BOARD OF DIRECTORS DECLARATION

The Board of Directors of Prime Markets FX LTD., reg.nr: 2025-00361, reg. Address: Ground Floor, The Sotheby Building, Rodney Bay, Gros-Islet, Saint Lucia P.O. Box 838, Castries, Saint Lucia prioritizes Corporate Integrity above all else, embodying an unwavering dedication to upholding the pinnacle of ethical standards. This steadfast commitment is pivotal, not only in fostering lasting value for the organization but also in safeguarding society's unequivocal trust in the institution.

Understanding the profound importance of this pledge, the Board places high regard on the AML (Anti-Money Laundering) Policy, championing rigorous compliance with the legal framework governing the prevention of money laundering and terrorism financing as a paramount concern.

To realize this objective, the Board has instituted the 'AML Policy,' aimed at thwarting money laundering and terrorism financing. This extensive document serves as a roadmap for robust prevention and control of illicit activities, delineating precise procedures crafted to identify and report any suspicious activities associated with money laundering or funding terrorist endeavors.

For the successful execution of the AML Policy, it is crucial that all staff members and senior management are thoroughly familiar with its contents, alongside the associated procedures and regulations governing these operations. Adherence to the principles delineated in the AML Policy is obligatory for every employee of Prime Markets FX LTD.

The company treats any deviation from the guidelines and criteria outlined in the AML Policy with the utmost gravity. Instances of non-compliance will result in appropriate responsibilities and sanctions. This stance underscores Prime Markets FX LTD.'s steadfast dedication to combating money laundering and terrorist financing activities, bolstering the company's pledge to uphold the highest standards of corporate integrity. By steadfastly adhering to these principles, Prime Markets FX LTD. aims to protect its reputation, maintain stakeholder confidence, and foster a safer and more secure financial environment.

CONTEXT OF APPLICATION

The AML Policy extends to all employees and senior management within Prime Markets FX LTD., superseding any conflicting internal regulations unless they impose stricter measures. This policy exemplifies our steadfast dedication to thwarting money laundering and terrorism financing. We prioritize adherence, ethics, and the cultivation of a secure financial landscape.

MONEY LAUNDERING AND TERRORIST FINANCING

Money laundering entails the concealment of the origins of unlawfully obtained funds to lend them an appearance of legitimacy. It encompasses the funneling of proceeds from criminal endeavors such as drug trafficking, fraud, corruption, or other illicit activities through a convoluted series of financial transactions. The primary aim of money laundering is to veil the illicit source of the funds, rendering it arduous for authorities to trace back to its criminal roots. This process typically unfolds across three stages: placement (where illicit funds infiltrate the financial system), layering (where multiple transactions are executed to obscure the money's trail), and integration (where the 'cleaned' money is reintegrated into the economy).

Conversely, terrorist financing entails the provision of financial assistance or resources to enable terrorist activities, encompassing the planning, preparation, and execution of terrorist acts. The funds may originate from diverse channels, including legitimate sources, donations, criminal enterprises, or state backing. Terrorist entities leverage these funds to recruit members, train operatives, procure weaponry, and execute their nefarious agendas. Disrupting the financial sustenance of terrorist organizations is imperative in impeding their operations and safeguarding global security.

Both money laundering and terrorist financing represent substantial threats to both the global financial system and national security. Regulatory bodies, financial institutions, and law enforcement agencies collaborate globally to enforce rigorous anti-money laundering (AML) and counter-terrorist financing (CTF) protocols aimed at identifying and thwarting these illicit practices. The objective is to fortify the integrity of the financial system, uphold ethical norms, and shield societies from the detrimental impacts of money laundering and terrorist activities.

Risk Management

Managing the risks associated with money laundering and terrorist financing necessitates the implementation of thorough strategies and protocols to identify, evaluate, and mitigate these risks effectively. Financial institutions and regulatory bodies assume pivotal roles in deploying robust risk management methodologies aimed at fortifying the integrity of the financial system and mitigating the threats posed by illicit activities. Here's an outline of the risk management approaches for both money laundering and terrorist financing:

By implementing these robust risk management measures, financial institutions and regulatory bodies can markedly diminish the probability of money laundering and terrorist financing activities. An integrated and proactive approach to risk management stands as imperative for preserving the integrity of the financial system and fortifying global security. Furthermore, fostering Information Sharing and Collaboration: fosters collaboration among financial institutions, regulatory bodies, and law enforcement agencies to exchange insights on emerging threats and best practices. This synergistic approach amplifies the collective efficacy of risk management measures, facilitating a more agile and responsive defense against evolving financial crimes.

