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FRATRES
Financial crime

Anti-Money Laundering & Counter-Terrorist Financing Policy

The firm’s risk-based approach to money laundering and terrorist financing risk, including customer due diligence, monitoring and reporting obligations.
Document reference
FGL-LEG-08
Version date
1 July 2026
Applies to
Fratres Limited

1.Purpose and legal framework

1.1
This Policy sets out the standards, controls and procedures by which Fratres Limited, a company registered in England and Wales, identifies, assesses, mitigates and manages the risk that its services, relationships or resources are used to launder the proceeds of crime or to finance terrorism.
1.2
The Company advises on, originates and facilitates investment, partnership and infrastructure transactions connected with Bangladesh and other markets. That activity brings the Company into contact with cross-border capital flows, state-linked counterparties and sectors of elevated inherent risk. The Company treats the prevention of financial crime as a condition of doing business rather than an administrative formality.
1.3
The principal instruments governing this Policy in the United Kingdom are:
  • Part 7 of the Proceeds of Crime Act 2002, which creates the principal money laundering offences of concealing, disguising, converting, transferring or removing criminal property (section 327), entering into or becoming concerned in an arrangement facilitating the acquisition, retention, use or control of criminal property (section 328), and acquiring, using or possessing criminal property (section 329);
  • Part III of the Terrorism Act 2000, which creates offences of fund-raising for the purposes of terrorism (section 15), use and possession of terrorist property (section 16), funding arrangements (section 17) and laundering terrorist property (section 18), together with the disclosure duties in sections 19 and 21A;
  • the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017, which prescribe the risk assessment, policies and controls, customer due diligence, enhanced measures, record keeping and training requirements adopted in this Policy;
  • the Sanctions and Anti-Money Laundering Act 2018 and the financial sanctions regimes made under it, which are addressed in detail in the Sanctions & Export Controls Policy;
  • the Bribery Act 2010 and Part 3 of the Criminal Finances Act 2017, which address the predicate conduct most closely associated with the Company’s markets and are addressed in the Anti-Bribery & Anti-Corruption Policy and the Prevention of the Facilitation of Tax Evasion Policy respectively.
1.4
In Bangladesh, the Company and its personnel must also comply with the Money Laundering Prevention Act 2012 and the Anti-Terrorism Act 2009, and with any lawful requirement of the Bangladesh Financial Intelligence Unit. Where the standards of two jurisdictions differ, the higher standard shall be applied, save that nothing in this Policy requires or permits any person to breach the law of any jurisdiction in which the Company operates.
1.5
The Company is not authorised or regulated by any financial services regulator and does not hold, control or transmit client money. Certain requirements of the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 are therefore adopted in this Policy as a matter of standard rather than as a direct statutory duty. That distinction does not narrow the Policy. The principal offences under the Proceeds of Crime Act 2002 and the Terrorism Act 2000 apply to every person, regulated or otherwise, and the Company applies the regulated-sector standard to all of its work.
1.6
This Policy is approved by the board of the Company. It forms part of the contractual duties of every employee and of every consultant, contractor and agent engaged by the Company.

2.Interpretation and definitions

2.1
In this Policy, the following defined terms have the meanings given below. Defined terms are capitalised throughout.
Beneficial Owner
Any natural person who ultimately owns or controls a Client, or on whose behalf a transaction is conducted, including any individual who directly or indirectly holds more than 25% of the shares, voting rights or ownership interest in a body corporate, and any individual who otherwise exercises control over the management of that body.
Business Relationship
A business, professional or commercial relationship between the Company and a Client which the Company expects, at the time contact is established, to have an element of duration.
CDD
Customer due diligence, meaning the measures described in clause 6 of this Policy.
Client
Any person or entity for whom the Company provides or proposes to provide services, and, where the context requires, any counterparty, introducer, joint venture partner, local partner, sponsor, agent or supplier subject to due diligence under this Policy.
Criminal Property
Property which constitutes a person’s benefit from criminal conduct, or which represents such a benefit in whole or in part and whether directly or indirectly, where the alleged offender knows or suspects that it constitutes or represents such a benefit, within the meaning of section 340 of the Proceeds of Crime Act 2002.
DAML
A defence against money laundering, being the protection obtained by making an authorised disclosure under section 338 of the Proceeds of Crime Act 2002 and obtaining appropriate consent under section 335 of that Act before a prohibited act is carried out.
EDD
Enhanced due diligence, meaning the additional measures described in clause 8 of this Policy.
Internal Report
A report of knowledge, suspicion or reasonable grounds for suspicion made by a member of Personnel to the Nominated Officer under clause 13.
NCA
The National Crime Agency, the United Kingdom financial intelligence unit to which suspicious activity reports are made.
Nominated Officer
The individual appointed under clause 5 to receive Internal Reports, to determine whether a SAR should be made, and to act as the Company’s money laundering reporting officer.
PEP
A politically exposed person, being an individual who is or has been entrusted with a prominent public function, together with that individual’s family members and known close associates as defined in clause 9.
Personnel
Every director, officer, employee, secondee, temporary worker, intern, consultant, contractor and agent of the Company, and any other person acting for or on behalf of the Company.
SAR
A suspicious activity report submitted to the NCA under Part 7 of the Proceeds of Crime Act 2002 or Part III of the Terrorism Act 2000.
Source of Funds
The activity, transaction or account from which the specific money or assets used in a transaction originate.
Source of Wealth
The origin of a person’s total accumulated wealth, and the activities and events which generated it.
2.2
References to a statutory provision include that provision as amended, extended, consolidated or re-enacted from time to time, and any subordinate legislation made under it.
2.3
The singular includes the plural and the plural includes the singular. Headings are for convenience only and do not affect interpretation. The words “including”, “includes” and “in particular” are illustrative and do not limit the words preceding them.

