Anti-Money Laundering (AML) Policy

Last Reviewed: April 9, 2025
Approved by: Executive Management, Financely

1. Introduction

Financely is committed to maintaining the highest standards in preventing the use of its services for money laundering, terrorist financing, or the concealment of illicit funds. The company enforces strict compliance with applicable anti-money laundering laws and regulations, including:

• The Bank Secrecy Act (BSA)
• The USA PATRIOT Act
• Anti-Money Laundering Act of 2020
• U.S. Department of the Treasury OFAC guidelines
• Financial Action Task Force (FATF) Recommendations

This policy applies to all employees, contractors, agents, advisors, and freelancers working with or on behalf of Financely or any of its subsidiaries, regardless of location.

2. Purpose

The purpose of this policy is to prevent Financely’s platform, services, and capital-raising activities from being used to launder money, finance terrorism, or enable financial crimes. It also ensures that all individuals associated with the company understand their responsibilities in detecting and reporting suspicious activity.

3. Core Risks in Trade & Project Finance

Money laundering risks are particularly acute in the areas Financely operates in:

Trade Finance

Trade finance can be used to launder money by over- or under-invoicing goods, falsifying documents (e.g., warehouse receipts, bills of lading), routing payments through third parties, or financing non-existent shipments.

Financely mitigates these risks by:

• Requiring underlying purchase and sales contracts
• Verifying counterparties and end buyers
• Reviewing logistics and collateral documentation (e.g. warehouse receipts)
• Rejecting any trade structure that lacks verifiable third-party involvement or evidence of goods in transit or in storage

Project Finance

In project finance, illicit funds can be disguised as investments in construction, infrastructure, or renewable energy projects, especially when large capital sums are involved with long timelines.

Financely mitigates these risks by:

• Performing KYC on all project sponsors and beneficiaries
• Requiring project-level documentation (permits, contracts, financial models)
• Verifying the source of funds and funding structure
• Rejecting layered structures designed to obscure ownership or financing flows

4. Definitions

• Money Laundering – The act of concealing the origins of criminally obtained funds, typically by moving them through a legitimate financial system.
• Terrorist Financing – Providing or collecting funds with the intent that they be used to carry out terrorist acts.
• Customer Due Diligence (CDD) – A process used to verify the identity of a client and understand the nature of the business relationship.
• Enhanced Due Diligence (EDD) – Additional scrutiny applied to high-risk clients, jurisdictions, or transactions.
• Politically Exposed Person (PEP) – An individual in a high-profile public role, along with their immediate family and close associates.

Ultimate Beneficial Owner (UBO) – The individual(s) who ultimately own or control a client entity.

5. Risk-Based Approach

Financely applies a risk-based framework to all client onboarding, transaction structuring, and investor relationships. Clients and transactions are assessed based on:

• Geographic risk (e.g., sanctioned or high-risk jurisdictions)
• Nature of the transaction (e.g., commodity trade, construction project, bridge loan)
• Complexity of the ownership or funding structure
• Size and frequency of transactions
• Use of third parties or intermediaries

Based on this assessment, Financely classifies relationships as low, medium, or high risk, with corresponding levels of due diligence applied.

6. Know Your Customer (KYC) & Due Diligence

Before entering any commercial relationship, Financely performs full KYC checks.

For Individuals:

• Government-issued ID
• Proof of address (dated within 90 days)
• Source of funds
• PEP declaration

For Entities:

• Certificate of incorporation
• Shareholder registry and UBO verification
• Identification of directors and controlling parties
• Registered business address
• Description of business activity
• Source of funds and, where applicable, source of wealth

For All Clients:

• KYC checks must be complete before engagement
• Ongoing monitoring continues throughout the relationship
• Refusal to provide required documentation results in immediate rejection or termination of the relationship

7. Enhanced Due Diligence (EDD)

EDD is mandatory for:

• PEPs or those closely linked to them
• Clients or counterparties from high-risk or sanctioned countries
• Transactions exceeding $500,000
• Clients using offshore structures or nominee shareholders without justification
• Any client whose ownership structure is intentionally obscured

EDD measures include:

• Additional identity verification steps
• Source of wealth verification
• Open-source intelligence gathering (media, sanctions databases, adverse news)
• Internal escalation to senior management

8. Ongoing Monitoring

All client activity is subject to continuous oversight. Financely performs:

• Periodic reviews of existing KYC files
• Sanctions and watchlist screening (OFAC, EU, UN, UK)
• Internal flagging of unexpected activity, such as:
• Third-party payment instructions
• Changes to transaction structure
• Use of shell companies
• Sudden influxes of capital or unexplained urgency

Where risk levels change, updated due diligence may be required.

9. Recordkeeping

Financely retains all AML-related documentation for a minimum of five (5) years from the date of the last transaction or end of the business relationship.

Records include:

• Client identification and KYC documents
• Correspondence and internal notes
• Risk assessments and classification rationale
• Transaction history and deal files
• Any Suspicious Activity Reports (SARs)

Data is stored in secure, access-controlled systems with audit logging in place.

10. Reporting Suspicious Activity

All team members must report suspicious behavior or transactions immediately to the AML Compliance Officer.

Indicators may include:

• Evasive answers during onboarding
• Attempts to alter documentation after submission
• Reluctance to explain the purpose of a transaction
• Structuring of transactions just below threshold limits
• Sudden involvement of third-party payers with no business link

No employee or contractor may inform a client that a report has been filed (“tipping off” is strictly prohibited). Where required, Financely will report directly to the Financial Crimes Enforcement Network (FinCEN) or the relevant regulatory body.

11. Sanctions Compliance

Financely screens all clients, partners, and investors against sanctions lists including:

• OFAC Specially Designated Nationals (SDN)
• United Nations Sanctions List
• European Union Consolidated List
• UK HM Treasury Sanctions List

If a match is found, the relationship is immediately suspended pending further review. Confirmed matches result in termination and reporting to authorities.

12. AML Compliance Officer

Financely has appointed an AML Compliance Officer responsible for:

• Maintaining and updating AML procedures
• Conducting internal audits and policy reviews
• Investigating red flags and reviewing reports from staff
• Coordinating with external regulators and legal counsel
• Approving high-risk relationships and transactions

The Compliance Officer has authority to halt any transaction or engagement pending review.

13. Training & Awareness

All personnel involved in client interaction, onboarding, or deal evaluation must complete AML training within 30 days of starting and refresh it annually.

Training includes:

• AML legal framework
• KYC and due diligence procedures
• Detecting and reporting suspicious activity
• Risks specific to trade and project finance
• Tipping off and confidentiality obligations

Attendance is mandatory and documented.

14. Enforcement

Any violation of this policy will be treated as a serious matter. Breaches may result in:

• Immediate termination of contract or employment
• Referral to law enforcement or regulatory bodies
• Legal action or financial penalties

Financely will not hesitate to sever relationships with clients or partners who present an unacceptable risk.

15. Policy Review

This AML Policy is reviewed annually and updated as needed to reflect changes in regulation, business activity, or risk profile. All updates are reviewed and approved by the executive team. The most current version is made available to all personnel and is enforceable across all jurisdictions in which Financely operates.