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ANTI-MONEY LAUNDERING AND COUNTER-TERRORIST FINANCING POLICY OF SVITSOFT EUROPE OÜ

INTRODUCTION

Svitsoft Europe OÜ (hereinafter - the “Company”, “We”, “Us”) is committed to conducting business in accordance with all applicable laws and regulations aimed at combating money laundering and terrorist financing. Money laundering is defined as the process by which the origin of the proceeds of crime is disguised in such a way as to give the impression of legitimate income. Criminals deliberately target financial services businesses or other organisations to launder illicit proceeds without the knowledge or suspicion of those firms or organisations.

Svitsoft Europe OÜ is not a virtual currency exchange service provider for fiat currency or a virtual currency wallet service provider or other obligated person under the Money Laundering and Terrorist Financing Prevention Act. Nevertheless, our Company is committed to adhering to the best corporate practices and strives to prevent money laundering and terrorist financing by implementing AML/CFT standards.

We deeply understand the paramount importance of maintaining a robust Anti-Money Laundering (“AML”) and Counter-Terrorist Financing (“CFT”) Policy (“Policy” or “AML/CFT Policy”) that serves as an impenetrable mechanism to protect our operations, preserve our reputation and mitigate the risks associated with financial crime. Recognizing the global trend towards stricter controls in the financial services sector and the importance of preventing financial crimes, we have voluntarily decided to implement internal AML/CFT policies and procedures.

The Company created this Policy to decrease the risk of money laundering and terrorist financing associated with its business and the sale of its products. This Policy emphasizes our individual obligation to adhere to AML and CFT legislation (and also with international legislation, such as European Union Directives etc).

This Policy shall be brought to the attention of all employees of the Company who manage, monitor or control the operations of Clients and are responsible for the application of methods, measures, procedures and controls specified in this Policy. Any employee who violates the rules of this Policy or allows anyone to violate these rules may be subject to appropriate disciplinary measures, up to and including dismissal, and may also be subject to personal civil or criminal penalties. This Policy also applies to all third parties with whom the Company may do business, as well as to consultants, contractors or others acting on behalf of or on behalf of the Company.

The AML requirements and Know Your Customer (“KYC”) due diligence measures are set out in the Estonian Money Laundering and Terrorist Financing Act (“Act”) and other Estonian legislation.

The Company regularly checks the relevance of the Policy and makes the necessary changes in case of amendments to the applicable regulations.

By steadfastly adhering to the guiding principles outlined in this AML/CTF Policy, we resolutely demonstrate our unwavering commitment to transparency, integrity, and regulatory compliance. This comprehensive Policy stands as a testament to our ongoing and relentless efforts to cultivate a culture of compliance within our esteemed Company.

1. COMPLIANCE OFFICER

1.1. The Company appoints a Compliance Officer. If a Compliance Officer has not been appointed, the CEO of the company performs the Compliance Officer’s duties.

1.2. The duties of a Compliance Officer include:

  • 1.2.1. To monitor and assess the correct and effective implementation of this Policy, the practices, measures, procedures and controls, and in general the implementation of the Policy;
  • 1.2.2. Review this Policy and update it periodically as may be necessary;
  • 1.2.3. Ensure the implementation of this Policy throughout the Company;
  • 1.2.4. To receive information from the Company’s employees which are considered to be knowledge or suspicion of money laundering or terrorist financing activities or might be related to such activities and take further actions as per the Policy;
  • 1.2.5. Notify the competent authority in case of suspicion of money laundering or terrorist financing;
  • 1.2.6. To organize the collection and analysis of information referring to unusual transactions or transactions or circumstances suspected of money laundering or terrorist financing.

1.3. If the Compliance Officer identifies shortcomings and/or weaknesses in the application of the required practices, measures, procedures and controls, he gives appropriate guidance for corrective measures and where deemed necessary informs the CEO of the Company.

2. DUE DILIGENCE MEASURES

2.1. The Company may carry out due diligence measures against individuals and legal entities:

  • 2.1.1. Upon establishment of a business relationship;

    Business relationship - means the Company's relations with other parties, the main purpose of which is to facilitate the episodic or regular course of business relations between them.