3.Scope and application

3.1
This Policy applies to all Personnel, at every level and grade, in every jurisdiction in which the Company operates, and to all of the Company’s activities without exception.
3.2
Every member of Personnel must:
  • (a)read, understand and comply with this Policy and with any procedure issued under it;
  • (b)complete the training required by clause 16 within the period notified to them;
  • (c)apply the due diligence standards in clauses 6 to 10 before a Business Relationship is established and before any material transaction is progressed;
  • (d)report knowledge, suspicion or reasonable grounds for suspicion of money laundering or terrorist financing to the Nominated Officer promptly and in any event as soon as is practicable after the information comes to them; and
  • (e)co-operate fully and honestly with any internal or external enquiry, review or investigation concerning financial crime.
3.3
This Policy applies to prospective as well as existing relationships. Personnel must not commit the Company to a mandate, execute an engagement letter, accept an introduction fee or hold the Company out as acting for any person before the due diligence required by this Policy has been completed and approved.
3.4
Where the Company acts alongside a co-adviser, introducer or local partner, the Company remains responsible for its own compliance with this Policy. Reliance on due diligence carried out by another person does not discharge that responsibility, and any such reliance must be documented, must be supported by immediate access to the underlying records, and must be approved in advance by the Nominated Officer.
3.5
This Policy is to be read with the Client Due Diligence & Know Your Customer Standard, the Sanctions & Export Controls Policy, the Anti-Bribery & Anti-Corruption Policy, the Prevention of the Facilitation of Tax Evasion Policy, the Conflicts of Interest Policy and the Whistleblowing & Speak-Up Policy. Where a genuine conflict arises between this Policy and any other internal document, this Policy prevails on matters of money laundering and terrorist financing.

4.Firm-wide risk assessment

4.1
The Company maintains a written firm-wide money laundering and terrorist financing risk assessment. The assessment identifies and assesses the risks to which the Company is subject, records the reasoning applied, and is the foundation of the risk-based approach required by this Policy.
4.2
The assessment addresses, at a minimum, the following risk factors.
4.3
Customer risk. The nature, behaviour and profile of the Client, including whether the Client is a PEP or connected to one; whether ownership or control is opaque, layered or held through nominees; whether the Client is a cash-intensive business; whether the Client, its owners or its officers have adverse media, regulatory findings or criminal associations; whether the Client is a state-owned or state-linked entity; and whether the Client’s stated purpose is consistent with its apparent means.
4.4
Geographic risk. The jurisdictions of incorporation, residence, operation, asset location and payment routing associated with the relationship, assessed by reference to credible sources including mutual evaluation reports of the Financial Action Task Force and its regional bodies, the list of high-risk third countries applicable in the United Kingdom, corruption indices, and the existence of financial sanctions, armed conflict or significant informal value transfer activity.
4.5
Product and service risk. The characteristics of the engagement, including whether it involves the introduction of capital across borders; the structuring of holding vehicles or special purpose entities; the acquisition or disposal of land, licences, concessions or natural resource rights; participation in public procurement or public-private partnership processes; the payment or receipt of success fees, commissions or introduction payments; or any element which obscures the identity of the ultimate beneficiary of a transaction.
4.6
Delivery channel risk. The manner in which the relationship is established and conducted, including whether the Client is met in person; whether the relationship is introduced by an intermediary, finder or agent and, if so, the intermediary’s own standing; whether identity is verified remotely or by electronic means; and whether instructions are received through third parties rather than from the Client directly.
4.7
The Company also takes account of transaction risk, including unusual size, unexplained complexity, the absence of an evident commercial rationale, unusual speed or urgency, and payment arrangements which do not correspond to the parties or the structure of the transaction.
4.8
Each Client relationship is assigned a risk rating of standard, elevated or high on the basis of the factors above. The rating determines the level of due diligence applied under clauses 6 to 10 and the frequency of review under clause 11. The rating and the reasons for it must be recorded in writing.
4.9
The firm-wide risk assessment is reviewed at least annually and additionally whenever there is a material change in the Company’s services, markets, delivery channels or Client base, or in the external risk environment. Each review, and any resulting change to controls, is recorded and approved by the board.

