Anti-Money Laundering and Counter-Terrorist Financing Program

Sempo Pty Ltd. ("we" or “our” or “Sempo” or “Company”) has developed an Anti-Money Laundering (“AML”) and Counter-Terrorist Financing (“CTF”) Compliance Program in an effort to maintain the highest possible compliance with the legislative requirements relating to anti-money laundering and counter-terrorist financing in Australia and globally.

It is Sempo’s policy to prohibit and actively prevent money laundering ("ML") and any activity that facilitates money laundering or terrorist financing (“TF”) or criminal activities. Sempo is subject to regulation designed to combat ML and TF as set out in the laws of Australia, the Financial Action Task Force (“FATF”) regulations and guidelines. We are registered with the Financial Transactions and Reports Analysis Centre of Australia (“AUSTRAC”) as a Digital Currency Exchange (“DCE”) with registration number DCE100617044-001 and cooperate fully with AUSTRAC requirements.

1. Anti-Money Laundering and Counter-Terrorism Financing Act 2006

Sempo insists on a comprehensive and thorough Know Your Customer ("KYC") and AML compliance framework. In accordance with the prescribed legislative requirements, we have certain verification, record keeping, and reporting requirements. Our Company has chosen to implement and maintain an AML/CTF compliance regime, which includes, but is not limited to:

  • Employing an AML Compliance Officer to be responsible for the implementation and oversight of our AML/CTF Program;
  • Establishing robust internal policies, procedures and controls that combat any attempted use of the platform for illegal or illicit purposes;
  • Executing Know Your Customer procedures on our customers;
  • Maintaining comprehensive records of transactions;
  • Regularly assessing our risks as it relates to money laundering and terrorist financing;
  • Monitoring transactions for potentially suspicious and attempted suspicious activities for purposes of filing Suspicious Matter Reports ("SMR");
  • Maintaining and providing written, on-going compliance training for our employees; and
  • Reviewing our policies and procedures, risk assessment and training program to test its effectiveness related to preventing ML and TF annually.

2. Appointment of an Anti-Money Laundering Compliance Officer

Sempo has appointed an AML Compliance Officer who reports to senior management and the board of directors for establishing and maintaining the AML/CTF program. The Compliance Officer has the authority and the resources to ensure the on-going compliance of our organization as it relates to ML and TF identification and prevention.

3. Policies and Procedures

Our AML Program has been reviewed and approved by our Senior Management. The Program is regularly reviewed and, if necessary, revised in an effort to comply with applicable rules, regulations and policies.

The Policy and related standards (covering such topics as Client Due Diligence ("CDD"), Risk Management, Politically Exposed Persons ("PEPs") and Suspicious Matter reporting), are applicable to all divisions of Sempo globally, and meet or exceed the AML/CTF regulatory standards in each country in which Sempo operates.

4. Ongoing Monitoring of Business Relationships

For all business relationships Sempo is required to:

  • Ascertain the identity of the individual; or
  • Confirm the existence of a corporation or other entity;
  • Risk rate all our business relationships;
  • Conduct ongoing monitoring of the business relationships at a frequency commensurate to our clients’ risk; and
  • Keep a record of the measures that have been taken to manage the risk of the relationship and the information that has been obtained as a result.

If necessary, we may require our clients to provide additional documentation or information to confirm source of funds (including digital assets) or the purpose of the transaction. We may also amend their risk rating if the need arises.

Our AML Compliance team will review any transactions that trigger an alert and determine if the transactions are within the clients’ stated activity before being released or completed. In some cases, Sempo will require additional information, which includes, but not limited to the client's source of income, proof of employment, and nature of the client's business.

5. Record Keeping

5.1 As a registered DCE, we are required to maintain records of our verification, including information provided by the Sempo account-holder regarding their identity, as well as specific details contained within those documents as well as records of any suspicious transaction reports submitted to AUSTRAC.

5.2 Protecting, securing and maintaining records of all data, including customer identification documents is a critical part of Sempo’s business. We keep the core technical infrastructure and database snapshots for at least seven years from the date such information is provided to Sempo or an account is closed, whichever is later.

5.3 The information we hold will be treated as confidential unless disclosure is required to a third party, in which case such disclosure shall be made in accordance with applicable laws and only to the extent required. We are legally obligated to collect and maintain this information, and may be legally obligated to continue maintaining it notwithstanding any request made by you to us to erase such information, where required and permitted under applicable Data Protection Laws and those relating to AML/CTF.

6. Verification Process

6.1 Sempo users have to be verified prior to being able to undertake any form of transactions through our platform. Accounts for fiat transactions are only made available to the fully verified users in order to mitigate the risk of money laundering and terrorist financing activities.

The users are verified by the documentary means and/ or non-documentary means. Sempo reserves the right to use non-documentary means where necessary to verify the true identity of the Sempo account-holder. To verify the identity of the Sempo account-holder, Sempo may ask you for a copy of your Government-issued proof of identity, as well as proof of the Sempo account-holder’s residential address less than 3 months old or may request any other document evidencing these. As part of the account sign up process, our users are asked to upload to our site the original electronic or paper documents they received or downloaded. All documents must appear to be authentic, valid and current in order to be acceptable.

6.2 We will verify the information provided to us within a reasonable time. Where we find suspicious information that indicates possible money laundering, terrorist financing activity, or other suspicious activity, we will, in conjunction with our AML Compliance Officer report that activity in accordance with applicable laws and regulations.

