Financial Crimes Risk Management Overview
Merkle Digital Limited and its affiliates, associates and subsidiary companies (collectively “Merkle” or the “Company”) are committed to supporting the integrity of the financial system and combating financial crimes across its operations. Consistent with this commitment, Merkle has implemented a risk-based global program designed to help detect, deter, and prevent financial crimes and assess and mitigate related risks in a manner consistent with applicable laws, rules, regulations, and supervisory guidance and industry best practices. Merkle is proud of its work and efforts to develop frameworks and guidance for managing financial crime risk.
Merkle’s Approach to Financial Crimes Risk Management
Merkle’s Global Financial Crimes Division (“GFCD”), headquartered in Hong Kong, manages the manage’s financial crimes compliance program consistent with regulatory expectations. GFCD is comprised of teams with resources in Hong Kong and Singapore as well as financial crimes compliance teams in each of the companies operating subsidiaries: Australia, New Zealand, Philippines, Thailand, Indonesia, Switzerland and the USA.
GFCD has issued global policies for managing financial crime risk consistently within and across business lines, support functions, and legal entities worldwide.
Our people and culture play an important role in the fight against financial crimes. All employees are responsible for complying with the Company’s financial crimes compliance policies, asking questions, and escalating concerns, including seeking advice from a supervisor, Compliance Officer, or through our anonymous reporting channels. Merkle prohibits retaliation against anyone who raises concerns in good faith.
Led by financial crimes compliance specialists, GFCD’s global departments address the three financial crime risk areas – Anti-Money Laundering (“AML”)/Countering the Financing of Terrorism (CFT”), Sanctions, and Anti-Bribery and Corruption (“ABC”). The Policy Statements for each of the three global financial crimes departments are here:
AML/CFT Policy Statement
Merkle is committed to complying with the letter and spirit of applicable AML/CFT laws everywhere we do business. This commitment includes zero tolerance for acts of money laundering and terrorist financing.
Specifically, the Merkle AML/CFT Policy prohibits:
• Knowingly facilitating or participating in any financial crimes activity or any activity that facilitates financial crimes (e.g., money laundering and financing of criminal activities);
• Knowingly providing services to entities or persons known to be involved in, or strongly suspected of involvement in, financial crimes activity;
• Ignoring information or circumstances that may be indicative of financial crimes; and
• Informing any person known to be involved or suspected of being involved in illegal or suspicious activity that such activity is being investigated or reported internally and/or to law enforcement authorities and regulatory agencies (known as “tipping off”).
Consistent with the Merkle’s AML/CFT Policy, the Company has established a global AML/CFT compliance program, including the following control processes:
• Designated persons responsible for the implementation and monitoring of the program, including a Global Head of AML/CFT and dedicated AML/CFT officers in each country of operation;
• Periodic AML/CFT risk assessments covering the customers, products and services, and geographies and related controls;
• Know-your-customer processes that require identification and appropriate verification of customer identities (including identification of ultimate beneficial owners), customer screening, customer due diligence, enhanced due diligence, customer acceptance/rejection, and customer reviews;
• Transaction monitoring systems and processes designed to detect unusual and potentially suspicious activity;
• Investigation processes to identify and report suspicious activity in compliance with the regulations in each of the jurisdictions in which Merkle operates;
• Prohibitions on relationships with certain customer types, including a prohibition on relationships with shell banks; and
• Information-sharing and record-keeping processes.
Sanctions Policy Statement
Merkle is committed to complying with both the letter and spirit of applicable economic sanctions laws everywhere we do business. This commitment includes zero tolerance for acts of sanctions circumvention and evasion.
The Merkle’s Sanctions Policy prohibits the funding of accounts and the processing of payments for, on behalf of, or for the benefit of, sanctions targets or jurisdictions in violation of applicable sanctions. Consistent with the Sanctions Policy, the Company has established a global sanctions compliance program, including the following control processes:
• Sanctions screening and reviews concerning customer on-boarding and processing of transactions;
• Periodic assessments of sanctions risks and controls; and
• Due diligence of customers with potential sanctions exposure.
Anti-bribery & Corruption Policy Statement
Merkle is committed to fostering a corporate culture of ethical business practices and compliance with both the letter and the spirit of the law everywhere we do business. This commitment includes zero tolerance for acts of bribery and corruption.
Merkle’s Anti-bribery & Corruption (ABC) Policy prohibits offering, giving, soliciting, or receiving, directly or indirectly, anything of value to or from anyone in exchange for an improper business benefit or advantage. The Policy also prohibits facilitation payments and falsifying books, records, and accounts relating to the Company’s business activities.
Consistent with the ABC Policy, the Company has established an ABC compliance program including the following control processes:
• Periodic assessment of bribery and corruption risks and controls;
• Due diligence and oversight of third-party service providers who act on the Bank’s behalf (i.e., intermediaries);
• Heightened review of gifts and hospitality, offers of employment/work experience, and charitable donations, particularly activities involving public officials; and
• Evaluation and management of risks associated with business transactions, including mergers and acquisitions.
Additional Program Elements
In addition to global compliance programs for each risk area, GFCD has centralized core functions that apply to all three programs, including employee training, risk assessment, record keeping/retention, monitoring and reporting to governing bodies (e.g., board- and management-level committees), testing and audit management functions, and management of identified financial crimes compliance issues.
Last updated: 4th June 2022