5.Governance and the Nominated Officer

5.1
The board of the Company retains ultimate responsibility for this Policy, for the adequacy of the controls established under it, and for the culture in which those controls operate. A member of the board is designated as the individual with overall responsibility for compliance with this Policy.
5.2
The Company appoints a Nominated Officer. The Nominated Officer is a person of sufficient seniority and independence, with unrestricted access to all Client files, transaction records, correspondence and Personnel, and with a direct reporting line to the board.
5.3
The Nominated Officer is responsible for:
  • (a)receiving and evaluating every Internal Report made under clause 13;
  • (b)determining whether an Internal Report gives rise to knowledge, suspicion or reasonable grounds for suspicion such that a SAR must be made to the NCA;
  • (c)making SARs and, where required, applying for a DAML, and communicating the outcome to the relevant Personnel to the extent permitted by law;
  • (d)approving the establishment and continuation of high-risk relationships, including all relationships involving a PEP;
  • (e)maintaining the firm-wide risk assessment, this Policy and the procedures issued under it;
  • (f)maintaining the register of Internal Reports, SARs, DAML applications and decisions required by clause 15;
  • (g)commissioning and reviewing independent testing of the Company’s financial crime controls; and
  • (h)reporting to the board at least annually, and immediately on any matter of urgency, on the operation and effectiveness of this Policy.
5.4
A deputy is appointed to discharge the functions of the Nominated Officer during any absence. All references in this Policy to the Nominated Officer include that deputy when acting.
5.5
No member of Personnel may instruct, pressure or influence the Nominated Officer in the exercise of the judgment required by clause 13. The decision whether to make a SAR rests with the Nominated Officer alone and is not subject to commercial override by any person, including the board.
5.6
The Company screens all Personnel whose work involves the application of this Policy, both before appointment and at appropriate intervals during employment or engagement, to assess their skills, knowledge, expertise, conduct and integrity. Screening is conducted lawfully and proportionately and in accordance with the Privacy Policy.
Escalation

Any member of Personnel who believes that this Policy is being circumvented, that due diligence is being conducted for appearance rather than substance, or that a concern has not been acted upon, may raise the matter under the Whistleblowing & Speak-Up Policy. A disclosure made in the reasonable belief that it is in the public interest is protected under the Public Interest Disclosure Act 1998, and the Company will not tolerate detriment of any kind to a person who raises such a concern.

6.Customer due diligence

6.1
CDD must be completed and approved before the Company establishes a Business Relationship, before it carries out any occasional transaction, and before it provides any substantive service. CDD must also be applied whenever the Company suspects money laundering or terrorist financing, and whenever it doubts the veracity or adequacy of documents or information previously obtained.
6.2
CDD comprises the following measures:
  • (a)identifying the Client and verifying that identity on the basis of documents, data or information obtained from a reliable source which is independent of the Client;
  • (b)identifying any Beneficial Owner and taking reasonable measures to verify that person’s identity, so that the Company is satisfied that it knows who the Beneficial Owner is;
  • (c)where the Client is a legal person, trust, partnership or similar arrangement, taking reasonable measures to understand its ownership and control structure;
  • (d)assessing and, as appropriate, obtaining information on the purpose and intended nature of the Business Relationship; and
  • (e)conducting ongoing monitoring of the relationship in accordance with clause 11.
6.3
For an individual, the Company obtains and verifies full legal name, date of birth, residential address and nationality, together with a government-issued photographic identity document and evidence of address from an independent source. Where identity is verified remotely, the Company applies additional measures to mitigate the higher risk of impersonation, including liveness or certification controls.
6.4
For a body corporate, the Company obtains and verifies the full legal name, any trading name, the registered number, the registered office and principal place of business, the constitutional documents, the names of the board and of the senior persons responsible for its operations, and the law to which it is subject. For a company registered in England and Wales, the Company obtains the register entries maintained under the Companies Act 2006, including the register of people with significant control, and treats those entries as a starting point rather than as conclusive evidence.
6.5
For a trust, foundation, partnership or similar arrangement, the Company obtains the constitutive document and identifies the settlor, the trustees or equivalent, the protector or equivalent, the beneficiaries or class of beneficiaries, and any other natural person exercising ultimate control.
6.6
The Company verifies the identity and authority of any person purporting to act on behalf of a Client, including the terms of any power of attorney, board resolution or mandate relied upon.
6.7
The Company must understand and record the purpose and intended nature of every Business Relationship, including the commercial rationale for the structure proposed, the anticipated size and pattern of the transaction or transactions, the jurisdictions expected to be involved, the identity of the ultimate beneficiary of the outcome, and the expected source of the funds to be deployed. A relationship whose purpose cannot be coherently explained must not be accepted.
6.8
All Clients, Beneficial Owners and connected persons are screened against applicable financial sanctions lists, including the United Kingdom Sanctions List and the consolidated list maintained by the Office of Financial Sanctions Implementation, and against adverse media and law enforcement information. Screening is performed at onboarding and repeated periodically thereafter in accordance with clause 11. Sanctions matters are governed by the Sanctions & Export Controls Policy.
6.9
Where the Company is unable to complete CDD, it must not establish the Business Relationship, must not carry out the transaction, and must terminate any existing relationship. In every such case the Nominated Officer must consider whether an Internal Report and a SAR are required, and the reasons for the decision must be recorded.

