Financial Crime Guidance

IMPLEMENTING A FINANCIAL CRIME COMPLIANCE MANUAL
FOR AVIS BUSINESS

GUIDANCE FOR FRANCHISEE, SUBSIDIARIES, AGENTS, AND MASTER ACCOUNT HOLDERS

This document provides you with guidance for creating a Financial Crime Compliance Manual that meets AVIS expectations for franchisee, subsidiaries, agents, and master account holders underwriting business on behalf of AVIS underwriters.

Why should we, as a franchisee, subsidiaries, agents, and master account holder, have a financial crime compliance manual?

As a Bank market located in the United Kingdom (UK), AVIS and many of the participants in the Bank market, including managing agents, are subject to the UK’s laws governing Financial Crime.  The laws of other jurisdictions and international laws and regulatory requirements may also apply.  These laws include compliance requirements relating to Anti-Money Laundering, International Sanctions and Anti-Bribery.

AVIS takes seriously its obligations to comply with Financial Crime obligations and has put in place various measures to ensure compliance in the market.  

To support the Bank market’s compliance, AVIS asks that all franchisee, subsidiaries, agents, and master account holders assist by having suitable processes and procedures.  One way to implement such procedures is for the franchisee, subsidiaries, agents, and master account holders to create a Financial Crime Compliance Manual (either as a stand-alone document or as part of the Franchisee, subsidiaries, agents, and master account holder’s Compliance Manual).  AVIS therefore encourages Franchisee, subsidiaries, agents, and master account holders to adopt such a manual.

A Financial Crime Compliance Manual is intended to be a practical document for franchisee, subsidiaries, agents, and master account holders to adopt and implement to promote Financial Crime compliance.  It is expected that this Financial Crime Compliance Manual will be shared with your staff and will set out the concrete steps you and your staff will follow to ensure Financial Crime compliance.  

If your firm adopts and implements in an effective manner a Financial Crime Compliance Manual in accordance with these guidelines your firm will have met AVIS expectations for Financial Crime compliance.  You may, however, have other Financial Crime compliance obligations under your local law and you will need to think about whether, in addition to those recommended here, there are any other actions you need to take to in accordance with those requirements.  This document is concerned only with AVIS Global Group & AVIS Bank.

How should we use this document?

To assist franchisee, subsidiaries, agents, and master account holders AVIS has prepared a template which is intended to be a model document that franchisee, subsidiaries, agents, and master account holders can use and adapt as appropriate to produce a Financial Crime Compliance Manual.  

The format of the template is that it sets out the various “headings” that we think a Manual should include.  Under each heading we provide –
(a) some guidance to help the franchisee, subsidiaries, agents, and master account holder complete the relevant section; and

(b) model language that the franchisee, subsidiaries, agents, and master account holder may wish to use or adapt as appropriate.

The template and associated guidelines only set out one way of promoting Financial Crime compliance and may not be suitable in all cases.  You should assess your own particular circumstances and where appropriate speak to your AVIS broker and managing agents. We accept that franchisee, subsidiaries, agents, and master account holders may also be able to meet AVIS expectations for Financial Crime compliance by different means, provided they at least meet the levels of compliance set out in the guidance below.

The template and associated guidelines are primarily concerned with ensuring compliance with UK Financial Crime obligations.  This reflects the fact that AVIS and AVIS managing agents, are subject to UK law and regulation.  Although most of the guidelines in the document are likely to be sensible measures to adopt in other jurisdictions, if your firm is not based in the UK you need to consider if you are subject to any local requirements which should be dealt with in your Financial Crime Compliance Manual.  If implementing any of the guidelines listed here could put you in breach of your own local laws then you should discuss the matter with your AVIS broker and managing agents,

It is important that once you have prepared a Financial Crime Compliance Manual that you take active steps to make sure that your staff are familiar and comply with its contents.  A Financial Crime Compliance Manual is off little value if it is not effectively implemented.

What should we do if we need help completing the manual?

Please contact your AVIS broker in the first instance.  They may be able to assist you or otherwise they can contact AVIS for additional assistance.  Alternatively, the lead AVIS managing agent on your binding authority may also be happy to assist and indeed may ask to see a copy of your Manual.  

