ANTI-MONEY LAUNDERING, COUNTERING FINANCING OF TERRORISM AND COMBATING PROLIFERATION FINANCING POLICY (AML/CFT/CPF)

Version 1.2.

1. INTRODUCTION

Bets Entertainment N.V. (referred to as either “Company”, "the Company", "We", "Us" or "Our" in this Policy) having its registered office at Abraham de Veerstraat 9, Curaçao, Company Registration number 155648, has developed a comprehensive risk-based Anti-Money Laundering, Countering Financing of Terrorism and Combating Proliferation Financing Policy (“the Policy”, ‘’the AML/CFT/CPF Policy’’) in an effort to maintain the highest possible compliance with applicable laws and regulations relating to anti-money laundering, countering financing of terrorism and combating proliferation financing.

The present AML/CFT/CPF Policy shall be regularly reviewed and, if necessary, revised to comply with applicable rules, regulations, policies, and best practices. The present AML/CFT/CPF Policy must be adhered to by the Company and Company’s staff to mitigate reputational, regulatory, legal and financial loss risks.

2. MISSION STATEMENT

This document is intended to outline the Company’s AML/CFT/CPF policies and procedures in order to ensure that:

• Statutory and regulatory obligations to prevent money laundering/financing of terrorism / financing of proliferation are met, taking positive action in order to minimize risk of the Company’s services being used for the purpose of laundering the proceeds of criminal activity or terrorist financing.
• The Company does not engage with or continue established relationships with those whose conduct gives rise to suspicion of involvement with illegal activities. We will seek to terminate any relationship where conduct gives the Company reasonable cause to believe or suspect involvement with illegal activities.
• Any such termination shall follow the reporting of the suspicions and thereafter shall be undertaken in conjunction with the relevant authorities and in accordance with the relevant regulations to avoid any risk to the Company.
• The Company complies with the obligations of relevant national and international legislation and regulation, adherence to Financial Action Task Force (FATF) recommendations, EU Directives and other applicable laws and regulations on the prevention of money laundering/financing of terrorism / financing of proliferation.
• The Money Laundering Reporting Officer (MLRO) will act as Key Official on behalf of the Company and is responsible for:

  – Receiving and assessing internal suspicion reports.

  – Taking reasonable steps to access any relevant “know your customer/business” information.

  – Making external reports to relevant national and international authorities.

  – Obtaining and using national and international findings concerning countries with inadequacies in their approach to money laundering prevention.

  – Taking reasonable steps to establish and maintain adequate arrangements for awareness and training.

  – Monitoring the day-to-day operation of the Company's Anti-Money Laundering, Countering Financing of Terrorism and Combating Proliferation Financing Policy.

  – Responding to reasonable requests from regulators and law enforcement authorities.

  – Making compliance reports to senior management.

The Company is committed to high standards of anti-money laundering compliance and requires management and employees to adhere to these standards in preventing the use of its products for money laundering/financing of terrorism/financing of proliferation purposes.

3. DEFINITIONS OF MONEY LAUNDERING, TERRORIST FINANCING AND PROLIFERATION FINANCING

Money Laundering is defined as:

1. The conversion or transfer of property, knowing that such property is derived from criminal activity or from participation in such activity, for the purpose of concealing or disguising the illicit origin of the property or of assisting any person who is involved in the commission of such an activity to evade the legal consequences of that person’s action;
2. The concealment or disguise of the true nature, source, location, disposition, movement, rights with respect to, or ownership of, property, knowing that such property is derived from criminal activity or from an act of participation in such activity;
3. The acquisition, possession or use of property, knowing, at the moment of receipt, that such property was derived from criminal activity or from an act of participation in such activity;
4. The participation in, association to commit, attempts to commit and aiding, abetting, facilitating and counselling the commission of any of the actions referred to points 1, 2 and 3;

There are often three acknowledged phases of money laundering:

• Placement – the physical disposal of cash or other assets derived from criminal activity.
• Layering – the separation of the illicit proceeds from their source by layers of transactions intended to hide the origin of the funds.
• Integration – supplying apparent legitimacy to illicit wealth through the re-entry of the funds into the economy in what appear to be personal transactions. However, even simple possession of criminal property may constitute an offence. Criminal property is defined as property which is, or represents, a person’s benefit from criminal conduct, where the alleged offender knows or suspects that it is such.

