Legal AML Appendix

LEGAL AML APPENDIX

This Anti‑Money Laundering Appendix ("Appendix") is entered into as of by and between Client Name: , an entity organized as under the laws of with principal place of business at , and Service Provider Name: , an entity organized as under the laws of with principal place of business at (each a "Party" and together the "Parties").

Recitals

WHEREAS, the Parties have entered into or anticipate entering into one or more commercial agreements under which the Service Provider will provide services that may involve the receipt, transfer or facilitation of funds, goods or information subject to anti‑money laundering and sanctions laws;

WHEREAS, the Parties wish to allocate responsibilities and procedures to prevent and detect money laundering, terrorist financing and sanctions violations, and to ensure compliance with applicable anti‑money laundering, counter‑terrorist financing and sanctions laws and regulations; and

WHEREAS, each Party represents that it maintains internal controls, policies and procedures reasonably designed to comply with applicable anti‑money laundering and sanctions obligations and desires to restate certain obligations in this Appendix.

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

1. Definitions

For purposes of this Appendix, the following terms shall have the meanings set forth below. "AML Laws" means all applicable laws, regulations, rules and sanctions administered by competent authorities relating to anti‑money laundering, counter‑terrorist financing and economic sanctions. "Customer Due Diligence" or "CDD" means the processes described in Section 3 below. "Suspicious Activity Report" or "SAR" means any internal or external report required by AML Laws relating to suspected money laundering or terrorist financing.

2. Compliance Program

Each Party shall implement and maintain, at its own expense, an AML compliance program reasonably designed to ensure compliance with all AML Laws. Such program shall include written policies and procedures, risk‑based CDD, ongoing monitoring, recordkeeping, reporting of suspicious activities, employee training and designation of an AML compliance officer.

3. Customer Due Diligence (CDD)

Each Party shall perform CDD prior to establishing a business relationship and on an ongoing basis, including but not limited to: verifying the identity of beneficial owners and authorized signatories; obtaining and retaining identification and documentary evidence; assessing the purpose and intended nature of the relationship; and performing risk‑based monitoring of transactions. Where record retention periods are prescribed by AML Laws, Parties shall retain records for at least the minimum period required and in any event for no less than five (5) years following the termination of the relationship unless a longer period is required.

4. Enhanced Due Diligence (EDD)

Where a Party determines, in its reasonable discretion, that a customer or transaction presents higher risk (including politically exposed persons, complex ownership structures, unusual transaction patterns or cross‑border activity involving high‑risk jurisdictions), that Party shall apply EDD measures commensurate with the risk, which may include obtaining additional identifying information, senior management approval, source of funds verification and heightened transaction monitoring.

5. Suspicious Activity Reporting; Law Enforcement

Each Party shall promptly file any SARs or equivalent reports required by AML Laws and shall not disclose to any third party the existence or content of a SAR except as required by applicable law. If a Party receives a lawful request from a competent authority relating to suspected wrongdoing, the receiving Party shall notify the other Party promptly to the extent permitted by law and shall cooperate in responding to lawful requests.

6. Sanctions Screening

Each Party shall maintain screening procedures to identify persons, entities or jurisdictions subject to economic or trade sanctions, and shall not knowingly facilitate transactions that would cause a violation of applicable sanctions. If a Party identifies a match on a sanctions list, that Party shall block or reject the transaction as required by law and shall promptly notify the other Party if the transaction involves the other Party's performance or customers.

7. Recordkeeping and Audit Rights

Each Party shall retain all records necessary to demonstrate compliance with this Appendix and with AML Laws. Upon reasonable prior written notice, and subject to applicable confidentiality and data protection laws, each Party shall permit the other Party or its independent auditor to conduct a review or audit of relevant records, policies and procedures to the extent necessary to verify compliance; such audits shall be conducted during normal business hours and in a manner that minimizes disruption.

8. Training and Monitoring

Each Party shall provide periodic AML training to employees with responsibilities under this Appendix and implement monitoring systems to detect patterns of activity indicative of money laundering, terrorist financing or sanctions evasion. Training materials and frequency shall be appropriate to the Party's size and risk profile.

9. Cooperation and Notices

The Parties shall cooperate in connection with any investigation, audit or regulatory inquiry concerning AML matters arising from the services. Notices required under this Appendix shall be sent to the contacts designated below:

10. Representations and Warranties

Each Party represents and warrants that: (a) it maintains policies and procedures reasonably designed to comply with AML Laws; (b) it is not subject to sanctions or owned or controlled by any person or entity that is subject to sanctions such that performance under the Agreement would cause a violation of applicable law; and (c) it will promptly update the other Party in writing if any representation in this Section becomes inaccurate.

11. Indemnification

Each Party (the "Indemnifying Party") shall indemnify, defend and hold harmless the other Party, its officers, directors and affiliates (the "Indemnified Party"), from and against any losses, liabilities, fines, damages and expenses (including reasonable attorneys' fees) arising from or relating to a material breach of the Indemnifying Party's obligations under this Appendix or its failure to comply with AML Laws, except to the extent caused by the gross negligence or willful misconduct of the Indemnified Party.

12. Confidentiality

Information disclosed pursuant to this Appendix, including SAR filings and related investigative materials, is confidential and shall be handled in accordance with the confidentiality provisions of the underlying agreement, except as disclosure is required by law or permitted to comply with AML Laws.

13. Term and Termination

This Appendix shall commence on the effective date set forth above and shall remain in effect for the term of the parties' underlying agreement. Either Party may terminate this Appendix with immediate effect upon written notice if the other Party materially breaches an AML representation or obligation and the breach is not cured within thirty (30) days following written notice, or immediately if required by applicable law.

14. Amendments; Waiver; Counterparts

Any amendment to this Appendix must be in writing and signed by authorized representatives of both Parties. No failure or delay in exercising any right shall operate as a waiver. This Appendix may be executed in counterparts, each of which shall be deemed an original and all of which together shall constitute one instrument.

15. Governing Law; Entire Agreement; Severability

This Appendix shall be governed by and construed in accordance with the laws of without regard to choice‑of‑law principles. This Appendix, together with the underlying agreement, constitutes the entire agreement of the Parties with respect to the subject matter hereof. If any provision of this Appendix is held to be invalid or unenforceable, the remaining provisions shall remain in full force and effect.

16. Additional Procedures

17. Audit Findings and Remediation

If an audit or regulatory examination reveals material deficiencies in a Party's AML program, that Party shall promptly propose and implement a written remediation plan acceptable to the other Party, and shall provide reasonable updates on remediation progress until completion.

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