    The Company considers the following to be business relationships:

    • investing in a token (if the Company determines that it would like to give away its utility tokens.);
    • establishing partnerships with third-party counterparties (for example, crypto exchanges).
  • 2.1.2. If the Company's employees reasonably suspect the Users of violating the AML legislation, i.e., using the Company's services for money laundering or terrorist financing.
  • 2.1.3. Users, when using the Company Services, make transactions in an amount equal to or exceeding EUR 15,000 or in any other asset.

2.2. The Company applies the following due diligence measures:

  • 2.2.1. Identification of a customer or a person participating in an occasional transaction and verification of the submitted information based on information obtained from a reliable and independent source, including using means of electronic identification and trust services for electronic transactions;
  • 2.2.2. Identification and verification of a representative of a customer or person participating in an occasional transaction and their right of representation;
  • 2.2.3. Identification of the beneficial owner and, for the purpose of verifying their identity, taking measures to the extent that allows the obliged entity to make certain that it knows who the beneficial owner is, and understands the ownership and control structure of the customer or of the person participating in an occasional transaction;
  • 2.2.4. Understanding of business relationships, an occasional transaction or operation and, where relevant, gathering information thereon;
  • 2.2.5. Gathering information on whether a person is a politically exposed person, their family member or a person known to be their close associate;
  • 2.2.6. Monitoring of a business relationship.

2.3. Various factors will determine the appropriate forms and levels of screening. The Company shall perform the KYC procedure for every Customer (natural or legal entity), Representative of the Customer (an individual who is authorized to act on behalf of the Customer), Beneficial Owner of the Customer and Politically Exposed Person (“PEP”) or a person connected with the PEP.

2.4. During the KYC procedure, every Customer must provide the Company with personal information and documents, which the Company needs to establish a portfolio of the Customer and access the risk (for more detailed risk description see Section 3 of the Policy), connected to it (see Table #1).

2.5. The Company may use any third-party services and software for KYC/KYB verification, such as Sum And Substance Ltd (SumSub) and Chainalysis or any other appropriate software.

2.6. The Company can independently verify the forms filled out during KYC through its employees.

2.7. If the token is traded on the secondary market, the service provider organising such trading is responsible for verifying its customers. In this case, the Company does not bear any legal responsibility related to the risks of money laundering and terrorist financing for trading that takes place on the second market.

2.8. The Company obtains all information necessary to establish to its full satisfaction the identity of each new Customer and the purpose and intended nature of the business relationship. The extent and nature of the information depends on the type of applicant (personal, corporate, etc.). Therefore, the Company has categorized the Customers (and personal information) as follows:

Table #1
Natural PersonLegal Entity

Low Risk

The Company shall obtain the following information:

  • The person’s name;
  • Their personal identification code or, where the person does not possess one, their date of birth and the place of residence or location;
  • Information concerning recognition and verification of the right of representation and scope thereof and, where the right of representation does not arise from law, the name of the document serving as the basis for that right, its date of issue, and the name of the issuer;
  • Particulars of the person’s means of telecommunication.

The Company identifies a natural person based on the following documents:

  • A document specified in subsection 2 of § 2 of the Identity Documents Act;
  • A valid travel document issued in a foreign country;
  • A driving license that meets the requirements provided for in subsection 1 of § 4 of the Identity Documents Act.

Documents acceptable and provided by the Customers must be provided preferably in color, a copy must be clearly readable, the full document must be visible.

The Company shall obtain the following information:

  • The name or business name of the legal person;
  • The registry code or registration number and the date of registration;
  • The names of the director, members of the management board or other body replacing the management board, and their authorization in representing the legal person;
  • The details of the telecommunications of the legal person;
  • The registry card of the relevant register;
  • The registration certificate of the relevant register, or a document equal to the document specified above;
  • The full addresses of the registered office and the head offices;
  • The individuals that are duly authorized to operate the account and to act on behalf of the legal person;
  • The beneficial owners of private companies and public companies that are not listed in a Regulated Market of an EEA country or a third country with equivalent disclosure and transparency requirements;
  • The registered shareholders that act as nominees of the beneficial owners;
  • The economic profile of the legal person;
  • Certificate of incorporation and certificate of good standing (where available).

