It is the policy of Logistic Pro Trade (The Company) to reach for the highest level of integrity and prohibit and actively prevent money laundering or the funding of terrorist or criminal activities by complying with all applicable requirements under the Bank Secrecy Act (BSA) and its implementing regulations.
Money laundering is generally defined as engaging in acts designed to conceal or disguise the true origins of criminally derived proceeds so that the proceeds appear to have derived from legitimate origins or constitute legitimate assets. Generally, money laundering occurs in three stages. Cash first enters the financial system at the “placement” stage, where the cash generated from criminal activities is converted into monetary instruments, such as cryptocurrencies, or deposited into accounts at financial institutions. At the “layering” stage, the funds are transferred or moved into other accounts or other financial institutions to further separate the money from its criminal origin. At the “integration” stage, the funds are reintroduced into the economy and used to purchase legitimate assets or to fund other criminal activities or legitimate businesses.
Although cryptocurrency is rarely deposited into exchange accounts, the crypto exchange industry is unique in that it can be used to launder cryptocurrency obtained elsewhere, and to generate illicit funds within the industry itself through fraudulent activities.
Terrorist financing may not involve the proceeds of criminal conduct, but rather an attempt to conceal either the origin of the funds or their intended use, which could be for criminal purposes. Legitimate sources of funds are a key difference between terrorist financiers and traditional criminal organizations. In addition to charitable donations, legitimate sources include foreign government sponsors, business ownership and personal employment. Although the motivation differs between traditional money launderers and terrorist financiers, the actual methods used to fund terrorist operations can be the same as or similar to methods used by other criminals to launder funds. Funding for terrorist attacks does not always require large sums of money and the associated transactions may not be complex.
Our AML policies, procedures and internal controls are designed to ensure compliance with all applicable BSA regulations and FINRA rules and will be reviewed by our compliance officer and updated on a regular basis to ensure appropriate policies, procedures and internal controls are in place to account for both changes in regulations and changes in our business.
AML Compliance Person Designation and Duties
The Logistic Pro Trade has designated Andre Beauchesne as its Anti-Money Laundering Program Compliance Person (AML Compliance Person), with full responsibility for the Logistic Pro Trade’s AML program. Andre Beauchesne has a working knowledge of the BSA and its implementing regulations and is qualified by experience, knowledge and training. The duties of the AML Compliance Person will include monitoring the Logistic Pro Trade’s compliance with AML obligations, overseeing communication and training for employees. The AML Compliance Person will also ensure that the Logistic Pro Trade keeps and maintains all of the required AML records and will ensure that Suspicious Activity Reports (SARs) are filed with the Financial Crimes Enforcement Network (FinCEN) when appropriate. The AML Compliance Person is vested with full responsibility and authority to enforce the Logistic Pro Trade’s AML program.
Giving AML Information to Federal Law Enforcement Agencies and Other Financial Institutions
FinCEN Requests Under USA PATRIOT Act Section 314(a)
Logistic Pro Trade will respond to a Financial Crimes Enforcement Network (FinCEN) request concerning accounts and transactions (a 314(a) Request) by immediately searching its records to determine whether we maintain or have maintained any account for, or have engaged in any transaction with, each individual, entity or organization named in the 314(a) Request as outlined in the Frequently Asked Questions (FAQ) located on FinCEN’s secure website. We understand that we have 14 days (unless otherwise specified by FinCEN) from the transmission date of the request to respond to a 314(a) Request. We will designate through the FINRA Contact System (FCS) one or more persons to be the point of contact (POC) for 314(a) Requests and will promptly update the POC information following any change in such information. (See also Section 2 above regarding updating of contact information for the AML Compliance Person.) Unless otherwise stated in the 314(a) Request or specified by FinCEN, we are required to search those documents outlined in FinCEN’s FAQ. If we find a match, Logistic Pro Trade will report it to FinCEN via FinCEN’s Web-based 314(a) Secure Information Sharing System within 14 days or within the time requested by FinCEN in the request. If the search parameters differ from those mentioned above (for example, if FinCEN limits the search to a geographic location), Logistic Pro Trade will structure our search accordingly.