Money Laundering Process

Money laundering represents a multifaceted process aimed at concealing the illicit origins of unlawfully acquired funds, thereby rendering them seemingly legitimate. Its objective lies in obfuscating the unlawful source of the funds, thereby complicating the task for authorities attempting to track its criminal lineage. This intricate process typically unfolds across three primary phases: placement, layering, and integration.

Throughout the intricate process of money laundering, criminals exploit vulnerabilities within financial systems, regulatory gaps, and the intricate nature of global transactions to obfuscate the origins of illicit funds. To effectively counteract this illicit activity, authorities, financial institutions, and regulatory bodies deploy advanced anti-money laundering (AML) measures, robust transaction monitoring systems, and foster international collaboration to identify and thwart such nefarious schemes. By disrupting the money laundering chain, law enforcement agencies aim to sever the financial lifelines of criminal enterprises, safeguarding the integrity of the global financial ecosystem.

Risk Matrix and Methodology for Evaluating Risk

In the context of the probability-based risk matrix, we utilize a five-point scale provided to evaluate the likelihood of a risk event transpiring. This scale spans from 1 to 5, with each point denoting a distinct level of likelihood. Here's the breakdown of how the probability scale corresponds to the risk matrix:

In risk management, impact levels are commonly classified into five categories, spanning from low to high. These classifications aid in gauging the potential repercussions or severity of a risk event. Below are the five impact levels:

Insignificant (Low Impact): Risks falling into this category have minimal consequences for the organization or project. They may lead to minor disruptions or negligible financial losses, which can be easily mitigated without substantial impact on overarching operations or objectives.

Minor (Low to Medium Impact): Risks categorized as minor have the potential to result in moderate disruptions or financial losses, which can be addressed with relatively straightforward risk mitigation measures. Though they necessitate attention, they are not anticipated to inflict severe or enduring damage.

Moderate (Medium Impact): Risks falling into the moderate category pose more substantial consequences that could impact the organization's operations, finances, or reputation. Addressing these risks effectively may require a well-considered response and mitigation plan.

Major (Medium to High Impact): Risks classified as major carry significant consequences that can profoundly disrupt operations, lead to substantial financial losses, or inflict considerable damage on the organization's reputation. Immediate attention and robust risk mitigation efforts are imperative to address these risks effectively.

Severe (High Impact): Risks classified as severe entail catastrophic consequences capable of severely damaging or even jeopardizing the organization's existence. They epitomize the most critical threats and necessitate immediate and comprehensive risk management strategies to prevent or mitigate their occurrence.

By leveraging these five impact levels, organizations can adeptly assess and prioritize risks in tandem with their likelihood (probability) of occurrence. This fosters informed decision-making, optimal resource allocation, and the formulation of tailored risk management strategies to safeguard the organization's interests and bolster resilience amidst uncertainties.

REGULATORY FRAMEWORK

Prime Markets FX LTD demonstrates an unwavering commitment to upholding the highest standards of compliance by rigorously adhering to the AML/CFT laws and regulations stipulated in Saint Lucia. Our resolute dedication to compliance is driven by the recognition that any deviation from these paramount laws can lead to severe repercussions, encompassing substantial penalties, potential legal ramifications, and irreparable harm to our esteemed reputation.

Listed below are the meticulously observed laws and regulations governing company incorporation and vigilant monitoring in the esteemed jurisdiction of Saint Lucia:

KNOW YOU CUSTOMER (KYC)

5.1 Definition of Customer

In our AML (Anti-Money Laundering) Policy, comprehending and addressing the concept of "customer" is paramount. A customer, within the scope of our policy, encompasses individuals, organizations, or entities engaging in transactions with our company, be it purchasing goods, availing services, or conducting financial activities. As a financial institution dedicated to maintaining the utmost integrity and compliance standards, we view our customers as vital stakeholders, acknowledging the responsibility to ensure that our interactions with them adhere to all pertinent AML and CTF (Counter-Terrorist Financing) regulations.

5.2 Type of Customer in General

In terms of customer diversity and risk assessment, we recognize the varied nature of customers, categorizing them into different groups based on their characteristics and associated risks. These customer types may include:

• Individual Customers: These are natural persons engaging in personal transactions with our company, such as opening accounts, making purchases, or conducting financial transactions for personal purposes.
• Corporate Customers: Legal entities, including companies, businesses, partnerships, and other organizations, transacting with our company for commercial or business-related activities fall under this category.
• Politically Exposed Persons (PEPs): Individuals holding prominent public positions or positions of influence are classified as PEPs. Given their susceptibility to corruption and financial crime, we treat them as a high-risk category and implement enhanced due diligence measures.
• High-Risk Customers: Besides PEPs, certain customers or customer groups may be designated as high-risk due to factors like their geographic location, business activities, or sources of funds. These customers necessitate additional scrutiny and more robust risk management measures.
• Low-Risk Customers: Customers displaying minimal risk concerning money laundering or terrorist financing activities are categorized as low-risk. Nonetheless, we uphold standard customer due diligence procedures to ensure compliance.

