Company is committed to the highest standards of the Anti-Money Laundering (hereinafter: AML) compliance and Terrorist Financing Prevention.

Basic terms

Money laundering involves the execution of actions that conceal the source of money or other property that is suspected of being illegally acquired at home or abroad, including exchange or any other transfer of money or other such property, concealment of the true nature, source, location, disposition, movement or ownership of or rights with respect to money or other such property, and acquisition, possession or use of money or other such property. The risk of money laundering or terrorist financing is a risk that the Client abuses the financial system for money laundering or terrorist financing, or that a business relationship, transaction or product will be directly or indirectly used for money laundering or terrorist financing.

Financing terrorism involves the provision or collection of funds, or an attempt of providing or collecting funds, legal or illegal, in any way, directly or indirectly, with the intention of using them or knowing that they will be used, in whole or in part, to commit a terrorist offense acts by terrorists or terrorist organizations.

Identification of the Client is a process that involves collecting Client information on the basis of credible, independent and objective sources, and checking the data collected on the Client if these data already is collected, determine real identity of the Client on the basis of credible, independent and reliable sources, and checking the identity, if the identity of the Client was already established.

Foreign politically exposed persons are all natural persons with permanent residence or habitual residence in a foreign country that operate or are in the last year (or longer) on prominent duties, including members of their immediate family members or persons known to be close associates of such persons.

Anti Money Laundering and Terrorist Financing Prevention Policy

Company adheres to the principles of AML and actively prevents any actions that aim or facilitate the process of legalizing of illegally gained funds. AML policy means preventing the use of the Company’s services by criminals, with the aim of money laundering, terrorist financing or other criminal activity. The Company reserves the right to suspend any Client’s operation, which can be regarded as illegal or, may be related to money laundering.

Company’s Procedures

Comapny will make sure that it is dealing with a real person or legal entity. Company performs all the required measures in accordance with applicable law and regulations, issued by monetary authorities. In order to prevent and detect money laundering and terrorist financing, the Company shall in performing their work to fulfill the commitments defined in this Policy, the law and regulations adopted under the law.

The obligations from the previous paragraphs of this Policy include:

1. Assessment of risks of misuse for money laundering and financing of terrorism for a particular Client, business relationship, transaction or product.
2. Due diligence of the Client in a manner and under conditions defined by this Policy.
3. Performing periodic (e.g. annual) reviews of the clients
4. Taking measures for prevention and detection of money laundering and terrorist financing.
5. Appointing authorized persons and their deputies for implementation of the measures and ensuring conditions for their work in accordance with this Policy and the law
6. Allow regular professional training and education of employees of the Company and ensuring regular control in the tasks and obligations in accordance with this Policy and the law.
7. Development and regular topping the list of indicators for identifying suspicious Clients and transactions for which there are grounds for suspicion of money laundering or terrorist financing,
8. Information and documentation on transactions and persons in accordance with this Policy and the law,
9. Ensure retention and protection of data and maintain records in accordance with these Policy and the Law,
10. Development of the information system within the Company in order to be fast, timely and fully to provide information on whether the Company maintains a business relationship with a particular person or entity, and what is the nature of that relationship.
11. Keeping records about reports of suspicious transactions and of suspicious activities.
12. Keeping records of its client at least 5 years after termination of the agreement with the client
13. Keeping transaction records at least 10 years after the transaction

Oversight of AML compliance efforts within the organization

• Receiving and assessing Suspicious Transaction Reports (STRs) submitted by employees.
• Filing STRs to the respective AML Office (AMLO).
• Ensuring staff training on AML/CFT policies and regulatory updates.
• Acting as the point of contact with regulators on AML/CFT matters.
• Regular review and update of AML policies to align with regulatory changes.
• Reporting

Assessment of risk of money laundering or terrorist financing

Risk analysis is a procedure in which the Company defines the evaluation of the likelihood that his business could be misused for money laundering or terrorist financing, and the criteria, which will be the particular Client, business relationship, product or transaction be classified as more or less risky in the field of money laundering or terrorist financing.

The Company will define the risk category by criteria defined in this Policy, under which the implementation of measures in the analysis of the Client, certain clients, business relationship, product or transaction considered, a risk category will be assigned. The Company in determining the risk category may, with respect to the criteria of risk, classifies particular client, business relationship, product or transaction as a high risk of money laundering or terrorist financing, and will make a deep analysis of the Client. In evaluating the risk the Company will use the list of indicators for identifying suspicious transactions and in relation to which there are reasons for suspicion of money laundering or terrorist financing.

