We get a number of questions about the Annual Compliance Review (ACR) and here we want to let people know the role it plays and why it is so important to us.

The ACR is a necessary part of doing business within the financial markets. It is there to ensure a stable and transparent market within which we call all operate with confidence.

To put it simply, Paynovate is a regulated entity, recognised as a financial institution by our prudential authority, the National Bank of Belgium (NBB-BNB). As such, we agree to act responsibly and within the framework of a highly regulated and controlled financial market. The aim of this of course is to provide a stable environment which is transparent and efficient, and one which everyone trusts.

All recognised financial institutions operate within the same rules and this is how we can ensure that customers’ transactions are processed in a safe and secure manner.

At the heart of all this is strict Anti-Money Laundering (AML) legislation to which we and our customers must adhere to. Basically, we have to ensure that every customer is who they say they are and that they are not involved in money laundering, or terrorist financing.

This practice, of washing proceeds from criminal activity through a legitimate source to make them appear clean, is the focus of AML legislation and Know Your Customer (KYC) good practices.

Therefore, we undertake security and identity checks to ensure that fraudulent behaviours are effectively detected, combatted, eliminated and prevented from entering the flow of funds of the institution.

There are a number of laws which underline Paynovate obligations as a financial institution. These include:

• Law 11/03/2018 on the status and supervision of payment and electronic money establishments, access to the activity of payment service provider, and to the activity of issuing electronic money, and access to payment systems;
• Law 18/09/2017 relating to the prevention of money laundering and the financing of terrorism and the limitation of the use of cash. (Recently updated on 07/20/2020 with new regulatory obligations).
  

To comply with the above laws, Paynovate must take the following measures before entering into a business relationship with the client and throughout the relationship: she 

• identify and verify the identity of the customer with sufficient certainty;
• carry out an evaluation of the characteristics of the client, the purpose and the envisaged nature of the commercial relationship;
• exercise constant vigilance over the customer and his transactions.

These three key steps form the central part of Paynovate's AML programme and KYC process.

Crucially, the KYC process is not only about collecting the necessary information from the customer, but also verifying that all identity information received can be proven using official evidence.

Paynovate's compliance department will carry out numerous checks and investigations to ensure that the client is clearly identified by verifying all documents collected from the client.

And although these steps take place before entering into a business relationship with the customer, the law also requires that vigilance and controls continue throughout the commercial relationship.

This is why Paynovate will continue to carry out regular checks to check whether the client's situation has changed since signing the contract, regarding its managers, address, business model, structure, etc.

Finally, there is a comprehensive annual assessment similar to that carried out when entering into the initial relationship with the client.

In addition to these obligations of permanent vigilance, Paynovate must also constantly monitor its customers' transactions in order to detect any suspicious activity, or atypical transaction. In compliance with AML regulations, Paynovate, like any financial institution, has implemented an effective system for managing alerts and warnings which allows us to have a precise vision of the client's transactions and to take all the necessary measures in carrying out permanent monitoring of transactions in our customer portfolio.

This may involve contacting the customer to request additional information on one, or more transactions.

If you require any further information about the ACR, or AML, or KYC, please contact support@paynovate.com