Anti Money Laundry Agreement by ytk35008

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									   Anti Money
Laundering Program




   200 Commerce Drive, Peachtree City, GA 30269
         770-487-9529 770-487-9645 Fax
           www.classicworldtravel.com
Introduction




200 Commerce Drive, Peachtree City, GA 30269
      770-487-9529 770-487-9645 Fax
        www.classicworldtravel.com
USA PATRIOT Act

Section 352 Anti-Money Laundering (“AML”) Programs

“In order to guard against money laundering, each institution shall establish an AML
program” that at a minimum includes:

       -   Written internal policies, procedures, and controls
       -   A designated Compliance Officer
       -   An ongoing employee training program
       -   An independent audit function to test programs

“Uniting and Strengthening America by Providing Appropriate Tools Required to
Intercept and Obstruct Terrorism.”

The signing of the USA PATRIOT Act placed new requirements on institutions that sell
financial instruments. These requirements expanded on existing regulations, all of which
are designed to prevent the financing of terrorist activity and money laundering globally.

Money Service Business

Effective January 1, 2002, FinCEN revised the regulatory definitions of certain non-bank
institutions and grouped the definitions into a separate category called Money Services
Businesses or MSBs. Any business that meets one or more of the MSB definitions is by
regulation an MSB and must comply with Bank Secrecy Act requirements applicable in
the U.S.

Generally, a business may be considered an MSB if it offers any of the following
products or services over $1,000 in value to the same person, or on behalf of the same
person in one day:

       -   Money Orders
       -   Money Transmission
       -   Currency Exchange
       -   Travelers Cheques
       -   Check Cashing
       -   Currency Dealing
       -   Stored Value Products

Bank Secrecy Act requirements applicable to MSBs include:

                    200 Commerce Drive, Peachtree City, GA 30269
                          770-487-9529 770-487-9645 Fax
                            www.classicworldtravel.com
       -   Register with the U.S. Department of the Treasury every two years (some
           exceptions)
              o Entities that are MSBs only because they function as an agent of
                  another MSB, need not register unless they perform other financial
                  services that bring them within the definition of an MSN e.g., money
                  transfer, check cashing, etc.
       -   Maintains a lift of all “agents” and update the list annually (Some exceptions)

American Express’ Commitment

In order to comply with these AML laws, American Express Travelers Cheques and
Prepaid Services (“TCPS”) has developed and implemented its Compliance program
which includes a robust AML component.

The AML program is supported by:

       -   Recordkeeping and currency transaction reporting policies and procedures
       -   Systems and procedures for identifying, investigating and reporting suspicious
           activity (SAR)

Is Classic World Travel an MSB?

An MSB is a business that provides money transfer services in any amount. As an
American Express agent, Classic World Travel is, at minimum, an agent MSB and must
have an appropriate AML program.

Bank Secrecy Act requiremtns applicable to MSBs include:

       -   Develop and implement an AML Compliance Program
       -   Comply with Recordkeeping, Currency Transaction and Suspicious Activity
           Reporting Requirements
       -   Retain certain records

American Express’ Commitment:

       -   Compliance Officer Designation – David Rowberry
       -   Periodic employee and agent training (monitored attendance)
       -   Frequent internal and external program evaluations
       -   Ongoing communication with agents
       -   On-site reviews of agent locations

                    200 Commerce Drive, Peachtree City, GA 30269
                          770-487-9529 770-487-9645 Fax
                            www.classicworldtravel.com
Money Laundering

Money Laundering is defined as disguising or concealing the illicit nature or source of
income or assets in order to make them appear legitimate. This includes the proceeds of
any type of criminal or illegal activity. The definition also includes the use of legitimately
derived funds for illegal purposes (e.g., terrorist financing).

In the U.S. over 170 “predicate” crimes are covered by AML laws:

       -   Drug related crimes
       -   Terrorism
       -   Tax Evasion
       -   Extortion
       -   Robbery
       -   Smuggling
       -   Weapons Trafficking
       -   Counterfeiting

Three Stages of Money Laundering:

       -   Placement
       -   Layering
       -   Integration

Money Laundering – Placement

Placement involved physically placing money, usually cash (can also include other
monetary instruments), into the financial system. Money is most vulnerable to detection
and seizure during the placement stage. This is where TCPS products might be
particularly targeted for misuse.

