Naumard LTD is a company incorporated in Cyprus with company registration number HE352653 and a registered address at Arch Makariou III, 172, Melford Tower, 3027 Limassol, Cyprus (hereinafter referred to as “Company”). Company is aware of its corporate duty to assist the fight against anti-money laundering, corruption and against the funding of terrorism.
For this reason, Company is aware of the fact that the use of its services for money laundering and terrorism funding is a valid concern and could, if not handled properly, result in the infringement of laws and regulations.
In its contribution to manage these risks related to money laundering and financing, Company is committed to respect all relevant laws, regulations, best practice and ethical standards applicable in Cyprus in order to fight money laundering and terrorist financing.
The present document details which procedures Company will follow in order to identify any accrued risk contractual relationship and take the necessary measures as a response to these risks.
This Policy should be read carefully in order to understand our best practices regarding anti-money laundering and combating the funding of terrorism and how Company will approach instances and matters whenever such activity occurs.
AML shall mean anti-money laundering.
Board of Directors shall mean the Board of Directors of Company.
Business Relationship(s) shall mean the contractual relationship which is formed between aClient and Company which can be formed through a collateral lending agreement between theClient and Company.
CFT shall mean combatting the funding of terrorism.
Client(s) shall mean a person seeking to make use of the Services which are provided by Company.
Cryptocurrency shall mean a digital currency in which encryption techniques are used to regulate the generation of units of currency and verify the transfer of funds, operating independently of a central bank, except any token representing a security or an asset.
Employee(s) shall mean any person who is bound to Company on a full-time or part-time basis by a contract of employment and whose scope of employment is related to the provision of investment advice or to any activity which falls under the scope of business which is defined inSection 3 of this Policy.
FATF shall refer to the Financial Action Task Force.
Token Purchase / Re-purchase Agreement shall mean the legally binding agreement between the Client and the Company, which govern the selling and purchase of certain cryptocurrency tokens.
PEP(s) shall refer to politically exposed person. A Client shall be classified as a PEP depending on the thresholds outlined in Section 8.5 of this Policy.
Platform shall refer to the online platform which is available onhttps://app.youhodler.com/sign-in.
Prosecuting Authority shall mean the court, tribunal or authority which is duly competent for the prosecution of any of the reports which are passed on to the Relevant Authority in Cyprus or to any other office or authority charged with processing the reports made in line with this Policy.
Policy shall mean this AML Policy and any other subsequent amendments which are carried out and recorded in Annex 1 of this Policy.
Service(s) shall mean the services carried out by Company which is the provision of the selling and purchase of certain tokens to the Client who has a User Account.
Third-Party Service Provider(s) shall mean any natural or legal person who has a contractual relationship which serves the purpose of outsourcing the services provided by Company or facilitates the services which are offered by Company.
Transactions shall mean any monetary transfer or Cryptocurrency which is transferred from theClient to Company which transfer is carried out as a result of the Business Relationship binding them.
User Account shall mean an account which is created on the Platform.
Working Days shall mean a day that is not Saturday or Sunday as well as any day which falls on a public holiday.
This Policy is meant to serve as a guideline and procedure for Company’s Board ofDirectors, Employees or Third-Party Service Provider and/or staff as well as affiliates or subsidiary companies of Company.
Company shall finalize Token Purchase / Re-purchase Agreement with the Client. In the exercise of its scope of business, there is the possibility that Company may resort toThird-Party Service Providers. Furthermore, Third-Party Service Providers may also be resorted to for the referral of Clients. For this reason, this Policy shall also extend toThird-Party Service Providers.
4.1. Due to its position in the market, Company, its Employees, its Third-Party Service Providers and Clients must be aware that pursuant to the Criminal Code, there are the following duties which must be adhered to:
a. Company must ensure that the source and origin of funds used by the Client is clarified;
b. Company must ensure that to ascertain the identity of the beneficial owner of the assets;
c. Company must ensure that it does not participate in the organisation of a corporate structure and which would result in the commission of crimes;
d) Company must ensure that any of the funds which are collected are not used for the commission of any crime of violence or public intimidation.