If Logistic Pro Trade searches its records and does not find a matching account or transaction, then Logistic Pro Trade will not reply to the 314(a) Request. Logistic Pro Trade will maintain documentation that Logistic Pro Trade has performed the required search by maintaining a log showing the date of the request, the number of accounts searched, the name of the individual conducting the search and a notation of whether or not a match was found.
Logistic Pro Trade will not disclose the fact that FinCEN has requested or obtained information from us, except to the extent necessary to comply with the information request. Logistic Pro Trade will review, maintain and implement procedures to protect the security and confidentiality of requests from FinCEN similar to those procedures established to satisfy the requirements of Section 501 of the Gramm-Leach-Bliley Act with regard to the protection of customers’ nonpublic information.
Logistic Pro Trade will direct any questions Logistic Pro Tradehas about the 314(a) Request to the requesting federal law enforcement agency as designated in the request.
Unless otherwise stated in the 314(a) Request, Logistic Pro Trade will not be required to treat the information request as continuing in nature, and Logistic Pro Trade will not be required to treat the periodic 314(a) Requests as a government provided list of suspected terrorists for purposes of the customer identification and verification requirements.
1. National Security Letters
Logistic Pro Trade understands that the receipt of a National Security Letter (NSL) is highly confidential. We understand that none of our officers, employees or agents may directly or indirectly disclose to any person that the FBI or any other federal government authority has sought or obtained access to any of our records. To maintain the confidentiality of any NSL Logistic Pro Trade receives, Logistic Pro Trade will process and maintain the NSL by dating and time stamping all such items on receipt, maintaining a log of all services received and copies of all documentation related to the investigation. If we file a SAR after receiving an NSL, the SAR will not contain any reference to the receipt or existence of the NSL. The SAR will only contain detailed information about the facts and circumstances of the detected suspicious activity.
2. Grand Jury Subpoenas
Logistic Pro Trade understands that the receipt of any grand jury subpoena concerning a customer does not in itself require that it files a Suspicious Activity Report (SAR). Upon receiving a grand jury subpoena, Logistic Pro Trade will conduct a risk assessment of the individual and/or entities subject to the subpoena as well as review the individual’s and/or entities account activity. If Logistic Pro Trade uncovers suspicious activity during our risk assessment and review, Logistic Pro Trade will elevate that customer’s risk assessment and file a SAR in accordance with the SAR filing requirements. Logistic Pro Trade understands that none of our officers, employees or agents may directly or indirectly disclose to the individual and/or entities who is the subject of the subpoena its existence, its contents or the information Logistic Pro Trade used to respond to it. To maintain the confidentiality of any grand jury subpoena received, Logistic Pro Trade will process and maintain the subpoena through Cyruli, Shanks, Hart & Zizmor, LLP. If Logistic Pro Trade files a SAR after receiving a grand jury subpoena, the SAR will not contain any reference to the receipt or existence of the subpoena. The SAR will only contain detailed information about the facts and circumstances of the detected suspicious activity.
3. Voluntary Information Sharing With Other Financial Institutions Under USA PATRIOT Act Section 314(b)
Logistic Pro Trade will share information with other financial institutions regarding individuals, entities, organizations and countries for purposes of identifying and, where appropriate, reporting activities that Logistic Pro Trade suspects may involve possible terrorist activity or money laundering. Logistic Pro Trade will ensure that it files with FinCEN an initial notice before any sharing occurs and annual notices thereafter. Logistic Pro Trade will use the notice form found at FinCEN’s website. Before sharing information with another financial institution, Logistic Pro Trade will take reasonable steps to verify that the other financial institution has submitted the requisite notice to FinCEN, either by obtaining confirmation from the financial institution or by consulting a list of such financial institutions that FinCEN will make available. Logistic Pro Trade understand that this requirement applies even to financial institutions with which we are affiliated, and that Logistic Pro Trade will obtain the requisite notices from affiliates and follow all required procedures.
Logistic Pro Trade will employ strict procedures both to ensure that only relevant information is shared and to protect the security and confidentiality of this information, for example, by segregating it from the Logistic Pro Trade’s other books and records.
We also will employ procedures to ensure that any information received from another financial institution shall not be used for any purpose other than:
- identifying and, when appropriate, reporting on money laundering or terrorist activities;
- determining whether to establish or maintain an account, or to engage in a transaction; or
- assisting the financial institution in complying with performing such activities.
