with all prevailing local and international Rules, Regulations, Standards and Practices of Anti Money Laundering (AML) in its all financial services and businesses.
In this respect, Bank Pasargad, has established its internal AML System which includes Strategies, Objectives, Procedures and instructions. This system is also under the ongoing and constant examinations.
The AML System of Bank Pasargad is consist of some Sub Systems such as Know Your Customer (KYC) for monitoring the clients and or the Suspicious Transactions Recognition (STR),Record keeping Regulations, Internal Training Program for different levels of the managements and employees and other related concepts and issues.
All management and employees of BANK are obliged to apply for this policy for any single transactions concluded between the Customers and the BANK in their daily job.
(II)Scope of the Policy
(A)-Objectives and Goals
The main objectives of the Policy is the prevention of the Bank Pasargad, its employees and its Clients from any possible misuses of the Bank Pasargad’s facilities for Money Laundering, Terrorist Financing and or any whatsoever financial crimes. At the same time, it is another goal of the Policy to bring the ultimate satisfaction to the Bank pasargad’s correspondents and their home regulators around the world, for cleanness of any single transaction concluded thereby. In this respect, it is believe of the BANK that the Policy is fully established based on all requirements set up by Local Authorities and also in accordance with all prevailing laws.
(B)-Relevancy and Applicability
Bank Pasargad believes that the Policy is fully in match with related regulations set up by the local regulators and existing laws. It is also the believe of the BANK that for any conflict between the BANK’s AML Policy with those regulations of the regulators and or laws, always the regulations or laws will be applied. However, it is a principle of Bank Pasargad to consult and coordinate with the regulators to well understanding of their concerns and objectives and applying them for modification of the Policy and related internal regulations.
(C)- Money Laundering Concept
Money Laundering is a series of the process, actions, instructions and transactions adopted by the real or legal person(s) who is (are) the owner of the illegal and dirty money (or other valuables) who earned it from the illegal activities, seeking for the transformation it into the legal form through the available services of Bank Pasargad, while concealing the origin and nature of it.
The Money Laundering phenomenon is taking place through the following steps:
Placement Is the stage where the Money (or other valuables) is presenting to the Bank Pasargad. In fact it is the starting point of the Money Laundering process and the first point of appearance of the Bank Pasargad in Money Laundering process.
Layering Is the stage where the illegal proceeds will be separated from its original sources. This separation is performed in layers of conduction of several complicated transactions. The layers are created to impede the auditing process and conceal of the origin of the funds and keeping the funds as nameless. The result of the using the layers is to affect auditing process and making the tracing impossible.
Integration Is the stage where the funds resulting from different transactions in Layering Stage is integrating and backing to the financial system by the owner through using the Bank Pasargad’s facilities, while the funds are considered as the legitimate funds.
The above steps are not necessarily taking place only through Bank Pasargad but also in any other bank which is involved in a part of the above steps as well.
According to Anti Money Laundering Act of Iran, the following classification for each Real and Legal Customer is defined in Bank Pasargad:
• Permanent Customer:
Permanent customer is the one who is holding the account and relationship with Bank Pasargad and doing constant financial transactions through the BANK.
• Non-permanent Customer:
Non-permanent customer is the one who is not holding account and has not any relationship with Bank Pasargad and is doing some transaction with the BANK.
The same classification is also applicable based on the nationality of the Customer which will be identified as:
• Iranian Real Customer:
Who is born in Iran and or has the Iranian nationality
• Foreign Real Customer:
Who is not born in Iran and or has not holding the Iranian nationality
• Iranian Legal Customer:
A company which is established in Iran and has the majority shareholders by Iranian nationals
• Foreign Legal Customer:
A branch, office, subsidiary, affiliated or any other means of organization of any foreign company established in Iran whose main shareholders are foreign nationals.
The identification procedure for each of the above mentioned categories are defined in the internal regulations and instructions of the BANK.
(B)- KYC Process
Within the Bank Pasargad, the KYC process is running in the following two main layers:
• Preliminary Identification:
Preliminary identification is the level of identification process which will be applied to Non-Basic Services that could be provided by BANK to Non-Permanent Customers.
• Full(Comprehensive) Identification:
Full (comprehensive) identification process is the level of identification which is applying to Basic Services that could be provided by BANK to Permanent Customers.
(C)-Banking and Credit Services
The Banking and Credit Services are those services which are provided by Bank Pasargad to the Customers. These services are categorized as follows:
• Non-basic Services:
Non-basic services are referred to those services provided to Customers which do not require any pre-required conditions for rendering such services by Bank Pasargad and or which do not create a continuous relationship between the BANK and the Customer. Issuing the money order, buying /selling of limited amount of cash foreign banknotes, travellers cheque are some examples of these services. The preliminary identification shall be applied to all Non-Basic Services.