5.3 Classification of Customer in Prime Markets FX LTD

At Prime Markets FX LTD, we prioritize adherence to domestic regulations and the maintenance of a robust risk management framework to effectively combat money laundering. To achieve this, we've implemented Customer Identification and Know Your Customer policies.

Within our framework, we classify our customers into two distinct groups: "Wholesale" Customers and "Retail" Customers. This categorization allows us to streamline our risk management processes while ensuring regulatory compliance.

For "Retail" Customers, we've established fewer identification requirements compared to "Wholesale" Customers. This distinction aims to facilitate a smooth onboarding process for our valued individual customers. Consequently, "Retail" Customers are not subject to the full extent of "Know Your Customer" policies.

Through this categorization, Prime Markets FX LTD optimizes its money laundering risk management efforts while efficiently managing business operations. This approach enables effective resource allocation, with heightened attention on higher-risk customer segments.

To qualify as a "Retail" customer, total transactions, including custody transfers, must not exceed the USD 30,000 threshold (or its equivalent in other currencies) within a calendar year. This threshold encompasses individual customers or smaller entities engaged in lower-value transactions, aiding in risk categorization.

Distinguishing between "Wholesale" and "Retail" customers upholds the highest standards of compliance, ethics, and security. This risk-based approach tailors AML policies to meet the unique needs of different customer segments, fostering a safer and more efficient financial environment for all stakeholders.

5.4 Customer Approval Policy

Our Customer Approval Policy delineates the criteria and procedures for onboarding new customers and forging business relationships. The policy is underpinned by the following key principles:

• Risk-Based Approach: We employ a risk-based approach to customer evaluation and acceptance, tailoring the level of due diligence to the perceived risk profile of each customer. Greater scrutiny is applied to higher-risk customers.
• Customer Due Diligence (CDD): Integral to our acceptance process is comprehensive customer due diligence. This encompasses identity verification, understanding the nature of the customer's business, and assessing the sources of their funds.
• Enhanced Due Diligence (EDD): For high-risk customers, including politically exposed persons (PEPs) and select business entities, we implement enhanced due diligence measures to delve deeper into their backgrounds and evaluate potential risks associated with the relationship.
• Ongoing Monitoring: Our policy mandates ongoing monitoring of customer relationships to promptly identify any changes in customer behavior or risk profiles throughout the course of the relationship.

Through the implementation of a robust Customer Approval Policy and adherence to defined customer categories, our company endeavors to cultivate a secure and compliant environment while nurturing positive and trusted relationships with our esteemed clientele. This customer-centric approach underscores our dedication to combating money laundering and terrorist financing activities, thereby upholding the integrity of the financial system and supporting collaborative endeavors to fortify the global business landscape.

Our customer approval policy includes the following key principles:

• Proper Identification: Customers must undergo a comprehensive identification process for acceptance. Failure to provide adequate identification will result in rejection. This pivotal step is integral to thwarting illicit activities and validating the authenticity of customer relationships.
• Blacklisted Unwanted Customers: Our company strictly prohibits the establishment of business relationships with individuals or entities listed as "Unwanted Customers." This measure serves to shield our organization from any connection with individuals or entities involved in suspicious or criminal activities
• OFAC SDN and UN Consolidated List: Customers identified on the Office of Foreign Assets Control (OFAC) Specially Designated Nationals (SDN) watch list and/or the United Nations "Consolidated List" are strictly prohibited from being accepted. This measure is implemented to mitigate risks associated with entities subject to international sanctions.
• No Anonymous or Fictitious Names: The company categorically refrains from establishing business relationships with individuals who provide anonymous or fictitious names. Complete transparency and proper identification are mandatory prerequisites for customer acceptance, ensuring transaction legitimacy and mitigating the risk of money laundering
• Legitimacy of Business and Funds: Customers whose business activities impede the verification of their legitimacy or whose funds' origins are inconsistent with their financial status will be declined. Upholding the credibility of customer businesses and funds underscores our dedication to risk management and compliance.
• Submission of Relevant Documentation: Customers are obligated to provide the requisite documentation in a timely manner and in the correct format. Non-compliance with this requirement will result in rejection. Thorough documentation is essential for validating the authenticity of customer relationships
• Suspected Criminal Activities: Customers identified, based on credible information, as suspects in criminal activities, particularly those associated with drug trafficking, terrorism, and organized crime, will be denied acceptance. This measure reaffirms our dedication to fostering a secure and compliant financial environment.