4. Checking the Office of Foreign Assets Control Listings
Before opening an account, and on an ongoing basis, Logistic Pro Trade will check to ensure that a customer does not appear on the SDN list or is not engaging in transactions that are prohibited by the economic sanctions and embargoes administered and enforced by OFAC. (See the OFAC website for the SDN list and listings of current sanctions and embargoes). Because the SDN list and listings of economic sanctions and embargoes are updated frequently, Logistic Pro Trade will consult them on a regular basis and subscribe to receive any available updates as soon as they occur. With respect to the SDN list, Logistic Pro Trade may also access that list through various software programs to ensure speed and accuracy. See also FINRA’s OFAC Search Tool that screens names against the SDN list. Logistic Pro Trade will also review existing accounts against the SDN list and listings of current sanctions and embargoes when they are updated. AML Compliance Officer will document the review.
If Logistic Pro Trade determines that a customer is on the SDN list or is engaging in transactions that are prohibited by the economic sanctions and embargoes administered and enforced by OFAC, Logistic Pro Trade will reject the transaction and/or block the customer’s assets and file a blocked assets and/or rejected transaction form with OFAC within 10 days. Logistic Pro Trade will also call the OFAC Hotline at (800) 540-6322 immediately.
Our review will include, but not limited to customer accounts, transactions involving customers (including activity that passes through the Logistic Pro Trade’s platform such as wires) and the review of customer transactions that involve physical cryptocurrencies.
5. Customer Identification Program
Logistic Pro Trade must collect information under FINRA Rules 2090 (Know Your Customer) and 2111 (Suitability). Logistic Pro Trade will collect certain minimum customer identification information from each customer who opens an account; utilize risk-based measures to verify the identity of each customer who opens an account; record customer identification information and the verification methods and results; provide the required adequate notice to customers that Logistic Pro Trade will seek identification information to verify their identities if applicable; and compare customer identification information with government-provided lists of suspected terrorists, once such lists have been issued by the government. See Section 5.g. (Notice to Customers) for additional information.
Logistic Pro Trade will also collect information to determine whether any entity opening an account would be excluded as a “customer,” pursuant to the exceptions outlined in 31 CFR 1023.100(d)(2)) (e.g., documentation of a company’s listing information, licensing or registration of a financial institution in the U.S, and status or verification of the authenticity of a government agency or department).
A. Required Customer Information
Prior to opening an account, our AML Compliance Officer will collect the following information for all accounts, if applicable, for any person, entity or organization that is opening a new account and whose name is on the account:
(1) the name;
(2) date of birth (for an individual);
(3) an address, which will be a residential or business street address (for an individual), an Army Post Office (APO) or Fleet Post Office (FPO) box number, or residential or business street address of next of kin or another contact individual (for an individual who does not have a residential or business street address), or a principal place of business, local office, or other physical location (for a person other than an individual); and
(4) an identification number, which will be a taxpayer identification number (for U.S. persons), or one or more of the following: a taxpayer identification number, passport number and country of issuance, alien identification card number, or number and country of issuance of any other government-issued document evidencing nationality or residence and bearing a photograph or other similar safeguard (for non-U.S. persons).
When opening an account for a foreign business or enterprise that does not have an identification number, Logistic Pro Trade will request alternative government-issued documentation certifying the existence of the business or enterprise.
B. Customers Who Refuse to Provide Information
If a potential or existing customer either refuses to provide the information described above when requested, or appears to have intentionally provided misleading information, Logistic Pro Trade will not open a new account and, after considering the risks involved, consider closing any existing account. In either case, our AML Compliance Officer will be notified so that we can determine whether we should report the situation to appropriate governing bodies.
C. Verifying Information
Based on the risk, and to the extent reasonable and practicable, Logistic Pro Trade will ensure that the company has a reasonable belief that it knows the true identity of our customers by using risk-based procedures to verify and document the accuracy of the information we get about our customers. Our AML Compliance Officer will analyze the information we obtain to determine whether the information is sufficient to form a reasonable belief that we know the true identity of the customer is real.
