LAFT Policy in Colombia
Introduction / Purpose
This procedure is intended to document the process required in Colombia to ensure the compliance of the LAFT Policy (Policy for the Prevention of Money Laundry and Terrorism Financing).
Scope or Applicability
The LAFT Policy (Policy for the Prevention of Money Laundry and Terrorism Financing) applies in Colombia for all Customers and Vendors doing business with the legal entities Dow Quimica de Colombia SA.
LAFT Policy: Policy for the Prevention of Money Laundry and Terrorism Financing.
Money laundering: Money laundering is a figure that pursues to give the appearance of legality to a money of illegal origin. Criminals through the movement of assets and money, seek to create this legal appearance of their earnings, or at least intended to be difficult to follow or trace the illicit source of their illicit profits.
Financing of terrorism (FT): Those who directly or indirectly provide, collect, deliver, receive, manage, contribute, custody or save funds, assets or resources, or perform any other act that promotes, organize, support, maintain, finance or hold economically groups of organized crime, national armed groups outside the law or its members, or foreign or domestic terrorist groups, or foreign or domestic terrorists, or terrorist activities.
Unusual operations: Those whose amount or characteristics do not hold relation to the economic activity of the counterparty, or whose amount, by the agreed quantities or by their particular characteristics, are not framed within the normal practices and systems of the business of a specific industry or sector.
Suspicious transactions: Those that by their number, amount or characteristics, are not framed within the normal practices and systems of the business of a specific industry or sector and, in addition, that in accordance with the traditions and customs of the activity concerned, they have not been able to be reasonably justified. These operations must be reported to the UIAF.
Compliance Officer: The Compliance Office is the person assigned by the Board of Directors to implement, verify and control the compliance of the LAFT Policy in the Company.
Second Compliance Officer: In absence of the Compliance Officer, the Second Compliance Officer will be responsible to implement, verify and control the compliance of the LAFT Policy into the Company.
Dow employees: All people hired by Dow to perform an specific role/job.
Vendors: Any 3rd party/external company, supplying a service and/or material to Dow.
Customers: Any 3rd party with a business relationship with Dow. Is the recipient of a material and/or service for a monetary or other valuable consideration.
Process For the implementation of the LAFT Policy the following tools and procedures were developed:
a) Guidelines for the knowledge of counterparts (Customer and Suppliers)
For the knowledge of counterparts it will use the information collected to create a Customer/Supplier in the System:
* Bank name
* Account number
* Swift code
* An invoice in blank or cancelled
* Bank account information letter
There are tools which allow full and reliable identification of specific service providers, as the Anti-Corruption Due Diligence Process. (ACDD). The ACDD is a more robust process designed to identify and flag potential risks in third parties through use of Securimate, a web-based application hosted by a third-party service provider. Various levels of investigative reports can be generated based on the risk-scoring methodology applied to the third party by the Office of Ethics and Compliance.
It must obtain the information and documents that reveal the economic activity of the customer or supplier, as well as determine the purpose, the nature and volume of its operations to determine if they have any risk to the company.
b) Verification if the Customer/Supplier is within accepted guidelines (revision of the RESTRICTIVE LISTS).
For the verification of compliance with the guidelines of acceptance of customers/suppliers, whether natural persons or legal entities, a review of restrictive lists (OFAC lists and lists of the United Nations) will be held.
Control of restrictive lists for legal entities includes:
- The corporate name
- Legal representatives
- Members of the Board of Directors
- Shareholders, partners or partners with 5% or more of the share capital contribution or participation
For this purposes we already count with the Trade Compliance Screening Processes.
c) Communication and certification request sent to customers and suppliers.
Letters of support were sent to all customers and suppliers expressing Dow’s commitments on Prevention and Risk Management of Money Laundering and Terrorism Financing, about the law and the adopted policy.
It was also requested to all customers and suppliers to sign the certification and agreement with the commitments above mentioned and were informed that Dow may, at any time, verify its compliance with the applicable requirements given.
d) Parameters against money laundering and terrorism financing.
Since the implementation of the policy, a mandatory clause was included to all commercial and services agreements indicating Dow’s commitments with the LAFT prevention and risk management. This clause also included the statement that in case the customer or supplier do not comply or meet this commitments it may apply the automatic termination of the contract/relationship.
A My Learning training of the LAFT Policy will be mandatory for all employees of Dow Quimica de Colombia SA and Dow Agrosciences de Colombia SA.
f) Background check of employees.
Annually it will be carried out on “spot basis” a background check on the judicial records of randomly selected employees.