POLICY ON ANTI-MONEY LAUNDERING AND COUNTER-TERRORIST FINANCING

 

Used in the company: Gearex Limited Liability Company

In order to comply with global standards on anti-money laundering and counter-terrorist financing, the company has put in place internal procedures related to customer service, risk assessment as to the customer, as well as obtaining from the customer the data necessary for analysis in accordance with AML/CFC regulations. To this end, the company complies with the national legislation of its jurisdiction, EU regulations and acts in accordance with the recommendations of the global Financial Action Task Force (FATF).

1. INTERNAL COMPANY REGULATIONS RELATED TO AML/CFC

The company has procedures in place to comply with its AML and terrorist financing obligations, including:

1. • Internal procedure against money laundering and terrorist financing;
2. • Procedure for sanctions screening and identification of politically exposed persons with a description of the process;
3. • A procedure for anonymous reporting of AML and terrorist financing violations;
4. • Procedure for monitoring transactions and reporting suspicious transactions (STR) with description of the process;
5. • Customer service documentation.

In addition, employees/co-workers receive ongoing training on AML and terrorist financing and are provided with access to relevant materials.

2. AML/CFC USE CASES IN CUSTOMER SERVICE

Pursuant to the AML/CFT Law, customer verification is carried out in the case of:

1. 1) Occasional transactions in excess of €1,000;
2. 2) Establishing business relationships;
3. 3) Existence of suspicion of money laundering or as to the veracity or completeness of the data so far obtained from the customer.

3. CUSTOMER RISK ASSESSMENT AND IDENTIFICATION OF HIGH-RISK COUNTRIES

The first step is to identify the risks of money laundering and terrorist financing and to assess these risks associated with the client.

We rely on the factors indicated in the Act with adaptation to our industry, i.e. type of client, geographical area, purpose of the account, type of products/services/distribution method, level of assets and transactions carried out, purpose of regularity and duration of the business relationship. In terms of customer risk, the customer's relationship with a high-risk country for money laundering and terrorist financing is assessed. EU policy on high-risk third countries Under Article 9 of Directive (EU) 2015/849, the Commission is required to identify high-risk third countries with strategic deficiencies in their AML/CFT systems. The aim is to protect the integrity of the EU financial system.

As part of our risk assessment, we use a scoring scale where:

1. • 0 - 16 pts Low risk;
2. • 17-26 pts Standard risk;
3. • 27 points and over High risk.

High risk = need for at least a source statement or other financial security measure or enhanced financial security measures.

4. APPLICATION OF FINANCIAL SECURITY MEASURES (CDD) AND REGULATORY OBLIGATIONS

According to the identified risk assessment, financial security measures are applied and regulatory obligations are fulfilled:

1. 1) identification of the customer and verification of his or her identity; The identification of the customer consists in determining in the case of:
   1. • an individual:
   1. (a) name and surname,
   2. (b) nationality,
   3. (c) the Universal Electronic System for Population Registration (PESEL) number and, where no PESEL number has been allocated, the date of birth and the country of birth,
   4. (d) the series and number of the person's identity document,
   5. (e) address of residence,
   6. (f) the (company) name, tax identification number (TIN) and address of the principal place of business, in the case of a natural person carrying out a business activity;
   2. • a legal person or an organisational unit without legal personality:
      1. (a) name(s),
      2. (b) organisational form,
      3. (c) the address of its registered office or place of business,
      4. (d) the TIN or, failing that, the country of registration, the name of the relevant register and the number and date of registration,
      5. (e) identification data, i.e. name and surname, and PESEL number or, where no PESEL number has been assigned, date of birth and country of birth, of the person representing that legal person or unincorporated entity.

Verification is instead carried out on the basis of the data obtained above with the relevant document (e.g. identity card, passport, residence card).

1. 2) identifying the beneficial owner and taking reasonable steps to:
   1. (a) verification of his identity,
   2. (b) the determination of ownership and control in the case of a client which is a legal person, an unincorporated entity or a trust;
   3. 
      
   4. In the case of legal persons (and entities other than natural persons), we check the data obtained in this way against the Central Register of Beneficial Owners or its equivalent at the customer's place of establishment.
   5. 
      