The criteria for determining the Client’s risk category

In assessing the risk of the Client, business relationship, product or transaction, the Company will take into account the following criteria:

1. The type, business profile and structure of the Client.
2. Geographical origin of the Client.
3. The nature of the business relationship, product or transaction.
4. Company’s past experience with the Client.

The Company may, in addition to the criteria set out in the preceding paragraph, comply with other criteria, such as:

1. Size, structure and activities of the Client, including status and ownership structure of the Client.
2. Presence/absence of the Client at the conclusion of a business relationship or conducting transactions and purpose of concluding a business relationship or executing a transaction.
3. Source of funds that are the subject of a business relationship or transaction in case of clients who by that criteria fall under the politically exposed persons.
4. The Client’s knowledge of products and services and his experience or knowledge in this field.
5. Other information indicating that the Client, business relationship, product or transaction may be more at risk.

Client risk categories

With regard to the criteria of risk, it is possible to divide clients, business relationships, products or transactions into 4 main categories of risk, namely:

1. Extremely high risk, which is why the conducting business is prohibited.
2. High risk.
3. Average risk.
4. Negligible risk.

Prohibition of conducting business

Clients with which operations are prohibited due to immediate and high risk of money laundering or terrorist financing, are clients (natural or legal persons and other entities) who are on the list of persons against whom effective action of the Security Council of the United Nations (hereinafter the UN Security Council) – relevant Measures include: financial sanctions include the freezing of funds on accounts and/or a ban on disposal of assets, military embargo means a ban on trade in weapons with the subject etc., and clients residing or established in entities that are not subject to international law.

Prohibition of conducting transactions and business relationship also applies in the following cases where transactions that were intended for persons or entities against whom measures of UN Security Council are effective, transactions that client committed in the name and on behalf of a person or entity against whom the measures of UN Security Council are effective and business relationships that would be concluded in favor of the person or entity who is on the list of persons and entities against whom the measures of UN Security Council are effective.

High risk of money laundering or terrorist financing

For natural persons, the Client is a foreign politically exposed person, or a person who is or was in the last year (or longer) an eminent public duty and is resident in a third country, in particular heads of state, heads of government, ministers and their assistants, elected representatives of the legislative branch, members of the supreme, constitutional and other high courts, judges on financial courts or members of Central Banks, ambassadors, consuls and senior officers of the armed forces and members of the management and supervisory boards of companies that are owned or in majority state ownership, the Client is a member of the family whose member is a foreign politically exposed person: spouse or common-law spouse, parents, brothers, sisters, children and their spouses or common-law partners, and client whose associate is a politically exposed person, the client is not personally present at the identification and identity verification at the Company.

For legal entities, the Client is a foreign legal entity that does not perform trade, manufacturing or other activities in the country where it is registered, the Client is a fiduciary or other similar foreign law firm with unknown or hidden owners or managers, the Client has a complicated structure of the statute or a complex chain of ownership, the Client is a financial organization that does not need, and is not obliged to obtain, a license of relevant supervisory authorities to perform their activities, the Client is a non-profit organization (and is based in a country that is known as an offshore financial center, or in a country that is known as financial or tax haven or among its members or founders there is a natural or legal person who is a resident of any of the countries listed in the previous paragraph), the Client is a legal entity established by issuing shares to the bearer.

The geographical position of the Client

Clients that pose a high risk of money laundering and terrorist financing are among those with permanent or temporary residence or registered office in:

1. A country which is, based on the assessment of competent international organizations, known for producing of drugs, or having well-organized and developed the drug trade (countries of the Near East, Middle East or Far East that are known for production of heroin: Turkey, Afghanistan, Pakistan and the countries of the Golden Triangle (Myanmar, Laos, Thailand ), South American countries known for cocaine production: Peru, Colombia and neighboring countries, the Middle and Far East and Central America, known for the production of hemp: Turkey, Lebanon, Afghanistan, Pakistan, Morocco, Tunisia, Nigeria and neighboring countries and Mexico).
2. Country that is, based on the assessment of the competent international organizations, known for its high level of organized crime because of: corruption, arms trafficking, human trafficking and human rights violations.
3. Countries which, according to the assessment of the international organization Financial Action Task Force are placed among non-cooperative countries and territories (these are countries or territories who, in the opinion of the FATF, do not have adequate legislation in the area of preventing and detecting money laundering or terrorist financing, state control of financial institutions does not exist, or is inappropriate, the establishment or operation of financial institutions is possible without the approval or registration with the competent state authorities, the state encourages the opening of anonymous accounts or other anonymous financial instruments, flawed system of recognition and reporting of suspicious transactions, legislation does not recognize the obligation determining the real owner, international cooperation is inefficient or does not exist).
4. Countries against which there are effective measures of the United Nations or the EU, among which are particularly complete or partial interruption of economic relations of rail, sea, air, postal, telegraphic, radio and other communication links, interruption of diplomatic relations, military embargo, passenger embargo and the like.
5. Countries that are known as financial or tax haven (for these countries it is particularly important to allow full or partial forgiveness of tax due, or tax rate is significantly lower than in other countries). These countries usually have signed agreements on avoidance of double taxation or if they have signed these agreements, do not respect them, the legislation of the country allows, or requires strict compliance with banking and trade secrets, provided fast, discreet and cheap financial services. Countries that are generally known as financial or tax haven include: Dubai – Jebel Ali Free Zone, Gibraltar, Hong Kong, Isle of Man, Liechtenstein, Macau, Mauritius, Monaco, Nauru, Nevis, Iceland – area of Norfolk, Panama, Samoa, San Marino, Sark, Seychelles, St. Kitts and Nevis, St. Vincent and the Grenadines, Switzerland – cantons Vaud and Zug, Turks and Caicos Islands, United States – the federal state of Delaware and Wyoming, Uruguay, US Virgin Islands and Vanuatu.
6. Country which is generally known as an offshore financial center (for that country it is important to define the limits of direct activities registered business entities in the country, ensuring a high degree of banking and trade secrets, implemented liberal control over foreign trade, insured fast, discreet and cheap financial services and registration of legal persons. The feature of these countries is that they have often lack of legislation in the area of preventing and detecting money laundering and terrorist financing. Countries that are known as a well-known offshore financial centers include: Andorra, Anguilla, Antigua and Barbuda, Aruba, Bahamas, Barbados, Belize, Bermuda, British Virgin Islands, Brunei, Cape Verde, Cayman Islands, Cook Islands, Costa Rica, Delaware (USA), Dominica, Gibraltar, Grenada, Guernsey, Isle of Man, Jersey, Labuan (Malaysia), Lebanon, Liechtenstein, Macau, Madeira (Portugal), Marshall Islands, Mauritius, Monaco, Montserrat, Nauru, Nevada (USA), Netherlands Antilles, Niue, Palau, Panama, the Philippines, Samoa, Seychelles, St. Kitts and Nevis, Saint Lucia, Saint Vincent and the Grenadines, Zug (Switzerland), Tonga, Turks and Caicos, Uruguay, Vanuatu and Wyoming (USA).

The Company will treat the following international organizations as competent to monitor the effectiveness of implementation of compliance measures in the area of money laundering and financing of terrorism within provisions of international standards: EU authorities, International project team for the Financial Action Task Force (FATF), International Monetary Fund, World Bank, International Association of Financial supervisory bodies concerned with detecting and preventing money laundering and terrorist financing, International Association of Securities Commissions (IOSCO) and International Association of Insurance Supervisors (IAIS).

Business relationships, products and transactions

Business relationships that may pose a high risk of money laundering and terrorist financing include commercial relations involving regular or large payments of cash from the account of the Client, or the credit or financial institution in a third country, or a state that is treated as equivalent to a third country, and business relationships concluded with the Company without personal presence of the Client.

Products which represent a high risk of money laundering and financing of terrorism shall include all negotiable instruments made out to the bearer, but also negotiable instruments issued to the bearer or in favor of a fictitious recipient, endorsed without restriction or in other forms that permit transfer titles after the surrender, and all other incomplete instruments that are indeed signed, but without stating the names of recipients of money.

Transactions which pose a high risk of money laundering and terrorist financing include payment of funds from the Client’s account or payment of funds to the Client’s account, which is different from the account that the Client stated in ascertaining identification, respectively, through which normally operates or operated, transactions intended for persons residing or established in a country which is known as financial or tax haven, transactions intended for persons residing or established in a country which is known as off-shore financial center, transactions intended for non-profit organizations headquartered in the country, known as an offshore financial center, or as a financial or tax haven.

Previous experience with the Client

Clients, which, considering the experience of the Company, are representing a high risk of money laundering or terrorist financing are persons for which the Company estimated, in connection with that person or transactions which the person has performed, there were reasons for suspicion of money laundering or terrorist financing.