Money Laundering – Layering

Layering involves separating or distancing the illegally obtained money from its criminal
origin by layering or moving it through a series of financial transactions designed to
make it difficult to trace the dirty money back to its original source (more layers create
further distance).

Examples


                     200 Commerce Drive, Peachtree City, GA 30269
                           770-487-9529 770-487-9645 Fax
                             www.classicworldtravel.com
       -      Account debit to purchase financial instruments e.g., money orders Travelers
              Cheques, etc. to then fund wire transfers
       -      Purchase of financial instruments at one financial institution and negotiating
              them at another location
       -      Wire transfers from one account to another
       -      Purchase and sale of securities and other investment vehicles within an
              account

Money Laundering – Integration

Finally, integration involves moving the “layered” proceeds into a seemingly legitimate
form. Integration may include, but not be limited to, the purchase of businesses or
commercial real estate that produces apparently legitimate income.

Money Laundering – additional information

Paper Trail

An important factor connecting the three stages of money laundering is the “paper trail”
generated by financial transactions. Criminals try to avoid leaving a “paper trail” by
evading reporting and recordkeeping requirements.

Criminals may attempt to coerce, bribe, or threaten employees not to take ID, file proper
reports or complete required records.

A common method used by criminals to evade reporting and recordkeeping requirements
is by “structuring” (breaking up a large transaction into several smaller transactions, each
under the record keeping or reporting threshold) transactions.

In the U.S., even if the funds are legitimately earned, if a person structures or attempts to
structure transactions in an effort to evade reporting and recordkeeping requirements, a
crime is being committed and must be reported.

Aggregation:

If your business has multiple locations (or recordkeeping facilities) and if your point of
sale or transaction systems have the capability to link transactional data together (or you
otherwise have knowledge), you have an obligation to identify and aggregate transactions
from different offices.


                       200 Commerce Drive, Peachtree City, GA 30269
                             770-487-9529 770-487-9645 Fax
                               www.classicworldtravel.com
You also have an obligation to report suspicious activity that aggregates to $2,000 or
more over any period of time.

Scale of the Problem:

According to the International Monetary Fund, it is estimated that between 2% and 5% of
the global economic value is laundered annually. Using 2005 figures, the dollar value
ranges between USD $1.1 trillion to USD $2.9 trillion.

Money laundering can undermine and disrupt governments and may lead to economic
and political instability.

Cost of Non-Compliance:

Two divisions within American Express were fined a total of $65 million dollars by
federal regulators for failing to file timely and accurate Suspicious Activity Reports,
implement adequate internal controls, conduct independent testing, and failing to
designate compliance resources to ensure compliance with the Bank Secrecy Act.

Western Union was fined $11 million dollars by the New York Banking Regulators and
FinCEN for failing to file almost 600 Currency Transaction Reports as well as 63
Suspicious Activity Reports. California Regulators added an additional fine of $5 million
dollars for inadequate money laundering controls and $3 million dollars the Arizona
Department of Financial Institutions added for improper documentation and maintenance
of training and poor customer identification recordkeeping.

Riggs Bank was assessed a $25 million dollar fine by FinCEN after they determined
Riggs failed to design and implement an anti-money laundering program that would have
ensured appropriate and timely suspicious activity and currency transaction reporting
mandated by the Bank Secrecy Act.

Banco Popular de Puerto Rico was fined $21.6 million dollars for its lax internal controls,
even though U.S. Regulators deferred criminal prosecution.

U.S. Regulators fined ABN Amro $80 million dollars for unsafe and unsound internal
controls to combat money-laundering. ABN Amro also participated in transactions that
violated U.S. sanctions laws.

FinCEN and the Federal Reserve jointly assessed a $50 million dollar fine for AmSouth
Bank’s failure to establish an adequate anti-money laundering program as well as failure
to file accurate, complete, and timely Suspicious Activity Reports. Defects were also
                     200 Commerce Drive, Peachtree City, GA 30269
                           770-487-9529 770-487-9645 Fax
                             www.classicworldtravel.com
identified with the bank’s internal controls, employee training and independent audit
programs.