7.Beneficial ownership and control

7.1
The Company must know who ultimately owns and controls every Client. Ownership recorded in a register, and ownership as it exists in fact, are not always the same thing. The obligation in this clause is to establish the latter.
7.2
A Beneficial Owner of a body corporate is any natural person who:
  • (a)directly or indirectly holds more than 25% of the shares or voting rights in that body;
  • (b)directly or indirectly holds the right to appoint or remove a majority of its board;
  • (c)otherwise exercises, or has the right to exercise, significant influence or control over that body; or
  • (d)exercises significant influence or control over a trust, partnership or other entity which itself satisfies any of paragraphs (a) to (c).
7.3
Ownership must be traced through every intervening layer until natural persons are identified. Indirect holdings are aggregated. Where the chain passes through a nominee, a bearer instrument, a trust, a foundation, a discretionary arrangement or a jurisdiction which does not maintain a public register of ownership, the Company must obtain documentary evidence sufficient to establish the position, and must record the ownership chain in writing.
7.4
The 25% threshold is a floor, not a safe harbour. Where a person holds less than 25% but exercises control in fact — through veto rights, shareholder agreements, funding arrangements, family relationships, contractual arrangements or personal influence — that person must be identified and treated as a Beneficial Owner.
7.5
Where, after exhausting all reasonable means, no natural person is identified as a Beneficial Owner, the Company may treat the senior person responsible for managing the Client as the Beneficial Owner. That treatment is exceptional. It must be approved by the Nominated Officer, the steps taken to identify a Beneficial Owner must be recorded, and the relationship must be rated as elevated risk at minimum.
7.6
Any discrepancy between the beneficial ownership information obtained by the Company and the information recorded on a public register must be investigated, resolved and documented before the relationship proceeds.
7.7
Deliberate obscuring of beneficial ownership, refusal to disclose ownership, or the provision of ownership information which proves to be false, is a ground for immediate termination of the relationship under clause 12 and must be reported to the Nominated Officer.

8.Simplified and enhanced due diligence

8.1
The extent of due diligence applied to a relationship is determined by its risk rating under clause 4.8. Simplified measures may be applied only where risk is demonstrably low. Enhanced measures must be applied wherever risk is high.
8.2
Simplified due diligence. Simplified measures may be applied only where the Company has determined, and recorded in writing, that the relationship presents a low degree of risk having regard to the factors in clause 4. Relevant low-risk indicators include that the Client is a public authority or a company whose securities are admitted to trading on a regulated market subject to disclosure requirements consistent with international standards; that ownership and control are transparent and publicly verifiable; and that the relationship is confined to jurisdictions with effective anti-money laundering supervision.
8.3
Simplified due diligence adjusts the extent, timing and type of the measures in clause 6. It never removes the obligation to identify the Client, to understand the purpose of the relationship, to screen for sanctions, or to conduct ongoing monitoring. Simplified measures must be discontinued immediately, and full CDD applied, if the risk assessment changes, if suspicion arises, or if the relationship no longer meets the conditions on which the determination was made.
8.4
Enhanced due diligence. EDD must be applied, and approval obtained from the Nominated Officer before the relationship proceeds, in each of the following circumstances:
  • (a)the Client, a Beneficial Owner or a connected person is a PEP, a family member of a PEP or a known close associate of a PEP;
  • (b)the Client, a Beneficial Owner, the transaction or the assets concerned are established in, connected with or routed through a high-risk third country, or a jurisdiction identified by the Financial Action Task Force as having strategic deficiencies;
  • (c)the relationship or transaction is unusually large, unusually complex, follows an unusual pattern, or has no apparent economic or lawful purpose;
  • (d)the Client has provided false, incomplete or inconsistent identification information, or has sought to obscure beneficial ownership;
  • (e)the relationship is conducted entirely remotely without adequate safeguards against impersonation;
  • (f)the Client, a Beneficial Owner or a connected person is subject to credible adverse media, regulatory sanction, criminal investigation or allegations of corruption;
  • (g)the relationship involves a state-owned entity, a public procurement process, a licence or concession award, or the allocation of public land or natural resources;
  • (h)payment is to be made or received through a third party, a jurisdiction unconnected with the transaction, or an account not held in the name of the Client; or
  • (i)the Nominated Officer determines that the relationship presents a high risk for any other reason.
8.5
EDD requires, as a minimum and as appropriate to the risk identified:
  • obtaining additional independent identification and verification evidence for the Client and each Beneficial Owner;
  • establishing Source of Funds and Source of Wealth in accordance with clause 10 and corroborating both with documentary evidence;
  • obtaining further information on the purpose and intended nature of the relationship and on the reason for the transaction;
  • conducting extended open-source, corporate registry, litigation and adverse media research, and, where proportionate, commissioning an independent integrity report;
  • obtaining senior management approval, being the approval of the Nominated Officer, for establishing or continuing the relationship;
  • increasing the frequency and depth of ongoing monitoring under clause 11 and applying a shorter review cycle; and
  • imposing conditions on the engagement, including restrictions on payment routing, fee structure or scope, where those conditions are necessary to manage the risk.
8.6
Where a relationship involves a high-risk third country, the Company applies the enhanced measures at clause 8.5 in full and does not treat any element of them as optional.

