Havvest

AML Policy

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Anti-Money Laundering Policy

1.OVERVIEW

We at Havvest Finance Global Limited (Havvest) are committed to the fight against all forms of financial crime, which includes, money laundering, terrorism financing, bribery and corruption. To this end, Havvest is implementing this policy for Anti-Money Laundering (“AML”), Combating the Financing of Terrorism (“CFT”) and the Prevention of the Financing and Proliferation of Weapons of Mass

Destruction. Strict adherence to the same is mandatory for all members of Havvest.

2.REGULATORY AND LEGAL FRAMEWORK

The policy ensures compliance with local and Global AML/CFT legislation and regulations and has incorporated leading best practices internationally including, but not limited to:

2.1.Institutional Framework – Local

2.1.1.Central Bank of Nigeria (CBN).

2.1.2.Securities and Exchange Commission (SEC).

2.1.3.Economic and Financial Crimes Commission (EFCC).

2.1.4.Nigerian Financial Intelligence Unit (NFIU).

2.1.5.Independent Corrupt Practices Commission (ICPC).

2.1.6.Federal Ministry of Commerce (FMC).

2.1.7.Federal Inland Revenue Services (FIRS).

2.2.Institutional Framework International – Global

2.2.1.Financial Action Task Force (FATF).

2.2.2.Inter-Governmental Group Against Money Laundering (GIABA).

2.2.3.Egmont Group (of Financial Intelligence Units).

2.2.4.Wolfsberg Group.

2.3.Legal Framework – Local

2.3.1.Money Laundering (Prohibition) Act, 2011 (as amended).

2.3.2.Terrorism (Prevention) Act, 2011 (as amended).

2.3.3.CBN AML/CFT Regulations, 2013.

2.3.4.SEC Rules and Regulations, 2013.

2.3.5.SEC AML/CFT Regulations, 2013.

2.3.6.Terrorism Prevention (Freezing of International Terrorists Funds and Other Related Measures) Regulations, 2011.

2.3.7.Cyber crimes (Prohibition, Prevention, etc) Act, 2015.

2.3.8.Special Control Unit against Money Laundering AML/CFT Regulations for Designated Non-Financial Businesses and Professions in Nigeria, 2013.

2.3.9.Advance Fee Fraud and other Fraud Related Offences Act, 2006.

2.3.10.Banks and other Financial Institutions Act, 1991.

2.3.11.ICPC (Establishment) Act.

2.3.12.EFCC (Establishment) Act, 2004.

2.4.Legal Framework- International

2.4.1.USA PATRIOT Act: Uniting & Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism.

2.4.2.USA Foreign Corrupt Practices Act.

2.4.3.The Financial Action Task Force (FATF) 40 Recommendations;

2.4.4.Directive 2005/60/EC of the European Parliament and of the Council.

2.4.5.Office of Foreign Asset Control (OFAC).

3.STRUCTURE OF THE FRAMEWORK

Policies and procedural guidelines have been developed by Havvest and are regularly reviewed/revised to ensure that they remain relevant and current and are in line with the evolving regulatory requirements and leading practices. The Policies and Procedures clearly articulate the Havvest's AML and CFT stance in the global fight against financial crime and are available on the Havvest’s Notions page for access to all members of staff at any point in time.

Havvest’s Compliance Policies are reviewed and approved by the Board of Directors on an annual basis and where it is necessary to update the policy between cycles, an addendum is drafted for implementation with the same and incorporated in the Policy at the next annual review. Havvest adopts risk-based approach that are commensurate with the specific risks of money laundering and terrorist financing”. Thus, Havvest identifies and assesses the risks from a proactive stance and allocates the requisite resources which center around systems and controls to manage these risks.

4.SCOPE

This policy applies to all Havvest employees, employees of temporary employment agencies, vendors, business partners, and contractor personnel regardless of geographic locations.

The Policy is reviewed by the Company on an annual basis, or more frequently where required by a material regulatory, business or strategy change.

