AML/CFT Position Statement
Prevention of Money Laundering and Combatting the Financing of Terrorism and Sanctions Compliance
Our commitment
Qatar Islamic Bank (“QIB” or “the Bank”) adheres to full compliance with relevant Qatari and international laws, regulations and guidelines pertaining to Anti-Money Laundering (AML) and Combatting the Financing of Terrorism (CFT).
The bank is committed to align its AML and CFT policies and procedures in line with international and local best practice. QIB’s AML and CFT framework is derived from:
- Domestic legal frameworks including Law No. (20) of 2019 on Combatting Money Laundering and Terrorism Financing of State of Qatar and Law No (27) of 2019 Promulgating the Law on Combating Terrorism.
- The Financial Action Task Force (FATF) 40 Recommendations issued in 2012 by the Group of Seven (G7). FATF has set minimum standards for action for countries to implement and embed these standards in to their local legal & regulatory framework pertaining to AML/CFT. That is detailed by Qatar’s Central Bank Circulars 17 & 18 /2020 and subsequent circulars.
- Regulations formulated by inter/non-governmental bodies such as United Nations, Office of Foreign Assets Control (OFAC) of United States of America and any other local regulatory authorities specifically where QIB operates.
QIB continuously monitors sanctions imposed by Qatar, UN, UK HMT, EU, and USA and strictly complies with them by screening all transactions.
Purpose and scope
This policy establishes QIB’s basic principles and commitments to prevent money laundering and combat terrorism financing. QIB employees are provided with access to all company policies and ethical guidelines. They are also provided with regular training to reinforce their understanding and implementation of this policy.
This policy applies across all QIB operations and to all persons working for QIB or on its behalf in any capacity, including employees at all levels, directors, officers, suppliers, contractors, external consultants, third-party representatives, and business partners.
Fulfilling our commitment
- Customer Due Diligence
QIB undertakes all the necessary efforts to verify the identity of its customers and the source of their funds through its Customer Due Diligence (CDD) Operations. QIB applies standard due diligence at minimum to all customers and enhance the level of the due diligence as the ML/TF risks increase. The bank’s Compliance Operations ensures the Know Your Customer (KYC) policies and procedures comply with relevant laws and regulations through periodic reviews.
The Bank has a comprehensive CDD that is implemented through a hierarchy starting from the Board of directors and trickling down to the senior management, head of compliance, relationship managers, and CDD operations. The roles and responsibilities of each entity is as follows (non-exhaustive):
- The Board of Directors sets effective customer due diligence policies, conducts an ongoing review of policies and procedures, and appoints the money laundering reporting officers (MLRO).
- The Senior Management formulates a written CDD procedures and implements an effective framework for compliance, assesses money laundering and terrorist financing risks into account, and approves high AML/CFT customers.
- The Head of Compliance ensures compliance with laws regulatory requirements, policies, and procedures in addition to establishing standards and implementing procedures.
- Relationship Managers and branch personnel are the first line of defense who are responsible for onboarding customers and identify and report unusual behaviour and suspicious elements in customer applications.
- Compliance operations ensure all documentation is obtained and procedures are adhered to at the time of account opening in accordance with board approved CDD procedures and establish records and perform verification of the documents including the source of funds.
- Business Heads and the Business Operations, which initiate and manage the relationship with the customer. Their primary responsibility is to understand the customer requirements so to mitigate the risk of default, collect and verify customer KYC documentation thereby mitigate failures leading to loss or damage to reputation or any other financial loss of the organization.
- Risk management, Compliance, Financial control, Information Security, Human Resource, Business Continuity Management are responsible for developing risk management and control framework within the organization and conducting independent assessment and direction of risk management and control activities.
- Internal Audit division, of the organization are responsible for providing a reasonable assurance on design and effectiveness as well as transactional controls prevailing within the bank. Third line of defense validates the design level controls and transaction level controls implemented by the first and second line of defense. The GIA (Group Internal Audit) team undertakes the internal audit of all the AEs (Auditable Entities) of the QIB. Internal audit of Compliance department will be undertaken on an annual basis and thus all the financial crimes falling under the purview of Compliance department will be audited at least once in every annual audit cycle.