Normal Risk

The Company may request the following additional information to the KYC Low Risk Customers:

  • About the Customer identification;
  • About the planned substance of the business relationship;
  • About the origin of the funds and wealth of the Customer and its beneficial owner;
  • About the underlying reasons for planned or executed transactions;
  • Any other information in order to assist the Company in deciding whether to establish or continue a business relationship;
  • A Customer's name in a credit institution of a contracting state of the EEA or in a third country that implements requirements equal to those of Directive (EU) 2015/849 of the European Parliament and of the Council.

The Company may request the following additional information:

  • About the Customer and its beneficial owner;
  • About the planned substance of the business relationship;
  • About the origin of the funds and wealth of the Customer and its beneficial owner;
  • About the underlying reasons of planned or executed transactions;
  • Any other information in order to assist the Company in deciding whether to establish or continue a business relationship.

When an account has been opened, but problems of verification arise in the service relationship that cannot be resolved, the Company can close the account and return the money to the source from which it was received.

High Risk

For the High-Risk Customers, the Company ensures to gather the documents that are requested from Low and Normal risk Customers, however they shall be in a certified true copy form or provide other additional documents, as the Company may see fit and reasonable.

The Company shall request, depending on the circumstances and risk profile of the Customer, additional documents and:

  • An autoportrait (“Selfie picture”);
  • Phone call;
  • Video call;
  • Proofs of the source of funds;
  • supportive documents, notarization KYC documents, and apostilled documents.

The Company may demand that a customer make a payment from an account held in the credit or financial institution of the EU.

As an additional CDD measure, on a risk-sensitive basis, the Company shall carry out (when deemed necessary) a search and obtain information from the records of the Registrar of Companies and/or any other relevant competent authority in the legal entity’s country of incorporation and/or request information from other sources in order to establish that the applicant company (legal person) is not, nor is in the process of being dissolved or liquidated or struck off from the registry of the Registrar of Companies and Official Receiver and that it continues to be registered as an operating company in the records of the appropriate authority of incorporation.

The Company shall request, depending on the circumstances and risk profile of the Customer, additional documents and:

  • An autoportrait (“Selfie picture”);
  • Video/phone call with the appointed/authorized person;
  • Proofs of the source of funds;
  • Supportive documents, notarization of KYC documents of individuals, and even apostilled documents.

3. RISK LEVELS AND CATEGORIES

3.1. The following Table #2 divides the type of risks into three levels:

Table #2
RISK LEVELRISK DESCRIPTION
Normal
  • These are the Customers who do not fall under the “High Risk” or “Extra High Risk” Customers.
High
  • The Customer is from a high-risk country;
  • The Customer is a local PEP or a person associated with a PEP;
  • The legal person’s area of activity is associated with enhanced money-laundering risk;
  • The legal person is situated in a country, which is listed in the list of risk countries;
  • The legal person's activities and liability are insufficiently regulated by law, and the legality of financing which is not easy to screen;
  • The representative or the Beneficial Owner/Shareholder of a legal person is a local PEP or his/her family member.
Extra High
  • The Customer is suspected to be or to have been linked with a financial offence or other suspicious activities;
  • The Customer is a non-resident individual, whose place of residence or activities is in a country, which is listed in the list of risk countries;
  • The representative or the Beneficial Owner/Shareholders of a legal person is a PEP or his or her family member;
  • There is information that a legal person is suspected to be or to have been linked with a financial offence or other suspicious activities;
  • A legal person registered outside the EEA, whose field of business is associated with a high risk of money laundering, or registered in a low tax rate country.