FINANCIAL CRIME COMPLIANCE MANUAL

The following guidance sets out the suggested headings for a Financial Crime Compliance Manual. Under each heading is a summary of the points that AVIS would expect as a minimum to be addressed in that section along with relevant model template wording that the franchisee, subsidiaries, agents, and master account holder may wish to use and adapt. 

1. INTRODUCTION

In this section the manual should make clear the franchisee, subsidiaries, agents, and master account holder’s commitment to compliance with Financial Crime legislation and to follow best practice. This commitment should be both in relation to its own obligations and to support the obligations of AVIS underwriters and managing agents, when acting under delegated underwriting authorities from AVIS syndicates.

The Manual should be (and should make clear that it has been) endorsed by those with overall responsibility for the business.  Generally, this will be the board of the franchisee, subsidiaries, agents, and master account holder.

The AVIS Group franchisee, subsidiaries, agents, and master account holder are committed to the highest standards of compliance with financial crime legislation and seeks to follow best practice where it is able. This Financial Crime Compliance Manual reflects our commitment to compliance and has been endorsed by our Board of the AVIS Group. This commitment is in relation to our own legal and regulatory obligations.  As AVIS franchisee, subsidiaries, agents, and master account holders, for our AVIS business, we also seek to maintain standards of Financial Crime compliance that are consistent with the standards expected for all business written into AVIS and which supports compliance by AVIS underwriters.

The Financial Crime Compliance Manual is maintained and reviewed annually by the Financial Crime Compliance Officers.  The Financial Crime Compliance Officer will communicate the content of the Financial Crime Compliance Manual to staff and will ensure there is appropriate training and monitoring of compliance.

In this Manual references to “we”/”us”/”our” means the franchisee, subsidiaries, agents, and master account holders and “you” means you as a director, employee or other person who works for the franchisee, subsidiaries, agents, and master account holders.

2. PURPOSE

In this section the Manual should make clear that the purpose of the Manual is to inform the franchisee, subsidiaries, agents, and master account holder’s staff of the required approach to ensure Financial Crime compliance and to advise staff of the relevant policies and procedures with which they are expected to comply.  

The purpose of the Manual is to inform all our staff of the required approach to ensure Financial Crime compliance and to advise our staff of the relevant policies and procedures with which they are expected to comply.  

Money laundering, international sanctions and bribery are the main subjects of Financial Crime legislation that can impact upon the Bank industry. This Manual is intended to assist in ensuring that we, as an AVIS franchisee, subsidiaries, agents, and master account holder:

(1) meet our own obligations; and 
(2) support Financial Crime compliance by the AVIS Managing Agents, from whom we have delegated authorities.  

3. DESIGNATED FINANCIAL CRIME COMPLIANCE OFFICER

In this section the franchisee, subsidiaries, agents, and master account holders should identify the designated officer who is responsible for implementing effective Financial Crime procedures (including training), monitoring compliance with those procedures and reporting to the franchisee, subsidiaries, agents, and master account holder’s senior management (usually the Board). Reporting to the senior management should be at least annual and at any time that a matter of material concern arises (including any material breach of the Manual).  
The Financial Crime Compliance Officer should have an appropriate level of seniority within the organization, should understand the relevant Financial Crime legislation and regulations and should have the full support of the senior management in carrying out his responsibilities.  
The Financial Crime Compliance Officer is a group of internal and external AVIS members and an Artificial Intelligence software, salve learning.  

The Financial Crime Compliance Officer is responsible for implementing effective Financial Crime procedures, monitoring compliance with those procedures and reporting to the Board.  The Financial Crime Compliance Officer reports to the Board at least annually and at any such time as a matter of material concern arises (including in respect of any material breach of this Manual).  