Curacao Gaming Control Board definition of money laundering (as provided in Regulations for Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT), August 2016): The process used to conceal or disguise the nature, location, source, ownership or control of money or assets, obtained through criminal activity.

Terrorist Financing is defined as:

The raising and processing of funds to supply terrorists with resources, the provision or collection of funds, by any means, directly or indirectly, with the intention that they be used or in the knowledge that they are to be used, in full or in part, in order to carry out any of the offences within the meaning of Articles 3 and 4 of Directive (EU) 2017/541 of the European Parliament and of the Council On Combating Terrorism. Terrorist financing entails soliciting, collecting, or providing funds with the intent of using them to support terrorist acts or organizations.

Curacao Gaming Control Board definition of terrorist financing (as provided in Regulations for Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT), August 2016): providing or collecting funds with the knowledge that they will be used in the commission of terrorist acts.

Proliferation Financing is defined as:

The financial support for the proliferation of weapons of mass destruction, providing funds or financial services which are used, in whole or in part, for the manufacture, acquisition, possession, development, export, trans-shipment, brokering, transport, transfer, stockpiling or use of nuclear, chemical or biological weapons and their means of delivery and related materials (including both technologies and dual-use goods used for non-legitimate purposes), in contravention of national laws or, where applicable, international obligations.

The term „proliferation financing-related targeted financial sanctions“ refers to specific sanctions outlined in European Union legal frameworks, aimed at preventing the spread of weapons of mass destruction.

4. LEGAL AND REGULATORY FRAMEWORK

The Legal and Regulatory Framework is set by, without being limited:

EU Legislation:

• Directive (EU) 2015/849 on the prevention of the use of the financial system for the purpose of money laundering or terrorist financing (4th Money Laundering Directive).
• Directive (EU) 2018/843 on the prevention of the use of the financial system for the purpose of money laundering or terrorist financing (5th Money Laundering Directive).
• Commission Delegated Regulation (EU) 2018/1108 on Central Contact Points.
• Commission Delegated Regulation (EU) 2019/758 on Measures for Groups present in Certain Third Countries.
• Commission Delegated Regulation (EU) 2016/1675 on High Risk Third Countries.
• Regulation (EU) 2015/847 - Information accompanying transfers of funds. Regulation (EU) 2023/1113 - Regulation on information accompanying transfers of funds (recast).
• Regulation (EU) 2023/1114)- Regulation on markets in crypto-assets.
• EU List of Prominent Public Functions (EUR-Lex - 52023XC00724). Prominent public functions at national level, at the level of International Organizations and at the level of the European Union Institutions and Bodies.
• DIRECTIVE (EU) 2017/541 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL On Combating Terrorism.
• Payment card Industry (PCI) Data Security Standard V1.2 (October 2008).

FATF International Standards:

• FATF Methodology for assessing compliance with the FATF Recommendations and the effectiveness of AML/CFT systems.
• FATF „Combatting Proliferation Financing: A Status Report on Policy Development and Consultation“.
• FATF „Guidance on Counter Proliferation Financing“.
• FATF „Guidance on Proliferation Financing Risk Assessment and Mitigation“.
• EU Strategy Against the Proliferation of Weapons of Mass Destruction 15708/03.

Curacao Legislation:

• Sanctions National Ordinance (Sanctielandsverordening, PB 2014, no. 55).
• NOIS: the National Ordinance Identification for Services (Landsverordening identificatie bij dienstverlening, PB 2017, no. 92, GT).
• NOOGH: the National Ordinance on Offshore Games of Hazard (Landsverordening buitengaatse hazardspelen, PB 1993, no. 63).
• NORUT: the National Ordinance on the Reporting of Unusual Transactions (Landsverordening melding ongebruikelijke transacties (LMOT), PB 2017, no. 99).
• Appointment of the GCB as the AML/CFT supervisor for the LMOT for the gaming industry (no. 19/0283, Landsbesluit toezichthouder ongebruikelijke transacties kansspelsector).
• National Decree supervisor identification when rendering services gaming sector (Landsbesluit toezichthouder identificatie bij dienstverlening kansspelsector, LB van 28 januari 2019, no. 19/0282).
• Rules for reporting unusual transactions. (PB 2020, 157, Landsbesluit inzake regels voor melding ongebruikelijke transacties (Landsbesluit goAML meldportaal).
• Indicators for recognizing unusual transaction. (PB 2015, 73, Regeling indicatoren ongebruikelijke transacties).
• Gaming Control Board. Regulations for Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT), August 2016.
• Caribbean Financial Action Task Force (CFATF) International Standards (Round Reports, Public Statements and Notifications).