Logistic Pro Trade will verify customer identity through documentary means, non-documentary means or both. Logistic Pro Trade will use documents to verify customer identity when appropriate documents are available. In light of the increased instances of identity fraud, Logistic Pro Trade will supplement the use of documentary evidence by using the non-documentary means described below whenever necessary. Logistic Pro Trade may also use non-documentary means if Logistic Pro Trade is still uncertain about whether we know the true identity of the customer. In verifying the information, Logistic Pro Trade will consider whether the identifying information that The Company receives, such as the customer’s name, street address, zip code, telephone number (if provided), date of birth and Social Security number, allows us to determine that Logistic Pro Trade has a reasonable belief that we know the true identity of the customer (e.g., whether the information is logical or contains inconsistencies).
Appropriate documents for verifying the identity of customers include the following:
- For an individual, an unexpired government-issued identification evidencing nationality or residence and bearing a photograph or similar safeguard, such as a driver’s license or passport; and
- For a person other than an individual, documents showing the existence of the entity, such as certified articles of incorporation, a government-issued business license, a partnership agreement or a trust instrument.
Logistic Pro Trade understands that it’s not required to take steps to determine whether the document that the customer has provided for identity verification has been validly issued and that we may rely on a government-issued identification as verification of a customer’s identity. If, however, we note that the document shows some obvious form of fraud, we must consider that factor in determining whether we can form a reasonable belief that we know the customer’s true identity.
Logistic Pro Trade will use the following non-documentary methods of verifying identity:
- Independently verifying the customer’s identity through the comparison of information provided by the customer with information obtained from a consumer reporting agency, public database or other source
- Checking references with other financial institutions; or
- Obtaining a financial statement.
- Utilize third party identity verification services
Logistic Pro Trade will use non-documentary methods of verification when:
(1) the customer is unable to present an unexpired government-issued identification document with a photograph or other similar safeguard;
(2) Logistic Pro Trade is unfamiliar with the documents the customer presents for identification verification;
(3) the customer and Logistic Pro Trade do not have face-to-face contact; and
(4) there are other circumstances that increase the risk that Logistic Pro Trade will be unable to verify the true identity of the customer through documentary means.
Logistic Pro Trade will verify the information within a reasonable time before or after the account is opened. Depending on the nature of the account and requested transactions, we may refuse to complete a transaction before we have verified the information, or in some instances when we need more time, we may, pending verification, restrict the types of transactions or dollar amount of transactions. If we find suspicious information that indicates possible money laundering, terrorist financing activity, or other suspicious activity, we will, after internal consultation with our AML compliance Officer, file a SAR in accordance with applicable laws and regulations.
Logistic Pro Trade recognizes that the risk that it may not know the customer’s true identity may be heightened for certain types of accounts, such as an account opened in the name of a corporation, partnership or trust that is created or conducts substantial business in a jurisdiction that has been designated by the U.S. as a primary money laundering jurisdiction, a terrorist concern, or has been designated as a non-cooperative country or territory. Logistic Pro Trade will identify customers that pose a heightened risk of not being properly identified.
Lack of Verification
When Logistic Pro Trade cannot form a reasonable belief that it knows the true identity of a customer, Logistic Pro Trade will do the following: (1) not open an account; (2) impose terms under which a customer may conduct transactions while Logistic Pro Trade attempts to verify the customer’s identity; (3) close an account after attempts to verify a customer’s identity fail; and (4) determine whether it is necessary to report to appropriate agencies in accordance with applicable laws and regulations.
Logistic Pro Trade will document its verification, including all identifying information provided by a customer, the methods used and results of verification, and the resolution of any discrepancies identified in the verification process. Logistic Pro Trade will keep records containing a description of any document that is relied on to verify a customer’s identity, noting the type of document, any identification number contained in the document, the place of issuance, and if any, the date of issuance and expiration date. With respect to non-documentary verification, Logistic Pro Trade will retain documents that describe the methods and the results of any measures Logistic Pro Trade took to verify the identity of a customer. Logistic Pro Trade will also keep records containing a description of the resolution of each substantive discrepancy discovered when verifying the identifying information obtained. Logistic Pro Trade will retain records of all identification information for five years after the account has been closed; Logistic Pro Trade will retain records made about verification of the customer’s identity for five years after the record is made.