5.DEFINITIONS

5.1.Money Laundering

The conversion or transfer or acquisition or possession or use or concealment or disguising the true nature, source, location, disposition, movement, rights with respect to or ownership of

property, knowing that such property is derived from a criminal activity or from an act of participation in such activity or of assisting any person who is involved in the commission of such offence(s) to evade the legal consequences of his/her actions”

5.2.Terrorist Financing

Terrorism financing is the provision of funds or providing financial support to individual terrorists or non-state actors. In the case of money laundering, the funds are always of illicit origin, whereas in the case of terrorist financing, funds can originate from both legal and illegal sources.

5.3.Politically Exposed Persons” (PEPs)

Individuals who are or have been entrusted with prominent public functions in any country, for example Heads of State or of government, senior politicians, senior government, judicial or military officials, senior executives of state-owned corporations, important political party officials and any “close associate” of a senior political figure (local/foreign).

PEP also include persons who are or have been entrusted with a prominent function by an international organization, including members of senior management including directors, deputy directors and members of the board or equivalent functions other than middle ranking or more junior individuals

Business relationships with family members or close associates of PEPs involve reputation risks similar to those with PEPs themselves.

6.COUNTERMEASURES

Havvest as a compliance-minded organization fully supports all initiatives to counter money laundering and combat financial terrorism and has put measures in place to achieve compliance that this initiative is meant to achieve. These measures are:

6.1.Know Your Customer / Business (KYC/KYB)

A duly completed account opening form and the provision of identification and other relevant information and documents are the foundation/bedrock for on-boarding a customer at Havvest. Customer Due Diligence (CDD) is conducted prior to entering into any brokerage relationship with a customer. This includes at a minimum, identity and address verification as well as ascertaining the source of income and wealth of the customer.

Where appropriate, KYC includes ascertaining who the Ultimate Beneficial Owner (UBO), Legal representatives and Trustees are.

Enhanced Due Diligence (EDD) is conducted on high-risk customers including Politically Exposed Persons (PEPs). The approval of Senior Management and Compliance is required prior entering into a relationship with high-risk countries.

Havvest takes requisite and regulatory measures when embarking on relationships with Designated Non-Financial Businesses and Professionals (DNFBPs) and other prescribed businesses, due to their perceived risk and in compliance with regulatory requirements.

As part of Havvest’s KYC and CDD procedures, identification documents are requested and obtained to confirm the ultimate beneficial owners of a business and the organization’s control and structure. Sanction screening is also conducted prior to entering a relationship as well as prior to effecting a transaction to ensure that Havvest does not enter a relationship with a sanctioned person/entity.

Havvest is compliant with the Foreign Account Tax Compliance Act (FATCA) and Common Reporting Standards criteria, and thus, have put measures in place in identifying the defined persons in the Havvest’s database. All identified US persons, natural or corporate entities seeking to perform global trade are required to complete the requisite tax forms i.e., W8 BEN, W8 BEN- E and W9. A Customer who fails to complete the forms would be regarded as recalcitrant.

This identification relies on the following fundamental principles:

a.Each customer (= each individual person and/or each person involved in the case of a legal entity) must be identified by means of original supporting documents uploaded for verification.

b.Each person identified must be registered by IT means.

c.A person will not be accepted as a customer if the identification and verification process prove to be incomplete.

d.Where appropriate, KYC/KYB includes ascertaining who the Ultimate Beneficial Owner (UBO), Legal representatives and Trustees are.

6.2.Transaction Monitoring

Transaction monitoring occurs on a manual and automated basis. The former is performed by all members of staff, who are regularly provided with red flags to look out for, and the latter resides within the Compliance Unit.

All members of staff know that suspicious activities/ transactions should immediately be referred to the Compliance Unit.

Suspicious Transactions are brought to the attention of the Compliance Unit on a manual or automated basis, the former by way of members of staff filing internal suspicious transaction reports to the Compliance Unit and the latter by way of transaction monitoring tools reviewed by Compliance Officers. If deemed appropriate, a report is filed to the NFIU.