The level of due diligence comprehensiveness correlates to the level of risk associated with the customer or transaction based on a Risk Based Approach that seeks to identify, manage, and analyze AML/CFT risk in order to design and effectively implement appropriate controls within CDD. QIB classifies customers into prohibited, high-risk, medium-risk, and low risk. Based on the risk classification, the bank may deny their service, conduct an enhanced due-diligence, or a standard due-diligence process.
Prohibited customers and counterparties are identified by regularly screening bank customers against lists of terrorists and sanctioned names issued by the UN, US, EU and Qatar through appropriate name filtering systems.
- Monitoring and Identification of Suspicious Transactions
All the processes corresponding to AML/CFT are tested to ensure compliance with key regulatory requirements and internal standards. A comprehensive testing template is utilised for carrying out the monitoring and testing. The attributes of the testing templates are the requirements of the regulations and policies, which are translated into simple language to facilitate easy understanding of the requirement. A separate sheet for all testing attributes mentioned in AML/CFT Monitoring & Testing Calendar has been prepared in the testing template.
For foreign branches, the bank ensures compliance with regulations in various jurisdictions through self-assessment exercises (monthly) basis and AML Compliance Testing (quarterly). Such exercises aim to get confirmation from each foreign branch & subsidiary about their activities and records/documents evidencing compliance with the requirements. It also ensures that the attested documents and activities are in place and the foreign branches and subsidiaries are complying with the stringent AML regulations.
- Reporting of Suspicious Transactions
In an event of a suspicious activity being discovered, the bank has an internal reporting mechanism through which all officers and employees can file an internal Suspicious Transaction Report (STR) to the MLRO. It is then the responsibility of the MLRO to verify and file an STR to the relevant authorities.
- Maintaining Records
For the purpose of preventing, detecting and investigating unusual and suspicious transactions, the Bank must keep electronic records and paper-based records of all transactions/screening records and due diligence measures carried out in accordance with this Policy.
Records must be kept at least 10 years to ensure compliance with relevant regulations, policies & procedures. Upon request from the competent authorities, the bank makes available all information obtained from monitoring & testing.
- Payment Screening
QIB screens all incoming and outcoming financial transactions for ML/TF risks as well as compliance with sanctions. Customers’ status is reviewed periodically.
- Specific Business and Customers
Customers and businesses that pose high risk of money laundering or terrorist financing are reviewed more closely at account opening and more frequently during their account relationships. These enhanced due diligence measures include obtaining comprehensive client information as part of the EDD, and obtaining senior management approval for onboarding and maintaining the customer.
- Training
Induction and quarterly trainings on AML/CFT are given to all employees. The trainings intend to provide staff with an understanding of the process of money laundering, the criminal business used to disguise the true origin and ownership of illegal cash, the laws that make it a crime and the responsibilities of employees across three lines of defense to help detect and prevent it. The training program is subject to review on a yearly basis by the Learning and Development team along with guidance from the Compliance function.
- Compliance and reporting
QIB applies a zero-tolerance approach to any breach of this policy. Refusal or failure to act in accordance with the guidelines of this policy will result in an internal investigation and may lead to disciplinary action being taken. Further or repeated non-compliance can be ground for more stringent measures, such as fines, legal prosecution and/or termination, depending on severity.
If a breach or suspected breach of this Policy has been identified by any of QIB’s employees; they must immediately report to their immediate manager. If this method is not feasible; then cases of misconduct should be reported using the local confidential whistleblower portal.
- Approvals and review
The Compliance Department has overall responsibility to ensure this policy complies with legal and ethical obligation. This policy has been approved by the board of directors of QIB. This policy will be periodically reviewed, taking into account any organizational, legal, regulatory updates, international best practices where applicable or business changes that may take place.