Western Union 2013 Annual Report Download - page 127

2013 FORM 10-K
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In February 2010, Western Union Financial Services, Inc. ("WUFSI"), a subsidiary of the Company, signed an agreement and
settlement ("Settlement Agreement"), which resolved all outstanding legal issues and claims with the State of Arizona (the "State")
and required us to fund a multi-state not-for-profit organization promoting safety and security along the United States and Mexico
border, in which California, Texas and New Mexico are participating with Arizona. As part of the Settlement Agreement, we have
made and expect to make certain investments in our compliance programs along the United States and Mexico border and a monitor
(the "Monitor") has been engaged for those programs. We have incurred, and expect to continue to incur, significant costs in
connection with the Settlement Agreement. The Monitor has made a number of recommendations related to our compliance
programs. In addition, in the fourth quarter of 2012, our Business Solutions business was included in the scope of the Monitor's
review. On January 31, 2014, WUFSI and the State agreed to amend the Settlement Agreement. Such amendment (the
“Amendment”) was subsequently approved by the Superior Court of the State of Arizona In and For the County of Maricopa that
same day. The Amendment extends the term of the Settlement Agreement until December 31, 2017, and imposes obligations on
the Company and WUFSI in connection with WUFSI’s anti-money laundering compliance programs and cooperation with law
enforcement. See Part I, Item 1A, Risk Factors - "Western Union is the subject of governmental investigations and consent
agreements with or enforcement actions by regulators" for more information on the Settlement Agreement, including the potential
impact on our business.
Regulators worldwide are exercising heightened supervision of money transfer providers and requiring increasing efforts to
ensure compliance. As a result, we are experiencing increasing compliance costs related to customer, agent, and subagent due
diligence, verification, transaction approval, disclosure, and reporting requirements, along with other requirements that have had
and will continue to have a negative impact on our business, financial condition, and results of operations.
Government agencies both inside and outside the United States may impose new or additional rules on money transfers
affecting us or our agents or their subagents, including regulations that:
• prohibit transactions in, to or from certain countries or with certain governments, individuals and entities;
• impose additional customer identification and customer, agent, and subagent due diligence requirements;
• impose additional reporting or recordkeeping requirements, or require enhanced transaction monitoring;
• limit the types of entities capable of providing money transfer services, impose additional licensing or registration requirements
on us, our agents, or their subagents, or impose additional requirements on us with regard to selection or oversight of our
agents or their subagents;
• impose minimum capital or other financial requirements on us or our agents and their subagents;
• limit or restrict the revenue which may be generated from money transfers, including transaction fees and revenue derived
from foreign exchange;
• require enhanced disclosures to our money transfer customers;
• require the principal amount of money transfers originated in a country to be invested in that country or held in trust until
they are paid;
• limit the number or principal amount of money transfers which may be sent to or from the jurisdiction, whether by an individual,
through one agent or in aggregate; or
• impose taxes or fees on money transfer transactions.