Management of the risks related to money laundering offenses, financing of terrorism, financing of the proliferation of weapons of massive destruction and other illicit activities. (LC/FT/FPADM).

Sivensa has established a number of regulatory aspects, which have been grouped in the Sivensa’s Code of Ethics, delivering a clear message to all the personnel that the fundamental mission of the Company is aimed at achieving its targets by highlighting among its employees the values of ethics, dignity and honesty; and refusing any possibility to achieve results at the expense of violating the legal norms in force or the internal norms of the Company.

By following the guidelines established in its Code of Ethics and attending as an obliged entity the rules of the Providence No. 209, “Norms related to the administration and control of the risks related with the offenses of money laundering, financing of terrorism, financing of the proliferation of weapons of massive destruction and other unlawful acts, applicable to the subjects controlled by the National Securities Superintendence”, Sivensa has implemented an Integral System of Management of Risks of Money Laundering, Financing of Terrorism and Financing of the Proliferation of Weapons of Massive Destruction or (SIAR LC/FT/FPADM), which includes the policies, programs, manuals, norms, procedures, structures, plans and strategies aimed at identify, measure, evaluate, monitor and apply corrective measures in order to reduce the possibility of utilization of Sivensa as a means to hide the origin, purpose and destiny of illicit capitals, during the realization of any operation. This Integral System considers: a) the establishment of the functions of the Board of Directors and the President of the Company; b) the appointment of a Compliance Officer; c) the constitution of the Unit of Prevention and Control of Capital Legitimation and Financing of Terrorism and Proliferation of Weapons of Massive Destruction; and d) the designation of compliance responsible officers in the various areas of the Company and those responsible of the first contact line.

Likewise, as part of the measures implemented on this matter, Sivensa has designed and approved the manual of Policies, Norms and Procedures for the Administration of the risk of LC/FT/FPADM, the AR/LC/FT/FPADM Annual Operating Plan and the Annual Training and Qualification Program Plan of AR/LC/FT/FPADM, as part of the instruments to prevent the risk arising from the crimes of LC/FT/FPADM, and other illicit associated with them, which are fully performed. The instruments mentioned are periodically revised and updated, in order to adapt them to the regulatory changes and to the norms that govern the matter.

Policy “Know your Shareholder”

It is very important for Sivensa the fulfillment of the policy ‘Get to know your shareholder’, therefore, in the strict compliance of the Stock Market Law, the Company has hired the services of a financial entity, to perform as a Transfer Agent, in order to keep the information up to date, to know and identify the shareholder, to determine his/her financial profile, the economic activities followed by him/her, the range where he/she performs frequently, the operations realized or any other criterion which permits to identify in due time the operations considered unusual or suspicious.

Registration and Identification of the Shareholders

The Transfer Agent sets individual records of each of its stockholders, applying an approach based on risk, in order to collect, register and keep the information up to date, to determine reliably their identification and verification, as of the time of the shareholder’s entry.

Policy “Know your supplier”

Sivensa adopts secure business relationships with its suppliers and in turn safeguards its reputation as Institution, in compliance of the legal regulations existing in Venezuela, in respect to the area of Administration and Control of the LC/FT/FPADM Risk, with the application of the Policy ‘Get to know your supplier’, for the adequate comprehension at the time of establishing the commercial relationship with the Supplier, to fully identify the service provider, to verify its identity and data provided, to determine the specific economic activity and its final benefits, as well as the Financial Profile of the supplier.

Registration and Identification of the Suppliers

Sivensa sets individual records, annual revisions and updates of every one of its suppliers, applying an approach based on risk, to gather, register, and maintain the information updated, to reliably determine their identification and verification, for the duration of the business relationship with the supplier.

Investors, Shareholders and Suppliers registration requirements

In the Providence No. 209 it is stated that the obligated subjects must keep an individual record for each of its investors, in order to obtain and maintain updated information on operations, irrespective of the amount of the transaction carried out by the investor with the obligated subject, for the duration of their commercial relationship. The aforementioned ruling establishes the requirements for the registration of natural persons, legal entities, cooperative associations and Non-profit Organizations (NPO).

Some basic concepts and legal framework related to the LC/FT/FPADM.

Money Laundering

Illicit Capital Laundering Money laundering is the process of concealing or disguising the existence, origin, movement, destination or use of goods or funds that have an illicit source, in order to make them appear to come from a legitimate activity.

Stages: Money laundering is carried out in 3 steps:

  1. Placing: During this initial stage of capital legitimation, the illegal profits are introduced into the financial system. In most cases, this stage is accompanied by the placement of the funds into circulation through financial institutions, casinos, businesses, exchange houses and other businesses, both nationally and internationally.
  2. Processing: Diversification of funds in different financial products and services, in order to confuse and give the appearance of being mercantile operations.
  3. Integration: at this stage, these funds of illicit origin are formally incorporated into the legal economic circuit, appearing to be of lawful origin or source.

The process of capital legitimation is also known in other jurisdictions as:

  • Money Laundering
  • Asset Laundering
  • Recycling of dirty money
  • Illicit Capital Laundering
  • Blanqueo de Activos

Financing of terrorism

The financing of terrorism is the utilization of licit or illicit funds, with the following purposes: to belong, finance, act or cooperate with armed gangs or groups of organized delinquency, in order to cause ravages, catastrophes, fires or detonate explosive devices. It also implies to subvert the constitutional order and democratic institutions or to seriously disturb the public peace.

Venezuelan Legal Frame regulating the phenomenon of Capital Legitimation and Financing of Terrorism

  1. Organic Law Against Organized Crime and Financing of Terrorism (LOCDOFT)
  2. Organic Law of Drugs
  3. Regulations on the Administration and Control of the risks related to the crimes of Money Laundering, Financing of Terrorism and Financing of the Proliferation of Weapons of Mass Destruction, applicable to institutions regulated by the National Securities Superintendence (Resolution 209-2020).