3.2. The following Table #3, Table #4 and clause 3.3 divide risk categories into risk by Customers, by countries and by transactions:

Table #3
Suspicious FactsPolitically Exposed Persons
Risk by Customers
  • Discrepancies in provided ID documents;
  • Fictitious person;
  • Stolen identity;
  • Counterfeited ID document;
  • Previous financial crime record;
  • Terrorist record;
  • Wanted person;
  • No contact phone number;
  • Not valid documents;
  • Discrepancies in provided documents for the legal person, etc.

Those who perform prominent public functions:

  • Head of state;
  • Head of government;
  • Minister and deputy or assistant minister;
  • A member of parliament or of a similar legislative body;
  • A member of a governing body of a political party;
  • A member of a supreme court, a member of a court of auditors or of the board of a central bank;
  • An ambassador, a chargé d’affaires, and a high-ranking officer in the armed forces;
  • A member of an administrative, management, or supervisory body of a state-owned enterprise;
  • A director, deputy director, and member of the board or equivalent function of an international organisation, except middle-ranking or more junior officials.
Table #4: High-Risk and Prohibited Jurisdictions

High-Risk Jurisdictions

(Countries identified by the European Commission and under increased monitoring identified by the FATF)

Prohibited Jurisdictions

(Sanctioned Countries under (UN/EU) and High-Risk Jurisdictions identified by FATF)

Risk by countries
  • Barbados
  • Bulgaria
  • Burkina Faso
  • Cameroon
  • Cayman Islands
  • Croatia
  • Gibraltar
  • Jamaica
  • Jordan
  • Kenya
  • Mozambique
  • Namibia
  • Nigeria
  • Panama
  • Philippines
  • Senegal
  • South Africa
  • Tanzania
  • Trinidad and Tobago
  • Turkey
  • Uganda
  • Vanuatu
  • Vietnam
Other:
  • Algeria
  • Angola
  • Benin
  • East Timor (Timor-Leste)
  • Ethiopia
  • Eswatini
  • Federal State of Micronesia
  • India
  • Kiribati
  • Laos
  • Lesotho
  • Morocco
  • Montenegro
  • Oman
  • Papua New Guinea
  • Paraguay
  • Saint Lucia
  • Togo
  • Afghanistan
  • Belarus
  • Bosnia and Herzegovina
  • Burundi
  • Central African Republic
  • China
  • Democratic Republic of the Congo
  • Guatemala
  • Guinea
  • Guinea-Bissau
  • Haiti
  • Iran
  • Iraq
  • Lebanon
  • Libya
  • Mali
  • Moldova
  • Montenegro
  • Myanmar (Burma)
  • Nicaragua
  • Niger
  • North Korea (DPRK)
  • Russia
  • Serbia
  • Somalia
  • South Sudan
  • Sudan
  • Syria
  • Tunisia
  • Venezuela
  • Yemen
  • Zimbabwe
Other:
  • Abkhazia
  • Cambodia
  • Crimea (region of Ukraine)
  • Donetsk (region of Ukraine)
  • Federal Republic of Ambazonia
  • Gabon
  • Honduras
  • Kosovo
  • Luhansk (region of Ukraine)
  • Pakistan
  • South Ossetia
  • Tajikistan
  • Transnistria
  • Turkmenistan

3.3. The Company shall inspect any outstanding transaction (Section 5 - detection of suspicious transactions), which includes but is not limited to the:

  • 3.3.1. large transactions that do not correspond to the Customer’s source of funds and/or source of wealth;
  • 3.3.2. executing payment via non-licensed payment institutions etc.

4. NOT ACCEPTABLE CUSTOMERS

4.1. The following list predetermines the type of Customers who are not acceptable for establishing a business relationship or an execution of an occasional transaction with the Company:

  • 4.1.1. shell banks;
  • 4.1.2. Customers from the jurisdictions that are being banned by internal policies from the company or international sanctions;
  • 4.1.3. Customers who were identified as the persons subject to International Sanction Act;
  • 4.1.4. EU Sanctions;
  • 4.1.5. sanctions administered by the Office of Financial Sanctions Implementation (“OFSI-UK”), Sanctions administered by the Office of Foreign Assets Control (“OFAC-US”);
  • 4.1.6. Customers who were identified as the persons subject to the UN Sanctions;
  • 4.1.7. The Company suspects money laundering or terrorist financing;
  • 4.1.8. any other that the Company considers risky to its business or suspicious in regards to money laundering and terrorist financing;
  • 4.1.9. the Company is prohibited from establishing a business relationship or making a transaction with a person whose capital consists of bearer shares or other bearer securities to the extent of more than 10 percent.