F. Comparison with Government-Provided Lists of Terrorists
At such time as Logistic Pro Trade receives notice that a federal government agency has issued a list of known or suspected terrorists and identified the list as a list for CIP purposes, Logistic Pro Trade will, within a reasonable period of time after an account is opened (or earlier, if required by another federal law or regulation or federal directive issued in connection with an applicable list), determine whether a customer appears on any such list of known or suspected terrorists or terrorist organizations issued by any federal government agency and designated as such by Treasury in consultation with the federal functional regulators. Logistic Pro Trade will follow all federal directives issued in connection with such lists.
Logistic Pro Trade will continue to comply separately with OFAC rules prohibiting transactions with certain foreign countries or their nationals.
G. Notice to Customers
Logistic Pro Trade will provide notice to customers that Logistic Pro Trade is requesting information from them to verify their identities, as required by federal law.
To help the government fight the funding of terrorism and money laundering activities, federal law requires all financial institutions to obtain, verify, and record information that identifies each person who opens an account.
When customers open an account, Logistic Pro Trade will ask for your name, address, date of birth and other information that will allow us to identify you. Logistic Pro Trade may also ask to see your driver’s license or other identifying documents.
H. Reliance on Another Financial Institution for Identity Verification
Logistic Pro Trade may, under the following circumstances, rely on the performance by another financial institution (including an affiliate) of some or all of the elements of our CIP with respect to any customer that is opening an account or has established an account or similar business relationship with the other financial institution to provide or engage in services, dealings or other financial transactions:
- when such reliance is reasonable under the circumstances;
- when the other financial institution is subject to a rule implementing the anti-money laundering compliance program requirements of 31 U.S.C. § 5318(h), and is regulated by a federal functional regulator; and
- when the other financial institution has entered into a contract with Logistic Pro Trade requiring it to certify annually to us that it has implemented its anti-money laundering program and that it will perform (or its agent will perform) specified requirements of the customer identification program.
5.Customer Due Diligence Rule
In addition to the information collected under the Customer Identification Program, and FINRA Rules 2090 (Know Your Customer), Logistic Pro Trade has established, documented and maintained written policies and procedures reasonably designed to identify and verify beneficial owners of legal entity customers and comply with other aspects of the Customer Due Diligence (CDD) Rule. Logistic Pro Trade will collect minimum CDD information from beneficial owners of legal entity customers. Logistic Pro Trade will understand the nature and purpose of customer relationships for the purpose of developing a customer risk profile. Logistic Pro Trade will conduct ongoing monitoring to identify and report suspicious transactions, and, on a risk basis, maintain and update customer information.
1. Identification and Verification of Beneficial Owners
At the time of opening an account for a legal entity customer, Logistic Pro Trade will identify any individual that is a beneficial owner of the legal entity customer by identifying any individuals who directly or indirectly own 25% or more of the equity interests of the legal entity customer, and any individual with significant responsibility to control, manage, or direct a legal entity customer. The following information will be collected for each beneficial owner:
(1) the name;
(2) date of birth (for an individual);
(3) an address, which will be a residential or business street address (for an individual), or an Army Post Office (APO) or Fleet Post Office (FPO) box number, or residential or business street address of next of kin or another contact individual (for an individual who does not have a residential or business street address); and
(4) an identification number, which will be a Social Security number (for U.S. persons), or one or more of the following: a passport number and country of issuance, or other similar identification number, such as an alien identification card number, or number and country of issuance of any other government-issued document evidencing nationality or residence and bearing a photograph or other similar safeguard (for non-U.S. persons).
For verification,Logistic Pro Trade will describe any document relied on (noting the type, any identification number, place of issuance and, if any, date of issuance and expiration). Logistic Pro Trade will also describe any non-documentary methods and the results of any measures undertaken.
1. Understanding the Nature and Purpose of Customer Relationships
Logistic Pro Trade will understand the nature and purpose of customer relationships for the purpose of developing a customer risk profile through the following methods:
- The type of customer;
- The account or service being offered;
- The customer’s domicile;
- The customer’s principal occupation or business; and
- In the case of existing customers, the customer’s history of activity.
1. Conducting Ongoing Monitoring to Identify and Report Suspicious Transactions
Logistic Pro Trade will conduct ongoing monitoring to identify and report suspicious transactions and, on a risk basis, maintain and update customer information, including information regarding the beneficial ownership of legal entity customers, using the customer risk profile as a baseline against which customer activity is assessed for suspicious transaction reporting. Our suspicious activity monitoring procedures are detailed within Section 7 (Monitoring Accounts for Suspicious Activity).