• Basic Services:
Basic services are referred to those services provided by Bank Pasargad to the Customers as the pre-requirement for rendering other services and create a continuous relationship between the BANK and the Customer. The services such as opening different types of bank accounts, granting financial facilities, leasing operations, letters of credit operations, safe-deposit box facilities, issuing different credit/debit cards are some examples of Basic Services.
Full (comprehensive) Identification shall be applied to all Basic Services.
(D)-National Identity number
Every real or legal person in Iran is enjoying from a Unique National Identity Number. For real persons this number is allocated when the parents of new born are applying for the birth registration to the Personal Status Registry Bureau.
For the case of legal persons, this number is provided when the company is registered officially at the Local Registrar Office and or the Unique Economic Code issued by the Ministry of Economic and Finance, Tax Administration Office for the Tax affairs.
Whenever the real or legal person is applying for any sort of financial services to Bank Pasargad, it is mandatory to declare his/her/its Unique National Identity Number to the BANK for the verification by presenting the valid documents. The valid documents are including either of the original National Identification Card issued by Personal Status Registry Bureau, original passport issued by State Passport Office and or the personal driving license of the applicant issued by the Traffic Police, where the Unique National Identity Number is appeared in all of the above documents.
(E)-Financial Information Unit (FIU)
In accordance with the Anti Money Laundering Act of Iran, the Financial Information Unit (FIU) is established in the Bank Pasargad. In fact the FIU in the Bank Pasargad is a Committee as part of the "Evaluation and Compliance Unit” named as (AM Committee) which is a sub-committee of Operational Risk Evaluation Unit of the Bank Pasargad which is under the “ExAMLtive Risk Management Unit". The ExAMLtive Risk Management Unit is directly under the supervision of the ExAMLtive Board (known as Operating Board) of the Bank Pasargad.
The AML committee is strictly responsible for setting up the AML policy of the Bank Pasargad and any necessary amendments. It has also the responsibility to define the internal AML procedure, rules, regulations and instructions, based on the most recent regulations set up by the local regulators. The issue of the training for different levels of the management and employees of the Bank Pasargad is another aspect of the AML committee’s function.
All the employees, branches and offices are obliged to report of any suspicious cases within the defined time limit to AML committee.
The AML committee will apply for the consideration of the case and if they are not convinced with the details they will report to the respective authorities through the website of WWW.IRANAML.IR and or WWW.IRANAML.COM in Farsi.
Bank Pasargad has set up the following instructions which are mandatory and all employees and offices of the BANK should have the full compliance with them:
(A)-Consideration of Customer identity:
In case the Bank’s employee/branch is facing with one of the following transactions, the consideration for ascertainment of the Customer identification should be applied:
• In accordance with the local regulations and at the time of receiving the cash transfers of worth of IRR 150,000,000 (almost equal to USD 10,000) or more outside an existing business relationship.
• At the time of conducting a sustainable business relationship with the Customer.
• In case the Customer is willing to do a single business with the Bank Pasargad.
(B)-Sustainable Business Relationship Establishment
In case a sustainable business is going to be established by a Customer, a certain amount of information should be submitted by the Customer for further investigation of the BANK. This information consists of:
For Real Persons
• Full name
• National identification number
• Date of Birth
• Father’s name Full postal address
• Telephone number
• Applying to Central Bank of the Islamic Republic of Iran (CBI) for any Non-Sufficient Fund (NSF) checks of the Customer for opening Checking Accounts.
For Legal Persons
• Full name of legal person
• the economic code for legal person
• date of establishment for legal persons
• the Board of Directors name for legal persons
• Full postal address
• telephone and fax numbers for legal persons
• The Iran Code issued by Ministry of Commerce for the legal persons
• The Trading Code issued by Ministry of Commerce for legal persons
• Public announcement in the Official Gazette for legal persons
• Original registration certification issued by the Local Registrar Office
• A true copy of the articles of the association of the legal persons
• Applying to CBI for any banking and financial mis-record
• Board of Directors resolution for opening the accounts with Bank Pasrgad and introducing the authorized signatories to Bank Pasargad ,for the legal persons
• A letter of commitment in the letterhead of the legal person, for formal announcement of any changes in the Board of Directors, Articles of Association, the authorized signatories and or any other material changes in the company, which might have negative impact to Bank Pasargad Business and services with company.
• If the Bank Pasargad is granting the Basic Services to a legal person, a letter of commitment should be issued in the letterhead of the company confirming:
Their full compliance with all instructions set up by Bank Pasargad in line with AML regulations
They will not permit the other persons rather than the company itself, to receive the Basic Services from Bank Pasargad and they committed to inform Bank Pasargad of such an event immediately.