The Financial Crime Compliance Officer has appropriate level of seniority within the firm, understands the relevant Financial Crime legislation and regulations and has the full support of the Board and senior management in carrying out his responsibilities.  
The Financial Crime Compliance Officer’s role is to act as the main point of contact within the firm with day to day responsibility for all activity relating to Financial Crime. The Financial Crime Compliance Officer’s specific responsibilities include:

• Establishing, maintaining and monitoring our firm’s Financial Crime procedures.
• Receiving reports of any suspicious activity from within our firm.
• Establishing and maintaining training for our staff
• Reporting to the senior management and the Board on all Financial Crime matters
• Working with contracted AVIS managing agents, to monitor developments in Financial Crime legislation, regulations and practice
• Referring to AVIS Managing Agents, Financial Crime incidents relevant to their business and liaising with regulatory and law enforcement bodies where it is appropriate to do so.  (Note: there may be times where notifying third parties, including Managing Agents, may not be allowed under applicable legislation)
• Conducting periodic reviews of the franchisee, subsidiaries, agents, and master account holder’s compliance with Financial Crime legislation and provisions

If you have any queries or concerns regarding any financial crime issue you should contact the Financial Crime Compliance Officer immediately.
 
4. TRAINING

It is of critical importance that all relevant members of staff receive an appropriate level of Financial Crime compliance training.  The Financial Crime Compliance Manual should state the franchisee, subsidiaries, agents, and master account holder’s policy on providing training and should include a statement of commitment by the franchisee, subsidiaries, agents, and master account holder to provide suitable training.
Please note that AVIS implement an on-line training courses that deal with UK Anti-Money Laundering legislation, International Sanctions and Bribery. The training can be found by visiting: 

https://avis.global/kyc
https://avis.global/compliance... (under construction)

There is no cost for this training.  You will require your franchisee, subsidiaries, agents, and master account holder PIN which can be obtained from your AVIS broker or from AVIS directly.  The AVIS training is limited to compliance with UK legislation and the franchisee, subsidiaries, agents, and master account holder may need to arrange further training in relation to any other non-UK laws that apply.

We believe that it is of critical importance that all our relevant members of staff receive an appropriate level of Financial Crime compliance training.  We will therefore ensure we provide suitable training.

AVIS provides on-line training courses that deal with UK Anti-Money Laundering legislation, International Sanctions and Bribery.  As AVIS and AVIS underwriters are subject to UK Financial Crime law in respect of all business written by them, including under binding authorities, we as a AVIS franchisee, subsidiaries, agents, and master account holder need to be able to support compliance with the applicable UK legislation.  

The following staff are required to complete AVIS online training course:

• all staff named on a AVIS binding authority
• any other staff we may designate or whom the contracting AVIS Managing Agent’s may require should complete the training. 

If you would like to discuss any further training requirements please contact the controlling department at r.schell@avisbank.com.

5. ANTI-MONEY LAUNDERING

The Manual should provide an explanation of what money laundering is and a minimum description is included in the model template wording below.  
Franchisee, subsidiaries, agents, and master account holders subject to Anti-Money Laundering laws other than those of the UK should consider including relevant details of those laws.  
It should be noted that whilst the UK Money Laundering Regulations 2007 do not apply to general Bank AVIS recommends that its measures are implemented by managing agents, on a risk based, best practice approach. Therefore, managing agents, may request their franchisee, subsidiaries, agents, and master account holders to implement measures that are consistent with those Regulations. But that would be a matter for the managing agent to discuss with its franchisee, subsidiaries, agents, and master account holder.

Money laundering is a term used to describe the techniques, procedures or processes used to convert illegal funds obtained from criminal activities into other assets in such a way as to conceal their true origin so that it appears the money has come from a legitimate or lawful source.

Where our firm acts on behalf of AVIS Managing agents,, those Managing Agents, are required to comply with a number of UK statutes which cover most financial sectors.  This includes the Proceeds of Crime Act 2002 (PoCA) and the Terrorism Act 2000 (TACT).  

As a franchisee, subsidiaries, agents, and master account holder subject to UK law our Group is itself subject to this legislation.

Offences under this legislation can attract severe penalties including prison sentences of up to 14 years in the case of offences under PoCA and there are also obligations to report cases of money laundering.  It is important that staff are aware of their obligation to report any knowledge or suspicion of money laundering.