6. Compliance with FinCEN’s Issuance of Special Measures Against Foreign Jurisdictions or International Transactions of Primary Money Laundering Concern
If FinCEN issues a final rule imposing a special measure against one or more foreign jurisdictions or financial institutions, classes of international transactions or types of accounts deeming them to be of primary money laundering concern, Logistic Pro Trade understands that it must read FinCEN’s final rule and follow any prescriptions or prohibitions contained in that rule.
7. Monitoring Accounts for Suspicious Activity
Logistic Pro Trade will monitor account activity for unusual size, volume, pattern or type of transactions, taking into account risk factors and red flags that are appropriate to our business. (Red flags are identified in Section 7.b. below.) The customer risk profile will serve as a baseline for assessing potentially suspicious activity. Our AML Compliance Officer or his or her designee will be responsible for this monitoring, they will review any activity that our monitoring system detects and will determine whether any additional steps are required, will document when and how this monitoring is carried out, and will report suspicious activities to the appropriate authorities.
A. Emergency Notification to Law Enforcement by Telephone
In situations involving violations that require immediate attention, such as terrorist financing or ongoing money laundering schemes, Logistic Pro Trade will immediately call an appropriate law enforcement authority. If a customer or company appears on OFAC’s SDN list, we will call the OFAC Hotline at (800) 540-6322. Other contact numbers we will use are: FinCEN’s Financial Institutions Hotline ((866) 556-3974) (especially to report transactions relating to terrorist activity), local U.S. Attorney’s office ((212) 637-2200), local FBI office ((212) 384-1000) and local SEC office ((21) 336-1100) (to voluntarily report such violations to the SEC in addition to contacting the appropriate law enforcement authority).
B. Red Flags
Red flags that signal possible money laundering or terrorist financing include, but are not limited to:
Customers – Insufficient or Suspicious Information
- Provides unusual or suspicious identification documents that cannot be readily verified.
- Reluctant to provide complete information about nature and purpose of business, prior banking relationships, anticipated account activity, officers and directors or business location.
- Refuses to identify a legitimate source for funds or information is false, misleading or substantially incorrect.
- Background is questionable or differs from expectations based on business activities.
- Customer with no discernable reason for using Logistic Pro Trade’s platform.
Efforts to Avoid Reporting and Recordkeeping
- Reluctant to provide information needed to file reports or fails to proceed with transaction.
- Tries to persuade an employee not to file required reports or not to maintain required records.
- “Structures” deposits, withdrawals or purchase of monetary instruments below a certain amount to avoid reporting or recordkeeping requirements.
- “Structures” deposits, withdrawals or purchase of monetary instruments below a certain amount to avoid reporting or recordkeeping requirements.
Certain Funds Transfer Activities
- Wire transfers to/from financial secrecy havens or high-risk geographic location without an apparent business reason.
- Many small, incoming wire transfers or deposits made using checks and money orders. Almost immediately withdrawn or wired out in manner inconsistent with customer’s business or history. May indicate a Ponzi scheme.
- Wire activity that is unexplained, repetitive, unusually large or shows unusual patterns or with no apparent business purpose.
Certain Deposits or Dispositions of Cryptocurrencies
- Customer’s explanation of how he or she acquired the cryptocurrency does not make sense or changes.
- Customer deposits cryptocurrency with a request to transfer cryptocurrencies to multiple accounts, or to sell or otherwise transfer cryptocurrencies.
Certain Cryptocurrency Transactions
- Customers have opened multiple accounts with the same beneficial owners or controlling parties for no apparent business reason.
- . Customer’s transactions include a pattern of depositing cryptocurrencies, selling the position and wiring out proceeds.
- Customer’s trading patterns suggest that he or she may have inside information.
Activity Inconsistent with Business
- Transactions patterns show a sudden change inconsistent with normal activities.
- Maintains multiple accounts or maintains accounts in the names of family members or corporate entities with no apparent business or other purpose.
- Appears to be acting as an agent for an undisclosed principal but is reluctant to provide information.
Other Suspicious Customer Activity
- Unexplained high level of account activity with very low levels of securities transactions.
- Funds deposits for purchase of a long-term investment followed shortly by a request to liquidate the position and transfer the proceeds out of the account.