9.Politically exposed persons

9.1
A PEP is an individual who is or has been entrusted with a prominent public function, including a head of state, head of government, minister, deputy or assistant minister; a member of a parliament or equivalent legislative body; a member of the governing body of a political party; a member of a supreme court, constitutional court or other high-level judicial body whose decisions are not generally subject to further appeal; a member of a court of auditors or of the board of a central bank; an ambassador, chargé d’affaires or high-ranking officer in the armed forces; a member of an administrative, management or supervisory body of a state-owned enterprise; and a director, deputy director or member of the board of an international organisation.
9.2
A family member of a PEP includes a spouse or civil partner, a partner considered equivalent to a spouse, a child, the spouse or partner of a child, and a parent.
9.3
A known close associate of a PEP includes any individual known to have joint beneficial ownership of a legal entity or legal arrangement with the PEP, any individual known to have any other close business relationship with the PEP, and any individual who has sole beneficial ownership of an entity known to have been set up for the benefit of the PEP.
9.4
Middle-ranking and junior officials are not PEPs by virtue of office alone. Where such an official has decision-making influence over a matter in which the Company is engaged, the Company applies the same enhanced measures as a matter of prudence.
9.5
The Company must take reasonable measures to determine, before a Business Relationship is established and on an ongoing basis, whether a Client, a Beneficial Owner or a connected person is a PEP, a family member of a PEP or a known close associate of a PEP.
9.6
Where a PEP relationship is identified, the Company must:
  • (a)obtain the approval of the Nominated Officer before the relationship is established or, where the status is identified later, before it is continued;
  • (b)take adequate measures to establish the Source of Funds and Source of Wealth involved in the relationship and in any proposed transaction;
  • (c)assess whether the individual’s wealth and lifestyle are consistent with their known lawful income and holdings, and record that assessment;
  • (d)record the office held, the period held, the jurisdiction concerned and the nature of any influence the individual may have over matters relevant to the engagement; and
  • (e)conduct enhanced ongoing monitoring of the relationship throughout its duration.
9.7
Where an individual ceases to be entrusted with a prominent public function, the Company continues to apply enhanced measures for at least twelve months thereafter, and for longer where the residual risk justifies it, having regard to the seniority of the former office, the influence retained and the nature of the engagement.
9.8
PEP status is a risk factor. It is not, by itself, a ground for refusing a relationship, and the Company does not decline relationships solely on the basis of that status. Equally, no commercial consideration justifies reducing the measures required by this clause.
9.9
Engagements in the Company’s markets frequently require lawful interaction with public officials. Nothing in this clause displaces the absolute prohibitions on bribery, facilitation payments and improper advantage set out in the Anti-Bribery & Anti-Corruption Policy and in the Bribery Act 2010.

10.Source of funds and source of wealth

10.1
Source of Funds and Source of Wealth are distinct enquiries and both must be addressed where EDD applies. Source of Funds concerns the origin of the specific money or assets to be used. Source of Wealth concerns how the person came to hold the wealth they hold at all.
10.2
An explanation is not evidence. Personnel must obtain a plausible account and then corroborate it with independent documentation. The file must show what was said, what was obtained to support it, and why the Company was satisfied.
10.3
Evidence appropriate to establishing Source of Funds includes bank statements showing the accumulation and movement of the relevant funds, loan or facility agreements and evidence of drawdown, sale agreements and completion statements, investor subscription documents, audited accounts, and confirmation from a regulated financial institution.
10.4
Evidence appropriate to establishing Source of Wealth includes audited financial statements of an operating business, evidence of the sale of a business or asset, employment contracts and remuneration records, tax returns and assessments, probate or inheritance documentation, court orders, and public filings or credible independent reporting on the individual’s holdings.
10.5
The following circumstances require the enquiry to be escalated to the Nominated Officer and resolved before the relationship proceeds:
  • wealth or funds which cannot be reconciled with the individual’s known lawful income, career history or holdings;
  • funds routed through jurisdictions with no connection to the Client, the counterparty or the transaction;
  • funds provided by, or payments to be made to, a third party whose relationship to the Client is not explained;
  • reluctance, delay or evasion in providing documentation, or the provision of documentation which cannot be independently verified;
  • wealth connected to the award of a public contract, licence, concession or resource right in circumstances which are not transparent; and
  • any indication that funds represent, in whole or in part, a benefit from criminal conduct, including corruption, tax evasion, fraud, sanctions evasion, environmental crime or human trafficking.
10.6
Where Source of Funds or Source of Wealth cannot be satisfactorily established, the Company must not proceed. Clause 6.9 applies and the Nominated Officer must consider whether a SAR is required.