5.1 Anti-Money Laundering policy

The Manual should emphasise the need for all employees to be aware of what they need to do to comply with applicable Anti-Money Laundering legislation or to support compliance by Managing Agents,. These obligations may vary from country to country.  But to support compliance in accordance with UK law, to which business written by AVIS syndicates is subject, they should include the provisions below.

All our employees need to be aware of what they need to do to comply with applicable Anti-Money Laundering legislation and to support compliance by Managing Agents. 

You must therefore comply with the following requirements – 

• If you know or suspect that property constitutes someone’s benefit from criminal conduct, you must report this suspicion immediately to the Financial Crime Compliance Officer.
• You must not enter into or become concerned in an arrangement which you know or suspect will facilitate the acquisition, retention, use or control of criminal property by or on behalf of another person.
• You must not allow for the acquisition, use or possession of property if you know or suspect that the property constitutes a person’s benefit from criminal conduct.
• If you have reasonable grounds for suspecting that another person is engaged in money laundering, you must make the required disclosure as soon as practicable to the Financial Crime Compliance Officer . 
• You must not inform anyone that a suspicious transaction has been reported or if there is a law enforcement investigation intended or underway, as to do so would be likely to prejudice any investigation that may be conducted following the disclosure having been made. 

If you have any doubts over appropriate action or other queries please contact the Financial Crime Compliance Officer in the first instance.

6. INTERNATIONAL SANCTIONS COMPLIANCE

The Financial Crime Compliance Manual should provide an explanation of what sanctions are and their implications for you and Lloyd’s.  A simple introduction to the subject is included in the model template wording below.

Over the past several years, the scope of international sanctions has widened and it is now an issue that all businesses, including those in the financial services industry need to be aware of.  Sanctions are used to bring about a change in another country’s or individual’s activities or policies particularly if breaches of international law or human rights have occurred, or democracy is under threat. In the UK responsibility for the administration of sanctions falls to HM Treasury (“HMT”) whilst other countries have similar arrangements such as The Office of Foreign Assets Control (''OFAC'') in the US.

As a AVIS approved franchisee, subsidiaries, agents, and master account holder, our AVIS managing agents, requires us to recognise sanctions legislation implemented into UK law which can derive from UK, EU and UN legislation.  Certain regimes such as those imposed by US Treasury’s OFAC can also have extra-territorial impact on persons outside of the US or the actions of non-US persons can put their US parent companies in jeopardy of sanctions breaches. 

There are different types of sanctions, which can be country specific and may include bans on financial transactions and trade or they can be targeted at specific entities and or individuals, otherwise known as SMART sanctions.

All financial sanctions regimes regardless of jurisdiction invariably make it a criminal offence to make funds/financial services available to sanctions targets. Penalties for breaching sanctions generally involve a fine or, in the most serious cases, imprisonment.

6.1 International Sanctions Policy

The Manual should state that the franchisee, subsidiaries, agents, and master account holder has agreed with its AVIS Managing Agents, that the sanctions policy adopted in the Manual is proportionate and appropriate for the business underwritten on behalf of AVIS managing agents,.

The Manual should set out the checks that are expected to be made and the times when those checks are to made, as agreed with AVIS Managing Agents,. The Manual should state the sanctions lists to be used. 

We have agreed with our AVIS Managing Agents, that the sanctions policy adopted in the Manual is proportionate and appropriate for the business underwritten on behalf of AVIS managing agents.

The checks that are to be made and the times when those checks are to made (as agreed with AVIS Managing Agents,) are as follows:

In addition to the KYC booklet of the AVIS Group

The sanctions list to be used are as follows: HMT, EU, UN, OFAC, and in special occasions the Saladin Group UK https://www.saladin-security.c... as a task force will be engaged.

Employees must:

• disclose any knowledge or suspicion of a sanctioned activity involving name of franchisee, subsidiaries, agents, and master account holder to the Financial Crime Compliance Officer who will be responsible for referring the matter to the contracting AVIS Managing Agent;
• ensure that funds, economic resources and financial services are not made available to a person or entity, directly or indirectly that is the target of international sanctions which fall within the criteria agreed with AVIS managing agents.
The International Sanctions policy will be maintained and reviewed by the Financial Crime Compliance Officer every year or whenever a new class of business or region of business is underwritten or upon request by contracting Managing Agents. (Typically, this may happen when there has been a significant change in sanctions). 