- Law enforcement subpoenas.
- Payment by third-party check or money transfer without an apparent connection to the customer.
- Payments to third-party without apparent connection to customer.
- No concern regarding the cost of transactions or fees (i.e., surrender fees, higher than necessary commissions, etc.).
C. Responding to Red Flags and Suspicious Activity
When an employee of Logistic Pro Trade detects any red flag, or other activity that may be suspicious, he or she will notify our AML Compliance Officer immediately. Under the direction of our AML Compliance Officer, Logistic Pro Trade will determine whether or not and how to further investigate the matter. This may include gathering additional information internally or from third-party sources, contacting the government, freezing the account and/or filing a SAR.
8. Suspicious Transactions and BSA Reporting
A. Filing a SAR
Logistic Pro Trade will file SARs with FinCEN for any transactions (including deposits and transfers) conducted or attempted by, at or through Logistic Pro Trade’s platform involving $5,000 or more of funds or assets (either individually or in the aggregate) where Logistic Pro Trade knows, suspect or have reason to suspect:
(1) the transaction involves funds derived from illegal activity or is intended or conducted in order to hide or disguise funds or assets derived from illegal activity as part of a plan to violate or evade federal law or regulation or to avoid any transaction reporting requirement under federal law or regulation;
(2) the transaction is designed, whether through structuring or otherwise, to evade any requirements of the BSA regulations;
(3) the transaction has no business or apparent lawful purpose or is not the sort in which the customer would normally be expected to engage, and after examining the background, possible purpose of the transaction and other facts, we know of no reasonable explanation for the transaction; or
(4) the transaction involves the use of the Logistic Pro Trade Platform to facilitate criminal activity.
Logistic Pro Trade will also file a SAR and notify the appropriate law enforcement authority in situations involving violations that require immediate attention, such as terrorist financing or ongoing money laundering schemes. In addition, although Logistic Pro Trade is not required to, Logistic Pro Trade may contact that SEC in cases where a SAR we have filed may require immediate attention by the SEC. See Section 7 for contact numbers. Logistic Pro Trade also understands that, even if we notify a regulator of a violation, unless it is specifically covered by one of the exceptions in the SAR rule, Logistic Pro Trade must file a SAR reporting the violation.
Logistic Pro Trade may file a voluntary SAR for any suspicious transaction that it believes is relevant to the possible violation of any law or regulation but that is not required to be reported by us under the SAR rule. It is our policy that all SARs will be reported regularly to the Board of Directors and appropriate senior management, with a clear reminder of the need to maintain the confidentiality of the SAR.
Logistic Pro Trade will report suspicious transactions by completing a SAR and will collect and maintain supporting documentation as required by the BSA regulations. Logistic Pro Trade will file a SAR-SF no later than 30 calendar days after the date of the initial detection of the facts that constitute a basis for filing a SAR. If no suspect is identified on the date of initial detection, Logistic Pro Trade may delay filing the SAR for an additional 30 calendar days pending identification of a suspect, but in no case will the reporting be delayed more than 60 calendar days after the date of initial detection. The phrase “initial detection” does not mean the moment a transaction is highlighted for review. The 30-day (or 60-day) period begins when an appropriate review is conducted, and a determination is made that the transaction under review is “suspicious” within the meaning of the SAR requirements. A review must be initiated promptly upon identification of unusual activity that warrants investigation.
Logistic Pro Trade will retain copies of any SAR filed and the original or business record equivalent of any supporting documentation for five years from the date of filing the SAR-SF. Logistic Pro Trade will identify and maintain supporting documentation and make such information available to FinCEN, any other appropriate law enforcement agencies, federal or state securities regulators or SROs upon request.
Logistic Pro Trade will not notify any person involved in the transaction that the transaction has been reported, except as permitted by the BSA regulations. Logistic Pro Trade understands that anyone who is subpoenaed or required to disclose a SAR, or the information contained in the SAR will, except where disclosure is requested by FinCEN, the SEC, or another appropriate law enforcement or regulatory agency, or an SRO registered with the SEC, decline to produce the SAR or to provide any information that would disclose that a SAR was prepared or filed. Logistic Pro Trade will notify FinCEN of any such request and its response.