11.Ongoing monitoring and trigger events

11.1
Due diligence is a continuing obligation, not an onboarding exercise. The Company conducts ongoing monitoring of every Business Relationship for its duration.
11.2
Ongoing monitoring comprises scrutiny of transactions and instructions undertaken throughout the relationship to ensure that they are consistent with the Company’s knowledge of the Client, its business and its risk profile and, where necessary, the Source of Funds; and keeping the documents, data and information obtained under clauses 6 to 10 up-to-date.
11.3
Client records are reviewed and refreshed on a cycle determined by risk rating: high-risk relationships at least every twelve months; elevated risk relationships at least every two years; and standard risk relationships at least every three years. Sanctions screening is repeated on a more frequent cycle and whenever a relevant designation changes.
11.4
Irrespective of the review cycle, due diligence must be reviewed immediately on the occurrence of any of the following trigger events:
  • (a)a change in the ownership, control or corporate structure of the Client;
  • (b)a change in the Client’s directors, senior management or authorised signatories;
  • (c)a change in the purpose, scope or geographic footprint of the engagement, or the addition of a new counterparty or jurisdiction;
  • (d)a transaction or instruction which is inconsistent with the Company’s understanding of the relationship, or which is unusual in size, structure, urgency or payment routing;
  • (e)the identification of a Client, Beneficial Owner or connected person as a PEP, or a change in that person’s public function;
  • (f)a sanctions designation, or a screening match, affecting the Client, a Beneficial Owner or a connected person;
  • (g)credible adverse media, regulatory action, insolvency, criminal charge or civil allegation of dishonesty concerning the Client or a connected person;
  • (h)a request to route payment through, or to receive payment from, an account or jurisdiction not previously disclosed;
  • (i)the expiry of identification evidence held on file, or doubt as to the veracity or adequacy of information previously obtained; and
  • (j)any Internal Report made in respect of the relationship.
11.5
A trigger event requires the risk rating to be reassessed and, where the rating increases to high, the application of EDD under clause 8.5 and approval by the Nominated Officer for the relationship to continue.
11.6
The outcome of every periodic review and every trigger event review, including a decision that no change is required, must be recorded on the Client file with the date and the identity of the reviewer.

12.Prohibited relationships

12.1
The Company shall not, in any circumstances, and irrespective of the commercial value of the opportunity:
  • (a)establish or maintain a relationship with a person whose identity cannot be verified, or whose Beneficial Owner cannot be identified, save where clause 7.5 has been properly applied;
  • (b)act for a person who is the subject of financial sanctions, or engage in any transaction which would breach a sanctions or export control regime applicable to the Company;
  • (c)accept an anonymous Client, act on the basis of an anonymous or fictitious account, or knowingly deal with a shell bank or with any entity established for the purpose of concealing ownership;
  • (d)accept cash in payment of fees, disbursements or any other sum, in any amount or currency;
  • (e)receive or make payment through an account which is not held in the name of the contracting counterparty, unless the arrangement has been disclosed, understood, documented and approved in advance by the Nominated Officer;
  • (f)accept an engagement whose apparent purpose is to create the appearance of legitimacy for funds, to obscure ownership, to defeat a court order or investigation, or to circumvent a law of any jurisdiction;
  • (g)act where the Company knows or suspects that the assets or funds involved are Criminal Property or terrorist property, except where a DAML has been obtained under clause 13; or
  • (h)continue a relationship in which a Client has provided information which the Company has established to be materially false.
12.2
Where a prohibited circumstance arises during a relationship, Personnel must cease work immediately, take no step which would advance any transaction, and notify the Nominated Officer without delay.
12.3
Termination of a relationship must be conducted in a manner which does not constitute tipping off under clause 14. Personnel must not volunteer the reason for termination to the Client, and must follow the Nominated Officer’s instructions on the wording and timing of any communication.
12.4
The exit of a relationship does not extinguish the obligations in this Policy. Reporting duties under clause 13 and record keeping duties under clause 15 continue to apply.

