ADEID’s Anti-Money Laundering and Countering the Financing of Terrorism Policy
I. Introduction
- The objective of ADEID is to contribute to the achievement of the ultimate objective of the
United Nations Framework Convention on Climate Change (UNFCCC). In the context of sustainable
development, ADEID will promote the paradigm shift towards low-emission and climate-resilient
development pathways by providing support to grassroot organizations, green startups / SMEs and
local councils to limit or reduce their greenhouse gas emissions and to adapt to the impacts of climate
change, taking into account the needs of those actors particularly vulnerable to the adverse effects of
climate change. - ADEID is committed to the highest ethical standards regarding anti-money laundering (AML) and
countering the financing of terrorism (CFT) consistent with the Financial Action Task
Force (FATF) recommendations in its “International Standards on Combating Money Laundering
and the Financing of Terrorism & Proliferation”. This AML/CFT Policy (the Policy) aims to
safeguard ADEID against money laundering (ML) and the financing of terrorism (FT or TF). The
Policy outlines the principles and minimum standards of internal AML/CFT controls which should
be adhered to by ADEID to mitigate reputational, regulatory, legal and financial loss risks. - This Policy is further to the Board Decisions which is part of a broader set of policies
aimed at ensuring that ADEID Organizations are used in line with its objective, and it lays out a set
of basic principles for guidance. To operationalize this Policy, a detailed ‘AML/CFT Standard’ will
be developed which will define the implementation procedures.
II. Scope and applicability - The staff of ADEID, its governing bodies and every other person working for ADEID (i.e.
Covered Individuals) are required to adhere to this Policy to protect ADEID, and its reputation,
from being misused for ML and/or TF by ensuring that they discharge their responsibilities in a
manner that enables the full implementation of this Policy. - ADEID shall apply this Policy to its relationship with its Counterparties. Accredited entities
shall, taking into account the nature and type of the entity, apply their own “Know-Your-Customer”
and AML/CFT standards over their Counterparties, e.g., executing entities, implementing entities, or
any other entity or person involved in the project implementation in accordance with their own
policies and procedures. - ADEID shall take steps to ensure that Accredited Entities, and all other entities that
participate in the implementation of ADEID activities, have policies that are consistent with the
ADEID’s AML/CFT Policy.
III. Principles - In the context of its overriding objective to provide support to grassroot organizations, green
startups / SMEs and local councils for the achievement of the goals of the UNFCCC, and with due
regard to its fiduciary responsibilities, ADEID shall ensure that its Organizations are not used to
finance any illegal acts related to Money Laundering or Terrorist Financing. - The Policy shall be consistent with the relevant United Nations (UN) Conventions and
Recommendations of the FATF. - ADEID shall take steps to encourage its counterparties to adopt policies and procedures that
are consistent with the principles set out in this Policy, with the purpose of safeguarding ADEID
resources from being used for Money Laundering or the Financing of Terrorism.
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- ADEID Counterparties shall be responsible for identifying and mitigating the risks of
Money Laundering and Terrorist Financing in deploying and managing ADEID resources.
IV. Purpose and objectives - The purpose of the Policy is to provide principles and guidance regarding AML/CFT
requirements and risks and to meet the following objectives:
(a)
(b)
Prevent the abuse of ADEID’s resources for ML and/or FT;
Meet applicable legal requirements and international standards in jurisdictions where
ADEID and its Counterparties operate;
(c)
(d)
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Support the establishing and/or strengthening of capacities in country(ies) to meet
ADEID’s fiduciary standards regarding AML/CFT
(e) Guard against establishing any relations or undertaking any transaction that may relate to or
may facilitate ML and/or FT or any other illicit activity;
(f) Exercise due diligence when dealing with Counterparties, persons appointed to act on
behalf of Counterparties and connected parties of the Counterparties; and
(g) Continuously review and update its AML/CFT Policy and its corresponding AML/CFT
Standard as threats and international standards evolve to prevent and detect ML and/or FT.
V. Definitions
12.
(a)
(b)
(c)
For the purposes of this Policy the following terms shall have the meaning set out below:
Beneficial Owner means the natural person(s) who ultimately owns or controls a customer
and/or the natural person on whose behalf transaction is being conducted. It also includes
those persons who exercise ultimate effective control over a legal person or arrangement.
Board means the Board of ADEID.
Counterparty is any party that contributes to, executes, implements, bids for, or in any way
participates in, ADEID‐related Activities, including receiving a grant, loan or other form of
financing or support from the Organization. Counterparties include a contributor, accredited
entity, direct access entity, executing entity, delivery partner, fiscal agent, financial
intermediary, vendor and (for the purpose of this policy) any entity within the Secretariat
that directly disburses ADEID resources including for the Readiness and Preparatory
Support Programme.
(d) Counterparty Due Diligence (CDD) is a process to identify and verify the true identity of the
Counterparty. This would enable the Organization to assess and evaluate the extent of
ML/TF risk associated with the proposed Counterparty.