9. AML Recordkeeping
A. Responsibility for Required AML Records and SAR Filing
Our AML Compliance Officer and his or her designee will be responsible for ensuring that AML records are maintained properly, and that SARs are filed as required.
In addition, as part of our AML program, Logistic Pro Trade will create and maintain SARs, and relevant documentation on customer identity and verification (See Section 5 above) and funds transmittals. Logistic Pro Trade will maintain SARs and their accompanying documentation for at least five years. Logistic Pro Trade will keep other documents according to existing BSA and other recordkeeping requirements, including certain SEC rules that require six-year retention periods.
B. SAR Maintenance and Confidentiality
Logistic Pro Trade will hold SARs and any supporting documentation confidential. Logistic Pro Trade will not inform anyone outside of FinCEN, the SEC, an SRO registered with the SEC or other appropriate law enforcement or regulatory agency about a SAR. Logistic Pro Trade will refuse any subpoena requests for SARs or for information that would disclose that a SAR has been prepared or filed and immediately notify FinCEN of any such subpoena requests that Logistic Pro Trade receives. See Section 7 for contact numbers. Logistic Pro Trade will segregate SAR filings and copies of supporting documentation from other Logistic Pro Trade books and records to avoid disclosing SAR filings. Our AML Compliance Officer will handle all subpoenas or other requests for SARs. Logistic Pro Trade may share information with another financial institution about suspicious transactions in order to determine whether Logistic Pro Trade will jointly file a SAR according to the provisions of Section 3.d. In cases in which Logistic Pro Trade files a joint SAR for a transaction that has been handled both by us and another financial institution, both financial institutions will maintain a copy of the filed SAR.
C. Additional Records
Logistic Pro Trade shall retain either the original or a digital copy or other copy or reproduction of each of the following:
- Each document granting signature or trading authority over each customer’s account;
- A record of each remittance or transfer of funds, or of currency, checks, other monetary instruments, investment securities or credit, of more than $10,000 to a person, account or place, outside the U.S.; and
- A record of each receipt of currency, other monetary instruments, checks or investment securities and of each transfer of funds or credit, of more than $10,000 received on any one occasion directly and not through a domestic financial institution, from any person, account or place outside the U.S.
10. Training Programs
Logistic Pro Trade will develop ongoing employee training under the leadership of our AML Compliance Officer and senior management. Our training will occur on at least an annual basis. It will be based on our company size, customer base, and resources and be updated as necessary to reflect any new developments in the law.
Logistic Pro Trade training will include, at a minimum: (1) how to identify red flags and signs of money laundering that arise during the course of the employees’ duties; (2) what to do once the risk is identified (including how, when and to whom to escalate unusual customer activity or other red flags for analysis and, where appropriate, the filing of SARs); (3) what employees’ roles are in Logistic Pro Trade compliance efforts and how to perform them; (4) Logistic Pro Trade record retention policy; and (5) the disciplinary consequences (including civil and criminal penalties) for non-compliance with the BSA.
Logistic Pro Trade will develop training at Logistic Pro Trade, or contract for it. Delivery of the training may include educational pamphlets, videos, intranet systems, in-person lectures and explanatory memos. Logistic Pro Trade will maintain records to show the persons trained, the dates of training and the subject matter of their training.
Logistic Pro Trade will review our operations to see if certain employees require specialized additional training. Logistic Pro Trade written procedures will be updated to reflect any such changes.
11. Monitoring Employee Conduct and Accounts
Logistic Pro Trade will subject employee accounts to the same AML procedures as customer accounts, under the supervision of the AML Compliance Officer. Logistic Pro Trade will also review the AML performance of supervisors, as part of their annual performance review. Our AML Compliance Officer’s accounts will be reviewed by CEO Andre Beauchesne.
12. Confidential Reporting of AML Non-Compliance
Employees will promptly report any potential violations of Logistic Pro Trade AML compliance program to the AML Compliance Officer, unless the violations implicate the AML Compliance Officer, in which case the employee shall report to the president/chairman of the Board of Directors. Such reports will be confidential, and the employee will suffer no retaliation for making them.
13. Senior Manager Approval
Senior management has approved this AML compliance program in writing as reasonably designed to achieve and monitor Logistic Pro Trade’s ongoing compliance with the requirements of the BSA and the implementing regulations under it. This approval is indicated by signatures below.