MoneyGram 2015 Annual Report Download - page 9

Table of Contents
Regulation
Compliance with laws and regulations is a highly complex and integral part of our day-to-day operations. Our operations are subject to a wide range of laws and
regulations of the U.S. and other countries, including anti-money laundering laws and regulations; financial services regulations; currency control regulations; anti-
bribery laws; regulations of the U.S. Treasury Department’s Office of Foreign Assets Control ("OFAC"); money transfer and payment instrument licensing laws;
escheatment laws; privacy, data protection and information security laws; and consumer disclosure and consumer protection laws. Regulators worldwide are
exercising heightened supervision of money transfer providers and requiring increased efforts to ensure compliance. Failure to comply with any applicable laws
and regulations could result in restrictions on our ability to provide our products and services, as well as the potential imposition of civil fines and possibly criminal
penalties. See “ RiskFactors” section in Item 1A for additional discussion regarding potential impacts of failure to comply. We continually monitor and enhance
our global compliance programs in light of the most recent legal and regulatory changes. We also launched the compliance enhancement program in 2014 to
enhance our systems and processes.
DeferredProsecutionAgreement— In November 2012, we announced that a settlement was reached with the MDPA and the U.S. DOJ relating to the previously
disclosed investigation of transactions involving certain of our U.S. and Canadian agents, as well as fraud complaint data and the consumer anti-fraud program,
during the period from 2003 to early 2009. In connection with this settlement, we entered into a deferred prosecution agreement ("DPA") with the MDPA and U.S.
DOJ dated November 8, 2012. Under the DPA, we agreed to a forfeiture of $100.0 million that is available as restitution to victims of the consumer fraud scams
perpetrated through MoneyGram agents. Also under the DPA, we have agreed, among other things, to retain an independent compliance monitor for a period of
five years, subject to adjustment to a shorter period under certain circumstances, and in the first quarter of 2013, Aaron Marcu, a litigation partner with Freshfields
Bruckhaus Deringer, LLP in New York and head of its global financial institutions litigation group, was selected as our independent compliance monitor. We have
received three annual reports from the compliance monitor, and we continue to make investments in various areas related to our compliance systems and operations
in order to comply with the requirements contained in the DPA and recommendations of the compliance monitor. If the Company is unable to meet such
requirements in the allotted time period, the term of the DPA and the independent compliance monitor could be extended, which could result in additional costs.
See “RiskFactors—WefacepossibleuncertaintiesrelatingtocompliancewithandtheimpactofthedeferredprosecutionagreemententeredintowiththeU.S.
federalgovernment”for additional information.
Anti-MoneyLaunderingCompliance— Our money transfer services are subject to anti-money laundering laws and regulations of the U.S., including the Bank
Secrecy Act, as amended by the USA PATRIOT Act, as well as 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 government 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
aggregation 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 U.S. 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 in light of the most current legal requirements.
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