Source: https://lowpricedcbd.com/pages/aml-program.html
Timestamp: 2019-07-23 05:11:02
Document Index: 539163477

Matched Legal Cases: ['§ 1023', '§ 1010', '§ 1010', '§ 1023', '§ 1010', '§ 1010', '§ 501', '§ 501', '§ 1023', '§ 1023', '§ 1023', '§ 1023', '§ 1023', '§ 1023', '§ 1023', '§ 1023', '§ 1010', '§ 1010', '§ 1010', '§ 1010', '§ 1010', '§ 1010', '§ 1010', '§ 1010', '§ 1023', '§ 1023', '§ 1010', '§ 1010', '§ 1010', '§ 1010', '§ 1010', '§ 1010', '§ 1023', '§ 1010', '§ 1010', '§ 1023', '§ 1023', '§ 1023', '§ 1023']

UPDATED AS OF September, 1, 2018
It is the policy of Low Priced CBD to prohibit and actively prevent money laundering and any activity that facilitates 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.
Low Priced CBD has designated Alan Horton as its Anti-Money Laundering Program Compliance Person, with full responsibility for Low Priced CBD’s AML program. Alan Horton has a working knowledge of the BSA and its implementing regulations and is qualified by experience, knowledge and training, including all accounting issues. The duties of the AML Compliance Person will include monitoring Low Priced CBD’s compliance with AML obligations, overseeing communication and training for employees, and any and all new or changed AML. The AML Compliance Person will also ensure that Low Priced CBD 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 Low Priced CBD’s AML program.
Low Priced CBD will provide FINRA with contact information for the AML Compliance Person through the FINRA Contact System (FCS), including: (1) name; (2) title; (3) mailing address; (4) email address; (5) telephone number; and (6) facsimile (if any). Low Priced CBD will promptly notify FINRA of any change in this information through FCS and will review, and if necessary update, this information within 17 business days after the end of each calendar year. The annual review of FCS information will be conducted by Alan Horton and will be completed with all necessary updates being provided no later than 17 business days following the end of each calendar year. In addition, if there is any change to the information, Alan Horton will update the information promptly, but in any event not later than 30 days following the change.
Rules: 31 C.F.R. § 1023.210; FINRA Rule 3310; FINRA Rule 4517.
We will respond to a Financial Crimes Enforcement Network (FinCEN) request concerning accounts and transactions (a 314(a) Request) by immediately searching our 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 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. 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, Alan Horton 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), Alan Horton will structure our search accordingly.
If Alan Horton searches our records and does not find a matching account or transaction, then Alan Horton will not reply to the 314(a) Request. We will maintain documentation that we have performed the required search by printing a search self-verification document from FinCEN’s 314(a) Secure Information Sharing System confirming that your firm has searched the 314(a).
We 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. Alan Horton 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.
Rule: 31 C.F.R. § 1010.520.
We understand 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 other federal government authority has sought or obtained access to any of our records. To maintain the confidentiality of any NSL we receive, we will process and maintain the NSL by securing in our locked filing cabinet. 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.
We understand that the receipt of a grand jury subpoena concerning a customer does not in itself require that we file a Suspicious Activity Report (SAR). When we receive a grand jury subpoena, we will conduct a risk assessment of the customer subject to the subpoena as well as review the customer’s account activity. If we uncover suspicious activity during our risk assessment and review, we will elevate that customer’s risk assessment and file a SAR in accordance with the SAR filing requirements. We understand that none of our officers, employees or agents may directly or indirectly disclose to the person who is the subject of the subpoena its existence, its contents or the information we used to respond to it. To maintain the confidentiality of any grand jury subpoena we receive, we will process and maintain the subpoena by only discussing with need to know staff. If we file 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.
We will share information with other financial institutions regarding individuals, entities, organizations and countries for purposes of identifying and, where appropriate, reporting activities that we suspect may involve possible terrorist activity or money laundering. Alan Horton will ensure that Low Priced CBD files with FinCEN an initial notice before any sharing occurs and annual notices thereafter. We will use the notice form found at FinCEN’s website. Before we share information with another financial institution, we 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. We understand that this requirement applies even to financial institutions with which we are affiliated, and that we will obtain the requisite notices from affiliates and follow all required procedures.
