KYC Compliance Procedure

KYC COMPLIANCE PROCEDURE

This KYC Compliance Procedure (the "Procedure") is entered into as of Effective Date: by and between Company Name: with registered address: and Counterparty Name: with registered address: (each a "Party" and together the "Parties").

RECITALS

WHEREAS, the Parties desire to establish documented procedures for customer identification, verification, risk assessment, monitoring and recordkeeping in order to comply with applicable anti-money laundering and counter-terrorist financing obligations;

WHEREAS, the Parties acknowledge the need for procedures to detect and report suspicious transactions, to apply enhanced due diligence where appropriate, and to maintain records that demonstrate compliance with regulatory expectations; and

WHEREAS, the Parties agree to allocate responsibilities between them and to implement controls, training and audit mechanisms consistent with this Procedure;

NOW THEREFORE, in consideration of the mutual covenants set forth herein, the Parties agree as follows:

1. DEFINITIONS

1.1 "Beneficial Owner" means the natural person(s) who ultimately own or control a customer and/or the natural person on whose behalf a transaction is being conducted, including those persons who exercise ultimate effective control over a legal person or arrangement.

1.2 "Enhanced Due Diligence" or "EDD" refers to the additional measures and verification required for higher-risk customers, politically exposed persons, complex ownership structures, or jurisdictions subject to heightened risk.

2. SCOPE

2.1 This Procedure applies to all customers, clients, suppliers, agents and intermediaries with whom the Parties establish a business relationship or execute a one-off transaction that meets the Parties' customer acceptance thresholds.

2.2 Where the Parties engage third-party service providers to conduct KYC on their behalf, the responsible Party shall ensure through contract that such providers apply standards substantially equivalent to this Procedure.

3. CUSTOMER IDENTIFICATION AND VERIFICATION

3.1 Identification requirements: The Parties shall collect and verify the following for each customer: legal name, date of incorporation or birth, principal place of business or residence, corporate registration number (if applicable), and government-issued identification for natural persons.

3.2 Documentary verification: Verification shall be evidenced by copies of identification documents, proof of address, corporate formation documents, and verification of beneficial ownership where applicable. Records of verification shall be retained in accordance with Section 7.

4. RISK ASSESSMENT

4.1 The Parties shall perform an initial risk assessment for each customer, taking into account jurisdiction risk, product/service risk, customer type, transaction volumes and delivery channels. The assessment will categorize customers as Low, Medium or High risk.

Risk Category: Low Medium High

5. ENHANCED DUE DILIGENCE

5.1 Enhanced Due Diligence shall be applied to customers assessed as High risk, to politically exposed persons, to clients from high-risk jurisdictions, and to complex ownership structures. EDD measures shall include, at a minimum: independent source verification of identity, expanded source-of-funds and source-of-wealth inquiries, senior manager approval to onboard, and more frequent monitoring.

5.2 Approval: Onboarding of High risk customers requires written approval from the designated Compliance Officer or an authorized delegate.

6. ONGOING MONITORING

6.1 The Parties shall monitor customer activity on an ongoing basis and update customer risk profiles where there is a material change in behavior, ownership, or transaction patterns. Monitoring shall include automated alerts, periodic reviews and manual investigations as necessary.

7. RECORDKEEPING

7.1 All KYC records, risk assessments, transaction monitoring logs, and documentation of decision-making shall be retained for no less than the minimum period required by applicable law and, in any event, for a period of not less than five (5) years following termination of the business relationship.

8. REPORTING SUSPICIOUS ACTIVITY

8.1 The Parties shall promptly report any activity that may reasonably be considered suspicious to the designated Compliance Officer and shall cooperate in the preparation of any required internal or regulatory reports. Reporting shall be carried out in accordance with the Parties' internal escalation procedures.

9. TRAINING AND COMPETENCE

9.1 The Parties shall ensure that employees with KYC responsibilities receive appropriate training at onboarding and at regular intervals thereafter. Training shall cover identification, verification, risk assessment, EDD, suspicious activity indicators and reporting obligations.

10. AUDIT AND REVIEW

10.1 The Parties shall permit periodic internal and external audits of KYC processes and shall implement corrective actions identified by such audits within a reasonable timeframe. Documentation showing remedial actions shall be maintained.

11. CONFIDENTIALITY

11.1 All information obtained pursuant to this Procedure shall be treated as confidential and used only for the purposes of compliance with KYC obligations, subject to disclosure where required by law or regulation.

12. NOTICES

13. AMENDMENTS, WAIVER AND COUNTERPARTS

13.1 No amendment to this Procedure shall be effective unless made in writing and signed by authorized representatives of both Parties. No failure or delay by either Party in exercising any right shall operate as a waiver of that right.

13.2 This Procedure may be executed in counterparts, each of which shall be an original and all of which together shall constitute one and the same instrument.

14. GOVERNING LAW

14.1 This Procedure shall be governed by and construed in accordance with the laws of the jurisdiction specified below. The Parties submit to the exclusive jurisdiction of the courts of that jurisdiction for any dispute arising out of or in connection with this Procedure.

15. ENTIRE AGREEMENT; SEVERABILITY

15.1 This Procedure, together with any schedules or attachments signed by the Parties, constitutes the entire agreement between the Parties with respect to its subject matter and supersedes all prior arrangements, understandings and agreements.

15.2 If any provision of this Procedure is held to be invalid or unenforceable, the remainder of this Procedure shall remain in full force and effect and the invalid or unenforceable provision shall be amended to the minimum extent necessary to make it valid and enforceable.

16. IMPLEMENTATION DETAILS

CERTIFICATIONS

Each Party certifies that the procedures described in this Procedure shall be implemented in good faith, that appropriate resources will be made available to effect the obligations herein, and that the information provided to the other Party in connection with KYC matters will be true, complete and not misleading.

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