MoneyGram 2010 Annual Report Download - page 10

Table of Contents
Anti-Money Laundering Compliance. Our money transfer services are subject to anti-money laundering laws and regulations of the
United States, including the Bank Secrecy Act, as amended by the USA PATRIOT Act, as well as similar state laws and regulations and
the anti-money laundering laws and regulations in many of the countries in which we operate, particularly in the European Union.
Countries in which we operate may require one or more of the following:
• reporting of large cash transactions and suspicious activity;
• screening of transactions against the government's watch-lists, including but not limited to, the watch list maintained by OFAC;
• prohibition of transactions in, to or from certain countries, governments, individuals and entities;
• limitations on amounts that may be transferred by a consumer or from a jurisdiction at any one time or over specified periods of
time, which require the aggregation of information over multiple transactions;
• consumer information gathering and reporting requirements;
• consumer disclosure requirements, including language requirements and foreign currency restrictions;
• notification requirements as to the identity of contracting agents, governmental approval of contracting agents or requirements and
limitations on contract terms with our agents;
• registration or licensing of the Company or our agents with a state or federal agency in the United States or with the central bank or
other proper authority in a foreign country; and
• minimum capital or capital adequacy requirements.
Anti-money laundering regulations are constantly evolving and vary from country to country. We continuously monitor our compliance
with anti-money laundering regulations and implement policies and procedures to make our business practices flexible, so we can comply
with the most current legal requirements.
We offer our money transfer services through third-party agents with whom we contract and do not directly control. As a money services
business, we and our agents are required to establish anti-money laundering compliance programs that include: (i) internal policies and
controls; (ii) designation of a compliance officer; (iii) ongoing employee training and (iv) an independent review function. We have
developed an anti-money laundering training manual available in multiple languages and a program to assist with the education of our
agents on the various rules and regulations. We also offer in-person and online training as part of our agent compliance training program
and engage in various agent oversight activities.
Money Transfer and Payment Instrument Licensing — The majority of states in the United States, the District of Columbia, Puerto Rico
and the United States Virgin Islands and Guam require us to be licensed to conduct business within their jurisdictions. In November
2009, our primary overseas operating subsidiary, MoneyGram International Ltd, became a licensed payment institution under the
European Union Payment Services Directive. Licensing requirements generally include minimum net worth, provision of surety bonds,
compliance with operational procedures, agent oversight and the maintenance of reserves or "permissible investments" in an amount
equivalent to outstanding payment obligations, as defined by our various regulators. The types of securities that are considered
"permissible investments" vary across jurisdictions, but generally include cash and cash equivalents, U.S. government securities and other
highly rated debt instruments. Most states and our other regulators require us to file reports on a quarterly or more frequent basis to verify
our compliance with their requirements. Many states and other regulators also subject us to periodic examinations and require us and our
agents to comply with anti-money laundering and other laws and regulations.
Escheatment Regulations — Unclaimed property laws of every state, the District of Columbia, Puerto Rico and the United States Virgin
Islands require that we track certain information on all of our payment instruments and money transfers and, if they are unclaimed at the
end of an applicable statutory abandonment period, that we remit the proceeds of the unclaimed property to the appropriate jurisdiction.
Statutory abandonment periods for payment instruments and money transfers range from three to seven years. Certain foreign
jurisdictions also may have unclaimed property laws, though we do not have material amounts subject to any such law.
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