13.Suspicion, internal reports and disclosure

13.1
Suspicion is more than speculation. It is a possibility, more than fanciful, that the relevant facts exist, founded on some material. Suspicion does not require proof, evidence, certainty or a belief that an offence has been committed, and Personnel must not attempt to investigate in order to satisfy themselves before reporting.
13.2
Every member of Personnel who knows or suspects, or who has reasonable grounds for knowing or suspecting, that a person is engaged in money laundering or terrorist financing, or that property is Criminal Property or terrorist property, must make an Internal Report to the Nominated Officer as soon as is practicable. The obligation is personal, it cannot be delegated, and it applies irrespective of the seniority of any person concerned.
13.3
An Internal Report must be made in writing and must state the identity of the persons and assets concerned so far as known, the information or matter on which the knowledge or suspicion is based, the whereabouts of any laundered property so far as known, the date on which the concern arose, and any deadline or transaction step which is imminent. Internal Reports are made to the Nominated Officer through the reporting channel notified to Personnel.
13.4
On making an Internal Report, the reporting person must take no further step in the matter, and must not communicate the making of the report to any person other than the Nominated Officer, until the Nominated Officer has given instructions.
13.5
The Nominated Officer must consider each Internal Report promptly, in the light of all information available to the Company, and must record the decision and the reasoning. Where the Nominated Officer concludes that knowledge, suspicion or reasonable grounds for suspicion exist, the Nominated Officer must make a SAR to the NCA as soon as is practicable. Where the Nominated Officer concludes that no SAR is required, the reasons must be recorded on the register maintained under clause 15.
13.6
SARs are submitted to the NCA through its secure reporting channel and contain the information required by the NCA, including the applicable reporting glossary codes. Terrorist financing concerns are reported under Part III of the Terrorism Act 2000 and are treated as urgent in every case.
13.7
Defence against money laundering. Where the Company proposes to carry out an act which it knows or suspects would otherwise constitute an offence under section 327, 328 or 329 of the Proceeds of Crime Act 2002, the Nominated Officer must make an authorised disclosure under section 338 of that Act and seek appropriate consent under section 335 before the act is carried out.
13.8
Where a DAML is sought, no step may be taken in the transaction until consent is given, or until the notice period expires without refusal. The statutory framework provides a notice period of seven working days beginning with the first working day after the disclosure is made, followed, if consent is refused within that period, by a moratorium period of 31 calendar days beginning with the day of refusal, which a court may extend on application by a senior officer. Personnel must treat these periods as absolute and must not permit commercial pressure to shorten them.
13.9
Obtaining a DAML protects against the principal money laundering offences. It does not authorise the transaction for any other purpose, does not cure a sanctions breach, does not answer the Company’s duties under any other policy, and does not oblige the Company to proceed. The Company retains an unqualified discretion to decline any matter.
13.10
A member of Personnel who makes an Internal Report in good faith is protected. The Company will not subject any person to detriment, disciplinary action or disadvantage of any kind by reason of having made a report, and a report made in the reasonable belief that it is in the public interest attracts the protections of the Public Interest Disclosure Act 1998.
13.11
Disclosure made in accordance with this clause does not breach any duty of confidentiality owed to a Client, whether arising under contract, equity or otherwise.
Where the reporting duty binds

The obligation to report under this Policy applies to information which comes to a member of Personnel in the course of the Company’s business, whatever the source. It applies to matters concerning prospective Clients as well as accepted ones, to matters arising after a relationship has ended, and to matters concerning colleagues, counterparties, introducers and suppliers. If in doubt, report to the Nominated Officer. There is no penalty for a report which turns out to require no action, and there is a criminal penalty for a report which should have been made and was not.

14.Tipping off and prejudicing an investigation

14.1
Personnel must not disclose to a Client, to a Beneficial Owner or to any other person that an Internal Report has been made, that a SAR has been made, that a DAML has been sought, or that a money laundering or terrorist financing investigation is being carried out or is contemplated, where that disclosure is likely to prejudice any investigation which might be conducted.
14.2
Making such a disclosure is a criminal offence under section 333A of the Proceeds of Crime Act 2002 and, in relation to terrorist property, under section 21D of the Terrorism Act 2000, in each case for persons in the regulated sector. Falsifying, concealing, destroying or otherwise disposing of documents relevant to an investigation, or causing that to happen, is a separate offence of prejudicing an investigation under section 342 of the Proceeds of Crime Act 2002. The Company treats the prohibitions in this clause as binding on all Personnel whether or not the regulated-sector offence applies to the particular activity.
14.3
Tipping off is not confined to an explicit statement. It includes any conduct from which a person could infer that a report has been made, including unexplained delay, sudden withdrawal from a transaction, evasive answers, a change of tone in correspondence, or an unusual request for further documentation. Personnel must conduct themselves so that the making of a report is not apparent.
14.4
Where a Client presses for an explanation of a delay or a refusal, Personnel must not speculate, must not confirm or deny that a report has been made, and must refer the question to the Nominated Officer, who will determine what may properly be said.
14.5
Once an Internal Report has been made, no document relating to the matter may be altered, deleted, backdated or removed from the Company’s systems, and any applicable retention period is suspended, until the Nominated Officer confirms otherwise.
14.6
Nothing in this clause prevents disclosure to the NCA, to a law enforcement or supervisory authority, to the Company’s legal advisers for the purpose of obtaining legal advice, or to another person within the Company where that disclosure is made for the purpose of preventing a money laundering or terrorist financing offence.