We 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 Low Priced CBD’s other books and records.
Rules: 31 C.F.R. § 1010.540.
e. Joint Filing of SARs by Broker-Dealers and Other Financial Institutions
We will file joint SARs in the following circumstances, according to all current rules. We will also share information about a particular suspicious transaction with any broker-dealer, as appropriate, involved in that particular transaction for purposes of determining whether we will file jointly a SAR.
If we determine it is appropriate to jointly file a SAR, we understand that we cannot disclose that we have filed a SAR to any financial institution except the financial institution that is filing jointly. If we determine it is not appropriate to file jointly we understand that we cannot disclose that we have filed a SAR to any other financial institution or insurance company.
Rules: 31 C.F.R. § 1023.320; 31 C.F.R. § 1010.430; 31 C.F.R. § 1010.540.
f. Sharing SARs With Parent Companies
Because we are a subsidiary, we may share SARs with A and D, or Low Priced Vape. Before we share SARs with A and D, or Low Priced Vape, we will have in place written confidentiality agreements or written arrangements that all parties to protect the confidentiality of the SARs through appropriate internal controls.
Before opening an account, and on an ongoing basis, Alan Horton 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. Because the SDN list and listings of economic sanctions and embargoes are updated frequently, we will consult them on a regular basis and subscribe to receive any available updates when they occur. With respect to the SDN list, we may also access that list through various software programs to ensure speed and accuracy. FINRA’s OFAC Search Tool that screens names against the SDN list. Alan Horton will also review existing accounts against the SDN list and listings of current sanctions and embargoes when they are updated and he will document the review.
Our review will include customer accounts, transactions involving customer’s activity that passes through Low Priced CBD such as wires and the review of customer transactions that involve physical security certificates or application-based investments, mutual funds.
Rules: 31 C.F.R. § 501.603; 31 C.F.R. § 501.604.
We do not open or maintain customer accounts within the meaning of 31 CFR 1023.100, in that we do not establish formal relationships with “customers” for the purpose of effecting transactions in securities. If in the future Low Priced CBD elects to open customer accounts or to establish formal relationships with customers for the purpose of effecting transactions in securities, we will first establish, document and ensure the implementation of appropriate CIP procedures.
We will 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))
Rule: 31 C.F.R. § 1023.220.
Prior to opening an account, Alan Horton 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:
(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 or a principal place of business, local office, or other physical location; and
(4) an identification number, which will be a taxpayer identification number 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.
In the event that a customer has applied for, but has not received, a taxpayer identification number, we will require a copy of the request to confirm that the application was filed before the customer opens the account and to obtain the taxpayer identification number within a reasonable period of time after the account is opened.
Rule: 31 C.F.R. § 1023.220(a)(2)(i).
Based on the risk, and to the extent reasonable and practicable, we will ensure that we have a reasonable belief that we know 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. Alan Horton 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 (e.g., whether the information is logical or contains inconsistencies).
We will verify customer identity through documentary means. We will use documents to verify customer identity when appropriate documents are available. In light of the increased instances of identity fraud, we will supplement the use of documentary evidence by using the non-documentary means described below whenever necessary. We may also use non-documentary means, if we are still uncertain about whether we know the true identity of the customer. In verifying the information, we will consider whether the identifying information that we receive, such as the customer’s name, street address, zip code, telephone number, date of birth and Social Security number, allow us to determine that we have a reasonable belief that we know the true identity of the customer.
We 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 Low Priced CBD's AML Compliance Person, file a SAR in accordance with applicable laws and regulations.
Rule: 31 C.F.R. § 1023.220(a)(2)(ii).
Rule: 31 C.F.R. § 1023.220(a)(2)(iii).
Rule: 31 C.F.R. § 1023.220(a)(3).
Rule: 31 C.F.R. § 1023.220(a)(4).
We will provide notice to customers that Low Priced CBD is requesting information from them to verify their identities, as required by federal law. We will use the following method to provide notice to customers by telephone, online, or walk-in, using one or more of the following.