Average risk of money laundering and financing of terrorism

The Company will put into the category of middle (average) risk clients, business relationships, products or transactions, which, under the provisions stated in this Policy, cannot be classified as high or slightly risky.

Slight risk of money laundering and financing of terrorism

The Company will treat the following clients as slight risk of money laundering or terrorist financing activity: banks, savings banks, building societies, Postal Office, domestic investment funds management companies, pension companies, which include the Company for management of pension funds and pension insurance companies, companies authorized for transactions with financial instruments, insurance companies that are licensed to conduct life insurance business, government bodies, bodies of local and regional governments, public agencies, public funds, public institutes or chambers, companies whose financial instruments are admitted and traded on an exchange or regulated public market.

Individual Clients

During the process of registration, each client provides personal information, specifically: full name; date of birth; origin; complete address, including phone number and city code. A client sends a high-resolution copy of the first page of local or international passport or ID, where the photo and the signature are clearly seen, or a copy of driver’s license with the same requirements, a high-resolution copy of a receipt of utility services payment or bank statement, containing the full client’s name and the actual place of residence which should not be older than 6 months.

Corporate Clients

In case the company is unquoted and none of the principal directors or shareholders already has an account with Company, the official provides the following documents: a high-resolution copy of the certificate of incorporation/certificate; an extract from the Commercial Register, or equivalent document, evidencing the registration of corporate acts and amendments; names and addresses of all officers, directors and beneficial owners of the corporate entity; a high-resolution copy of Memorandum and Articles of Association or equivalent documents duly recorded with the competent registry; evidence of the company’s registered address and the list of shareholders and directors; description and nature of business.

 In the event a Client does not present a valid government ID; or the firm is not familiar with the documents the Client provides; or the Client opens the account without appearing in person; and any other circumstances that increase the risk that we will not be able to verify the true identity of the Client through documents an account will not be opened.

UN and EU Sanctions List

All individuals and entities will be checked against applicable lists of sanctioned countries published by the United Nations or EU and periodically rechecked against updated lists. If a Client is from a country on the list, his or her account will not be opened. All new Clients’ names will be compared to the list provided by our third-party Client screening service. If a Client’s name appears on the list, we will contact low enforcement authority immediately.

Monitoring of Clients’ information and documents

Company continuously monitors the clients’ activities and compares them with the collected data about the clients. The company continuously monitors the topicality and validity of collected data and client documents. When the company determines that the expiration date is approaching for some of the collected client documents, it immediately invites the client to submit a valid document. Once a year, the Company invites the client to renew data and documents.

Monitoring of Client Activity

In addition to gathering information from the clients, Company continues to monitor the activity of every client to identify and prevent any suspicious transactions. The Company will carefully monitor the business activities carried out by his client, monitor and verify compliance of the Client with the expected nature and purpose of a business relationship, resources with a source of funds, and operations or transactions of the Client with his usual scope of operations or transactions.

Policy update rules

This policy is adjusted at least once a year or more times during the year if relevant regulations have changed, and it is necessary to adjust the policy.

AML Policy

Appendix 1

Penalties and Fines for AML Non-Compliance

• Monetary fines for Company and Directors
• Suspension or revocation of the business license
• Reputational damage and loss of customer trust
• Legal action against directors or officers in cases of negligence

Customer Due Diligence and Enhanced Due Diligence

1. Customer Due Diligence (CDD) including:

• Verification of customer identity (e.g., ID documents, proof of address, detailed personal data like country, place and date of birth, active citizenships etc. ).
• Understanding the purpose and nature of the business relationship.
• Ongoing monitoring of transactions.
• Mandatory KYC refresh at list once a year.

2. Enhanced Due Diligence (EDD)

In addition to CDD

• Obtaining source of funds and source of wealth information.
• Conducting enhanced monitoring of transactions.
• Regular updating of customer information.

Guidelines for EDD procedure activation

The company will carry out an enhanced analysis procedure when it determines that:

• the customer is Politically Exposed Person (PEP),
• the customer comes from a high-risk country,
• to any customer who has been assigned a high-risk status based on a risk assessment.

3. Reference to Related Policies and Procedures

When implementing AML procedures, the Company uses this policy and the following internal acts, such as:

– Rules on identification, classification of clients and initiation of cooperation with the client

– Operational risk management policy

– Rules on storage of business documents and data

– Rules on establishment and operations of risk monitoring

– Risk assessment in the system for preventing money laundering and terrorist financing

– Regulatory reporting