6.3 Where we are not able to confirm with a reasonable degree of certainty the true identity of the Sempo account-holder and/or are not satisfied that the Sempo account-holder presents an acceptable level of risk to Sempo, we may: (1) deactivate or suspend the account; (2) close an account after attempts to verify the Sempo account-holder’s identity fail; and (3) determine whether it is necessary to inform applicable regulators and regulatory bodies in accordance with applicable laws and regulations.

6.4 Sempo must within a reasonable period of time after an account is opened (or earlier, if required by another law or regulation or directive issued in connection with an applicable list), determine whether a Sempo account-holder appears on any government-issued list of known or suspected terrorists or terrorist organisations following which Sempo may, as required and/or permitted by applicable laws, submit such information to applicable regulatory bodies.

7. Corporations and Other Entities

For corporate clients, we are required to confirm the existence of the entity, and the entity's beneficial ownership.

7.1 Corporations

We confirm the existence of a corporation as well as the corporation's name and address, by referring to the documents below.

The minimum information we must collect from a customer who is a domestic company is:

  • full legal name, being the name that it has registered with the Australian Securities and Investments Commission (ASIC) or the foreign equivalent;
  • full address of the entity (a principal place of business address, registered office address or both);
  • Australian Company Number (ACN) issued to the company;
  • whether the company is a proprietary or public company;
  • if the company is registered as a proprietary company, the name of each director of the company.

In addition to the minimum information outlined above, we have systems and controls to determine whether and in what circumstances additional KYC information should be collected. We will request additional information if we suspect the potential customer might be providing financial services in Australia.

The minimum information we collect from a customer who is a foreign company is:

  • full name of the company;
  • identification number issued by the relevant foreign registration body;
  • nature of business relationship;
  • control structure of the customer;
  • beneficial ownership of the customer;
  • whether the company is a proprietary or public company.

The minimum information we collect from a customer who is a government body is:

  • the full name of the government body;
  • the full address of the government body’s principal place of operations;
  • whether the government body is an entity or emanation, or is established under legislation, of the Commonwealth; and
  • whether the government body is an entity or emanation, or is established under legislation, of a State, Territory, or a foreign country and the name of that State, Territory or country.

The applicants will be required to provide an electronic version of the proof of existing and activity from the Australian Government Organisations Register or DVS.

7.2 Entities other than corporations

We confirm the existence of an entity other than a corporation by referring to a partnership agreement, articles of association or any other similar record that confirms the entity's existence.

In confirming an entity’s existence, we must be able to refer to a paper or electronic record and retain a copy of it. Verbal confirmation is not sufficient. Electronic records must be from a public source, which states the type of business and the registration number.

7.3 Beneficial Ownership Records

In addition to confirming the existence of a corporation or other entity, we also must determine and confirm the accuracy of the entity's beneficial ownership through the following:

  • If the entity is a corporation:

    • The name of all directors of the corporation; and both:
    • the full name of each individual who directly or indirectly own or control 25% or more of the entity, and
    • their date of birth or full residential address.
  • If the entity is other than a corporation, both:

    • the full name of each individual who directly or indirectly own or control 25% or more of the entity, and
    • their date of birth or full residential address.

Please note, the requirement to find out ownership of 25% or more is discretionary. We may request to be provided ownership under 25% on a case-to-case basis. For all individuals who are identified as a beneficial owner, we must undertake the same steps to collect and verify information from them as we would from an individual customer.

8. Record Maintenance

We must keep our client information up to date. For clients that have a customer file with us, we will, at a minimum, update the client identification at least every two years. This is to be done by reviewing original identity documents and recording the identification details for our files as appropriate.

We are required to maintain an effective recordkeeping system to enable AUSTRAC to have access to the records in a timely fashion. Our records have to be kept in such a way that they can be provided to AUSTRAC as soon as possible upon a request to examine them.

9. Suspicious Matter Reports (SMRs)

The Company must report any transactions or attempted transaction that we suspect relates to money laundering or terrorist activity financing regardless of the amount. There is no monetary threshold for submitting a Suspicious Matter Report.

The Compliance Officer has the authority to file SMRs with AUSTRAC and is required to maintain a log of all reports filed.

Tax evasion is also considered a predicate offense for money laundering; accordingly, if we suspect transactions are being undertaken to avoid or evade paying income taxes we need to report the transactions as suspicious to AUSTRAC.

10. Terrorist Property Reporting Requirements and Sanctions

There are two situations where we must send a terrorist property report to AUSTRAC immediately:

  • Knowing that property is owned or controlled by or on behalf of a terrorist or terrorist group; and
  • Believing that a property is owned or controlled by or on behalf of a listed person.

11. De-marketing/Closing of Accounts

If in the course of reviewing and monitoring we identify unexplainable or unusual activity, we will request to obtain further information so that these discrepancies can be satisfactorily answered. If required, the activity in question will be escalated to the Compliance Officer who is required to maintain a record/log of all internally generated reports.

A review will be conducted to determine if an SMR is to be filed with AUSTRAC. If we have not reached a clear understanding of the sources and movement of funds, it may result in the account being permanently de-marketed/closed. This will be followed by terminating the relationship with the de-marketed account owner and placing them on the de-market list without the right of re-opening a new account unless authorized by the senior Compliance/AML officials.

Last updated on September 3, 2019.