CUSTOMER RISK CLASSIFICATION POLICY

The 'Customer Risk Classification Policy' represents our organization's systematic approach to evaluating and categorizing customers according to their risk levels concerning money laundering and terrorist financing. This policy empowers us to efficiently oversee and diminish potential risks associated with our customer portfolio. Below, we provide a comprehensive breakdown of its essential elements:

• Risk Factors Assessment: Our policy encompasses a thorough evaluation of diverse risk factors linked to customers. These factors encompass geographic risk, business activity, source of funds, transaction patterns, customer profile, and any other pertinent indicators of potential risk.
• PEPs Identification: We accord special attention to Politically Exposed Persons (PEPs), individuals occupying or having held prominent public positions or positions of influence. PEPs undergo enhanced due diligence measures owing to their elevated vulnerability to corruption and financial crime.
• Risk Categorization: Customers undergo categorization into different risk levels based on the assessment of risk factors. Typically, this categorization entails three levels:
• Low Risk: This category encompasses customers with minimal risk factors and straightforward profiles.
• Medium Risk: Customers falling into this category possess moderate risk factors that may necessitate additional monitoring.
• High Risk: Customers classified as high risk exhibit significant risk factors, such as PEPs or customers originating from high-risk jurisdictions.

• Enhanced Due Diligence: Higher-risk customers, including those categorized as "Medium Risk" and "High Risk," undergo enhanced due diligence procedures. This entails thorough verification of their identity, source of funds, and business activities to mitigate associated risks effectively.
• Ongoing Monitoring: Customers across various risk categories undergo continuous monitoring to identify any alterations in their risk profiles or transaction patterns. Regular reviews ensure that risk assessments remain current and fitting.
• Resource Allocation: The policy facilitates efficient resource allocation by prioritizing greater scrutiny and attention toward higher-risk customers, while employing standard due diligence measures for low-risk customers.
• Compliance with Regulations: The risk categorization policy guarantees adherence to pertinent Anti-Money Laundering (AML) and Counter-Terrorist Financing (CTF) regulations, thereby upholding the utmost standards of integrity and compliance.
• Proactive Risk Management: Through the identification and categorization of customer risk, our organization proactively manages potential threats associated with money laundering and terrorist financing. This proactive approach fosters a secure financial environment and safeguards the interests of our organization and stakeholders.

Overall, the 'Customer Risk Classification Policy' serves as a cornerstone of our risk management framework. It equips us with the tools to make informed decisions, apply the necessary level of due diligence, and fortify our defenses against illicit activities. This policy underscores our dedication to upholding a transparent and compliant business environment while effectively mitigating risks.

6.1 Due Diligence

The documentation required from each customer is contingent upon the risk category assigned at the time of account opening.

Customers deemed low-risk by Prime Markets FX LTD will be asked to complete a registration form, providing their personal and contact details. In the event of any changes, such as a change in address or telephone number, the customer must promptly inform the company and replace the old registration form with a new one containing the updated information. Additionally, a copy of the customer’s identification must be enclosed. The company is responsible for cross-referencing against available PEP lists to ensure the new customer does not fall into this category.

Customers categorized as medium-risk are required to provide the same information as low-risk customers, along with additional supporting documentation such as a utility bill as proof of address. They are also mandated to complete a "Know Your Customer" form, detailing the source of funds, estimated annual income, estimated net assets or equity, and estimated total annual investment.

High-risk customers undergo enhanced due diligence procedures. In addition to the general procedure, a comprehensive report detailing the circumstances must be filed (refer to annexes), outlining all variables considered in creating such a profile. This report must be substantiated by relevant documentation and any sources of information elucidating the customer’s assets, financial position, and/or the source of funds.

• The business relationship must be approved by the Compliance Officer
• Additional information must be collected for certain Customer, Products or Services categories.

Customers classified under the PEPs category are mandated to adhere to these requirements consistently, as they are deemed high-risk irrespective of the total amounts transacted.

6.2 Customer Identification

The primary aim of Customer Identification is to ensure a thorough and accurate understanding of each customer's true identity. This responsibility is paramount at our organization, representing a pivotal aspect of our dedication to fostering a secure and compliant financial environment.

To accomplish this goal, all customers are required to furnish valid and dependable identity documents, including:

• I.D. (Identity Card) or Passport: These government-issued identification documents furnish crucial information about the customer's identity and are widely acknowledged as reliable verification sources.
• Driver's License: Another accepted form of identification, a valid driver's license, features a photograph that facilitates visual confirmation of the customer's identity.

It's crucial to highlight that all the aforementioned identity documents must be picture IDs, meaning they must feature a clear photograph of the customer. Furthermore, to uphold the highest standards of security and accuracy, we do not accept expired or deteriorated identity documents. Only current and well-maintained documents will be considered for the customer identification process.

