The growth of the financial services sector has, in turn, increased the need for strict regulation, with the aim of helping organisations, states and economic partnerships limit the risk of money laundering and counter-terrorism financing.
These national and international obligations have created a complex scenario for financial institutions, whose obligations to adhere to anti-money-laundering (AML) and counter-terrorism financing (CTF), as well as to keep themselves updated on the continuously evolving laws and regulations, are not a light burden to carry.
Originally set up in 1998 by Dr Malcolm Mallia and situated in the heart of Valletta, Lexco provides compliance services to the business community, by assisting businesses and subject persons – including notaries, auditors, accountants, legal professionals, company service providers, tax advisors, real estate agents, and trustees and fiduciaries – to adopt and comply to the demands for compliance with local and international laws, regulations, directives and guidelines.
To assist subject persons to create a compliance process, execute it and maintain it, Lexco uses its wealth of experience as well as the latest technological tools.
Lexco’s experienced compliance team offers customised solutions and support in several areas, including a personalised risk management system with relevant customised and updated manuals and policies, support with the FIAU and MFSA annual compliance reports, handling the CDD process, as well as assistance with business risk assessments. This experienced and multi-disciplinary team is committed to consistently aid and support clients throughout the ongoing process of legal compliance, even helping clients to ensure they are always prepared for eventual regulatory compliance visits.
Lexco also makes use of a customised KYC Portal software to create automated legal compliance solutions for all types of organisations. This software is a high-tech system that has been listed in the 2019 and 2020 RegTech Top 100 Products global awards – and efficiently allows sole practitioners and organisations of any size and type to meet their AML obligations. The software provides fully automated real-time risk assessments, embedded biometric facial recognition to reduce interface risk, can be updated in cases of regulatory changes, and offers ongoing daily customer screening for sanctions, enforcements, adverse media and PEP searches.
Lexco’s unique ability is to combine expertise and advanced technology to offer clients the best possible service and solutions to keep their business compliant.
Lexco services include:
Anti-Money-Laundering documentation
Subject persons are required to have measures, policies and procedures in place that are adequate and appropriate to prevent the carrying out of operations that may be related to money laundering or funding of terrorism.
The AML manual – which forms part of the entire compliance management system – lays down the internal procedures adopted by the subject person against the fight of money laundering and funding of terrorism.
The Customer Acceptance Policy defines the clients which will be acceptable or not (risk appetite), by identifying a number of risks associated with the clients and identifying procedures on how to manage and mitigate those risks.
CDD forms enable the subject person to collect information on their clients which allows them to carry out proper CDD and risk assessment within the context of the Customer Acceptance Policy.
Support
Lexco provides all the necessary support to help you be compliant with AML legal obligations. The team is always available to provide real time support whenever you have a query related to issues such as initial on-boarding, source of funds, source of wealth, filling of forms or more complex issue such as legal interpretation, support to MLRO, or support with the FIAU submission of the Risk Evaluation Questionnaire and Business Risk Assessment.
Risk assessment
Every subject person is responsible for taking the appropriate risk-assessment steps, proportionate to the nature and size of its business, to identify and assess the risks of money laundering and funding of terrorism that arise out of its activities or business, taking into account risk factors including those relating to customers, countries or geographical areas, products, services, transactions and delivery channels and shall furthermore take into consideration any national or supranational risk assessments relating to risks of money laundering and the funding of terrorism.
Risk assessment policies, procedures and tools must be developed and implemented to ensure clients are properly risk assessed prior to onboarding or the carrying out of an occasional transaction and during the term of the business relationship.
Automated daily Sanction Screening
As part of the Customer Due Diligence (CDD), subject persons should have a system in place which detects whether prospective or existing customers, whether natural or legal persons, are subject to any financial sanctions. The system adopted by subject persons should be sufficiently adequate to keep subject persons updated with all financial sanctions that might be issued or updated from time to time by the UN Security Council or the EU in connection with terrorism or the proliferation of weapons of mass destruction.
When carrying out CDD in relation to a business relationship or an occasional transaction subject persons shall be required to screen customers to determine whether they are designated persons or entities. Other checks on adverse media and politically exposed persons (PEPs) databases, shall also be carried out
Customer due diligence
Subject persons must carry out proper customer due diligence on existing and prospective customers, including the nature of the transaction or business relationship, as well as a number of identification and verification checks including verification of source of wealth and funds. Customer Due Diligence shall include initial CDD, carried out both at on-boarding stage as well as on periodic reviews, carried out during the term of the business relationship.
Compliance audits
Subject persons are required to implement an independent audit function to test internal measures, policies, controls and procedures. Apart from assisting clients develop systems, Lexco also provides and conducts audits against pre-set criteria to ensure internal policies and procedures are adhered to and thus prepare clients for eventual external audits.
Regulatory obligations
Service providers may also be subject to meeting a number of regulatory obligations imposed by the financial services regulator. Therefore, Lexco’s officials may help companies with various services such as the provision of compliance officer services, which would include numerous crucial tasks such as the monitoring and supervision of the firm’s regulatory compliance, submission of documents to the MFSA including the Annual Compliance Report.
All the above services provided by Lexco give clients the peace of mind that their compliance obligations and automation of such obligations are handled by a professional and experienced team thus allowing clients to focus more time on their core competence.
For more information visit lexco.com.mt or contact the Lexco team on Compliance@Lexco.com.mt.