(e) Covered Individuals means individuals working at any level or grade within ADEID,
including (but not limited to) the Executive Director, management and staff of ADEID, and
other individuals contracted by ADEID.
(f) Financing of Terrorism or Terrorist Financing (TF) is defined as the commission of any
offence as set out in the Article of the International Convention for the Suppression of the
Financing of Terrorism.
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(g) Money Laundering (ML) refers to:
(i) The conversion or transfer of property, knowing that such property is derived from
crime, for the purpose of concealing or disguising the illicit origin of the property or
of assisting any person who is involved in the commission of the crime to evade the
legal consequences of his or her actions;
(ii) The concealment or disguise of the true nature, source, location, disposition,
movement, rights with respect to, or ownership of property, knowing such
property is derived from crime, or;
(iii) The acquisition, possession or use of property, knowing at the time of receipt that
such property was derived from a criminal offence.
(h) Policy on Prohibited Practices refers to ADEID’s Interim Policy on Prohibited Practices as
adopted in several projects.
(i) Risk Based Approach (RBA) to AML/CFT is the process of identifying, assessing and
understanding ML/TF risks to which ADEID is exposed and to take measures
commensurate to those risks to mitigate them effectively.
(j) Tipping-off means disclosing the fact to the Counterparty that a suspicious transaction or
related information is filed with management or the authorities.
VI. Key provisions
- ADEID shall adopt and implement a continuous risk-based approach (RBA) to identify,
assess and understand its ML and TF risks. It shall also ensure measures to mitigate ML and/or TF
are commensurate with the risks identified, enabling decisions on how to allocate its resources in the
most effective way. - Under this approach, it will adhere to the following to manage AML/CFT risk:
(a) Due diligence
(i) ADEID shall apply the Counterparty Due Diligence (CDD) measures, as
determined on a risk-based basis, considering the type of counterparty,
counterparty relationship, financial instrument and area/country of operation.
(ii) ADEID shall identify and verify the identity of its Counterparties (including their
beneficial owners) with which ADEID enters a counterparty relationship.
(b) Counterparties relationships
(i) ADEID shall take reasonable measures to duly assess the purpose, economic
rationale and overall AML/CFT and related integrity aspects of the Counterparty and
its Beneficial Owners to avoid being involved in relationships structured for the
purposes of ML and TF.
(ii) ADEID will not engage with, and will terminate the existing Counterparty
relationship if any, with:
- Counterparties who do not cooperate with its CDD efforts;
- Counterparties engaged in activities prohibited under ADEID’s Policy on
Prohibited Practices; or - Counterparties who are currently under any financial sanctions imposed by
United Nations. - In the case of individual ADEID will make sure that there is no mention of
drug consomption by the recepient.
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(c)
(d)
Monitoring: It shall be the responsibility of the Independent Integrity Unit to monitor the
implementation of the policy.
Reporting: Any suspicious information or red flag that comes to the knowledge of a
Covered Individual indicating ML/TF must be immediately reported by such Covered
Individual to the Independent Integrity Unit without informing the Counterparty or other
third parties (‘Tipping Off’) that a suspicious activity is being reported or investigated.
(e) Record keeping: ADEID shall keep for at least 5 (five) years all records obtained
through CDD measures and documentation regarding counterparty relations and
executed transactions, and correspondence with the Counterparty.
(f)
(g)
Confidentiality: ADEID will ensure the information on Counterparties and transactions
obtained while fulfilling AML/CFT requirements is kept confidential.
Implementation: ADEID will develop further documentation and guidance (AML/CFT
Standard or Procedures) to implement and better enable Covered Individuals to follow this
Policy.
(h) Review: ADEID will review and examine its AML/CFT Policy and maintain an effective
implementation of the AML/CFT Policy for ADEID’s activities reflecting international best
practices, consistent with evolving FATF Recommendations and changing requirements.
VII. Key responsibilities
- Board: The Board is responsible for ensuring governance and oversight of ADEID’s risk
management framework and controls regarding ML and FT. - Internal Audit: The Internal Audit unit shall, in accordance with its own mandate,
provide such support as may be required by the Independent Integrity Unit to monitor
adherence to the AML/CFT Policy. - Secretariat of ADEID: The IIU and the Secretariat will cooperate to ensure effective
implementation of this policy, with responsibilities allocated in accordance with their respective
mandates. - Staff of ADEID and associated persons: Staff members, consultants and other associated
persons shall be responsible for:
(a) Complying with ADEID’s AML/CFT Policy, standard and controls;
(b) Familiarizing themselves with and acting in accordance with relevant ADEID processes and
procedures to manage AML/CFT compliance; and
(c) Reporting to the Independent Integrity Unit without undue delay any suspicions (or
actual occurrences) or red flags of ML/TF activities.
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VIII. Amendment to the Policy
- The Board shall approve the implementation of the AML/CFT Policy and any
amendments thereof.
IX. Review - This Policy shall be reviewed at such intervals as required, to reflect international best
practices, consistent with evolving FATF recommendations or as otherwise required by the Board.