Rule: 31 C.F.R. § 1023.220(a)(5).
We may, under the following circumstances, rely on the performance by another financial institution 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 the other financial institution has entered into a contract with our firm requiring it to certify annually to us that it has implemented its anti-money laundering program and that it will perform specified requirements of the customer identification program.
Rule: 31 C.F.R. § 1023.220(a)(6).
We do not open or maintain accounts for legal entity customers within the meaning of 31 CFR 1010.230. If in the future Low Priced CBD elects to open accounts for legal entity customers, we will first establish, document and ensure the implementation of appropriate CDD procedures.
We will identify foreign bank accounts and any such account that is a correspondent account. Upon finding or suspecting such accounts, firm employees will notify the AML Compliance Person, who will terminate any verified correspondent account in the United States for a foreign shell bank. We will also terminate any correspondent account that we have determined is not maintained by a foreign shell bank but is being used to provide services to such a shell bank. We will exercise cautionregarding liquidating positions in such accounts and take reasonable steps to ensure that no new positions are established in these accounts during the termination period. We will terminate any correspondent account for which we have not obtained the information described in Appendix A of the regulations regarding shell banks within the time periods specified in those regulations.
Rule: 31 C.F.R. § 1010.630; 31 C.F.R. § 1010.605.
Rule: 31 C.F.R. § 1010.630(b).
Rule: 31 C.F.R. § 1010.630(e).
Rule: 31 C.F.R. § 1010.670.8. Due Diligence and Enhanced Due Diligence Requirements for Correspondent Accounts of Foreign Financial Institutions
We have reviewed our accounts and we do not have, nor do we intend to open or maintain, correspondent accounts for foreign financial institutions and if one is found trying to open such an account it will be stopped immediately.
Rule: 31 C.F.R. § 1010.610(a).
Rule: 31 C.F.R. § 1010.620.
We do not maintain any accounts (including correspondent accounts) with any foreign jurisdiction or financial institution. However, ifFinCEN issues a final rule imposing a special measure againstone or more foreign jurisdictions or financial institutions, classes of international transactions or types of accounts deeming them to be of primary money laundering concern, we understand that we must read FinCEN’s final rule and follow any prescriptions or prohibitions contained in that rule.
Rules: 31 C.F.R. §§ 1010.651, 1010.653, 1010.655, 1010.658, 1010.659, 1010.660.
We 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. Monitoring will be conducted through the following methods: manual monitoring.The customer risk profile will serve as a baseline for assessing potentially suspicious activity. The AML Compliance Person or his or her designee will be responsible for this monitoring, will review any activity that our monitoring system detects, 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.
We will conduct the following reviews of activity that our monitoring system detects: All suspicious activities. We will document our monitoring and reviews as follows: written reports. The AML Compliance Person or his or her designee will conduct an appropriate investigation and review relevant information from internal or third-party sources before a SAR is filed. Relevant information can include, but not be limited to, the following: all written reports.
Rules: 31 C.F.R. § 1023.320; FINRA Rule 3310.
In situations involving violations that require immediate attention, such as terrorist financing or ongoing money laundering schemes, we 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), local U.S. Attorney’s office (512) 916-5858, local FBI office (254) 772-1627 and local SEC office (817) 978-3821. If we notify the appropriate law enforcement authority of any such activity, we must still file a timely a SAR.
Rule: 31 C.F.R. § 1023.320.
• Customer with no discernable reason for using Low Priced CBD’s service.
• Unusual concern with Low Priced CBD’s compliance with government reporting requirements and firm’s AML policies.
• Unexplained high level of accountactivity with very low levels of securities transactions.
• Buying and selling securities with no purpose or in unusual circumstances.
ayment by third-party check or money transfer without an apparent connection to the customer.
When an employee of Low Priced CBD detects any red flag, or other activity that may be suspicious, he or she will notify the Manager and the other partners. Under the direction of the AML Compliance Person, Low Priced CBD 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.
We will monitor all transactions looking for anything suspicious and report according to the BSA reporting system.