5. REGULATORY KEY PROVISIONS

The 4th EU Money Laundering Directive contains the following provisions:

• Risk-based approach – all gambling operators are required to undertake customer due diligence on all transactions over 2,000 EUR: for providers of gambling services, upon the collection of winnings, the wagering of a stake, or both, when carrying out transactions amounting to EUR 2 000 or more, whether the transaction is carried out in a single operation or in several operations which appear to be linked.
• Operators will have to develop, update and implement suitable written risk assessments, policies and procedures as well as processes for testing their effectiveness. Must be documented and made available to regulators and independent auditors.
• Staff must be fully screened and trained in AML/CFT.
• Must conduct enhanced due diligence where the risk profile of a customer indicates high risk and for domestic and foreign politically exposed persons (PEP). Simplified due diligence permitted for low-risk customers.
• Evidence of higher risk which are set out in Directive Annexes include size and frequency of transactions, customer residence in countries with significant corruption and crime and payments received from unknown parties.
• Records must be kept for a minimum of 5 years.

The 5th EU Money Laundering Directive refers the following points:

• Cryptocurrencies are obliged to comply with the AML Regulations applied to financial institutions.
• Extension of sectors that are now “obliged entities” and in scope of the updated money laundering regulations. Includes: Crypto assets exchange providers – entities that either exchange virtual assets to money or to other virtual assets, or vice versa; Custodian Wallet Providers – entities that provide services to safeguard, hold, store and administer virtual assets on behalf of its customers. All newly obliged entities will require a full suite of policies, controls and procedures designed to meet their new regulatory obligations and designed for their specific business.
• Obliged entities need to be confident that they are using correct PEP definitions and that the PEP data they rely upon is accurate and up to date. It is not unusual for obliged entities to experience high levels of false positives when carrying out PEP screening. As such, PEP lists (commercial or independently generated), need to be reviewed constantly to make sure the data is up to date and contains secondary identifiers such as date of birth, sex, nationality, photo and where possible, date appointed to office. Enhanced due diligence measures are still required if a PEP is identified.
• Obtaining beneficial owner information is a huge challenge for obliged entities. Many registries around the world simply do not publish beneficial owner information, or else the information is partial and incomplete. Often organization structures are complex and include offshore entities. As a result, unpacking ownership structures and correctly identifying beneficial owners is a specialist skill requiring experienced and highly trained staff, particularly as these are the types of organization that are most likely to be used by financial criminals. It is advisable for obliged entities to work with an experienced provider in order to assist with this process.

Regulation (EU) 2023/1114)- Regulation on markets in crypto-asset contains the following provisions:

Crypto-asset service providers will have to conduct the money laundering and terrorist financing risk assessment, develop, update and implement suitable general policies and procedures related thereto. Legal persons or other undertakings that intend to offer to the public or seek the admission to trading of asset-referenced tokens shall submit their application for an authorization to the competent authority and provide a description of their internal control mechanisms and procedures to ensure compliance with the obligations in relation to the prevention of money laundering and terrorist financing under applicable EU regulations.

FATF Customer Profile Risk Indicators of the potential breach, non-implementation or evasion of Countering Proliferation Financing measures:

• During on-boarding, a customer provides vague or incomplete information about their proposed activities. Customer is reluctant to provide additional information about their activities when queried.
• During subsequent stages of due diligence, a customer, particularly a trade entity, its owners or senior managers, appear in sanctioned lists or negative news, e.g. past ML schemes, fraud, other criminal activities, or ongoing or past investigations or convictions, including appearing on a list of denied persons for the purposes of export control regimes.
• The customer is a person connected with a country of proliferation or diversion concern, e.g. through business or trade relations – this information may be obtained from the national risk assessment process or relevant national CPF authorities.
• The customer is a person dealing with dual-use goods or goods subject to export control goods or complex equipment for which he/she lacks technical background, or which is incongruent with their stated line of activity.
• A customer engages in complex trade deals involving numerous third-party intermediaries in lines of business that do not accord with their stated business profile established at onboarding.
• A customer or counterparty, declared to be a commercial business, conducts transactions that suggest that they are acting as a money-remittance business or a pay-through account. These accounts involve a rapid movement of high-volume transactions and a small end-of-day balance without clear business reasons. In some cases, the activity associated with originators appear to be entities who may connected a state-sponsored proliferation program (such as shell companies operating near countries of proliferation or diversion concern), and the beneficiaries appear to be associated with manufacturers or shippers subject to export controls;
• A customer affiliated with a university or research institution is involved in the trading of dual-use goods or goods subject to export control.