6.3.Reporting Suspicious Transactions

Regulatory and statutory requirements provide that certain reports and returns are made to regulatory bodies. In Nigeria, the Nigerian Financial Intelligence Unit (NFIU) is the agency charged with the responsibility of receiving the following core transaction-based reports:

- Currency Transaction Report (CTR)

- Foreign Currency Transaction Report (FTR)

- Suspicious Transaction Report (STR)

Havvest renders reports to the NFIU and the Central Bank of Nigeria (CBN) in accordance with the provisions of Sections 2, 6 and 10 of the Money Laundering (Prohibition) Act of 2011 as amended (“the Act”).

Section 2 of the Act provides that financial institutions must submit a report on all international transfer of funds and securities of a sum exceeding ten thousand dollars ($10,000) or its equivalent in other foreign currencies.

Section 6 of the Act provides that a financial institution must submit a report on all unusual and suspicious transactions.

Section 10 of the Act provides that any lodgment or transfer of funds in excess of N5 million and above for individuals and N10 million and above for corporate customers must be reported.

6.4.Enhanced Due Diligence (EDD)

Enhanced Due Diligence (EDD) is conducted on high-risk customers including Politically Exposed Persons (PEPs). The approval of Senior Management and Compliance is required prior entering into a relationship with high-risk countries.

Havvest takes requisite and regulatory measures when embarking on relationships with Designated Non-Financial Businesses and Professionals (DNFBPs) and other prescribed businesses, due to their perceived risk and in compliance with regulatory requirements.

As part of the Havvest’s KYC and KYB procedures, identification documents are requested and obtained to confirm the ultimate beneficial owners of a business and the organization’s control and structure. Sanction screening is also conducted prior to entering into a relationship as well as prior to effecting a transaction to ensure that Havvest does not enter into a relationship with a sanctioned person/entity.

Havvest is in compliance with the Foreign Account Tax Compliance Act (FATCA) and Common Reporting Standards criteria, and thus, have put measures in place in identifying the defined persons in Havvest’s database. All identified US persons are required to complete the requisite tax forms i.e. W8 BEN, W8 BEN-E and W9. A Customer who fails to complete the forms would be regarded as recalcitrant.

6.5.Havvest also conducts independent verification of the legal status of incorporated entities and sole proprietorships with the Corporate Affairs Commission in writing.

7.SANCTIONS COMPLIANCE MANAGEMENT

Havvest as a policy, does not enter into any relationship with sanctioned individuals/entities. All employees, as applicable to their functions, are required to screen names of individuals and organizations who have or plan to enter a business relationship or carry out a transaction with/through the watch list.

The watch list contains amongst others, the names of individuals and entities, who have been blacklisted by various regulatory bodies worldwide: Office of Foreign Asset Control “OFAC”; European Union (EU); Her Majesty’s Treasury (HMT); The Ministry of Economy, Finance and Industry in France (MINEFI); The United Nations (UN).

Employees are required, as part of Havvest’s policy, to refrain from any relationship and/or transaction which yield a true or positive match and follow the escalation procedure. Sanction’s screening is done at account opening and on a real time basis for all SWIFT transactions.

8.POLITICALLY EXPOSED PERSONS (PEPs)

PEPs are individuals who are or have been entrusted with prominent public functions and people or entities associated with them. Enhanced due diligence measures are applied to PEPs, as with other high-risk customers to mitigate the AML/CFT risk they pose. This is to ensure that Havvest not unknowingly supporting activities such as money laundering and/or the financing of terrorism.

Establishment of new accounts for PEPs as well as continuity of such accounts (for those already existing in the system) is subject to the approval of an Executive Director and the Legal Department.