We will file SARs with FinCEN for any transactions (including deposits and transfers) conducted or attempted by, at or through our firm involving $5,000 or more of funds or assets where we know, suspect or have reason to suspect:
(4) the transaction involves the use of Low Priced CBD to facilitate criminal activity.
We do not allow any transaction that exceeds $5,000.00 to be executed without the consent of both partners. Our firm prohibits transactions involving currency and has the following procedures to prevent such transactions: We do not allow Cash transactions larger than $1000.00. If we discover such transactions have occurred, we will file with FinCEN CTRs for currency transactions that exceed $10,000. Also, we will treat multiple transactions involving currency as a single transaction for purposes of determining whether to file a CTR if they total more than $10,000 and are made by or on behalf of the same person during any one business day. We will use the BSA E-Filing System to file the supported CTR Form.
Rules: 31 C.F.R. §§ 1010.311, 1010.306, 1010.312.
Our firm prohibits both the receipt of currency or other monetary instruments that have been transported, mailed or shipped to us from outside of the United States, and the physical transportation, mailing or shipment of currency or other monetary instruments by any means other than through the postal service or by common carrier. We will file a CMIR with the Commissioner of Customs if we discover that we have received or caused or attempted to receive from outside of the U.S. currency or other monetary instruments in an aggregate amount exceeding $10,000 at one time. We will also file a CMIR if we discover that we have physically transported, mailed or shipped or caused or attempted to physically transport, mail or ship by any means other than through the postal service or by common carrier currency or other monetary instruments of more than $10,000 at one. We will use the CMIR Form provided on FinCEN’s website.
Rules: 31 C.F.R. §§ 1010.340, 1010.306.
Rules: 31 C.F.R. §§ 1010.306, 1010.350, 1010.420.
Rule: 31 C.F.R. § 1010.415.
When we are the transmittor’s financial institution in funds of $3,000 or more, we will retain either the original or a copy (e.g., microfilm, electronic record) of the transmittal order. We will also record on the transmittal order the following information: (1) the name and address of the transmittor; (2) if the payment is ordered from an account, the account number; (3) the amount of the transmittal order; (4) the execution date of the transmittal order; and (5) the identity of the recipient’s financial institution. In addition, we will include on the transmittal order as many of the following items of information as are received with the transmittal order: (1) the name and address of the recipient; (2) the account number of the recipient; (3) any other specific identifier of the recipient; and (4) any form relating to the transmittal of funds that is completed or signed by the person placing the transmittal order.
We will also verify the identity of the person placing the transmittal order (if we are the transmitting firm), provided the transmittal order is placed in person and the transmittor is not an established customer of Low Priced CBD. If a transmittor or recipient is conducting business in person, we will obtain: (1) the person’s name and address; (2) the type of identification reviewed and the number of the identification and (3) the person’s taxpayer identification number or, if none, alien identification number or passport number and country of issuance, or a notation in the record the lack thereof. If a transmittor or recipient is not conducting business in person, we shall obtain the person’s name, address, and a copy or record of the method of payment. In the case of transmittors only, we shall also obtain the transmittor’s taxpayer identification number or, if none, alien identification number or passport number and country of issuance, or a notation in the record of the lack thereof. In the case of recipients only, we shall obtain the name and address of the person to which the transmittal was sent.
Rules: 31 C.F.R. § 1010.410(e) and (f); Exchange Act Rule 17a-8 (requiring registered broker-dealers subject to the Currency and Foreign Transactions Reporting Act of 1970 to comply with the BSA regulations regarding reporting, recordkeeping and record retention requirements); FINRA Rule 3310.
Rules: 31 C.F.R. § 1010.430; Exchange Act Rule 17a-8 (requiring registered broker-dealers subject to the Currency and Foreign Transactions Reporting Act of 1970 to comply with the BSA regulations regarding reporting, recordkeeping and record retention requirements); FINRA Rule 3310.
We will hold SARs and any supporting documentation confidential. We 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. We 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 we receive. See Section 11 for contact numbers. We will segregate SAR filings and copies of supporting documentation from other firm books and records to avoid disclosing SAR filings. Our AML Compliance Person will handle all subpoenas or other requests for SARs. We may share information with another financial institution about suspicious transactions in order to determine whether we will jointly file a SAR according to the provisions of Section 3.d. In cases in which we file 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.
