MoneyGram 2008 Annual Report Download - page 11

Table of Contents
Regulation
Compliance with legal requirements and government 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 globally. These laws and regulations include international, federal and state
anti-money laundering laws and regulations; money transfer and payment instrument licensing laws; escheatment laws; privacy laws;
data protection and information security laws; and consumer disclosure and consumer protection laws. 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" for additional discussion regarding potential impacts of
failure to comply. We continually monitor and enhance our global compliance program to stay current with the most recent legal and
regulatory changes. During 2009, we intend to increase our compliance personnel headcount significantly and make certain investments
in our compliance-related technology and infrastructure.
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 the anti-money laundering laws and
regulations in many of the countries in which we operate, particularly in the European Union (the "EU"). 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 governments' watch-lists, including but not limited to, the watch list maintained by the
U.S. Treasury Departments' Office of Foreign Assets Control ("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 our ability to directly control our agents'
compliance is limited. As a money services business, the Company and its 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 online training as
part of our agent compliance training program.
Money Transfer and Payment Instrument Licensing. The majority of U.S. states, the District of Columbia, Puerto Rico and the
U.S. Virgin Islands require us to be licensed to conduct business within their jurisdictions. Licensing requirements generally include
minimum net worth, provision of surety bonds, compliance with operational procedures and reserves or "permissible investments" that
must be maintained in an amount equivalent to outstanding payment obligations, as defined by the various states. The types of securities
that are considered "permissible investments" vary from state to state, but generally include cash and cash equivalents, U.S. government
securities and other highly rated debt instruments. Most states require us to file reports on a quarterly or more
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