Affects of Money Laundering

The integrity of the financial services marketplace depends heavily on the perception that
it functions within a framework of high legal, professional and ethical standards.

If funds from criminal activity can be easily processed through a particular institution or
product, the institution could be drawn into active complicity.

Money laundering can lead to FINES and IMPRISONMENT.

Federal Recordkeeping and Reporting

MSBs are required to:

       -   Keep detailed records of currency exchange transactions (cash for cash) over
           $1,000 up to $10,000
               o Customer’s name, physical address (not a P.O. Box), taxpayer ID or
                   passport (unless received by mail or common carrier), date of
                   transaction, dollar amount of transaction, currency name, currency
                   country, total dolar amount of each foreign currency purchased.
       -   Keep detailed records of cash purchases of Travelers Cheques and Gift Cards
           from $3,000 to $10,000
               o Customer’s name, physical address (not a P.O. Box), SSN (or, if
                   customer is an alien, alien ID number), date of birth, ID that verifies
                   the customer’s name and address (e.g., drivers license or state ID), ID
                   details including type, place of issuance and number, date of
                   transaction, type of each instrument purchased (including serial
                   numbers), dollar amount of each instrument purchased.
       -   Report cash transactions over $10,000 to the IRS via a CTR:
               o Customer’s name, physical address (not a P.O. Box), SSN, individual
                   taxpayer ID number (TIN) or Employer ID number (EIN), date of
                   birth, occupation, profession or type of business, ID that verifies the
                   customer’s name and address (e.g., drivers license or state ID), ID
                   details including type, place of issuance and ID number, date of
                   transaction, type of instrument purchased, total dollar amount of
                   transaction
       -   If customer is an alien or non-US resident, record passport nuber, alien ID
           card or other official document evidencing nationality or residence
                    200 Commerce Drive, Peachtree City, GA 30269
                          770-487-9529 770-487-9645 Fax
                            www.classicworldtravel.com
       -   If the transaction is conducted on behalf of a 3rd party (person or entity),
           record the party’s name, address, SSN, TIN or EIN, date of birth, occupation,
           profession or type of business, ID that verifies the party’s name and address
           (e.g., drivers license or state ID), ID details including type, place of issuance
           and ID number.
       -   CTR Filing
                o Filing deadline – 15 calendar days (if electronically filing, 25 calendar
                    days)
                o Retain Records for 5 years
                o Remember that YOU complete the CTR, not the customer
       -   Report suspicious activity that is attempted or conducted at, in or through the
           MSB involving any financial transaction, or pattern of transactions over a
           period of time of $2,000 or more via a SAR.

Recognizing Red Flags

As a seller of TRS products, it is important to remain aware at all times of the
transactions you conduct. Criminals and their activities have become more sophisticated,
requiring greater scrutiny. That is why it is important to be able to recognize “red Flags”
and potentially “suspicious transactions”.

       -   Customer is reluctant to answer questions about the transaction or provide
           requested information
       -   Customer makes a large transaction which is inconsistent with what you know
           about him or her
       -   Customer purchases products in large amounts and high denominations which
           are inconsistent with the customer’s business or for which there is no
           reasonable explanation
       -   Customer attempt to hide the size of a single large transaction by breaking it
           into multiple, smaller transactions (structuring)
       -   Customer makes several repetitive small transactions over several days,
           staying under reporting or record keeping limits (structuring)
       -   Customer presents identification which appears to have been altered or seems
           strange or out of order
       -   Customer alters or reduces the transaction amount upon learning that
           identification is required
       -   Customer, or group, frequently exchanges cash into Travelers Cheques or
           Stored Value Products
       -   Customer requests to purchase Travelers Cheques or Stored Value products in
           bulk, possibly for resale
       -   Customer alters the spelling or the order of his or her name
                    200 Commerce Drive, Peachtree City, GA 30269
                          770-487-9529 770-487-9645 Fax
                            www.classicworldtravel.com
      -   Customer conducts transactions on behalf of unrelated third parties
      -   Depending on the circumstance, a customer asks about identification
          requirements

