Financial Crime Risk Appetite Statement

KwiikPay SP z.o.o. is committed to maintaining a robust and effective framework for preventing Financial Crime including Money Laundering (AML), Counter-Terrorist Financing (CTF), Fraud, Sanctions and Anti-Bribery & Corruption (ABC).

KwiikPay maintains a strong risk culture and risk awareness in its delivery of strategic goals. KwiikPay embraces carefully managed risk taking in-line with regulatory requirements, internal procedures and high ethical standards and business practises.

What follows is an extract from KwiikPay's risk appetite statement which details:

• Purpose and Scope
• Overview of Risk Appetite
• Prohibited and restricted business activities
• Prohibited jurisdictions for both onboarding and transacting
• High Risk jurisdictions for both onboarding and transacting

Purpose and Scope

This Financial Crime Risk Appetite Statement (the "Risk Statement") emphasises KwiikPay's commitment to combating financial crime by defining KwiikPay's risk appetite, risk tolerance and strategy and aligns with the values, culture and high levels of ethical standards and business practises.

Financial crime, as referred to throughout, encompasses Money Laundering, Terrorist Financing, Tax Evasion, Proliferation Financing, Sanctions breaches, Fraud and associated risks in both fiat and crypto assets.

We perceive our relationships with our customers as a collaborative venture, where mutual dedication to legal compliance is imperative. Each customer pledges to fulfil its obligations under the applicable law, ensuring that accounts at KwiikPay operate in strict adherence to governing statutes, regulations and robust standards. The principles outlined in this statement apply directly to our B2C and B2B customers, Business Partners, Contractors, Sub-Contractors, Third Parties, all employees and Senior Management of KwiikPay.

KwiikPay has no appetite for any involvement (direct or indirect) in facilitating deliberate or knowing participation in activities that may lead to illicit behaviour or engaging in activities where potential new or increased risk exposures have not been thoroughly evaluated and mitigated before commencement.

Overview of Risk Appetite

KwiikPay maintains a comprehensive financial crime management framework, which emphasises the importance of regulatory standards, professionalism, maintaining high quality staff, and accountability to stakeholders and forms part of the overarching Compliance Management Framework that illustrates a three-pronged approach of Prevent, Detect and Manage.

KwiikPay's risk appetite underpins both this framework and the firm's financial crime mitigation strategy.

2.1 Financial Crime Risk Appetite Statement

• Financial Crime Business Wide Risk Assessment
• Financial Crime Policies and Procedures
• Customer Due Diligence (CDD) and Enhanced Due Diligence (EDD) procedures (including onboarding and ongoing screening, monitoring)
• Transaction Monitoring (TM) of Fiat to Cryptocurrency (Off-ramp to On-ramp) including but not limited to, spot checks and Requests for Information (RFIs), suspicious and unusual activity including spikes and dormancy as part of Detection measures
• AML/CTF training for the Board and all employees

2.2 Cryptocurrency Risk

KwiikPay is committed to combating financial crime and continually strives to ensure that accounts held at KwiikPay are not misused for the purpose of financial crime irrespective of product or origination. Both Fiat currencies and Cryptocurrencies carry high risks of illicit activity. Cryptocurrencies are a type of Virtual Assets and fall within the definition prescribed by the Financial Action Task Force (FATF) and are globally recognised to be of a very high risk:

• High and rapid levels of volatility in the Virtual Asset space with it being largely unregulated and a lack of protection from statutory bodies
• The values of cryptocurrencies can drop as quickly as they rise based on, but not limited to, public speculation, supply and demand, swings in investor confidence, and operational interruptions at exchanges
• You should be prepared to lose all the money you invest in Virtual Assets
• All Virtual Assets are highly complex. You should do your own research before investing and/or using Virtual Assets and in particular, Cryptocurrencies
• Reliance on putting all your money into a single type of investment allows criminals to target the vulnerable, especially those with a lack of knowledge and understanding

2.3 Financial Crime Risk Management Controls

Our financial crime risk management controls are proportionate to the risks we face. In line with this, KwiikPay will not:

