Preventing money laundering and terrorist financing

MuniFin is a credit institution that specialises in financing the Finnish municipal sector and affordable social housing production. MuniFin operates under the Finnish Act on Credit Institutions. Its operations are supervised by the European Central Bank and the Finnish Financial Supervisory Authority.

In addition to the parent company Municipality Finance Plc, Municipality Finance Group includes the subsidiary company Financial Advisory Services Inspira Ltd, which offers financial advisory services for the Finnish public sector.

MuniFin’s business involves providing its customers with financial products (credits, financial leasing and derivatives for hedging purposes). MuniFin does not take deposits or offer custody services, payment transfer services or services in which it would act on behalf of its customers towards third parties.

MuniFin acquires its funding by issuing bonds on international capital markets. In all of its funding transactions, MuniFin is assisted by renowned international banks which act as counterparties to these transactions. These banks then sell the bonds issued by MuniFin to their customers, i.e.investors.

MuniFin uses derivative instruments for hedging purposes and invests its liquid assets in financial instruments in accordance with its investment policy.

Due to the nature of its business operations as described above, MuniFin does not operate on behalf of any other parties or as an intermediary. Transactions made by MuniFin or other Municipality Finance Group companies are always accounted as MuniFin’s own transactions.

MuniFin’s Anti-Money Laundering and Counter Terrorist Financing Policy (“AML Policy”) has been approved by the Board of Directors and is updated at least yearly. The AML Policy forms the basis for the procedures and processes for detecting and preventing money laundering and terrorist financing. The AML Policy is binding on all MuniFin employees and other parties acting in the name of the company.

The AML Policy takes into account the fact that the company’s business operations are, for the most part, linked only to Finnish municipalities, joint municipal authorities and affordable social housing organisations nominated and guaranteed by the State of Finland, as well as well-known and reputable Finnish and foreign commercial banks, whereby the company may, as a general rule, follow a simplified procedure permitted by legislation in its customer due diligence.

MuniFin adheres to the legislation and official regulations and guidelines in all of its operations. For this reason, the company must verify the identity of its customers and their representatives. Furthermore, MuniFin must know its customers, determine the purpose of its customer relationships, map all risks related to customer due diligence and the prevention of money laundering and terrorist financing in its business operations and prepare procedures for limiting such risks. MuniFin continuously monitors its customers’ transactions concerning MuniFin. In the event of suspected money laundering or terrorist financing, MuniFin will submit the statutory notification to relevant authorities.

All information pertaining to customers is maintained as part of customer documentation, in accordance with individual archiving instructions on each type of document. All information related to customer identification is stored for no less than five years after the customer relationship has ended. All employees working with customers are obliged to monitor the customer relationship and update information concerning the customer whenever needed.

If it is suspected that a transaction involves money laundering or terrorist financing, the person responsible for compliance at MuniFin will assess the situation together with the CEO and the CRO. They will decide on the necessary actions and the submission of a notification, if any, to the Financial Intelligence Unit of the National Bureau of Investigation.

To protect any official investigation and MuniFin employees, suspected cases or notifications of such are not disclosed to the customer.

MuniFin ensures that its customers are not included on the lists of international financial sanctions imposed by the United Nations (UN), the European Union (EU), HM Treasury in the UK or OFAC in the US. The company checks its customer registers against the sanctions lists at regular intervals.

All employees receive regular training on the AML and KYC requirements. The person in charge of compliance at MuniFin ensures that all employees are informed of external and internal regulatory requirements on customer due diligence and of any changes to these. The Compliance team regularly assesses the need to make changes to the internal guidelines and offers employees training to stay up to date on the revised guidelines confirmed by the Board of Directors.