6. RISK BASED APPROACH

The risk-based approach recognizes that the AML/CFT/CPF risks faced by each sector and each subject person are different and allows for resources to be invested and applied where they are most required. The risk-based approach envisages the application of checks that are proportionate to the assessed risk. The cornerstone of the risk-based approach is the risk assessment which must be carried out at different stages of a subject person’s activities. This assessment allows the subject person to identify its AML/CFT/CPF vulnerabilities and the AML/CFT/CPF risks it is exposed to. On this basis, the subject person will be able to draw up, adopt and implement AML/CFT/CPF measures, policies, controls and procedures that address any identified risks.

7. RESPONSIBILITY

The MLRO and the Key Officials are responsible for ensuring the Anti-Money Laundering, Countering Financing of Terrorism and Combating Proliferation Financing Policy. They are also responsible for ensuring the plan is kept up to date and that employees are aware of the procedure.

8. KYC PROCEDURE

Know Your Customer Procedures are followed to achieve the following objectives:

• Allowing only legitimate customers to register an account (i.e. to exclude from registration the following categories: Minors, Sanctioned Persons or Players from Sanctioned countries are not allowed to register a gaming account).
• Build the risk profile associated with the customer.
• Confirming that customers are who they say they are.
• Monitoring customer accounts and transactions for illegal activities.
• Blocking duplicate accounts.
• Identifying possible PEP & Sanctioned customers.

8.1. Registration

Before being able to play on the website a customer needs to first register an account. On the registration page the customers are asked for the following details:

• Email address. In order to validate the email address of the player and email with a link to validate the email address will be sent to the email address listed in the registration. A player will not be allowed withdraw funds unless the email is validated.
• Full name
• Date of Birth
• Residence Address

Once the above information is received the fraud department will screen the information for any false or suspicious information, possible duplicate/Self-Excluded accounts, Politically Exposed Persons and Sanction Lists.

The IP address from where the traffic originated is tracked by the Company’s back-office software. Should traffic originate from countries which are on the list of restricted countries, the account will be blocked.

Should the checks (manual or automatically done by the system) indicate that a duplicate account has been registered, the account is suspended until further checks are made. Further checks are aimed to determine whether this is indeed a duplicate account registered intentionally with the detrimental or offensive purpose.

8.2. Age Verification

No customers under the age of 18 can register an account. The system does not allow persons under 18 to register an account. We reserve the right to request proof of age documents from persons intending to participate or participating in the gaming opportunities offered by the Company at any time. Acceptable proof of age documents includes valid government-issued photo IDs.

The Company takes all reasonable steps to prevent underage gamblers from accessing and using the Company’s services, including the use of identity verification services to ensure that all users are eligible to play.

8.3. Due Diligence

Player KYC and due diligence shall be ongoing and conducted on a risk‐sensitive basis in situations, which by their nature, represent a higher risk of Money Laundering or Financing of Terrorism. The Fraud & Payments Manager is responsible for setting out a matrix which scores risk according to criteria which influence the risk rating.

8.4. Standard Due Diligence

The Company collects, verifies, and authenticates KYC Due Diligence information regarding the customers. Standard KYC Due Diligence required submission of the following documents:

• Scan of identification document e.g., ID card or Passport.
• Valid proof of address e.g., utility bill (not older than 3 months).
• Proof of payment method ownership.

In case the customer doesn't have an opportunity to provide the documents in Latin or Cyrillic alphabet above-mentioned alphabets the Company reserves the right to demand video verification where the customer shows his/her documents.

