Anti-Money Laundering and Counter-Terrorism Financing Policy
Introduction:
SHARQ Yemeni Bank for Islamic Microfinance is committed to subjecting all its transactions to Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) procedures and requirements, in light of laws, regulations, and supervisory instructions, and in accordance with best practices. This ensures compliance with all regulatory and legal requirements, contributing to the protection of the national and global financial system, as well as the bank, its clients, and its employees.
SHARQ Yemeni Bank for Islamic Microfinance confirms its commitment to the laws, regulations, rules, and guidelines for AML/CTF in accordance with National Law No. (1) of 2010 and its executive regulations, Law No. (17) of 2013 and its executive regulations and amendments, and in accordance with the instructions and circulars issued by the Central Bank of Yemen and the Financial Information Unit (FIU) in Circular No. (1) and Circular No. (2) of 2012, and any subsequent instructions. This also includes international recommendations issued by the Financial Action Task Force (FATF), the Basel Committee, and all relevant regulatory bodies.
This policy has been approved by the bank’s highest authority, represented by the Board of Directors. SHARQ Yemeni Bank for Islamic Microfinance commits to the following:
Establishing written policies and procedures for customer identification, consistent with due diligence and Know Your Customer (KYC) principles.
Appointing an officer to perform AML/CTF duties and oversee the bank’s compliance program.
Implementing an automated system based on a risk-based approach to identify and monitor suspicious transactions.
Adopting clear channels for internal and external reporting of any suspicious transactions.
Continuously training employees to identify suspicion indicators, verification procedures, and reporting of suspicious transactions, and updating training programs according to new instructions and laws.
Informing employees of their legal duties regarding transactions that may involve suspicious money laundering or terrorist financing and their legal responsibilities in case of non-compliance.
Conducting a continuous training program to introduce AML/CTF procedures to all bank employees, managers, and Board members.
Establishing record-keeping procedures to ensure the secure retention of customer identity and transaction details.
Conducting periodic and continuous reviews of AML/CTF policies and procedures to ensure their effectiveness and compliance with instructions issued by the United Nations and relevant international bodies.
SHARQ Yemeni Bank for Islamic Microfinance continuously reviews all its activities and operations to ensure:
No execution of any transactions to or from countries subject to international sanctions, or countries not engaged in AML/CTF efforts.
Performing enhanced due diligence (EDD) when establishing relationships with correspondent banks, conducting necessary questionnaires, and requesting information to verify the AML/CTF procedures of these banks before commencing dealings. Data is updated according to established methods and whenever necessary.
The bank possesses an automated system containing lists of names subject to international or local sanctions, which scans the names of persons, entities, and parties to financial transactions, takes necessary measures to stop and prevent dealing with these parties, and helps monitor customer relationships and financial transactions. This system is updated continuously.
SHARQ Yemeni Bank for Islamic Microfinance establishes specific policies for identifying Politically Exposed Persons (PEPs), their relatives, and associates, and taking enhanced and rigorous due diligence measures toward them according to their risk level.
All employees of SHARQ Yemeni Bank for Islamic Microfinance, including Board members and executive management, are responsible for implementing this policy. To this end, the following is carried out:
AML/CTF Policies, Procedures, and Controls:
All documents related to banking operations are kept according to the law; the bank retains documents for five years or more after the end of the business relationship.
In addition to internal audits and inspection rounds by the Central Bank of Yemen, SHARQ Yemeni Bank for Islamic Microfinance is subject to review by external auditors to ensure its compliance with AML/CTF laws and regulations.
SHARQ Yemeni Bank for Islamic Microfinance does not establish business relationships with shell banks that have no physical presence or are not subject to jurisdiction in the countries where they are licensed.
The bank has policies covering relationships with Politically Exposed Persons, their families, and close associates.
Compliance Management:
The bank has a compliance department responsible for AML/CTF at the head office and branches, provided with the necessary capabilities and systems.
SHARQ Yemeni Bank for Islamic Microfinance has appointed a Compliance Manager and a deputy, applying the best standards during selection. The bank grants them necessary powers, ensures full independence, and provides unrestricted access to information and data enabling verification of compliance with laws and regulations. Their names and positions have been reported to the Financial Information Unit.
The bank’s compliance program includes the appointment of liaison officers at the branch level, responsible for monitoring operations, ensuring adherence to procedures, and reporting suspicious activities to the compliance department.
Risk-Based Approach:
Based on local and international legislation and recommendations from the FATF, the Basel Committee, and the Central Bank of Yemen, the bank has adopted a risk-based approach, classifying customers into three categories:
High-risk customer.
Medium-risk customer.
Low-risk customer.
According to the risk-based approach, risks are identified based on:
Customer risk.
Service and product risk.
Delivery channel risk.
Geographic risk.
The bank re-evaluates these classifications every two years or whenever necessary.
Know Your Customer (KYC) / Due Diligence (CDD) / Enhanced Due Diligence (EDD):
Accounts are not opened for persons or entities without verifying their identities and documents in accordance with CDD/EDD procedures and KYC requirements.
All personal data verified by customer identity, source of funds, purpose of opening the account, and identification of the Ultimate Beneficial Owner (UBO) are obtained, with documents retained for at least five years after the end of the relationship.
Incoming electronic transfers are not accepted without obtaining sender details, and all outgoing transfers must include beneficiary details, purpose of transfer, and the relationship with the beneficiary.
Screening, Preventing, and Reporting Suspicious Transactions:
The bank has clear, documented channels for reporting suspicious transactions.
Clear procedures are adopted for employees to report suspicious transactions internally to the compliance department, and for the bank (via the compliance department) to report them to the Financial Information Unit according to established instructions.
Transaction Monitoring:
The bank has an effective monitoring system for unusual and suspicious activities, covering all financial transfers and other financial instruments.
AML/CTF Risk Assessment:
The compliance department conducts a comprehensive assessment of AML/CTF risks to identify, evaluate, and prioritize them, allocate resources to mitigation measures, and subject them to continuous monitoring.
Know Your Employee Policy:
The Human Resources department follows rigorous hiring procedures, verifying the authenticity of documents submitted by applicants, and conducting tests to ensure the employee’s behavioral and cognitive record, integrity, and character.
Continuous Training:
All employees receive basic training as part of an annual program to raise awareness regarding AML/CTF risks, indicators, and prevention.
Employees are trained on tasks before assuming them, and periodic training is conducted at least once a year and whenever necessary.
Record Keeping:
Customer documents are automated, and received documents are kept in a secure place with access restricted to authorized personnel.
Records are kept throughout the duration of the relationship and for five years or more after it ends.
Compliance Monitoring:
The compliance department is subject to independent reviews by the Internal Audit department (third line of defense), Central Bank of Yemen staff, and external independent auditors to ensure the compliance program is updated and aligned with regulatory risk management.
Corruption, Bribery, and Fraud:
SHARQ Yemeni Bank is committed to adopting procedures that enhance ethics and good conduct. Employees and officials are prohibited from entering into relationships with clients that represent conflicts of interest or lead to preferential treatment. Employees are prohibited from accepting financial payments for facilitating procedures. The bank provides maximum protection for customers, maintains confidentiality, and provides instructions to raise awareness about fraud prevention.
Code of Conduct (Professional Ethics):
SHARQ Yemeni Bank for Islamic Microfinance adopts principles of ethics, integrity, honesty, and fair dealing, which form the basis of the bank’s reputation. The bank has issued a Code of Professional Conduct to create a healthy work environment, prevent conflicts of interest, and maintain the confidentiality of banking information and customer data.
Wolfsberg Questionnaire
Compliance Program
Compliance Department