Anti-Money Laundering (AML) Policy

Anti-Money Laundering (AML) Policy Statement

XICOM SOLUTIONS FZCO is dedicated to the prevention of money laundering, the funding of terrorism, and the circumvention of sanctions. Adhering strictly to relevant laws and regulations is crucial to protecting the reputation of XICOM SOLUTIONS FZCO and maintaining public confidence in our organization.

In line with this commitment, XICOM SOLUTIONS FZCO will establish an anti-money laundering (AML) framework that outlines specific actions to be followed. This framework is designed to ensure the seamless implementation of guidelines that not only align with our broader organizational objectives but also comply with the regulatory standards for designated non-financial businesses and professions (DNFBP) within the United Arab Emirates (UAE). This AML policy will extend to all entities where XICOM SOLUTIONS FZCO holds an ownership interest.

Policy Aims

To clearly define XICOM SOLUTIONS FZCO's stance on money laundering, terrorist funding, and sanctions evasion.
To provide straightforward instructions on the compliance duties required of all employees.
To offer guidance to employees in conducting daily business activities in accordance with legal obligations.
To foster a culture of compliance within the workplace, ensuring that employees adhere to legal regulations in their professional duties.

Understanding Money Laundering

As defined under Article 2 of the Anti-Money Laundering Law, money laundering involves knowingly engaging in the following actions with funds derived from criminal activities:

Transferring, moving, or disposing of proceeds to conceal or obscure their origin.
Hiding or misrepresenting the true nature, source, or location of the proceeds, including how they are disposed of.
Acquiring, possessing, or using proceeds upon receipt.
Assisting the individual who committed the crime to avoid punishment.

It's important to recognize that money laundering is an intentional offense and cannot occur through negligence. However, XICOM SOLUTIONS FZCO acknowledges that gross negligence, particularly the failure to report suspicions to the Financial Intelligence Unit (FIU), may result in criminal liability.

Legal and Regulatory Framework

The legal framework to which XICOM SOLUTIONS FZCO is subject includes the following:

UAE Federal Law No. 20 of 2018: Anti-Money Laundering, Combating the Financing of Terrorism, and Financing of Illegal Organizations.
Cabinet Resolution No. 10 of 2019: Implementing Regulations of Federal Law No. 20 of 2018.
UAE Federal Law No. 7 of 2014: Combatting Terrorism Offenses.
UAE Federal Penal Law No. 3 of 1987 (as amended): Penal Code.
UAE Federal Penal Procedures Law No. 35 of 1992 (as amended): Penal Procedures Law.
UAE Federal Law No. 5 of 2012: Combatting Cyber Crimes.
SCA Decision (17/R) of 2010: Procedures for Anti-Money Laundering and Countering Terrorism Financing.
UAE Central Bank Regulations for Anti-Money Laundering, particularly Circular No. 24/2000 and its amendments by Notices No. 1045/2004 and 2922/2008.
Any applicable United Nations sanctions ratified by the UAE.

XICOM SOLUTIONS FZCO is committed to implementing a comprehensive, risk-based compliance program, strictly adhering to legal requirements and industry best practices.

Investigatory Authority and Enforcement

The responsibility for overseeing and investigating suspected illegal financial activities within the UAE falls under the Financial Intelligence Unit (FIU) within the UAE Central Bank. The Public Prosecution has the authority to initiate legal action, and these cases are prosecuted in the criminal courts.

Legal Defenses

The regulations do not specify any unique legal defenses for money laundering charges. The defenses available under UAE law for money laundering are the same as those for other criminal offenses.

Criminal proceedings for money laundering cannot be resolved through settlement or plea bargaining. Once the Public Prosecutor determines that money laundering has occurred, they must refer the case to the criminal courts without discretion.

Transaction Monitoring System

XICOM SOLUTIONS FZCO has established a transaction monitoring system to detect any suspicious or unusual transactions. Currently, daily transaction reports are downloaded in .csv format and reviewed manually. However, XICOM SOLUTIONS FZCO plans to implement an automated transaction monitoring system by 2023 to enhance efficiency. The manual review process is currently supported by the 'Veriff' Identity Verification Service.

Detection of Suspicious Activity

Operating within a retail business-to-consumer (B2C) model, XICOM SOLUTIONS FZCO primarily handles transactions ranging from $9 to $999. Each transaction undergoes a rigorous manual approval process, adhering to due diligence principles. This process is designed to identify any abnormal, irregular, or suspicious transactions, ensuring that business operations remain compliant with relevant regulations and standards.

Reporting Suspicious Transactions

XICOM SOLUTIONS FZCO meets its obligation to report any suspicious transactions to the appropriate authorities through established communication channels. These transactions are reported to The Central Bank of the United Arab Emirates via our designated banking partner, Mashreq Bank PSC.

Though XICOM SOLUTIONS FZCO is still in its third year of operation, it has implemented a robust document retention strategy. All relevant records and documents are securely stored for at least five years, ensuring compliance with legal and regulatory requirements.

Risk Assessment

A dedicated risk management team within XICOM SOLUTIONS FZCO is responsible for the detailed manual review of individual client profiles. This comprehensive risk assessment process involves thorough due diligence on customers based on their risk rating, allowing the company to effectively manage potential risks in line with applicable laws and regulations.

Sanctions and Consequences

In cases of non-compliance with established standards, the regulations provide for administrative sanctions. These sanctions may include warnings, fines, restrictions or suspensions of business activities, and the removal of board members or senior management responsible for regulatory violations. The board's authority may also be limited by appointing a temporary observer.

In the event of a conviction for money laundering, the Anti-Money Laundering Law imposes penalties, including fines ranging from AED 100,000 to AED 10 million and imprisonment for up to 10 years.

XICOM SOLUTIONS FZCO’s Responsibilities

Identify potential criminal risks within its operations.
Conduct regular assessments of these identified risks.
Establish internal controls and policies to manage these risks effectively.
Implement appropriate due diligence procedures as outlined below.
Comply with and enforce any United Nations (UN) directives related to preventing terrorism financing and the spread of weapons of mass destruction.

Avoiding Relations with Shell Entities

XICOM SOLUTIONS FZCO conducts meticulous manual reviews of each transaction, applying due diligence principles to prevent establishing relationships with shell banks or organizations.

Annual Training on AML/CFT

Employees at XICOM SOLUTIONS FZCO receive annual training on Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT). The training covers:

Identifying and reporting transactions that must be communicated to authorities.
Examples of money laundering or terrorist financing through company products or services.
Internal policies to prevent money laundering and escalate suspicious activities or red flags.

XICOM SOLUTIONS FZCO maintains detailed records of its training sessions, including attendance and instructional materials. The company ensures that any new or revised AML/CFT laws, along with updates to existing policies, are communicated to relevant staff.

Dedicated Compliance Team

The Risk Management team regularly conducts compliance testing to ensure adherence to legal standards. A Designated Compliance Officer oversees the entire Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) program, managing its daily operations and ensuring all aspects are properly coordinated.