The following events will trigger the Standard Due Diligence procedures:

• Accumulated transactions (Deposits and/or Withdrawals) is equal to or above 2,000 Euro.
• The Company has doubts about the accuracy or adequacy of previously obtained customer identification data.
• Customer's activity raise suspicion, even if Customer’s accumulated transactions are less than 2,000 Euro.
• Customer requests to change account details like address, email, any other profile details provided earlier by customer to the Company.

8.5. Enhanced Due Diligence (EDD)

In cases where players, products or transaction are deemed to be of higher risk Enhanced Due Diligence (EDD) procedures should apply. The following events should trigger the EDD procedures:

• Player is a PEP (Politically Exposed Person) or becomes a PEP
• Duplicate IPs
• IP shifting
• Country of origin associated with higher credit card fraud
• Attempts to create multiple accounts
• Attempting to withdraw funds without using the funds to play (withdrawal without making any bets or starting any game session)
• Sudden changes in account activity
• The registered country is not part of the FATF white list or any other country that appears associated with higher risk of money laundering, terrorist and proliferation financing, as well as countries identified as having significant levels of corruption or other criminal activity
• Noticeable changes in the gaming patterns of a customer, such as when the customer carries out transactions that are significantly larger in volume when compared to the transactions he normally carries out.
• Customer carries out transactions which seem to be disproportionate to their wealth, known income or financial situation.
• Size and frequency of transactions raise suspicions. Sudden changes in account activity e.g., the volume of transaction increases suddenly.
• The Company has doubts about the accuracy or adequacy of previously obtained customer identification data.

For every account deemed as High Risk an Enhanced Ongoing Monitoring of the business relationship will be conducted.

In situations where EDD check is required the customer must submit also:

• Bank statement (not older than 3 months).
• Proof of the source of funds.
• Payment method confirmation (if required).

If the customer does not send these documents within 30 days, the gaming account will be blocked from all transactions. The account also can be suspended (access to account temporarily restricted) until provision of the requested documents depending on relevant risk level.

Other EDD measures applied by the Company depending on the risk level defined:

• Obtaining additional information on the customer (e.g., occupation, volume and assets, information available through public databases, internet etc.) and updating more regularly the identification data of customer;
• Obtaining necessarily detailed information on the source of funds or source of wealth of the customer;
• Obtaining the approval of senior management to commence or continue the business relationship;
• Conducting enhanced monitoring of the business relationship, by increasing the number and timing of controls applied, and selecting patterns of transactions that need further examination.

8.6. Ongoing Due Diligence

The Company performs ongoing and regular monitoring of potentially risk placement of funds by customers. In case of suspicious placement of funds customer’s account and funds are freezed and enhanced due diligence is conducted.

The Company shall conduct ongoing due diligence on the business relationship and scrutinize transactions undertaken throughout the course of that relationship to ensure that the transactions being conducted are consistent with the Company’s knowledge of the customer, their risk profile, including where necessary the source of funds.

The Company shall ensure that documents, data, and information collected through the Standard and/or Enhanced Due Diligence (KYC) measures are kept up-to-date and relevant by undertaking reviews of existing records, particularly for higher risk categories of customers.

8.7. Duplicate accounts

Customers are only allowed to hold one account. When a player registers, the details are checked for possible duplicate accounts. Should the checks indicate that a duplicate account has been registered; the account is suspended until further checks are made to determine whether or not this is indeed a duplicate account.

Should the fraud management department have any doubts about any of the information submitted at registration stage or have any doubts whatsoever, further identification verification should be carried by requesting supplementary documents from the player. The documents requested are:

• scan of identification document e.g., ID card or passport
• scan of credit card, other payment method confirmation (if required)
• valid proof of address e.g., utility bill (not older than 3 months)

Should the fraud department still not be satisfied, they should ask for further documents. If in doubt the MLRO should be informed and consulted for further steps, decisions and reporting.

8.8. Record Keeping

The Company keeps for at least 5 (five) years all records obtained through Standard and/or Enhanced Due Diligence (KYC) measures and documentation regarding relations with customers and customers’ transactions, as well as correspondence with the customers.