4.2. For this reason, any procedures, rules and regulations which are outlined in this Policy shall serve the purpose of mitigating Company’s risk of legal liabilities which are outlined in thisSection.
Identification and Verification of a Client who is a natural person
The information which shall be obtained by Company in order to identify the Client is the following;
The identification of a natural person will require the Client to present a document which will establish the Client’s identification. The Client may be identified through an extract in original or a copy of:
For purposes of verification, Company may request attestations from public authorities may be collected.
6.1. Company’s business activities are primarily based on a Business Relationship which is long-term.
6.2. Company may also have instances when Clients shall be involved in one-timeTransactions.
Company shall repeat the process of identification and verification if, in its sole discretion, it has doubts that the information provided by the Client is not accurate.
8.1. Scope of identifying the business relationship
Through the course of the Business Relationship, Company is required to ascertain the nature and purpose of the Business Relationship wanted by or with the Client.
Company shall draw and record its own conclusions. The contractual agreement bindingCompany with the Client is sufficient to understand the purposes of the BusinessRelationship. This requirement shall be fulfilled by Company in order to understand whether there is the obligation to carry out special duties of due diligence.
8.2. Client’s economic background
Company may take steps to understand the source of wealth, and if necessary, the source of funds of the Client if;
a. the Business Relationship or the funds used in order for the business relationship to subsist are deemed to be unusual in Company’s view; or
b. it is clear that the funds derive from any illegal activity; or
c. there is a factor of high risk in the business relationship.
8.3. High-Risk Business Relationship
8.3.1. Company may use the following factors to indicate whether the Business Relationship with the Client can be categorized as high-risk:
a. domicile, nationality or address of the Client;
b. nature and location of the business activities of the Client;
c. the amount of personal contact with the Client;
d. the nature of the requested Services or products;
e. the amount of the assets deposited;
f. the amount of the asset flows;
g. origin or target country of frequent payments.
8.3.2. Company may also resort to the methods of evaluation set out in Section 10 of this Policy in order to evaluate whether or not a Client is categorized as high-risk (hereinafter referred to asa “High-Risk Client”).
8.3.3. With regards to the Transactions which occur between the Client and Company, theTransaction (hereinafter referred to as the “High-Risk Transaction”)is categorized as high-risk if:
a. the amount of the assets or the volume of the Transactions appears unusual, considering the Client’s profile or the circumstances of the Client;
b. in the specific Business Relationship or in similar Business Relationships, considerable deviations are noted from customary transaction nature, volumes and frequencies;
c. in money or asset transfers one or more Transactions which appear to be interrelated amount to or exceed a sum of five thousand Euro (EUR 5’000);
8.3.4. Company shall also categorize the following as High-Risk Transactions of money laundering:
a. the manner in which the Transactions are indicated are for an illegal purpose;
b. from an economic point of view, the Transactions feature quantities which are excessive or not discernible; or
c. the amount of funds within the Transaction do not seem reasonable to Company when the client profile is examined.
In the event that the Client originates from a country which is categorized as aHigh-risk jurisdiction by FATF, the Client shall be categorized as a high-risk Client byCompany.
8.4. Suspicious Activity
8.4.1. Company shall immediately classify a Client as suspicious if there is an explicit refusal to provide any documentation which is requested by Company.
8.4.2. When a Client makes a Transaction from an account which is present in a country or are quest is made to Company to transfer any profits to is made to such a country deemed to be high risk according to FATF, Company shall also categorize such activity to be suspicious.
8.4.3. Company has its own internal measures in order to evaluate whether the volume of the transactions appear to be unusual.