• Knowingly facilitate criminal activities by customers, including but not limited to Anti-Bribery and Corruption, Financial Crime including Tax Evasion, AML, CTF, Proliferation Financing or any other fraudulent or illegal activity
• Accept any deliberate or systemic breaches of applicable laws and regulation
• Facilitate transactions with entities and/or individuals that:
  • Cannot be identified in accordance with KwiikPay's KYC/KYB programme, in-line with KwiikPay's AML, Fraud, ABC Policies and all AML applicable laws, and are unresponsive to information requested by KwiikPay which is significant to their identification, activities or intentionally provide misleading information to KwiikPay as part of the onboarding and/or ongoing monitoring procedures
  • Are Sanctioned, on Designated Lists or known to be associated, directly and/or indirectly with the financing of terrorism, drugs and human trafficking, corruption, relations with PEPs, RCAs, SIPs, SEIs, SOEs
  • Are known and verified to be operating without required licensing and/or registration(s)
• Operate any line of business or conduct business with any customer segment in which the Board believes that its control environment cannot protect KwiikPay from risks that exceed its stated tolerance

All high-risk customers (as determined by our Customer Risk Assessment methodology) must be approved by the relevant MLRO / Compliance Manager prior to onboarding and/or post periodic reviews on an ongoing basis (existing customers) as part of the KYC, KYB and KYBP fulfilment requirements, in-line with KwiikPay's AML Policies and procedures, applicable laws (statute and common) and regulatory requirements. Any High-Risk customers that are not approved by the MLRO / Compliance Manager must either not be onboarded or offboarded immediately (existing customers) in accordance with KwiikPay's offboarding procedures policies.

2.4 Prohibited & Restricted Customer Business Activities

Whilst KwiikPay's customer base covers entities active within a broad range of industries, we recognise that our customers may have use cases which involve them being active in other sectors.

KwiikPay recognises that some industries carry a greater inherent financial crime risk than others. As such, KwiikPay applies further restrictions and prohibitions depending on the industry in which customers operate.

KwiikPay will not enter into business relationships with entities or individuals actively involved in, formerly involved in and/or with strong connections to the following sectors:

• Arms and defence, such as manufacturers and distributors of military fighting vehicles, weapons including but not limited to Nuclear, explosives and ammunition
• Illegal, unregulated, unlicensed, or unauthorised gambling or gaming firms
• Unregulated or unlicensed Money Service Businesses
• Illegal sale or distribution of recreational drugs
• CBD Oil (Cannabidiol — oil derived from the Cannabis Plant)
• Class A Drugs Dealers, Cartels and organisations including Marijuana-related businesses
• Unlicensed Pharmaceuticals, Chemical firms, including but not limited to Research and Development, manufactured and/or industrial
• Businesses that produce, manufacture, distribute hazardous chemicals and materials or industrial or laboratory-grade chemicals, controlled substances, precursor chemicals or any other substances that may be used in the manufacture of illicit drugs, explosives or other harmful compounds
• Businesses that conduct research and development of Pathogens including but not limited to manufacturing, industrial, biotechnologies, promotion
• Trafficking of cultural artefacts and/or wildlife or protected species
• Human trafficking including body parts, modern slavery, and any other illegal activity
• Offenders of environmental regulations and perpetrators of environmental crime
• Adult industry
• Unlicensed and unregulated exchanges (including but not limited to Virtual Assets)

This list is not exhaustive and will be updated as and when necessary.

2.5 Prohibited Transactions

KwiikPay accounts must not be used to initiate transactions with the following characteristics:

• Payments that appear to relate to any form of illegal/unlawful activity
• Payments sanctioned by applicable law and regulations (UN, EU including member state, UK and US)
• Payments that are non-compliant with the Funds Transfer Regulations, EU Wire Regulations, Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA) or equivalent
• Payments that do not appear to have a legitimate purpose, including without limitation, commercial payments in repetitive, round amounts and payments lacking transparency regarding the originator and beneficiary
• Payments related to the provision of correspondent banking services to Financial Institutions (nested/downstream correspondent banking services) not approved by KwiikPay

KwiikPay SP z.o.o. ("KwiikPay" or the "Firm") and its operations located in various jurisdictions are considered in the scope of this statement.

2.6 Prohibited and High Risk Country List

The list below illustrates those countries that KwiikPay considers High Risk, in accordance with regulatory bodies' global standards and global sanctions lists, determining whether a given relationship will be prohibited or EDD will be required, prior to onboarding and facilitating transactions to fulfil KYC and KYB requirements.

The below list will be amended as and when necessary.

This list is not exhaustive and will be updated as regulatory guidance changes. For a full country list, please contact info@kwiikpay.io.