Rule: 31 C.F.R. § 1023.320(e).
A record of each advice, request or instruction received or given regarding any transaction resulting in the transfer of currency or other monetary instruments, funds, checks, investment securities or credit, of more than $10,000 to or from any person, account or place outside the U.S.;
A record of each advice, request or instruction given to another financial institution or other person located within or without the U.S., regarding a transaction intended to result in the transfer of funds, or of currency, other monetary instruments, checks, investment securities or credit, of more than $10,000 to a person, account or place outside the U.S.;
Each record described in Exchange Act Rule 17a-3(a): (1) blotters, (2) ledgers for assets and liabilities, income, and expense and capital accounts, (3) ledgers for cash and margin accounts, (4) securities log, (5) ledgers for securities in transfer, dividends and interest received, and securities borrowed and loaned, (6) order tickets, (7) purchase and sale tickets, (8) confirms, and (9) identity of owners of cash and margin accounts;
Rules: 31 C.F.R. § 1010.410; 31 C.F.R. 1023.410; Exchange Act Rule 17a-8 (requiring registered broker-dealers subject to the Currency and Foreign Transactions Reporting Act of 1970 to comply with the BSA regulations regarding reporting, recordkeeping and record retention requirements); FINRA Rule 3310.
We will work closely with our clearing firm to detect money laundering. We will exchange information, records, data and exception reports as necessary to with AML laws. Both our firm and our clearing firm have filed the necessary annual certifications for such information sharing, which can be found on FinCEN’s website. As a general matter, we will obtain and use the following exception reports offered by our clearing firm in order to monitor customer activity and we will provide our clearing firm with proper customer identification and due diligence information as required to successfully monitor customer transactions. We have discussed how each firm will apportion customer and transaction functions and how we will share information and set forth our understanding in a written document. We understand that the apportionment of functions will not relieve either of us from our independent obligation to comply with AML laws, except as specifically allowed under the BSA and its implementing regulations.
Rules: 31 CFR § 1010.540; FINRA Rule 3310; FINRA Rule 4311.
15. Training Programs.
Our 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; (3) what employees' roles are in Low Priced CBD's compliance efforts and how to perform them; (4) Low Priced CBD's record retention policy; and (5) the disciplinary consequences for non-compliance with the BSA.
We will develop training in our firm, or contract for it. Delivery of the training may include educational pamphlets, videos, intranet systems, in-person lectures and explanatory memos. Currently our training program is: all registered representatives must view the video entitled “Spotting Money Laundering” within two weeks of being hired. We will maintain records to show the persons trained, the dates of training and the subject matter of their training.
Rules: 31 CFR § 1023.210(b)(4); FINRA Rule 3310.
Our manager will conduct the testing to confirm we are following the AML compliance program. This test will be given to all employees every two years.
The testing of our AML program will be performed every two calendar years by David Beeson, of our firm, who is not the AML Compliance Person nor does he perform the AML functions being tested nor do they report to any such persons. His qualifications include a working knowledge of applicable requirements under the BSA and its implementing regulations. To ensure that he remain independent, we will separate his functions from other AML activities. Independent testing will be performed more frequently if circumstances warrant.
Rules: 31 C.F.R. § 1023.210(b)(2); FINRA Rule 3310.
We will subject employee accounts to the same AML procedures as customer accounts, under the supervision of the AML Compliance Person. We will also review the AML performance of supervisors, as part of their annual performance review. The AML Compliance Person’s accounts will be reviewed by David Beeson.
Rules: 31 C.F.R. § 1023.320; 31 C.F.R § 1023.210; FINRA Rule 3310.
Employees will promptly report any potential violations of Low Priced CBD’s AML compliance program to the AML Compliance Person, unless the violations implicate the AML Compliance Person, in which case the employee shall report to the president. Such reports will be confidential, and the employee will suffer no retaliation for making them.
Low Priced CBD has reviewed all areas of its business to identify potential money laundering risks that may not be covered in the procedures described above and have found none.
Signed: David Beeson