SAR Filing

      -   Filing Deadline – 30 calendar days
      -   Retain Records for 5 years
      -   Liability – the law protects you from civil liability
      -   Your role – you are not accusing the customers of criminal activity
      -   Confidentiality – it is illegal to tell any person involved in the transaction that
          a SAR is being filed

What American Express Asks You to Do

   1. Know Your Customer!

      -   Ensure the customer completes the purchase agreement forms and provides all
          information requested
      -   Obtain identification for large purchases as required
      -   Ask probing questions when you have concern
      -   Take note of comments and conversations the customer makes

   2. Always be alert for unusual or suspicious transactions

   3. Ensure your institution has developed and implemented a written AML program

   4. Do not provide TCPS products to any person or entity for resale

   5. Never advise a customer on how to break up transactions to avoid recordkeeping
      or reporting requirements

   6. Ensure you provide requested information to American Express promptly

      -   Sellers of Travelers Cheques and other TCPS products may receive routine
          requests for information
      -   These requests are made as part of American Express’ obligation as an issuer
          of financial instruments to minitor how its products are being used and who
          uses them
      -   Failure to comply with requests may be considered break of contract, possibly
          resulting in suspension of product re-supply and/or account termination
                   200 Commerce Drive, Peachtree City, GA 30269
                         770-487-9529 770-487-9645 Fax
                           www.classicworldtravel.com
U.S. Sanctions

Economic sanctions prevent or restrict certain types of trade and block certain types of
property. Traditionally, sanctions were targeted at specific countries. Sanctions programs
also address Terrorism and Narcotics Trafficking. U.S. Sanctions are imposed by the
President under various laws in response to national emergencies.

The U.S. Department of Treasury Office of Foreign Assets Control (“OFAC”)
administers U.S. Sanction programs. U.S. Citizens worldwide, U.S. residents, U.S.
incorporated entities worldwide and foreign entities operating in the U.S. and its
territories must comply with OFACs regulations.

Sanctions generally prohibit financial transactions or services involving sanctioned
countries or blocked persons.

       -   “persons” includes individuals, businesses (banks, airlines, commercial
           entities, etc.), government personnel/agencies and vessels
       -   Blocked persons are known as “SDNs” – Specially Designated Nationals
       -   SDNs are generally associated with a sanctioned country or program
       -   Sanction changes take effect immediately and with minimal or no notice
       -   Sanctions generally require prohibited transactions or property to be blocked
           (property includes anything of value – currency, Travelers Cheques,
           documents, etc – with a present or future value or contingent interest

Current U.S. Sanctioned countries

       -   Burma (Myanmar)
       -   Cuba
       -   Iran
       -   Sudan
       -   North Korea
       -   Syria (to a lesser extent)

Current SDN programs:

       -   Terrorism
       -   Narotics Trafficking
       -   “Iraq 2”
       -   “Balkan”
       -   “Belarus”
       -   “Congo”
                    200 Commerce Drive, Peachtree City, GA 30269
                          770-487-9529 770-487-9645 Fax
                            www.classicworldtravel.com
       -    “Cote d’Ivoire”
       -    “Liberia”
       -    “Non-proliferation”
       -    “Taliban”
       -    “Zimbabwe”

American Express Travelers Cheques and Prepaid products can not be used in
sanctioned countries or sold to SDNs

Resources

       -    OFAC website for information on sanctions programs and SDNs:
            www.ustreas.gov/ofac
       -    OFAC e-mail notification service for updates about sanctions changes
       -    OFAC telephone hotline and email service for questions
       -    Industry gropus and regulatory agencies
       -    Software Vendors
       -    Legal counsel and compliance officer
       -    Free MSB Information and Guidance Materials: www.msb.gov
       -    Money Services Business Outreach Office: 800-386-6329
       -    FinCEN website: www.fincen.gov

All information in the introductory portion of this policy was taken from “Travelers
Cheques and Prepaid Services Anti-Money Laundering Training 2007” presented by
Paula Colvin, Sr. Compliance Manager, American Express




                    200 Commerce Drive, Peachtree City, GA 30269
                          770-487-9529 770-487-9645 Fax
                            www.classicworldtravel.com
Policies, Procedures
    and Controls




   200 Commerce Drive, Peachtree City, GA 30269
         770-487-9529 770-487-9645 Fax
           www.classicworldtravel.com
Customer Identification and Recordkeeping




All agents of Classic World Travel will follow the above Federal guidelines for customer
identification and reporting. All necessary forms can be found at
http://classicagents.com.

