Financial Crime Compliance Statement

1.  Introduction

EXMO Group of companies (hereafter, EXMO) recognises the adverse effect of financial crimes and is committed to conducting its activities with integrity, respecting its regulatory, ethical and social responsibilities to:

• protect customers, staff (permanent and contractors), and others with whom we do business; and
• support governments, regulators, and law enforcement in wider economic crime prevention.

EXMO will not tolerate any deliberate breach of financial crime laws and regulations (e.g. bribery, corruption, money laundering & terrorist financing, sanctions, tax evasion or market abuse) that apply to our business activity.

EXMO has a dedicated global Financial Crime function, which sits within Compliance. The Financial Crime function facilitates effective and efficient financial crime risk management by providing expert support and oversight to the business in the jurisdictions of operations.

2.  Governance

Chief Compliance Officer (CCO) is responsible for group-wide adherence to applicable AML and Financial Crime regulations and obligations in the jurisdictions of operations. In addition, CCO is responsible for establishing and maintaining AML program to identify, assess, monitor and manage risks related to Money Laundering, Terrorist Financing and other financial crime related matters.

CCO is supported by MLROs of relevant jurisdictions who have overall responsibility for establishing and maintaining effective financial crime controls and perform day-to-day AML related duties.

3.  Policies and Procedures

EXMO’s Financial Crime Compliance policy framework covers six key risk areas:

• anti-money laundering & counter-terrorist financing (AML&CTF);
• sanctions
• anti-bribery & corruption (ABC);
• anti-tax evasion (ATEF);
• fraud and
• market abuse,

Our holistic approach to financial crime allows us to identify and manage relevant synergies and connections between the key risk areas.

All policies and procedures are accessible by all staff at any time. In addition, all policies are:

• designed to ensure that all employees, businesses and legal entities comply with extra-territorial obligations and relevant regulations applicable in jurisdictions of EXMO operations;
• approved by the Board of Directors and applicable to all entities within EXMO group;
• are subject to an annual review cycle to ensure their effectiveness, which provides senior executive management with the necessary assurance regarding the financial crime control framework.

4.  Mitigation and Management of Financial Crime Risks

EXMO has developed and implemented a comprehensive set of measures to mitigate, identify and manage financial crime risks. These measures include:

• BWRA and AML risk assessment;
• A robust KYC process;
• Training and awareness for EXMO staff;
• PEP and Sanctions controls;
• SARs;
• Anti-Bribery and Corruption;
• Anti-fraud.

4.1 BWRA and AML risk assessment

EXMO has implemented an ongoing Business Wide and AML Risk Analysis to assess the level of risk exposure considering business activities including clients, products, transactions, delivery channels, organisational structure and geographical locations in which EXMO operates. Financial Crime safeguards are derived from the results of the analyses.

4.2 KYC Process

EXMO has established and maintains risk-based customer due diligence (CDD), identification, verification and know your customer (KYC) procedures, including enhanced due diligence (EDD) for those customers presenting higher risk, such as:

• politically exposed persons (PEPs); and
• customers from countries or industries deemed high risk.

KYC process includes strict identification requirements, name screening procedures and the ongoing monitoring and regular review of all existing business relationships.

KYC includes not only knowing the clients and entities EXMO deals with or renders services to, but also the Ultimate Beneficial Owners (UBOs), Legal Representatives and Authorised Signatories as appropriate.

The ongoing monitoring process includes regular PEP and Sanctions screening, as well as periodic and trigger reviews. Customers with high-risk indicators are subject to periodic reviews on an annual basis, whereas medium risk customers are subject to a review every three years. Trigger reviews might be initiated due to material changes in a customer’s profile.

4.2.1 Transaction Monitoring

EXMO relies on data analysis as a risk-assessment and suspicious activity detection tools. These tools perform a variety of compliance-related tasks, including capturing data, filtering, record-keeping, investigation management and reporting.

In relation to AML/CTF risk, EXMO:

• monitors all transactions and reserves the right to ensure that transactions of suspicious nature are reported to the proper law enforcement;
• requests customers to provide additional information and documents to confirm Source of Funds (SoF) and Source of Wealth (SoW) in case of suspicious transactions;
• suspends or terminates customer’s account when there is reasonable suspicion that such customer is engaged in illegal activity.

However, the above list is not exhaustive and Compliance monitors customers’ transactions on a regular basis in order to define whether such transactions are to be reported and treated as suspicious.

4.3 Training and Awareness

EXMO has implemented a comprehensive Financial Crime Compliance training program to ensure that all staff, in particular individuals responsible for transaction processing and/or initiating and/or establishing business relationships, undergo AML awareness training.

The training is tailored to the business to ensure that staff are aware of different possible patterns and techniques of money laundering which may occur in their everyday business. Training also covers the general duties arising from applicable external (legal and regulatory), internal requirements and the resulting individual duties which must be adhered to in everyday business as well as typologies to recognise money laundering or financial crime activities.

4.4 Sanctions Controls

Compliance with OFAC, EU, UN and UK sanctions is mandatory for all EXMO employees globally. Lists from Governments of other countries where such lists are legally applicable to EXMO’s operations in those countries.

The Company’s sanctions controls are applied to new and existing customers, third party service providers and staff, as well as crypto wallets before the execution of transactions.

4.5 Filling Suspicious Activity Reports (SARs)

Suspicious activities must be properly handled and escalated within the respective legal entity. Regular AML and Financial Crime Compliance training ensures that staff are reminded of their duty to timely report any suspicious activity to their respective MLRO.

4.6 Anti-Bribery and Corruption (ABC) and Anti-Fraud

EXMO does not tolerate bribery, or any form of corruption. All staff and third parties that act on behalf of EXMO are prohibited from having any involvement in acts of bribery and corruption.

All staff undertake ABC training which forms part of financial crime compliance training, and covers requirements for dealings with PEPs, regulations for gifts and entertainments, as well as donations and business courtesies.

Anti-fraud measures include training of staff on the subject of risk mitigation of external fraud. In addition, for the purpose of mitigating the risk of internal fraud, staff must take consecutive block of time away from work each year.

5.  Country of Residence

EXMO’s AML/CTF Policy sets out EXMO’s risk appetite with regard to client’s onboarding. EXMO does not accept clients who are residents in countries deemed to be above risk appetite. These include:

EXMO also does not accept any clients from disputed or unrecognized territories as they do not produce recognized official ID documents. These include:

• Crimea (Ukraine region)
• Donetsk People’s Republic (DPR)
• Luhansk People’s Republic (LPR)
• Nagorno-Karabakh Republic (Republic of Artsakh)
• Palestine
• Pridnestrovian Moldavian Republic
• Republic of Abkhazia
• Republic of China (Taiwan)
• Republic of Kosovo
• Republic of Somaliland
• Republic of South Ossetia
• Sahrawi Arab Democratic Republic
• Turkish Republic of Northern Cyprus