The Company will keep the following records:

– transaction documents

– due diligence information

– information relating to suspicious transactions

– MLRO reports

– training in relation to AML matters, and

– policies and procedures

– records obtained through Standard and/or Enhanced Due Diligence (KYC) measures

This information could be required on a timely basis by regulatory authorities. The documents as outlined should be kept for 5 years from the date of the transaction or the date of completion of any related transaction. Customer due diligence information, or copies thereof, must also be kept for a minimum of 5 years from the date the person concerned ceases to be a registered customer or from the date of the customers most recent activity. These records can be kept in documentary or electronic format.

8.9. Politically Exposed Persons (PEPs)

A Politically Exposed Person is someone who has been entrusted with a prominent public function, such as a senior political figure. Individuals who are closely related to this person, for instance, immediate family members and close associates, are also considered as PEPs. PEPs are classified as a money laundering risk since they may be exposed to property that has been generated by corruption and bribery because of their position.

As a general rule within the daily work flow every client that has been identified as high-risk, EDD measures will be applied, and also additional checks are made to identify if the client is a PEP. EDD measures are applied to the customer identified as PEP and the close associates, in compliance with the applicable EU directives.

The current PEP lists are consulted in order to identify a customer as PEP. Once established as PEP, the following steps are taken:

• Obtain the approval from risk management to maintain the business relationship.
• EDD measures are applied.
• Ongoing monitoring of the customer’s / business partner activity.

As such, PEP lists (commercial or independently generated) and customer profiles, need to be reviewed constantly to make sure the data is up to date and to identify the situations when person becomes a PEP after establishing business relationship with the Company.

9. MONITORING TRANSACTIONS FOR SIGNS OF MONEY LAUNDERING, TERRORIST FINANCING AND PROLIFERATION FINANCING

9.1. Risk Profiles

The Company develops and maintains risk profiles to determine the customer categories which expose the Company to higher risk.

9.2. Suspicious Transactions

There is a number of events which might raise suspicions of money laundering, and which require further scrutiny. The following are listed below (but not limited to):

• Customer does not cooperate in the carrying of customer due diligence.
• Customer attempts to register more than one account with the same website.
• Customer deposits considerable amounts during a single session by means of multiple payment methods.
• Customer deposit funds well in excess of what is required to sustain their usual betting patterns.
• Customer makes small wagers even though he has significant amounts deposits, followed by a request to withdraw well in excess of any winnings.
• Customer makes frequent deposits and withdrawal requests without any reasonable explanation.
• Noticeable changes in the gaming patterns of a customer, such as when the customer carries out transactions that are significantly larger in volume when compared to the transactions he normally carries out.
• Customer enquiries about the possibility of moving funds between accounts (websites) belonging to the same gaming license.
• Customer carries out transactions which seem to be disproportionate to their wealth, known income or financial situation.
• Customer seeks to transfer funds to the account of another customer or to a bank account held in the name of a third party.
• Customer displays suspicious behavior in playing games that are considered as high risk.
• Artificially splitting a withdrawal to remain “below the radar”.
• Unexplained or unclear source of wealth e.g., student playing large volumes of money the source of which cannot immediately be ascertained.
• Sudden changes in account activity e.g., the volume of transaction increases suddenly.

Any suspicions of Money Laundering should be reported internally to the MLRO. These reports should be documented by means of an Internal Suspicious Transaction Report. The MLRO will then investigate the report and decide if it is necessary to escalate the report to the responsible authorities, restrict access to customer’s account and perform other necessary measures.

9.3. Tipping Off

It is extremely important that at no point is the customer to be informed that he/she is being investigated or that any transactions he/she made were flagged for suspicious activity. Such an action would qualify as “tipping off”. Tipping off could unnecessarily alarm the customer if following investigations, it turns out that there is no suspicious activity going on, but more importantly it could forewarn anybody conducting criminal activity of the investigations and could prejudice investigations. If forewarned of an impending investigation a criminal could destroy evidence incriminating them. Tipping off is a criminal offence. No unnecessary staff should be informed of the suspicions; it is sufficient to initially inform the MLRO. It is also important not to take any action which might indicate to the person being investigated of the suspicions e.g., suspending account for no immediate apparent reason without proper explanation.

9.4. Suspected Fraud/Money Laundering Involving Employees

ML/FT activity and/or fraud can also be conducted by employees of the Company. Should any activities of the Company employees raise suspicions of ML/FT or fraud, the same procedure should as with customer transactions should apply. The suspicious activity should be reported to the MLRO by means of an Internal Suspicious Transaction Report whilst avoiding tipping off and involving any unnecessary employees.