4.2. The Company will not accept as Сustomers, persons or entitled from Prohibited jurisdictions (Table # 4) and other countries and jurisdictions, where these services can not be provided by legislation countries.

4.3. Persons or entities from jurisdictions where a particular license or permit is required will not be accepted as Customers if the Company has not received such a permit or license.

5. SUSPICIOUS TRANSACTIONS AND TRANSACTIONS WITH PEPs

5.1. Where the Company identifies an activity or facts whose characteristics refer to the use of criminal proceeds or terrorist financing or to the commission of related offences or an attempt thereof or with regard to which the obliged entity suspects or knows that it constitutes money laundering or terrorist financing or the commission of related offences (the “suspicious transaction”), the Company will report such case to the competent authority immediately, but not later than within two working days.

5.2. A suspicious transaction will often be one that is inconsistent with a Customer's known, legitimate business or personal activities or with the normal business of the specific account.

5.3. In a situation where a person participating in a transaction made in economic or professional activities, a person participating in a professional act, a person using a professional service, a Customer or their beneficial owner is a politically exposed person, a family member of a politically exposed person or a person known to be a close associate of a politically exposed person, the Company applies the following due diligence measures in addition to the due diligence measures provided for in subsection 1 of § 20 of the Act:

  • 5.3.1. obtains approval from the senior management to establish or continue a business relationship with the person;
  • 5.3.2. applies measures to establish the origin of the wealth of the person and the sources of the funds that are used in the business relationship or upon making occasional transactions;
  • 5.3.3. monitors the business relationship in an enhanced manner.

5.4. Where a politically exposed person no longer performs important public functions placed upon them, the Company must at least within 12 months take into account the risks that remain related to the person and apply relevant and risk sensitivity-based measures as long as it is certain that the risks characteristic of politically exposed persons no longer exist in the case of the person.

6. REPORTING TO COMPETENT AUTHORITIES

6.1. If upon performance of economic or professional activities or professional operations or provision of professional services, the Company identifies an activity or circumstances which might be an indication of money laundering or terrorist financing or an attempt thereof or in the event of which the Company has reason to suspect or knows that it is money laundering or terrorist financing, the Company shall immediately, but not later than within two working days from identifying the act or circumstances or from the rise of the suspicion, notify the competent authority.

6.2. If as a result of the application of due diligence measures the Company identifies a subject of the financial sanction or that the transaction or act which is planned or carried out by them violates financial sanctions, or if additional information obtained upon application of due diligence measures does not enable to identify it, as well as in the case of the suspicion of violation of financial sanctions, the Company shall inform the competent authority.

6.3. The Company will not inform the person, its beneficial owner, representative or third party about a report submitted on them to the competent authority, a plan to submit such a report or the occurrence of reporting as well as about a precept made by the competent authority or about the commencement of criminal proceedings. After a precept made by the competent authority has been complied with, the Company may inform a person that the competent authority has restricted the use of the person’s account or that another restriction has been imposed.

7. RELIEF FROM LIABILITY

7.1. The Company, its employee, representative or a person who acted in its name shall not, upon performance of the obligations arising from the money laundering and terrorist financing prevention laws, be liable for damage arising from failure to enter into a transaction or failure to enter into a transaction by the due date if the damage was caused to the person participating in the transaction made in economic or professional activities in connection with notification of the competent authority of the suspicion of money laundering or terrorist financing in good faith, or for damage caused to a Customer or a person participating in a transaction entered into in economic or professional activities in connection with cancellation of a contract entered into for an indefinite period.

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