   6. When discrepancies are discovered between the information collected in the CRBR and the established information on the beneficial owner from the client, we note these discrepancies and take steps to clarify the reasons for the discrepancies.
   7. 
      
   8. If the recorded discrepancies are confirmed, a verified notification of these discrepancies, together with the justification and documentation of the recorded discrepancies, shall be submitted to the authority in charge of the Registry. The notification is made electronically via https://crbr.podatki.gov.pl/adcrbr/#/ under the "Report discrepancy" tab.
   9. 
      
2. 3) assessing the economic relationship and, as appropriate, obtaining information on its purpose and intended nature.
   1. If we have a business relationship with a customer, we then assess it through the prism of compliance/non-compliance. As an Obligated Institution, we provide virtual currency exchange services. Any activity that may indicate that the client, for example, uses our company to invest in platforms that offer profits every day (cryptocurrency brokers, etc.) or platforms with a high degree of risk (hand us your cryptocurrencies and we will operate them so as to pay you a profit) does not comply with our policy. Consequently, then the assessment is 'non-compliant' and we do not carry out the transaction. We therefore assess the purpose and intended nature of the relationship (e.g. the CEO makes a declaration that he is buying cryptocurrencies to pay his team bonuses in virtual currencies because that is their wish and he will do it periodically every month). We document/record the above client explanations.
3. 4) Checking that the client is not a politically exposed person or is not a family member of such a person or a close associate of such a person.
4. 5) Checking the client on sanction lists.

IN THE EVENT OF THE ESTABLISHMENT OF A BUSINESS RELATIONSHIP WITH A CLIENT, IN ADDITION TO THE ABOVE-MENTIONED DUTIES, WE ALSO MONITOR THE CLIENT'S BUSINESS RELATIONSHIP, INCLUDING:

1. a) we analyse transactions carried out in the course of a business relationship to ensure that those transactions are consistent with our knowledge of the customer, the nature and extent of the customer's business and consistent with the money laundering and terrorist financing risks associated with that customer;
2. b) we investigate the source of assets at the client's disposal - where justified by the circumstances;
3. 
   
4. c) ensure that the documents, data or information held on the business relationship are kept up to date - documenting this with a note (we do this depending on the level of risk and in accordance with the procedure low is every 3 years, standard is every 2 years, high is every year, and also when there is a change in the risk assessment of a customer or when new information about a customer is obtained, or in the case of investigative activities related to updating knowledge about a customer or in other cases when updating knowledge about a customer is required).
5. 
   
6. No less frequently than every two years, we perform an overall assessment of the company's operations, in which the risks associated with the company's operational activities are analysed.

5. CUSTOMER DATA AND CUSTOMER REFUSAL TO PROVIDE DATA

We would like to inform you that the customer's personal data in connection with the establishment of a business relationship or the carrying out of an occasional transaction are processed in connection with the company's compliance with its obligations relating to the prevention of money laundering and terrorist financing.

The company will take steps to confirm the authenticity of documents and information provided by clients. The Company will make every effort to verify identifying information through secondary sources and reserves the right to further investigate cases of clients for which it considers the documents submitted and explanations provided insufficient.

Customer's personally identifiable information will be collected, stored, shared and protected strictly in accordance with the Privacy Policy and relevant policies. The customer in the event that any information changes, ceases to be true or becomes materially misleading undertakes to notify the company of the changes.

Should the client refuse to provide the company with information or documents, the company reserves the right:

1. 1) Do not carry out an occasional transaction;
2. 2) Do not establish a business relationship;
3. 3) Dissolve business relationships if previously established.

In this case, the company will consider whether there is a basis for forwarding the notice to the relevant authorities.

6. PERSONS RESPONSIBLE FOR THE IMPLEMENTATION, APPLICATION AND ENFORCEMENT OF AML/CFC REGULATIONS

The company has designated individuals responsible for the implementation and execution of its AML and CFT obligations, by designating:

1. • senior executives responsible for carrying out the obligations set out in the AML/CFT Law.
2. • a person from among the members of the management body responsible for implementing the obligations set out in the law in the AML/CFT Act.
3. • an employee in a managerial position responsible for ensuring that the firm's activities and those of its employees and other persons performing activities for the firm comply with anti-money laundering and counter-terrorist financing laws. The designated employee is also responsible for submitting notifications to law enforcement agencies on behalf of the firm.