8.5.1. For the purposes of this Policy, PEPs shall be defined in the same manner as the
a. Foreign PEPs: individuals who are or have been entrusted with prominent public functions by a foreign country, such as heads of state or of government, senior politicians at national level, senior government, judicial, military or political party officials at national level, and senior executives of state-owned corporations of national significance;
b. Domestic PEPs: individuals who are or have been entrusted with prominent public functions at national level in Cyprus in politics, government, the armed forces or the judiciary, or who are or have been senior executives of state-owned corporations of national significance. This domestic status as a PEP expires 18months after the termination of the public function;
c. PEP in international organisations: individuals who are or have been entrusted with a prominent function by an intergovernmental organisation or international sports federations, such as secretaries general, directors, deputy directors and members of the board or individuals who have been entrusted with equivalent functions;
d. Any family member and close associate of the PEPs (hereinafter altogether referred to as “Related Individual(s)”).
8.5.2. In the event that the Client is a Foreign PEP or Related Individual shall be categorized as a High-Risk Client by Company.
8.5.3. Company shall categorize a Domestic PEP or Related Individual or a PEP in international organisations or Related Individual as a High-Risk Client depending on the nature of the requested services or products and the amount of the assets deposited.
9.6. Monitoring on the Business Relationship and Transactions
9.6.1. Throughout the Business Relationship, Company shall request, acquire and record information from the Client in order to update the information needed for an on-going monitoring purposes.
9.6.2. With regards to PEPs (ref. Section 8.5), Company shall carefully scrutinize whether to enter into a Business Relationship with a Client who falls under the definition of a PEP.
9.6.3. The Business Relationship with a Client who falls under the definition of a PEP shall be reviewed periodically every year.
9.6.4. With regards to High-Risk Clients, a regular review of this Business Relationship shall be carried out by Company.
9.7. Source of Wealth and Source of Funds
9.7.1. The following information must be further clarified in order to have a prudent understanding of;
a. the source of the funds used in the Transaction;
b. the reason and purpose why the Client instructs Company to ensure that the funds are withdrawn;
c. the source of wealth of the Client;
9.7.2. Company may resort to the following instruments in order to obtain a prudent understanding for the special duties of due diligence;
a. written or verbal declarations;
b. private inquiries from third-parties who do not form part of the Business Relationship.
9.7.3. Company may terminate the Business Relationship if;
a. doubts about the information of the customer persist also after performing special duties of due diligence;
b. there is a suspicion that false information was given intentionally to Company.
10.1. In order to carry out a risk evaluation of how the Client can be evaluated, Company may take use the following processes and scales in order to mitigate and eliminate the risks of being held criminally liable under the possible illicit activities mentioned in Section 4 of this Policy and in order to attribute and categorize a Client as High-Risk.
10.2. With regards to High-Risk Clients, Company will apply the procedures and approaches which were outlined in Section 8 of this Policy.
10.3. Risk Analysis
10.3.1. Risks which are identified by Company may be assessed according to the likelihood that they occur and the impact of these risks on the business if they occur. The following system is used to determine the likelihood of a risk:
LOW - the risk is very unlikely to occur
MEDIUM - the risk has a small chance to occur
HIGH - the risk has reasonable chance to occur
CRITICAL - the risk has very high chance to occur
10.3.2. The impact of the risk identified by Company shall be measured as follows:
LOW - negligible loss or damage
MEDIUM - limited loss or damage
HIGH - large loss or damage
CRITICAL - severe loss or damage
10.4. Risk Assessment
The degree of risk will be assessed according to their likelihood to occur and their impact if they do:
11.1. What should be reported?
11.1.1. A report may be filed to the Relevant Authority.
11.1.2. Company will proceed to file a report if in the course of a Business Relationship:
a. it has sufficient knowledge or duly suspects that any funds are related to any of the illicit activity which is outlined in Section 4 of this Policy;
b. it terminates a Business Relationship due to any reasonable suspicion that there was any illicit activity which is related to Section 4 of this Policy;
11.1.3. Company may resort to the possibility of carrying out a report if it has made observations from the procedures outlined in Section 8 of this Policy that there is a possibility that the profits made by the Client may be used for the finance of terrorism, for tax evasion or money laundering activity.