15.Record keeping and audit

15.1
The Company retains a copy of, or references to, the evidence and information obtained under clauses 6 to 11, together with supporting records in respect of every transaction and engagement, in a form which permits the reconstruction of individual matters and which is capable of responding promptly to a request from a law enforcement or supervisory authority.
15.2
Records must be retained for a period of five years beginning on the date on which the Business Relationship ends or, in the case of an occasional transaction, on the date on which the transaction is completed. Where records are required for the purposes of current or contemplated legal proceedings, or where a law enforcement authority so requires, retention continues until the matter is concluded.
15.3
At the expiry of the retention period, personal data contained in those records is deleted or securely destroyed unless the Company is required by law to retain it, or the data subject has consented to its retention, or it is required for the purposes of current or contemplated legal proceedings. Retention and disposal are governed in detail by the Data Retention & Records Management Policy.
15.4
The Nominated Officer maintains a confidential register recording every Internal Report received, the date received, the decision taken, the reasons for that decision, whether a SAR was made and when, whether a DAML was sought and its outcome, and the date on which any restriction on the matter was lifted. The register is accessible only to the Nominated Officer, the deputy and the board.
15.5
Personal data processed under this Policy is processed in accordance with the UK GDPR and the Data Protection Act 2018. The lawful bases relied upon are compliance with a legal obligation and the legitimate interests of the Company in preventing financial crime. Processing for the purposes of preventing money laundering and terrorist financing is a substantial public interest condition under Schedule 1 to the Data Protection Act 2018 where special category or criminal offence data is involved. Data subjects are informed of this processing through the Privacy Policy, and certain rights are restricted where their exercise would prejudice the prevention or detection of crime.
15.6
The Company commissions an independent review of the adequacy and effectiveness of the controls established under this Policy, conducted by a person who is not responsible for their operation. The review examines the firm-wide risk assessment, a sample of Client files, the operation of the Internal Report process and the completeness of records. Findings are reported to the board, and remedial actions are tracked to completion by the Nominated Officer.

16.Training, breach and review

16.1
The Company provides training to all Personnel on the law relating to money laundering and terrorist financing, on the risks specific to the Company’s sectors and markets, and on the practical operation of this Policy. Training is provided on appointment, before a person begins Client-facing work, and at least annually thereafter.
16.2
Training addresses, at a minimum, the principal offences under the Proceeds of Crime Act 2002 and the Terrorism Act 2000; the recognition of indicators of money laundering, corruption and sanctions evasion; the due diligence standards in clauses 6 to 11; the identification of PEPs; the Internal Report process; the tipping-off prohibition; and the personal criminal liability of the individual.
16.3
Additional targeted training is provided to Personnel working on high-risk engagements, and following any material change in the law, in the firm-wide risk assessment, or in the Company’s services or markets. The Company records attendance, the content delivered and the outcome of any competence assessment, and retains those records.
16.4
Personnel are also briefed on the indicators most relevant to the Company’s work, including:
  • an introducer or agent whose fee is disproportionate to the work performed, or whose role in a transaction cannot be explained;
  • a request to structure an engagement so that a payment is directed to a jurisdiction, entity or individual unconnected with the mandate;
  • a counterparty whose interest in a licence, concession or public contract appears to depend on a relationship with an official rather than on merit;
  • pressure to complete before due diligence is finished, or an artificial deadline linked to an official process;
  • a proposed structure whose only discernible effect is to obscure who benefits; and
  • an offer of a benefit, opportunity or interest to a member of Personnel in connection with a mandate.
16.5
Breach of this Policy is a serious matter. For employees it is treated as a disciplinary matter which may constitute gross misconduct and lead to summary dismissal. For consultants, contractors, agents and suppliers it is a ground for immediate termination of the engagement. The Company will report conduct to the appropriate authorities where it is required or considers it right to do so, and will co-operate fully with any resulting investigation.
16.6
Individuals should understand that liability under the money laundering legislation is personal as well as corporate. The principal offences under sections 327 to 329 of the Proceeds of Crime Act 2002 carry a maximum sentence on indictment of fourteen years’ imprisonment, an unlimited fine, or both. Failure to disclose and tipping off carry a maximum of five years’ imprisonment, an unlimited fine, or both. The Company will not indemnify any individual against a criminal penalty imposed for conduct in breach of this Policy.
16.7
This Policy is reviewed at least annually by the Nominated Officer and approved by the board. It is additionally reviewed following any material change in the applicable law, any significant change in the Company’s business or risk profile, and any incident which reveals a weakness in the controls it establishes.
16.8
Questions about this Policy, requests for a copy of it, and enquiries from counterparties, financial institutions or advisers concerning the Company’s financial crime controls should be submitted through the enquiry form at fratresgroup.com/contact, marked for the attention of the Nominated Officer. Enquiries will be acknowledged within five business days.
16.9
Reports of suspected money laundering or terrorist financing must not be submitted through the public enquiry form. Personnel must use the internal reporting channel under clause 13. Any other person with such a concern should report it directly to the National Crime Agency or to the police.
16.10
This Policy is governed by the law of England and Wales.
Related policies
Client Due Diligence & Know Your Customer StandardFGL-LEG-09Anti-Bribery & Anti-Corruption PolicyFGL-LEG-10Sanctions & Export Controls PolicyFGL-LEG-11Prevention of the Facilitation of Tax Evasion PolicyFGL-LEG-12
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