Purpose and Scope
Novatum is a payment institution authorized in the UK under the FCA.
The purpose of this Anti-Money Laundering / Counter-Terrorist Financing (“AML/ CTF”) Risk Appetite Policy is to define Novatum’s risk tolerance and the guiding principles governing Money Laundering and Terrorist Financing risk identification, measurement, reporting, management, and monitoring, as required by applicable laws.
The following businesses are acceptable with EDD (enhanced due diligence):
- As required, products and services sold or provided by Novatum´s Clients’ must comply with applicable legal or regulatory standards.
- Financial Services businesses
- Financial Technology businesses
- Subsidiary businesses where we need to follow a chain to including through businesses registered outside of the UK to reach beneficial owners
- Clients linked to adverse press
- Online Gambling – Accepted activities are: online gambling, betting, poker, sport, horse racing, casino, lottery, arcade.
- Invoice finance businesses
- International remittance businesses
- Bureau de change businesses
- Cryptocurrency Businesses – Licensed
Simplified due diligence ( SDD) may be applied to:
- certain other UK, EU, or similar jurisdiction regulated firms in the financial sector;
- companies listed on the UK, EU, or similar jurisdiction regulated stock market;
- beneficial owners of pooled accounts held by notaries or independent legal professionals in the UK
- UK public authorities;
- EU Community institutions
- life assurance corporations in the UK
- pension funds in the UK
- other situations where after a performed documented assessment we are reasonably satisfied that the risk of ML/TF is low.
The information Novatum obtains when applying SDD measures must enable the firm to be reasonably satisfied that the risk associated with the relationship is low. It must also be sufficient to give the firm enough information about the nature of the business relationship to identify any unusual or suspicious transactions. SDD does not exempt Novatum from reporting suspicious transactions to the NCA.
Prohibited Client Types and Prohibited Payment Flows:
As a general principle, Novatum shall not onboard Clients carrying out businesses or activities that are illegal, conducted in absence of required licenses or permissions, or present an excessive reputational risk (which includes any material adverse media) for Novatum.
Novatum will not do business with groups, legal entities, bodies, and similar which have been sanctioned for offenses irrespective of when the client was sanctioned and the jurisdiction(s) in which it was sanctioned.
Novatum does not permit pay in or payouts from its accounts in physical cash. Novatum has no appetite for being used as a conduit for transactions and activities related to financial crime. Through our KYC process, we will attempt to identify accounts that have characteristics that indicate an elevated level of risk beyond our appetite Novatum does not onboard, nor will it process the payment flows for its Merchant Clients, for the following:
- Carbon Credits
- Counterfeit Goods
- Drug Paraphernalia
- High-Value Dealers
- Human Trafficking
- Illegal Goods
- Multi-Level Marketing
- Ponzi/Pyramid Schemes
- Precious Metals
- Shell Banks (banks based in countries where they have no physical presence involving decision-making and management and which are typically not connected to wider regulated financial groups)
- Shell Companies (a company with no physical presence involving effective decision-making, operations or assets other than cash or equivalents of cash)
- Bearer Shares corporations and companies connected to the nominee or similar arrangements for the purpose of hiding or mask the true beneficial ownership
- Speculative Trading
- Unregistered charities
- Clients linked with Politically Exposed Persons (PEPs)*
- Gambling/Casino – companies involved in the production and sale of related equipment or services, not licensed business, cash-based gambling.
- Cash-based businesses
- Adult entertainment
- Unregulated entities conducting activities that require regulations.
- Novatum has a low appetite for clients, transactions, and activities carrying the following risk factors:
- Deemed or known to entail a high risk of being directly or indirectly involved in financial crime activities including but not limited to money laundering, tax offenses, and bribery.
- Opaque or unnecessarily complex corporate setups and ownership structures.
- Institutional clients known not to comply with local legislation or whose policies and/or risk-mitigating processes in place are assessed not meet the standards adhered to by the Group.
- Residing domiciled or incorporated in high-risk countries as defined by Novatum’s country risk model.