Verification Against Watchlists

• OFAC List - List issued by the Office of Foreign Assets Control (OFAC), USA: http://www.treasury.gov/offices/enforcement/ofac/sdn/
• UN List - List issued by The United Nations: http://www.un.org/spanish/sc/ctc/resolutions.shtml

List of "Unwanted Customers"

The Compliance Officer at Prime Markets FX LTD will compile a list of natural and legal persons who are not wanted as customers, which shall include the following:

• Individuals or companies that have been featured in publications with ties to organized crime, money laundering, and terrorist financing.
• Customers who have been the subject of a Suspicious Transaction Report (STR), leading the Committee for the Prevention of Money Laundering and Terrorist Financing ("The Committee") to decide to include them in this list.
• Individuals or legal entities that the committee has decided not to accept.

PEPs List

This list is issued by companies offering PEPs identification services and managed by the Compliance Officer. All customers, including shareholders (in the case of closely held stock corporations), representatives (if applicable), beneficiaries, suppliers, and counterparts will undergo screening against the OFAC SDN list, the "Unwanted Customers" list, and the PEPs list.

6.3 Financial Affidavit

All Wholesale Customers and those customers deemed necessary by the Compliance Officer will be requested to furnish a Financial Affidavit, which will be included in the customer's file.

Special Circumstances: In cases where funds originate from a single specific event, such as the sale of real estate, the customer will have the opportunity to submit supporting documentation validating the source of such funds.

MONITORIBG POLICY AND SUSPICIOUS TRANSACTION REPORT

7.1 Suspicious Transactions

A suspicious transaction refers to a financial activity or transaction that arouses concerns due to its peculiar nature or characteristics. It deviates from the customer's typical behavior or the expected norms for legitimate business transactions. These transactions are identified for additional scrutiny and investigation to ascertain whether they may be associated with illegal or illicit activities.

• Unusual Nature: Suspicious transactions frequently display uncommon characteristics that significantly diverge from typical patterns observed for a specific customer or industry. These anomalies may encompass unusually large or frequent transactions, erratic transaction timing, or unexpected fluctuations in transaction volumes.
• Inconsistent with Customer Profile: Transactions that do not correspond with the customer's established behavior, risk profile, or known business activities trigger suspicion. For example, a customer recognized for making small, sporadic purchases suddenly initiating high-value international transfers would be deemed inconsistent with their profile.
• Lack of Business or Legal Purpose: Suspicious transactions often lack a clear and legitimate business rationale or legal justification. These may involve transactions where no discernible goods or services are exchanged, or transactions with parties unrelated to the customer's stated business activities.
• Possible Involvement in Illegal Activities: The occurrence of a suspicious transaction may suggest potential involvement in illegal activities, such as money laundering, wherein illicit funds are laundered to appear legitimate. It could also indicate terrorism financing, where funds are funneled to support terrorist activities.
• Fraud and Other Financial Crimes: Suspicious transactions may signal fraudulent activities, such as payment scams, identity theft, or embezzlement. Additionally, they could be associated with other financial crimes, such as tax evasion or corruption.
• Concealment and Manipulation: In certain instances, suspicious transactions may be crafted to circumvent detection thresholds or manipulate reporting requirements. These efforts aim to obscure the true nature of the transaction and may indicate illicit behavior.
• Transactions from High-Risk Jurisdictions: Transactions involving parties or entities from high-risk jurisdictions, characterized by insufficient anti-money laundering controls, may trigger suspicions.

It's essential to emphasize that labeling a transaction as suspicious doesn't automatically imply the occurrence of illegal activities. Rather, it signals the necessity for additional investigation and scrutiny to determine whether any unlawful activities are indeed involved.

7.2 Control of Suspicious Transactions

Counter-Terrorist Financing (CTF) Program, implementing stringent controls is crucial for financial institutions to swiftly identify, report, and mitigate suspicious activities, thereby fostering a secure and compliant financial landscape. Below are essential control measures for managing suspicious transactions:

• Transaction Monitoring System: Utilize sophisticated transaction monitoring systems equipped to detect abnormal or suspicious activities in real-time. These systems leverage predefined rules and algorithms to flag potential indicators, such as significant cash transactions, structuring, or sudden alterations in transaction patterns.
• Threshold Reporting: Establish transaction thresholds tailored to different customer segments or transaction types. Transactions exceeding these thresholds prompt alerts for further investigation and reporting in accordance with regulatory requirements.
• Automated Alerts and Flagging: Configure the system to automatically generate alerts for transactions meeting specific predefined criteria indicative of suspicious activities. This ensures prompt attention and follow-up by the compliance team.
• Enhanced Due Diligence (EDD): Implement EDD measures for high-risk customers, politically exposed persons (PEPs), and customers from high-risk jurisdictions. EDD entails gathering additional information and conducting in-depth analysis to comprehend the nature and purpose of their transactions.
• Suspicious Transaction Reporting (STR): Establish a structured procedure for submitting Suspicious Transaction Reports (STRs) to relevant financial intelligence units or authorities. These reports furnish comprehensive details about the suspicious activity, enabling authorities to conduct further investigations.
• Compliance Oversight: Appoint a dedicated AML compliance officer tasked with supervising the management of suspicious transactions. This officer should ensure compliance with AML policies, monitor alerts from transaction monitoring systems, and facilitate reporting when necessary.
• Training and Awareness: Conduct regular training programs to educate employees on identifying and reporting suspicious transactions effectively. These awareness sessions aid in fostering a culture of compliance and vigilance throughout the organization.
• Internal Investigation Procedures: Develop robust internal investigation procedures to promptly evaluate suspicious transactions. Investigations should be conducted discreetly, with meticulous records maintained.
• Customer Due Diligence (CDD): Perform comprehensive CDD on all customers during the onboarding process. Ensure regular updates to customer information and validate the accuracy of data to facilitate the detection of anomalies.
• Record-Keeping and Documentation: Maintain detailed records of all transactions and supporting documentation pertaining to suspicious activities. Thorough documentation is vital for regulatory compliance and potential law enforcement inquiries.

7.3 Red Flag

In the realm of financial transactions and risk management, a "red flag" denotes a warning sign or indicator indicating the possible existence of suspicious or abnormal activity. Red flags play a crucial role in identifying potential risks associated with money laundering, terrorist financing, fraud, or other illicit activities. They trigger additional investigation and due diligence to uphold compliance with anti-money laundering (AML) and counter-terrorist financing (CTF) regulations. Some common red flags include:

• Large Cash Transactions: Unusually substantial cash deposits, withdrawals, or transfers that deviate from the customer's usual transaction behavior may raise suspicion.
• Frequent Structuring: Deliberate transactions aimed at circumventing reporting thresholds by dividing substantial amounts into smaller, less conspicuous sums.
• Rapid Movement of Funds: Abrupt and recurrent transfer of funds across numerous accounts or jurisdictions without evident business rationale.
• High-Risk Jurisdictions: Transactions involving parties or entities from jurisdictions characterized by inadequate AML controls or a reputation for financial crime.
• Politically Exposed Persons (PEPs): Engaging in business relationships with individuals occupying prominent public positions or positions of influence, as they pose higher risk due to potential corruption vulnerabilities.
• Incomplete or Inconsistent Information: Transactions where provided customer information is lacking, contradictory, or challenging to authenticate.
• Unusual Business Activities: Transactions not aligned with the customer's stated business activities or lacking clear commercial intent.
• Unexplained Third-Party Payments: Transactions involving third parties unrelated to the customer's business or lacking a transparent rationale.
• Geographic Anomalies: Transactions with counterparties situated in jurisdictions recognized for tax havens or lax financial regulations.
• Anonymous or Nominee Transactions: Transactions encompassing anonymous or nominee arrangements aimed at concealing the true beneficiary or owner.
• Unusual Customer Behavior: Aberrant customer conduct, such as reluctance to furnish required information or displaying undue apprehension regarding transaction monitoring.
• Uncommon Products or Services: Transactions involving high-risk products or services, including shell companies, prepaid cards, or virtual currencies.

7.4 Suspicious Transactions Report (STR)

A Suspicious Transaction Report (STR) holds significant importance within the realm of anti-money laundering (AML) and counter-terrorist financing (CTF) endeavors. Serving as a pivotal document, it aids in identifying and reporting potentially illicit financial activities to the pertinent regulatory authorities. The primary objective of an STR is to notify authorities of suspicious transactions, thereby empowering them to initiate further investigations and implement appropriate measures to combat financial crime. Below are the key components of a Suspicious Transaction Report (STR):

Purpose:

The primary objective of an STR is to report any financial transaction or activity that arouses suspicion of being associated with money laundering, terrorism financing, fraud, or other illicit activities. It serves as a mechanism to identify and thwart financial crimes, safeguarding the integrity of the financial system.

Detection and Identification:

An STR is generated when an individual or entity within a financial institution detects a transaction or activity displaying red flags or indicators of potential suspicious behavior. These red flags may encompass large and unexplained cash transactions, frequent structuring, transactions involving high-risk jurisdictions, or other aberrant patterns.

Content and Information:

The report usually comprises comprehensive details regarding the suspicious transaction or activity, including the customer's name, account number, transaction date, and amount. It also incorporates a narrative elucidating the nature of the suspicious activity and the rationale behind deeming it as such.

Supporting Documentation:

Alongside the narrative description, the STR may encompass supporting documentation like transaction records, customer identification documents, correspondences, and any other pertinent information validating the suspicious nature of the activity.

