1. Regulatory Framework
Livo Bank's AML/CFT policy is established in compliance with the following:
- Anti-Money Laundering Law (Royal Decree No. M/20, dated 08/04/1439H)
- Counter-Terrorism Financing Law (Royal Decree No. M/6, dated 07/02/1426H)
- SAMA AML/CFT Regulations and related circulars
- FATF 40 Recommendations and applicable FATF guidance
- CFT Law (Royal Decree No. M/20, dated 08/04/1439H)
The policy applies to all Livo Bank employees, subsidiaries, agents, and business partners who act on behalf of the Bank.
2. Customer Due Diligence (CDD)
CDD is the cornerstone of Livo Bank's AML/CFT framework. The following measures are applied:
2.1 Standard CDD
- Identification and verification of customer identity using reliable, independent source documents
- Identification and verification of beneficial owners
- Understanding the purpose and intended nature of the business relationship
- Ongoing monitoring of the business relationship and transactions
2.2 Simplified CDD
Simplified due diligence may be applied in low-risk scenarios, such as:
- Government entities and regulated financial institutions
- Listed companies subject to disclosure requirements
- Accounts with low balances and transaction volumes
2.3 Prohibition of Anonymous Accounts
Livo Bank is prohibited from maintaining anonymous accounts or accounts in fictitious names. All customers must be identified and verified before an account is opened or a transaction is conducted.
3. Enhanced Due Diligence (EDD)
EDD measures are applied where the risk assessment indicates a higher risk of ML/TF, including:
- Politically Exposed Persons (PEPs) and their relatives and close associates
- Correspondent banking relationships
- Customers from high-risk countries or jurisdictions identified by FATF
- Complex, unusual, or large transactions
- Non-face-to-face business relationships
- Cash-intensive businesses
- New products and technologies
EDD measures include obtaining senior management approval, enhanced scrutiny of transactions, and establishing the source of wealth and source of funds.
4. Suspicious Transaction Reporting
Livo Bank is required to report suspicious transactions to the Saudi Financial Intelligence Unit (SFIU), also known as the Financial Investigation General Directorate (FIGD). Employees must report:
- Transactions that appear to have no lawful purpose
- Unusually complex transactions with no apparent economic rationale
- Transactions inconsistent with the customer's known profile
- Sudden changes in transaction patterns
- Attempts to structure transactions to avoid reporting thresholds
- Any transaction involving sanctioned parties or countries
5. Sanctions Screening
All customers, beneficial owners, and transaction parties are screened against applicable sanctions lists, including:
- United Nations Security Council (UNSC) sanctions lists
- SAMA sanctions and watchlists
- OFAC Specially Designated Nationals (SDN) list
- EU sanctions lists
- UK sanctions lists
- Local and regional sanctions lists as applicable
Sanctions screening is conducted at onboarding, during periodic reviews, and for all cross-border transactions. Matches are investigated and reported to the Compliance function for determination.
6. Record Keeping
Livo Bank maintains comprehensive records in compliance with AML/CFT regulations:
- KYC Documents: Retained for a minimum of 5 years from the end of the business relationship
- Transaction Records: Retained for a minimum of 5 years from the date of the transaction
- STR Records: Retained for a minimum of 5 years from the date of filing
- Correspondence: Retained for a minimum of 5 years from the date of the correspondence
7. Employee Training
All Livo Bank employees receive mandatory AML/CFT training:
- New Employees: AML/CFT induction training within 30 days of joining
- All Staff: Annual refresher training on AML/CFT obligations
- Frontline Staff: Enhanced training on transaction monitoring and red flag identification
- Compliance Staff: Specialized training on regulatory updates, STR filing, and sanctions screening
- Senior Management: Governance and oversight responsibilities in AML/CFT
8. Correspondent Banking Due Diligence
Before establishing or maintaining correspondent banking relationships, Livo Bank conducts due diligence to:
- Gather sufficient information about the respondent institution to understand fully the nature of its business, reputation, quality of supervision, and AML/CFT controls
- Assess the respondent institution's AML/CFT controls
- Obtain senior management approval
- Document respective AML/CFT responsibilities
- Ensure the respondent institution does not permit its accounts to be used by shell banks
9. Wire Transfer Rules
In compliance with FATF Recommendation 16, Livo Bank ensures that all wire transfers include:
- Originator's name, account number, and address (or national ID number, or date and place of birth)
- Beneficiary's name and account number
- Originator's and beneficiary's account numbers are verified
- Required information is transmitted through the payment chain
10. Prohibitions
10.1 Shell Bank Prohibition
Livo Bank is prohibited from establishing or maintaining relationships with shell banks. Shell banks are financial institutions that are not licensed in the jurisdiction in which they are incorporated and have no physical presence in any jurisdiction, and are not affiliated with a regulated financial group.
10.2 Tipping Off Prohibition
No employee or agent of Livo Bank shall disclose to the customer or any unauthorized third party that:
- A Suspicious Transaction Report has been or is being filed
- An investigation is being or may be conducted
- Any information related to such a report or investigation has been obtained
Violation of the tipping off prohibition is a criminal offense under Saudi law, punishable by imprisonment and fines.