VTEX (“VTEX” or the “Company”) is committed to conducting its business with the highest legal and ethical standards and expects all employees and other individuals acting on its behalf to uphold this commitment. As such, the Company has adopted this Anti-Money Laundering Policy (the “AML Policy”), which is applicable to all directors, officers, employees, agents, representatives, consultants, advisors, distributors, supplier contractors, or other third parties acting on behalf of the Company (collectively “Company Personnel”).
This Anti-Money Laundering Policy (the “AML Policy”) and the internal controls herein sets out:
- VTEX’s commitment to combatting the risk of its business being used to facilitate money laundering and terrorist financing;
- What money laundering is
- Your obligations to comply with this AML Policy and the consequences arising from a failure to do so; and
- How to recognise and report potential money laundering or terrorist financing.
VTEX will not conduct business with individuals or corporates whose conduct may give risk to suspicions of involvement with illegal activities. VTEX will report any suspicions of money laundering or terrorist financing activity to the relevant authorities.
This AML Policy and the internal controls herein have been designed to avoid the commission of money laundering, including the laundering of illicit proceeds by the same person (‘self-laundering’), and the use of money, goods, or gains of illicit provenance and, consequently, prevent potential criminal liability of the Company that could arise out of said offenses. Company Personnel who violate this AML Policy may be subject to disciplinary action, up to and including dismissal from the Company, termination of agreements, and or any other associated legal actions, in accordance with the applicable law. The consequences for violating Anti-Money Laundering Laws can be severe for the Company, including significant fines, loss of operating licenses, limitations on engaging in certain business activities, imprisonment and reputational damage.
Terms & Definitions
Money laundering is defined as engaging in acts designed to conceal or disguise the true origins of illegally or criminally derived proceeds so that the proceeds appear to have legitimate origins or to be legitimate assets, and are thus introduced into the legal financial and business cycle. If any Company Employees or Company Personnel suspects that there has been money laundering, that person must immediately report the suspected violation to VTEX’s Compliance Team.
For the purposes of this policy, the following conducts shall be regarded as money laundering:
- The conversion or transfer of property, knowing that such property is derived from criminal activity or from an act of participation in such activity, 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 such an activity to evade the legal consequences of that person’s action;
- The concealment or disguise of the true nature, source, location, disposition, movement, rights with respect to, or ownership of, property, knowing that such property is derived from criminal activity or from an act of participation in such activity.
- The acquisition, possession or use of property, knowing, at the time of receipt, that such property was derived from criminal activity or from an act of participation in such activity.
- Participation in, association to commit, attempts to commit and aiding, abetting, facilitating and counselling the commission of any of the above-mentioned actions.
Examples of illicit provenance are forgery of money, extortion, robbery, and drug crime, as well as fraud, corruption, organized crime, or terrorism, etc.
The money laundering process consists of three “stages”:
- Placement: This involves the introduction of illegally obtained monies or other valuables into financial or non-financial institutions.
- Layering: Layering occurs by conducting multiple, complex financial transactions that make it difficult to link the money to an illegal activity. These layers are designed to hamper the audit trail, disguise the origin of funds and provide anonymity.
- Integration: Placing the laundered proceeds back into the economy in such a way that they re-enter the financial system as apparently legitimate funds.
Company Personnel immediately must report any suspected terrorist financing to VTEX’s Compliance Team. For the purposes of this AML Policy, “terrorist financing” means the provision or collection of funds, by any means, directly or indirectly, with the intention to be used or in the knowledge that they are to be used, in full or in part, in order to use indiscriminate violence as a means to create terror, fear, or to achieve a political, religious, or ideological aim.
Politically Exposed Person (PEP)
Transactions involving Politically Exposed Persons (“PEPs”) require enhanced due diligence. A PEP is an individual who is or has been entrusted with a prominent public function. Due to their position and influence, it is recognized that many PEPs are in positions that potentially can be abused for the purpose of committing money laundering offences and related predicate offences, including corruption and bribery, as well as conducting activity related to terrorist financing. The potential risks associated with PEPs justify the application of additional anti-money laundering / counter-terrorist financing preventive measures.
For purposes of this AML Policy, PEPs include, but are not limited to:
- Heads of State, heads of government, ministers and deputy or assistant ministers.
- Members of parliament or of similar legislative bodies.
- Members of the governing bodies of political parties.
- Members of supreme courts, of constitutional courts or of other high-level judicial bodies, the decisions of which are not subject to further appeal, except in exceptional circumstances.
- Members of courts of auditors or of the boards of central banks.
- Mayors and members of local administration, city and district assemblies.
- Ambassadors, chargés d’affaires and high-ranking officers in the armed forces.
- Members of the administrative, management or supervisory bodies of State-owned enterprises.
- Directors, deputy directors and members of the board or equivalent function of an international organization.
Not only the person that officiates a public function must be considered as PEP, also close family members must be included in the assessment. For the purpose of this AML Policy, family members mean:
- The spouse, or a person considered to be equivalent to a spouse, of a politically exposed person.
- The children and their spouses, or persons considered to be equivalent to a spouse, of a politically exposed person.
- The parents of a politically exposed person.
Also, persons known to be close associates to a PEP must be assessed with the same risk approach that includes:
- Natural persons who are known to have joint beneficial ownership of legal entities or legal arrangements, or any other close business relations, with a Politically Exposed Person.
- Natural persons who have sole beneficial ownership of a legal entity or legal arrangement which is known to have been set up for the de facto benefit of a Politically Exposed Person.
The careful examination of those operations where risk factors exist is important. For example, this could mean those in which third parties propose the use of cash or bearers’checks, international transactions (in particular those with persons or entities residents in tax havens or high-risk territories), operations with persons holding positions of public responsibility or PEPs or transactions conducted through intermediary companies.