Filing and Submission:

Following the identification of the suspicious transaction and the preparation of the STR, it is promptly lodged with the pertinent regulatory authority. The procedural requirements for submitting an STR may differ based on the jurisdiction and the particular obligations of the financial institution.

Confidentiality:

The details contained within an STR are handled with the utmost confidentiality. They are safeguarded under pertinent data protection and privacy regulations to prevent the disclosure of sensitive information pertaining to the financial institution, the customer, or the investigation to unauthorized individuals.

Impact and Follow-up:

Upon receipt of an STR, regulatory authorities commence investigations to evaluate the legitimacy of the reported suspicious activity. Depending on the findings, they may undertake enforcement measures such as asset freezing, legal proceedings initiation, or imposition of penalties if illegal activities are substantiated.

Compliance Obligation:

Financial institutions bear a legal and ethical responsibility to report suspicious transactions and collaborate with authorities in combatting financial crime. Neglecting to report suspicious activities can result in severe repercussions, including regulatory penalties and damage to reputation.

7.5 Record Keeping

At our Company, we prioritize stringent adherence to regulatory mandates and maintain the utmost standards of data integrity and security. To foster transparency and enable collaboration with regulatory bodies or judicial authorities, it is imperative to meticulously retain the following information for the designated durations:

Documentation for Identification and Know Your Customer (KYC) Policies:

We will securely preserve all documentation gathered during the customer onboarding process, essential for adhering to our Identification and KYC policies. This encompasses customer identification documents, transactional records, and any supplementary information utilized to authenticate the customer's identity. The retention period for this information will be a minimum of 7 years after the relationship with the customer has ended. This allows us to respond promptly to any requests from regulatory bodies or judicial authorities and maintain a comprehensive historical record of customer interactions.

Original Documentation or Certified Copies of Transactions:

For the sake of ensuring comprehensive transparency and accountability, we will securely store either the original documentation or certified copies of all completed transactions or operations.

These transactional records will be maintained for a minimum of 7 years from the date of execution. This timeframe allows us to effectively reconstruct transactional histories and handle any potential inquiries or investigations with precision and efficiency.

Unusual Operations Reports and Supporting Documentation:

As part of our dedication to combatting financial crime, we will retain all Unusual Operations Reports (UORs) and their accompanying documentation.

The retention period for both UORs and supporting documents will extend to 7 years from the date of issuance. This timeframe allows us to furnish comprehensive records of reported suspicious activities and maintain compliance with regulatory reporting requirements.

Suspicious Transactions Reports (STRs) and Supporting Documentation:

Recognizing the pivotal role of STRs in identifying and reporting suspicious activities, we approach the responsibility of filing and retaining them with utmost seriousness.

Every issued STR, along with its supporting documentation, will be retained for a minimum of 7 years from the report's date. This commitment enables us to provide comprehensive information to regulatory authorities as needed and maintain a robust audit trail of reported suspicious transactions.

Our data retention policy aligns with industry best practices, ensuring secure storage and easy accessibility of information when required. Upholding the significance of data privacy and protection, all retained information will be subject to stringent confidentiality and safeguarding measures.

7.6 Confidentiality

To uphold our commitment to maintaining confidentiality, we will ensure the following:

Non-Disclosure Prohibition:

Authorities and staff are strictly prohibited from disclosing any information sent to or requested from the Financial Intelligence Unit (UIAF) to any involved or third party.

Confidentiality of Actions:

All actions pertaining to money laundering prevention, including the filing of Suspicious Transaction Reports (STRs), shall be treated with the utmost confidentiality.

Exclusion from Customer Files:

To preserve the confidentiality of suspicious transaction information, STRs will not be retained within customer files.

Compliance Oversight:

Confidentiality protocols will be rigorously enforced by the Compliance Officer to ensure adherence to the policy.

Disciplinary Measures:

Non-compliance will result in stringent disciplinary actions, potentially including criminal sanctions. We emphasize the importance of confidentiality in maintaining trust, regulatory compliance, and safeguarding our customers' interests.

KNOW YOUR EMPLOYEE POLICY (KYE Policy)

Implementation:

Our KYE policy encompasses a meticulous onboarding procedure for all employees, wherein we gather extensive information to authenticate their identity and suitability for the position. Employees must furnish precise self-declarations concerning their qualifications, experience, and any potential conflicts of interest. We validate the educational credentials and professional background of our employees to verify the accuracy of the information provided during the recruitment phase. Regular audits and revisions of employee data are conducted to ensure the currency and precision of our records. Furthermore, employees undergo training on the significance of compliance, ethical conduct, and adherence to the KYE policy.