9.ROLES AND RESPONSIBILITIES

9.1.THE BOARD

The roles and responsibilities of the Board of Directors with respect to AML/CFT Compliance Risk Management include (but shall not be limited to):

9.1.1.Assume overall accountability for Compliance performance;

9.1.2.Ensure that appropriate AML/CFT Compliance Policy is established and is in operation;

9.1.3.Approve the AML/CFT Compliance program and policies;

9.1.4.Provide guidelines regarding the management of AML /CFT Compliance risks.

9.2.COMPLIANCE OFFICER

9.2.1.Coordinate and monitor AML/CFT Compliance by Chaka;

9.2.2.Inform Board and Management of AML/CFT Compliance efforts, compliance failures and the status of corrective actions;

9.2.3.Monitor implementation of the code of corporate governance;

9.2.4.Ensure implementation of Board decisions on compliance matters;

9.2.5.Ensure that regulatory changes are effectively implemented in Havvest;

9.2.6.Direct prompt investigation of any unusual or suspicious transaction and reports to the Regulatory body;

9.2.7.Ensure that compliance requirements are integrated into the day-to-day activities of Havvest and that processes are efficient and in accordance with applicable laws and policies.

9.3.ALL STAFF MEMBERS

9.3.1.Learning and complying with applicable laws and regulations

9.3.2.Report unusual transactions to the Compliance Officer;

9.3.3.Maintain records;

9.3.4.Attend scheduled trainings.

10.HAVVEST’S INTERNAL CONTROL

10.1.Procedures

This Policy, as well as procedures including minimum KYC standards which clearly articulate Havvest’s AML and CFT stance in the global fight against financial crime have been translated into operational guidelines or procedures that are available on the Intranet site of Havvest.

10.2.Prohibited Business Relationships

In line with international best practice, Havvest does not open accounts or conduct transactions for customers using pseudonyms or numbers instead of actual names or maintain relationships with individuals or entities that have been sanctioned.

10.3.Risk Assessment

Havvest conducts Risk Assessment on its customers, products, and services. This is to ensure that AML/CFT risks are identified and mitigated.

10.4.Record Retention

Customer identification documents are retained throughout the life of the account and for 5 years after the cessation of the customer relationship and for 5 years after the transaction date for transaction instruments. In litigation and/or regulatory investigations, the records will be kept for as long as they are required.

10.5.Data Protection

Havvest has a duly approved Data Protection Policy which is revised on an ad-hoc basis to reflect the legal, regulatory, and operating environment. Havvest adheres strictly to both local and international data protection policies such as the Nigerian Data Protection Regulations and the European Union General Data Protection Regulation (EU-GDPR.)

10.6.Anti-Bribery and Corruption (ABC) and Anti-Fraud)

Havvest is committed to the highest standards of ethical conducts in all its endeavors and interactions. Havvest has zero tolerance for any form of bribery, corruption, fraud and unethical practices among employees, between Havvest and its employees, as well as between Havvest and external parties. Havvest also expects the same standards to be applied by third parties acting on behalf of Havvest.

10.7.Training

Havvest places a high premium on the training of its employees. Training is conducted to ensure employees are well informed about the AML/CFT laws, KYC principles and the red flags of money laundering or terrorism financing which may occur in their job functions. Annual Compliance training is mandatory for all members of staff, including Senior Management and Directors.

Training is conducted via e-learning, face to face or on an ad hoc basis by email to the appropriate personnel in relation to topical national and international findings.

11.RELATIONSHIP WITH REGULATORS AND LAW ENFORCEMENT AGENCIES

Havvest understands that part of its corporate and social responsibility is to cooperate with law enforcement agencies in the fight against financial crime. To this end, the Havvest maintains a cordial and supportive relationship with all regulatory and law enforcement agencies. Havvest promptly complies with all requests made, pursuant to the law, and provides information to regulators including the NFIU, the CBN and other relevant agencies.

Havvest is also at the forefront of cooperating with regulators to give feedback on new regulations and means to mitigate the risks that are being encountered in the financial industry brought on by new innovations and developing trends.

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