11.1.4. Company shall in no circumstance inform the Client that it has filed a report.
11.1.5. The prohibition on providing information does not apply to protecting Company’s interests in the context of a civil action or criminal or administrative proceedings.
11.1.6. Company may also choose to inform the custodian of the assets that the report regarding a Client when the services are carried out jointly between Company and the custodian of the assets.
12.1. Company shall proceed to terminate or continue the Business Relationship if;
a. after sending the report outlined in Section 11.1. of this Policy, the RelevantAuthority does not send a reply to Company within twenty (20) days;
b. after sending the report outlined in Section 11.1. of this Policy, the RelevantAuthority informs Company that it will not be taking action on the report filed and there was no notification from the Prosecuting Authority five (5) Working Days;
12.2. Company will terminate the Business Relationship in the following instances:
a. it still has doubts regarding the information provided by the Client, even after carrying out repetition of the verification of the identity of the Client;
b. the Client does not co-operate to carry out the verification of the identity.
12.3. Company shall ensure that a contractual clause regarding the possibility to terminate aBusiness Relationship with immediate effect in the event that the procedures implemented in this Section of the Policy are resorted to by Company.
12.4. In the event that Company holds any assets belonging to the Client, the assets shall be withdrawn on condition that a compliance audit trail is retained which enables the prosecution to trace the assets.
12.5. Company shall terminate the Business Relationship after the reporting procedures outlined in Section 11 of this Policy have been completed.
12.6. In the event that procedure in Section 11 has been resorted to by Company, theBusiness Relationship shall not be terminated.
13.1. Company shall proceed to freeze any assets belonging to the Client as soon as the theRelevant Authority sends a confirmation that the Prosecuting Authority has been informed of the report.
13.2. Company shall retain the frozen assets until it receives a ruling from the ProsecutingAuthority.
13.3. In any case, Company shall not retain the frozen assets for more than five (5) WorkingDays from the date on which the Relevant Authority gives notice of the report to be sent to the authority vested with the power to prosecute the subject matter of the report.
13.4. In the event that the assets are not under Company’s custody, the custodian of the assets shall be duly informed of the freezing order.
14.1. Company shall prepare any documents and receipts related to the Business Relationship with the Client in a manner that an audit compliance trail is created in line with the relevant laws and regulations applicable to the Business Relationship.
14.2. Company shall keep a register that includes all Business Relationships and document the identification, findings, clarifications and reports which are made for every Client.
14.3. Business Relationships with high-risk Clients or PEPs have to be labelled as such.Reports must be kept separately.
14.4. The documentation must enable reconstruction of each individual transaction.14.5. Company shall retain the documents in a manner that they can be presented to a
Prosecuting Authority within a reasonable time.
14.6. Company’s storage medium or server is in European Union.
15.1. Company has Employees who form part of an AML department.
15.2. Company’s AML department has the power to issue directives and formulate training programs for its Employees and Third-Party Service Providers.
15.3. The Board of Directors of Company shall consult the AML Department regarding matters which fall under the AML Department’s competence.
15.4. The AML Department and the Business Relationship personnel must be separated in the event that Company exceeds twenty (20) Employees.
15.5. The tasks of the AML Department include, but are not limited to, the following:
a. The reviewal of this Policy and any other internal policy related to AML and CFT;
b. The development of internal transaction monitoring systems and the reports which are generated by the internal monitoring system;
c. The management and overview of the special due diligence procedure and the process of on-going monitoring;
d. The preparation of a risk analysis for AML and CFT, specifically taking into consideration the client’s domicile or residence, the client segment as well as the products and services offered;
e. The risk analysis shall be approved by the Board of Directors and updated periodically.
16.1. Employees must be provided with the measures and instructions to prevent money-laundering.
16.2. Any new Employees may be given basic training within an appropriate period.
16.3. The training program shall mostly cover the content of this Policy.
17. Jurisdiction and applicable law This Policy and all matters arising out of or relating toit shall be governed by the substantive laws of Cyprus.