Performance Evaluation and Rewards:

Adherence to the KYE policy and other pertinent policies serves as a crucial metric in assessing employee performance. Employees who consistently exhibit ethical conduct, compliance, and a dedication to the KYE policy are acknowledged and rewarded for their constructive contributions. Additionally, we foster an environment where employees are encouraged to actively advocate for compliance and report any suspicious activities. Incentives and recognition are provided to incentivize and acknowledge their diligence and vigilance in this regard.

Disciplinary Measures:

Any breach of the KYE policy, such as the provision of false information or the concealment of pertinent details, will be swiftly addressed. In instances of suspected violations, an internal inquiry will be initiated to gather facts and evaluate the circumstance. Depending on the gravity of the breach, suitable corrective measures will be implemented, which could encompass counseling, further training, suspension, or termination, in accordance with our progressive disciplinary approach. We prioritize safeguarding whistleblowers from retaliation when they report violations in good faith.

Our KYE policy underscores our dedication to fostering a work environment that prioritizes compliance, ethics, and accountability. Through the implementation of robust measures, acknowledgment of positive conduct, and swift resolution of violations, we cultivate a culture built on trust and integrity among our employees, clients, and stakeholders.

STAFF TRAINING POLICY

Our staff training serves as a cornerstone in the development of a highly skilled and compliant workforce. Led by our experienced Compliance Officer, these comprehensive sessions provide our employees with essential knowledge and skills. Throughout the training, employees acquire a profound understanding of our policies, legal obligations, and regulatory requirements. They become proficient in identifying and addressing potential risks, particularly those associated with financial crimes such as money laundering and fraud. Our Compliance Officer ensures that employees are adept at recognizing suspicious activities and are familiar with the proper procedures for reporting them promptly, including filing Suspicious Transaction Reports (STRs) or Unusual Operations Reports (UORs).

Emphasis is placed on data privacy, confidentiality, and customer due diligence to safeguard sensitive information and ensure adherence to regulations. Through role-play exercises and real-life case studies, employees are empowered to apply their knowledge effectively in practical scenarios. Regular refresher sessions and timely updates keep our workforce informed and prepared to uphold our commitment to integrity, ethics, and compliance. Through robust staff training investments, we cultivate a proactive and vigilant team that fosters trust among our stakeholders and maintains our reputation as a responsible organization within the industry.

ORGANIZATIONAL STRUCTURE

Our proposed Committee for the Prevention of Money Laundering and Terrorist Financing (CPMLTF) comprises the following key members:

• Chief Compliance Officer (CCO): The head of the CPMLTF, responsible for developing AML and CTF policies and ensuring overall compliance oversight.
• Director or Executive Management Representative: Offers strategic guidance and demonstrates the organization's dedication to AML and CTF initiatives.
• Head of Compliance or Risk Management: Oversees the risk management framework and ensures the effective mitigation of AML and CTF risks.
• Head of Legal Department: Provides legal expertise and guidance on regulatory compliance and potential legal ramifications.
• Head of Anti-Money Laundering (AML) Unit (where applicable) / Compliance Officer: Implements AML measures, conducts investigations, and prepares suspicious activity reports.

The CPMLTF functions as a unified team, collaborating to combat financial crimes, uphold compliance, and safeguard the company's reputation and stakeholders.

Our Compliance Officer serves as a linchpin within the Committee for the Prevention of Money Laundering and Terrorist Financing (CPMLTF). They bear the responsibility of spearheading our organization's endeavors to combat financial crimes and uphold strict adherence to anti-money laundering (AML) and counter-terrorist financing (CTF) regulations. With their expertise, commitment, and proactive approach, our Compliance Officer ensures that our company fosters a robust compliance culture and maintains the highest standards of integrity and ethics across all financial endeavors.

INDEPENDENT AUDITS

Independent audits constitute a vital component of our dedication to combating financial crimes and ensuring the effectiveness of our anti-money laundering (AML) and counter-terrorist financing (CTF) measures. These audits are carried out by external, impartial entities possessing expertise in AML and CTF compliance. Their objective is to evaluate our organization's compliance with regulatory standards and the efficacy of our risk management framework.

Independent audits offer us invaluable insights into our compliance endeavors, allowing us to pinpoint areas of proficiency and areas for enhancement. These audits furnish an objective assessment of our anti-money laundering (AML) and counter-terrorist financing (CTF) policies, procedures, and controls, ensuring their alignment with both domestic and international regulations.

The observations and suggestions stemming from these audits inform our ongoing endeavors to fortify our defenses against money laundering and terrorist financing schemes. They serve as tangible evidence of our dedication to transparency, accountability, and diligence in shielding our company and stakeholders from the detrimental consequences of financial crimes.

Teaming up with reputable audit firms underscores our steadfast commitment to upholding a compliant and ethically driven organizational ethos. Insights gleaned from independent audits empower us to make well-informed decisions, strengthen our compliance initiatives, and cultivate trust among our clientele, collaborators, and regulatory bodies.