Anti-Money Laundering (AML) Program

The main risks associated with the sale of diamonds and jewellery are the following:

  • Falsely declaring items in imports. This can be importing additional items over and above the declared invoice, under or overvaluing the items, or shipping fewer items than declared.
  • Receipt of illegitimate funds

To combat these risks, we have implemented the following policies and procedures. It is our mission and top priority to facilitate and support legitimate trade in the jewellery industry.

1. Company Policy

It is the policy of Nivoda to actively prevent money laundering in the trade of diamonds and jewellery. Our anti-money laundering policies and procedures have been designed to ensure compliance with regulation and will be reviewed and updated on a regular basis to ensure procedures and controls are in line with both regulation and our business practice.

2. Historic Price Comparison

When a product is listed and/or purchased on the site, the sale price is then compared to the historic selling price of that individual item. This ensures that product prices are not engineered to facilitate transfer pricing, tax evasion or money laundering.

3. Quality Control with Computer Vision

Our quality control process includes matching all microscopic laser inscriptions on the diamonds to the GIA Certificate (Gemological Institute of America) and invoice of sale.

4. AML Compliance Person Designation and Duties

The firm has designated David Sutton as its Anti-Money Laundering Program Compliance Director (AML Compliance Director), with full responsibility for the firm’s AML program. The duties of the AML Compliance Director includes monitoring the firm’s compliance with AML obligations, ensuring all funds are received from legitimate sources and goods are not over or undervalued.

5. Know Your Customer (KYC) Program

The KYC rules apply to all customers who open new accounts with Nivoda.

A. Sign-up process

During the sign-up process, customers are required to fill out a KYC form with the following information:

  • Company Name
  • Registered Address
  • Telephone Number
  • Email Address
  • Year of Establishment
  • Nature of Business
  • Diamond Dealers Club Membership No.
  • Jewellers Association Membership No.
  • Company Registration Number
  • Company Registration Date
  • VAT Number
  • EORI Number
  • Does the company adhere to KPCS? Yes / No / N/A
  • Is the company a sightholder of DTC? Yes / No / N/A
  • Is the company aware of DTC Best Practice Principles? Yes / No / N/A

The following documents are required to be attached to the application:

  • Photo Identity of Directors
  • Certificate of Incorporation
  • Business proof of Address
B. Customers who refuse to provide information

If a potential or existing customer either refuses to provide the information described above when requested, or appears to have intentionally provided misleading information, our firm will not open a new account and, after considering the risks involved, consider closing any existing account.

C. Verifying information

Based on the risk, and to the extent reasonable and practicable, we will ensure that we have a reasonable belief that we know the true identity of our customers. The AML Compliance Director will analyze the information we obtain to determine whether the information is sufficient to form a reasonable belief that we know the true identity of the customer (e.g., whether the information is logical or contains inconsistencies).

We will use documents to verify customer identity. In verifying the information, we will consider whether the identifying information that we receive, such as the customer’s name, street address, postcode, telephone number and date of birth, allow us to determine that we have a reasonable belief that we know the true identity of the customer (e.g., whether the information is logical or contains inconsistencies).

We will verify the information within a reasonable time before or after the account is opened. Depending on the nature of the account and requested transactions, we may refuse to complete a transaction before we have verified the information.

6. Monitoring Accounts for Suspicious Activity

We monitor account activity for unusual size, volume, pattern or type of transactions, taking into account risk factors and red flags that are appropriate to our business.

The AML Compliance Director will be responsible for this monitoring, will review any activity that our monitoring system detects, will determine whether any additional steps are required.

Suspicious Customer Activity examples:

  • Unexplained high level of account activity.
  • Purchasing goods with discounts in excess of 10%. This is measured against the asking price initially presented by the vendor. This could indicate invoice discounting.
  • Purchasing goods for a higher price than initially presented by the vendor. This would indicate transfer pricing.
  • Payment by third-party check or money transfer.
  • Payments to third-party.
  • No concern regarding the cost of goods or fees (i.e. paying higher than necessary costs).

7. Responding to Red Flags and Suspicious Activity

When an employee of the firm detects any red flag, or other activity that may be suspicious, he or she will notify David Sutton. David will then decide how to further investigate the matter. This may include gathering additional information internally or from third-party sources, contacting the government and freezing the account.