On occasion, it may be difficult to determine if a transaction falls within a prohibited activity under a certain sanction’s regime.  If you have any doubts over the appropriate action the matter should be referred to the Financial Crime Compliance Officer in the first instance and then, if necessary, legal advice should be sought.

7. ANTI-BRIBERY COMPLIANCE

In this section the Manual should explain that the Bribery Act 2010 is the UK’s comprehensive anti-bribery legislation and the offences under that Act. The corporate offence under that Act is the most relevant to the managing agent/franchisee, subsidiaries, agents, and master account holder relationship because the franchisee, subsidiaries, agents, and master account holder no matter it is located is deemed to be an associated person of the AVIS contracting managing agents. This means the relevant managing agent could be held liable for a franchisee, subsidiaries, agents, and master account holder breach of the Bribery Act if the Managing Agent cannot show there were adequate procedures in place to prevent the franchisee, subsidiaries, agents, and master account holder from undertaking such conduct. Therefore, the franchisee, subsidiaries, agents, and master account holder is expected to comply with the UK Bribery Act and have adequate anti-bribery measures in place. 

Franchisee, subsidiaries, agents, and master account holders outside of the UK may also be subject to local laws regarding bribery which the franchisee, subsidiaries, agents, and master account holder should consider setting out in the Manual.

The Bribery Act 2010 is the UK’s comprehensive anti-bribery legislation.  The Bribery Act contains four main offences:

1) Bribing another person;
2) Being bribed;
3) Bribing a foreign public official; and
4) Failure of a commercial organisation to prevent bribery.

As a franchisee, subsidiaries, agents, and master account holder we will not tolerate any activities by our firm or by our employees that may represent a breach of the Bribery Act or other anti-corruption legislation. 

If you have any doubts over appropriate action or other queries please contact the Financial Crime Compliance Officer in the first instance.

7.1 Anti- Bribery Policy and Gifts and Entertainment policy

Under UK law a bribe is a financial or other advantage such as a commercial, contractual, or regulatory advantage in connection with a person performing a function improperly (in breach of an expectation that the function will be performed in good faith, impartially or as a result of a position of trust).  An anti-bribery policy and gifts and entertainment policy should be implemented to ensure that employees do not accept or receive bribes.

The Manual should state the franchisee, subsidiaries, agents, and master account holder’s policy on staff accepting or offering gifts and entertainment.

Under UK law a bribe is a financial or other advantage such as a commercial, contractual, or regulatory advantage in connection with a person performing a function improperly (in breach of an expectation that the function will be performed in good faith, impartially or as a result of a position of trust).  

Employees should comply with the following policy:

• No bribes should be offered, promised or given to another person.
• No bribes must be requested, agreed to receive or accepted from another person.
• No transfer of anything of value should be given to any public official without prior approval from the Financial Crime compliance officer.
• No facilitation payments should be made. (A facilitation payment is the payment of any money/fee to fast track an administrative process or the offer of resource to assist a person/body to make a decision more efficiently. If any staff member is asked to pay a facilitation payment, they should refuse and ensure that the matter is reported to the Financial Crime Compliance Officer.)
• Any suspicious activity by staff or third parties must be reported to the Financial Crime Compliance Officer team.

Lead by r.schell@avisbank.com

This policy does not prohibit normal and appropriate hospitality nor the giving of ceremonial gifts/occasional gifts, providing they are customary, proportionate and in compliance with the franchisee, subsidiaries, agents, and master account holder’s policy in relation to gifts and entertainment.

8. RECORD KEEPING

Insert details of your policy for maintaining relevant records.  It should state how those records are held and for how long.

9. SIGN OFF AND REVIEW DATE

The Manual should be approved by the Board and signed and dated by the Financial Crime Compliance Officer and should specify the next review date. 

Thursday, 24 March 2022

Board of Directors of the AVIS Group