Anti-Money Laundering (AML) Policy
Effective Date: 6th of July 2025
1. Purpose and Scope
This AML Policy establishes the framework for Citizen Mutual Bank to identify, prevent, and report money laundering (ML), terrorist financing (TF), and proliferation financing. It aligns with UK legislation, international standards (CFATF), and best banking practices. The Policy applies to all employees, officers, and representatives (“Representatives”) of Citizen Mutual. It is the responsibility of the Chief Compliance Officer (CCO) to review and update the Policy periodically.
2. Definitions
Money Laundering: The process of disguising the origin of illicit funds through financial transactions to appear legitimate.
Terrorism Financing: Provision or collection of funds to be used, in full or in part, to commit acts of terrorism, whether or not the funds are actually used.
Proliferation Financing: Provision of funds or financial services to acquire, develop, or transfer weapons of mass destruction or related materials, contrary to UK law.
3. Risk-Based Approach
Citizen Mutual applies a risk-based approach to manage ML/TF risks. Higher-risk customers, jurisdictions, products, and services are subject to enhanced controls. Risk assessments consider:
- Customer type and profile
- Services and delivery channels
- Geographical exposure
- Organizational structure and staff
4. AML & CTF Program
Citizen Mutual maintains an AML & Counter-Terrorism Financing (CTF) Program that:
- Implements customer due diligence (CDD) and ongoing monitoring
- Ensures reporting of suspicious activities
- Defines the roles of AML & CTF Compliance Officers
- Provides staff training and awareness
- Establishes an independent review/audit function
The Program is regularly reviewed to ensure effectiveness and compliance with evolving ML/TF risks.
5. Customer Due Diligence (CDD)
CDD measures are applied to all customers prior to establishing a relationship or providing services, and include:
- Verifying identity using government-issued ID
- Collecting residential address, date of birth, nationality, and occupation
- Understanding the purpose and nature of the business relationship
Enhanced due diligence is applied to high-risk customers, including Politically Exposed Persons (PEPs) and customers from high-risk jurisdictions. Assessing source of funds is required where appropriate.
6. Correspondent Banking
Only correspondent relationships with regulated, reputable financial institutions are permitted. Citizen Mutual does not engage with shell banks or allow accounts to be used by third-party clients of correspondent banks.
7. Employee Due Diligence and Training
Staff are vetted prior to hiring and receive periodic AML & CTF training. Training covers legal obligations, risk indicators, reporting procedures, and compliance responsibilities.
8. Transaction Monitoring and Reporting
Transactions are monitored to detect suspicious activity. Representatives must report suspicious activities to the AML & CTF Compliance Officer. The Bank will file reports with the Financial Services Unit (FSU) or other authorities as required.
9. Record Keeping
Citizen Mutual retains records for a minimum of six years, including:
- Customer identification and verification documents
- Transaction and due diligence records
- AML & CTF Program and related audits/reviews
- Reports of suspicious activities
10. Independent Review
AML & CTF systems, procedures, and processes are reviewed at least annually, either internally or through independent external audit, to ensure compliance and effectiveness.
11. Cooperation with Authorities
Citizen Mutual cooperates fully with regulatory and law enforcement authorities and complies with any directives, notices, or guidance issued regarding ML/TF risks.
12. Confidentiality and Protection
Customer information is kept confidential, except as required by law or regulatory reporting obligations. Employees acting in good faith under the AML & CTF Act are protected from civil or criminal liability.