All financial transactions will be processed using the American Express product
“ExpressPass”. Copies of all transactions will be kept in a central filing location for 5
years.




                     200 Commerce Drive, Peachtree City, GA 30269
                           770-487-9529 770-487-9645 Fax
                             www.classicworldtravel.com
Currency Transaction Reporting (“CTR”)


Transactions over $10,000 require that a Currency Transaction Report be filed. The
report must be filed within 15 days of the transacation and kept on file for 5 years.

A copy of this report can be found at http://classicagents.com and also at
www.msb.gov/pdf/fin104_ctr.pdf
Suspicious Activity Monitoring

It is imperative that agents of Classic World Travel are aware of “Red Flag”Activities by
customers. It’s important that all regulations be followed carefully as they are in place to
weed out potential criminal activity.

The following page highlights some possible “Red Flags”.




                    200 Commerce Drive, Peachtree City, GA 30269
                          770-487-9529 770-487-9645 Fax
                            www.classicworldtravel.com
200 Commerce Drive, Peachtree City, GA 30269
      770-487-9529 770-487-9645 Fax
        www.classicworldtravel.com
Suspicious Activity Reporting (SAR)

Any suspicious activity must be reported using the Suspcicious Activity Reporting form.
It must be submitted within 30 days and kept on file for 5 years.

The SAR form can be found at http://classicagents.com and also at
www.msb.gov/pdf/fin109_sarmsb.pdf.

Independent Audit/Examination

Classic World Travel will perform a complete audit of finacial service products once per
year. The compliance officer, Christy Solly, will oversee this yearly audit.

On a no less than quarterly basis, Katherine Solly, will perform random checks of
employees and processes. Katherine does not work in the office on a regular basis and
does not sell financial products. She will act as an independent outside controller for this
program. She will pull transactions at random and be certain that they were processed
correctly and all necessary forms are on file.


Employee Training

All employees will be required to read and state that they understand this manual. All
information necessary for properly executing the sale of financial products can be found
herein. Agents who are responsible for handling financial products and selling to
customers must also be comfortable with the American Express tool “ExpressPass”.

An employee training log will be kept with this manual and will be udpated when new
information has become available. It will be the responsibility of Christy Solly,
compliance officer, to be certain that all agents are aware of Classic World Travel’s Anti-
Money Laundering Program and Policies.

Agents will be required to visit the “What’s New” area of the FinCEN and MSB websites
on a quarterly basis in order to stay informed about Anti-Money Laundering Issues.

These sites may be accessed at:

www.fincen.gov/index.html and www.msb.gov/new/index.html



                    200 Commerce Drive, Peachtree City, GA 30269
                          770-487-9529 770-487-9645 Fax
                            www.classicworldtravel.com
Sanctions Screening

There are a number of nationalities and persons with whom it is against the law to do
business in the United States. Sanctions are established to protect national security and
we at Classic World Travel will be actively aware of our responsibility in refusing to do
business with sanctioned countries or persons.

Names may be checked against the OFAC database by accessing:

http://bridgerinsight.coicepoint.com/free-services.htm and selection the OFAC Free
Name Check.

Classic World Travel will not sell financial products or services to anyone in the
sanctions database.

Records Retention

All records of financial services transactions will be kept on file for a minimum of 5
years.

Compliance Officer Designation

Christy Solly, Vice President of Operations, will serve as the Anti-Money Laundering
Compliance Officer for Classic World Travel.




                    200 Commerce Drive, Peachtree City, GA 30269
                          770-487-9529 770-487-9645 Fax
                            www.classicworldtravel.com

								
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