9.5. Failure to Report

One should always keep in mind that failure to report a suspicious transaction when there are reasonable grounds to suspect ML/FT activities is also a criminal offence.

10. EMPLOYEE TRAINING AND SCREENING

10.1. Training

It is imperative that staff receive appropriate and regular training as to their responsibilities with regard to:

– customer due diligence measures

– record-keeping procedures

– internal reporting procedures

– policies and procedures on internal control, risk assessment, risk management, compliance management and communications that are adequate and appropriate to prevent the carrying out of operations that may be related to money laundering or the funding of terrorism/proliferation.

– relevant regulation in each jurisdiction where a license is held; and

– the recognition, handling and monitoring of transactions which might raise suspicions of money laundering and terrorist financing, and which require further scrutiny.

Records are kept of all training given to staff together with confirmation that they have reached the necessary level of understanding and competence, as well as position-specific training level. All documentation related to AML/CTF/CPF training including materials, tests, results, attendance and date are maintained. In addition, our compliance training program is updated as necessary to reflect current laws and regulations.

10.2. Screening

Staff who are dishonest present a fraud and business risk to the Company. The Company ensures that there is in place appropriate procedures for due diligence when hiring employees.

This could include reference checks, credit record checks and other vetting measures including verification of information given during the recruitment phase, and confirmation of identity.

To summarize, employees should:

– be identified and verified.

– be screened to ensure their probity.

– receive appropriate training.

11. KNOW YOUR BUSINESS (KYB)

The Company applies KYB procedures in order to verify the identity of the vendors, suppliers and any contractors (referred to as ‘’Business Partner’’). This includes checks on background of the Business Partner, its directors and the beneficial owners (and all individuals/entities in a holding structure of the Business partner), with whom the Company contract or intend to contract.

The purposes of KYB:

• to identify the beneficial owner and take reasonable measures to verify the identity of the beneficial owner of the Business Partner. For legal persons and arrangements this should include understanding the ownership and control structure of the Business Partner;
• to conduct ongoing due diligence on the business relationship and scrutiny of transactions undertaken throughout the course of that relationship to ensure that the transactions being conducted are consistent with the Company’s knowledge of the Business Partner, their business and risk profile, including, where necessary, the source of funds.

The Company requests from each suppliers, providers and contractors with the KYB procedure:

– Company corporate ownership chart indicating all companies in the shareholding structure up to UBO/UBOs. If ownership is exercised through one or more companies, it is necessary to provide company certificates for each company up to UBO/UBOs;

– Extract from Register of equivalent document (corporate certificates) indicating directors, shareholders, registered address;

– Memorandum and Articles of Association of the company;

– Passport copies in regard to all UBOs and Directors indicated in the corporate structure;

– Utility bills or other evidence of residential address not older than 3 months in regard to all UBOs and Directors indicated in the corporate structure.

The Company reserves the right to request further documentation and information that the MLRO considers necessary to identify background of the suppliers, providers and contractors.

12. DESIGNATED MONEY LAUNDERING REPORTING OFFICER (MLRO)

The Nominated Money Laundering Reporting Officer is responsible to ensure that, when appropriate, the information or other matter leading to knowledge or suspicions, or reasonable grounds for knowledge or suspicion of money laundering is properly disclosed to the relevant authority. The MLRO will liaise with the relevant law enforcement agencies on the issues of whether to proceed with a transaction or what information may be disclosed to customers or third parties.

The MLRO acts independently.

Any member of staff that has a suspicion that a customer is engaged in money laundering/ financing of terrorism/ financing of proliferation should report the matter to MLRO whose task is to decide whether it should be reported to authorities, which can also provide guidance on how to deal with suspicious customers. These reports will be delivered via an internal form, which will be kept on record even though the MLRO decide to not take the reported activity further.

The MLRO will also be responsible for ensuring this policy is implemented and that risk assessment is regularly updated. The MLRO shall prepare regular reports covering operation and effectiveness of the Company’ policies and procedures to overcome the threat of ML/TF/PF. The MLRO should respond promptly to any reasonable requests for information made by applicable regulator or law enforcement authorities.

APPENDIX A: SUSPICIOUS TRANSACTION REPORT