Western Union 2015 Annual Report Download - page 117

15
International Investment
No provision has been made for United States federal and state income taxes on certain of our outside tax basis differences,
which primarily relate to accumulated foreign earnings of approximately $6.1 billion as of December 31, 2015, as we have
reinvested and expect to continue to reinvest these earnings outside the United States indefinitely. Over the last several years, such
earnings have been used to pay for our international acquisitions and operations and provide initial Company funding of global
principal payouts for Consumer-to-Consumer and Business Solutions transactions. However, if we are unable to utilize accumulated
earnings outside of the United States and we repatriate these earnings to the United States in the form of actual or constructive
dividends, we would be subject to significant United States federal income taxes (subject to an adjustment for foreign tax credits),
state income taxes and possible withholding taxes payable to various foreign countries.
Regulation
Our business is subject to a wide range of laws and regulations enacted by the United States federal government, each of the
states, many localities and many other countries and jurisdictions, including the European Union. These include an increasingly
strict set of legal and regulatory requirements intended to help detect and prevent money laundering, terrorist financing, fraud,
and other illicit activity. These also include laws and regulations regarding financial services, consumer disclosure and consumer
protection, currency controls, money transfer and payment instrument licensing, payment services, credit and debit cards, electronic
payments, foreign exchange hedging services and the sale of spot, forward and option currency contracts, unclaimed property, the
regulation of competition, consumer privacy, data protection and information security. Failure by Western Union, our agents, or
their subagents (agents and subagents are third parties, over whom Western Union has limited legal and practical control), and
certain of our service providers to comply with any of these requirements or their interpretation could result in the suspension or
revocation of a license or registration required to provide money transfer services and/or payment services or foreign exchange
products, the limitation, suspension or termination of services, changes to our business model, loss of consumer confidence, private
class action litigation, the seizure of our assets, and/or the imposition of civil and criminal penalties, including fines and restrictions
on our ability to offer services.
We have developed and continue to enhance our global compliance programs, including our anti-money laundering program
comprised of policies, procedures, systems and internal controls to monitor and to address various legal and regulatory requirements.
In addition, we continue to adapt our business practices and strategies to help us comply with current and evolving legal standards
and industry practices, including heightened regulatory focus on compliance with anti-money laundering or fraud prevention
requirements. As of December 31, 2015, these programs included approximately 2,200 dedicated compliance personnel, training
and monitoring programs, suspicious activity reporting, regulatory outreach and education, and support and guidance to our agent
network on regulatory compliance. Our money transfer and payment service networks operate through third-party agents in most
countries, and, therefore, there are limitations on our legal and practical ability to completely control those agents' compliance
activities. In 2015, we spent approximately $200 million on our compliance and regulatory programs.
Money Transfer and Payment Instrument Licensing and Regulation
Most of our services are subject to anti-money laundering laws and regulations, including the Bank Secrecy Act in the United
States, as amended (collectively, the "BSA"), and similar laws and regulations. The BSA, among other things, requires money
transfer companies and the issuers and sellers of money orders to develop and implement risk-based anti-money laundering
programs, to report large cash transactions and suspicious activity, and in some cases, to collect and maintain information about
consumers who use their services and maintain other transaction records. In addition to United States federal laws and regulations,
many other countries and states impose similar and, in some cases, more stringent requirements. These requirements also apply
to our agents and their subagents. In addition, the United States Department of the Treasury has interpreted the BSA to require
money transfer companies to conduct due diligence into and risk-based monitoring of their agents inside and outside the United
States, and certain states also require money transfer companies to conduct due diligence reviews of their agents and subagents.
Compliance with anti-money laundering laws and regulations continues to be a focus of regulatory attention, with recent agreements
being reached with Western Union, other money transfer providers and several large financial institutions.
201 FORM 10 K
5 -