VTEX is committed to fight against money laundering and the finance of terrorism. Therefore, the following due diligence principles should be followed, not only in situations where particular risk factors exist, but as to all customers and third parties:
a) Identifying the Third Party
Company Employees and Company Personnel must conduct due diligence on customers and other third parties and document the findings. As part of the due diligence process, the following information (as applicable) should be collected: name, date of birth, address, National Identity Number (DNI), passport number, social security number, Foreigner’s Identity Number or residence card if it is a physical person or company name, registered office, corporate purpose, Employer Identification Number, Tax Identification Number, Tax Identity Code (CIF), and/or incorporation details.
As part of due diligence, the Company must verify that the customer or third party does not appear on any of the US Department of the Treasury Office of Foreign Assets Control’s sanctions list, including the Specially Designated Nationals and Blocked Persons lists. The Company will not enter into a business relationship with a person or an entity that appears on one of these lists.
You must also take steps to understand the nature and purpose of the customer or third party relationship and develop an appropriate risk profile based on the information learned. Based on the risk profile, the Company may actively maintain and update the customer or third party information. The Company also will conduct ongoing monitoring to identify suspicious transactions and report those transactions where legally required.
b) Identifying the Ultimate Beneficial Owner (UBO)
Before the commencement of a commercial relationship, whether of a habitual nature, and prior to its execution, the beneficial owner of the third parties who are involved must be identified. Company Employees and Company Personnel must document this analysis. Ultimate Beneficial Owner (UBO) means the person who directly or indirectly controls 25% or more of the equity or voting rights in the corresponding company or owns the company. In the event of the existence of a beneficial owner in the third arty, that person must be identified through their name, nationality, National Identity Number (DNI), passport, Foreigner’s Identity Number (NIE) or residence card. Listed companies are excluded from the obligation to identify the UBO.
If the UBO is a PEP, then the Company must conduct enhanced due diligence before entering into any contractual relationship with the entity.
c) Obligation to formally record commercial relationships in writing
Before the commencement of commercial relationships and prior to carrying out transactions with third parties (attention being paid to those of an international nature) the relationship must be formally recorded in a written agreement in accordance with VTEX’s standards.
The provisions in a written agreement should include a commitment to comply with AML laws, and VTEX’s right to immediately terminate the contract in case of violation, subject to applicable law.
In addition, the following clause (or a modified version pre-approved by Compliance Team) must be incorporated into the contract:
[*Insert name or company name of the third party] totally rejects any practice involving money laundering or the financing of terrorism and complies, strictly and rigorously, with the obligations applicable to it under the legislation in force for the prevention thereof. In this regard, [*insert name or company name of third party] represents and warrants that the source of the funds/assets that are delivered to VTEX pursuant to this agreement is not an activity that is illicit or that may be illicit. In addition, [he/she/it] declares that the source of the property of [*insert name or company name of third party] comes from lawful corporate activities and, under no circumstances, does it come, whether directly or indirectly, from illicit activities or those that might be illicit, whether in the United States or abroad. Given the foregoing, [*insert name or company name of third party] exempts VTEX, from any liability that may arise from the falseness or inaccuracy of this declaration.
Red Flags for Money Laundering and Terrorist Financing
Red flags are circumstances that suggest that there may be illegal or improper conduct. Be aware of and recognize red flags. If you become aware of a red flag, then you must conduct enhanced due diligence on the individual or the entity prior to entering into a business relationship. If you suspect a red flag or just aren’t sure, consult your leader or the Compliance Team.
- Unexplained Spikes in account activity
- Large Number of transactions, which indicate layering
- The third party tries to conceal its identity or the sources of its funds
- The third party is an entity without a clear registered office and does not appear online
- The third party’s structure make it diffiicult to recognise it
- The third party funds for the transaction come from abroad when there is no apparent link between this country where the funds are sourced and the the third party
- The third party uses multiple bank accounts or ones held abroad without and justification
- The third party intends to make payments in cash or using bearerchecks
- The third party intends to pay a higher price for the service for no good reason
- The third party is based in a tax or a high-risk country
Enhanced Due Diligence
If you identify a red flag or the transaction directly or indirectly involves a PEP, then enhanced due diligence must be conducted prior to entering into a business relationship with the customer or third party.
Enhanced due diligence involves the gathering of additional information to ensure that the person or entity is not participating in any improper or illicit conduct. This information should include, but is not limited to, the source of the funds, the source of the individual or company’s wealth, and the individual’s occupation or the type of business. The findings of enhanced due diligence should be documented.
If you are unsure whether enhanced due diligence is required in a particular situation or have any other questions regarding enhanced due diligence, you should contact VTEX’s Compliance Team.
Company Employees, Company Personnel and other individuals that are closely affiliated with the Company may also engage in actions that constitute money laundering or facilitate the commission of money laundering.
If you suspect that an employee or other Company affiliate has engaged in improper or illicit activity, or if you have any questions about insider abuse, you should contact VTEX’s Compliance Team.
Seeking Advice and Reporting Potential Violations
The Company has an obligation to report suspicious activities related to money laundering to the appropriate authorities. Company Employees and Company Personnel immediately must report to the Compliance Team the facts or circumstances that may be characterized as a violation of the law, or our policies. If you suspect a violation of this AML Policy or of any anti-money laundering laws, you must notify a Compliance Team member without delay. If you are unsure of whether conduct constitutes money laundering or have questions regarding the AML Policy or other VTEX policy, or if need help or wish to raise a concern, you may communicate that to our Compliance Team or you can use the Ethics Channel, which is safe, confidential and which protects against retaliation. VTEX has zero tolerance for any form of retaliation, including intimidation, exclusion, humiliation or other forms of harassing employees who, in good faith, report misconduct or express concern about a particular practice or decision.