(C)-Final Beneficiary Identification
There is a possibility that Bank Pasargad is asked for the identification of a customer. In this case, Bank Pasargad should identify the Final real person by considering the following key issues:
• The final beneficiary who is the owner of the funds
• Final controller of the accounts and assets of the Customer
• The name of the real or legal person to whom on his behalf the transaction is taking place or business relationship is established.
(D)-Suspicious Transactions Reporting
Suspicious persons/entities are those, whose names and details are included in the list provided by the Financial Information Section and / or the Central Bank, for the reason of their involvement in Money Laundry and Terrorism Financing activities.
By observation of any suspicious transaction, the employee of the bank in charge of such transaction should fully inform the officer in charge of AML unit in the same branch/office in confidential basis without giving any indication to the Customer.
The officer in charge will inform the AML Committee of the BANK for further consideration and informing the competent authorities through the website of WWW.IRANAML.IR and or WWW.IRANAML.COM
In order to avoid of any misuse of the concept and at the same time having the better performance, some internal standards and instruction are established in the BANK. These standards and instructions are included in the training schedule of the BANK which includes all levels of management and employees.
There are strict punishments for any employee or manager of the BANK, who failed to inform the respective Customer of AML consideration for that particular transaction.
(E)-Monitoring the Customers Accounts
Bank Pasargad has a constant plan of monitoring the Customers accounts, in order to avoid of any Suspicious and unusual transactions.
Bank Pasargad has some internal standards and instruction, on determining the limits for any real or legal Customer.
For the real persons, they have to fill some forms and application and submit their Salary Slip, Social SAMLrity Record, accounts statements. The Bank Pasargad office or branch will apply for investigation of the authenticity and genuineness of the submitted documents, which accordingly will set up the limit in accordance with internal policies.
For the legal persons, the submitted documents will be different due to the nature of the business. The legal persons rather than the filled applications and forms, also should submit the business plan, audited financial statements, bank account statements with other banks, tax declaration, type of business and any other documents might be requested by the Bank Pasargad office/branch. Bank Pasargad office/branch will apply for the examination of the submitted documents and after that the limit will be allocated based on the internal policies of the Bank Pasargad.
All limits will be checked against actual transactions and the accounts records on quarterly basis and if required new limits will be setup.
In case the investigation and examination of the submitted documents either by real or legal person is not in satisfactory of the Bank Pasargad internal regulations and also accounts statements are not proportionately support the business, it will be reported to the AML unit of the Bank Pasargad.
(F)-Correspondent Banking and Identification of Shell Banks
The correspondent banking is referring to the different banking services which are supplied and exist between the two banks. This is not limited to the home country banking system but mainly is considering the relationship with the banking system of foreign countries. The correspondent banking relationship between the banks of two countries is considered as a sAMLred route for trade business between those or other countries. Therefore, the correspondent banking relationship could be considered as a means of any Money Laundering, Terrorism Financing or other illegal financial activities.
Bank Pasargad has established an internal procedure for monitoring the existed correspondent banking relationship by means of controlling the types and levels of business conducted between the two banks, the means of communications, monitoring the performance of financial orders, new areas of business, new Customers/beneficiaries involved in business while some limits and sAMLrity measures are implemented.
At the time of establishing the correspondent banking relationship with new banks, the following information is requested by Bank Pasargad and submitted the same, if required by the new correspondent:
• Shareholders and ownership structure
• Fields of activities with special focus on main activity
• Address of the premises
• Internal AML policies, strategies and instructions
• Supervisory regulations
• Risk profile and outlines
• Credit rating reports
• Last three years of the audited financial statements
• Standard settlement instruction (SSI) for different currencies
• Purpose of opening the vostro accounts, any third party receiving the services of the account, expected volume of the funds to be debited or credited over the account, the main sources of covering the account
Bank Pasargad has the definition of the Shell banks as "the banks that have no physical presence in the jurisdiction where they obtained the license for the establishment and activity and are not related to any financial groups who are under constant and continuous banking supervision by the local authorities. The management of these banks are running their job in the other jurisdictions. Any business is forbidden with these shell banks.
At the time of establishing the correspondent banking relationship with a new bank, Bank Pasargad is referring to a list of shell banks prepared and submitted by the Central Bank of the Islamic Republic of Iran (CBI). If the new bank is within the list while rejecting the application, it will be reported to CBI accordingly. As a common standard and practice, Bank Pasargad has its own internal policies for classification of the world to three main zones of High Risk, Medium Risk and Low Risk. Based on such policies, Bank Pasargad has its own list of shell banks.
(G)-Doing the Business with Suspicious Persons/Companies/Banks
As a result of implementation of the AML laws and regulations by the banks, list of suspicious real persons/legal entities/banks are created during the time. This list is prepared by the cooperation of CBI and other competent authorities in Iran and submitted to the banking system by CBI. The list is updated from time to time by CBI.
Bank Pasargad is committed to control such list for at the time of establishing the business contracts with real persons or legal entities and or correspondent banking relationship with the banks. The list is submitted to all offices and branches and is updated on the Intranet (internal portal) of the BANK for the awareness of the all managers and employees.
All managers and employees of Bank Pasargad are obliged to apply to this list in their daily jobs while at the same time they have to take the following actions:
• Updating of the information of each case
• Keeping confidentiality of the information of each case
• Arranging the Updating of all internal related software
• Applying for the reporting in case-by-case bases (not in a bulk form)
• Preparing the periodical reports for the management and authorities (if requested)
(H)- AML and Electronic Banking/Electronic Payment System
Bank Pasargad has a wide range of electronic banking instruments and at the same time a large number of its customers are using the electronic payment system.
For the issuing of any single electronic debit or credit card, which are considered as the transaction tools, the applicant should open a base account and submit his/her full identification. Based on the submitted information, the KYC procedure and policies will be applied.
If any applicant is requesting to receive different electronic banking services through Bank Pasargad, a full identification will be applied. The identified information is recorded in a central system which all offices and branches have the access to this system as the user only.
At the time of final stage of electronic banking contract with customers, they have to sign a form submitted by Bank Pasargad, that they promise and guarantee that they will be the sole user of the electronic banking services and in case of any misuse or other issues, they accept the full responsibility and negative consequences of such event.
All the Customers applying for electronic banking services of the BANK are obliged to inform any changes in their status, address, type of business (and any other material changes) to BANK within the time limit.
Electronic payments are allowed if the ordering Customer is already applied for such services and the respective information and forms are submitted and the full information is registered in the electronic banking system of the BANK.
Identifying the Customer electronically is allowed only when customer's signature has been verified by the CBI and the full documents have been submitted.
(I)-Sending All Customer Related Documents via the Post
Whenever the Customer is applying for receiving the Basic Services of the BANK for the first time or applying for additional new services, they have to submit their application to BANK. By the satisfaction of the BANK to provide the requested services, BANK will send a list of required documents to the address of the Customer in registered mail and will ask the Customer to submit all the documents by presenting the registered mail.
In case of any discrepancies in the submitted documents with the preliminary application, the Customer is obliged to prove the correct information within maximum 3 months. This period is not extendable and if the Customer fails to such proof, BANK should stop all services to that Customer and inform the case to the competent authorities.
In the preliminary application by the Customer, the full residence address/office premises, postal code and the telephone and fax numbers should be informed.
In case the Customer is a foreigner, some special boxes in the application form should be included to register the nationality, passport number, work permission number, visa date and number, residence address.
(J)-Maintaining Records of Commercial Documents and Banking Books
For the purpose of filing and recording of the documents of the BANK as a reference for any future consideration and investigation, based on the Anti Money Laundering Act of Iran and related guidelines and instructions issued by competent authorities and CBI, Bank Pasargad has the introduced the following 5 level of documents , where each level has its own features.
• Documents of First Level
The documents classified in this level are those related to ownership of Movable and Non-Movable assets, articles of association, all registration, licenses, all minutes of general assembly, original financial statements and related notes, all reports on Board of Directors Activities and share documents of the BANK. All these documents will be kept forever.
• Documents of Second Level
The accounting books of the BANK shall be kept for maximum 10 years after the respective financial year.
• Documents for Third Level
All related documents for the accounts opened such as the specimen of the signatures, copy of ID cards, original of drawn cheks, traveller's cheks, inter-bank cheks, promissory notes, drafts, collections, original concluded contracts between the Customer and the BANK, tender related documents, original deed of guarantees, share related documents, payment transaction documents, clearing related documents, bonds and trust funds documents, export/import documentary letters of credit documents, cash withdrawals and transfer documents are classified in this level which should be kept at least for 5 years.
• Documents for Fourth Level
The documents related to all contracts, credit facilities granted, sale of depreciated assets, commercial discounts, purchase of Movable and Non-Movable assets of the BANK are eligible to be classified for this level which should be kept for at least 3 years.
• Documents for Fifth Level
Recording books related to incoming and outgoing correspondences, submitted letters, all cheks stubs issued by different departments of the BANK are classified for this level which should be kept at least for 1 year.
• Different Means of the Maintaining the Documents
According to the nature of the documents and the maintaining period of each level, Bank Pasargad has set up its internal regulation for maintaining the documents by using the following means: