AML/CFT Statement

BENEDIXUS OÜ

POLICY FOR PREVENTION OF MONEY LAUNDERING AND TERRORIST FINANCING

OBJECTIVE AND BASES OF POLICY

The legal basis of this Policy is the legislation of the Republic of Estonia and the European Union, international agreements and conventions, instructions of international organisations and regulatory authorities.

The objective of the Policy is to establish the basic principles and general activity guidelines in order to ensure efficient and proportionate implementation of money laundering and terrorist financing prevention measures at BENEDIXUS OÜ, hereinafter the Company.

The Company was founded on 29.05.2019, the Company’s website is at www.benedixus.com. The money laundering and terrorist financing prevention activities are organised by and are the responsibility of a member of the Management Board of the Company or the Financial Intelligence Unit Compliance Officer appointed by a member of the Management Board.

The Company’s risks and the measures for mitigating these are determined by the Risk Assessment; the Company’s risk appetite is also determined in the Risk Assessment.

The Company is guided upon prevention of the money laundering and terrorist financing by the principle of Know Your Customer. One of the primary prerequisites for the efficient functioning of the principle of Know Your Customer is the gathering of as precise and as thorough data as possible upon establishment of the customer relationship. This enables, based on the data provided by the customer, to position the customer’s initial degree of risk and assess the compliance of the customer’s payment behaviour with the data provided thereby.

The risk-based approach, gathering and updating of data, monitoring of transactions and analysing of documents certifying the origin of property are the measures which implementation must result in the creation for the Company of a full picture of the customer and the Company’s inner belief that the customer’s activities are legal.

The Company implements the principle of Know Your Customer during the entire customer relationship. The Company assesses and analyses the risks of money laundering and terrorist financing on a regular basis and has established detailed instructions to the employees of the Company for money laundering and terrorist financing prevention.

The specific instructions for the prevention of money laundering and terrorist financing are determined in the guideline “Procedures to prevent money laundering and terrorist financing”. The employees of the Company are obliged to fully comply with the instructions for prevention of money laundering and terrorist financing established in the legislation and the internal rules.

COMPANY’S AREAS OF ACTIVITY

The Company provides the following financial services permitted by authorisation FFA000350 issued by the Police and Border Guard Board:

Lending;
Intermediation of money;
Leasing transactions;
Guarantees and commitments;
Management of securities portfolios;
Advising of customers;
Other transactions which are similar to the financial services specified above;

RISK MANAGEMENT SYSTEM

All employees must ensure the identification of risks in the activities, products and processes in their sphere of responsibility, assessment thereof and implementation of sufficient control mechanisms to identify any deficiencies and errors in the activities of the employees, job descriptions, procedures or processes. In order to ensure compliance with this principle, the Company has divided the risk management tasks according to the international method of three lines of defence.

1st line of defence

The tasks of the first line of defence are fulfilled by a fully automated IT solution. The task of the program is to determine, on the basis of the entered data, the customers’ risk profile and their degree of risk, the appropriate due diligence measures and the monitoring frequency. The work of the program is monitored by the FIU Compliance Officer and internal audit.

2nd line of defence

The tasks of the second line of defence are fulfilled by the FIU Compliance Officer who ensures training of the employees, implementation of the international sanctions, gathering of information about unusual transactions, transactions suspected of money laundering and/or of the nature referring to terrorist financing, analysing of the respective information and communication thereof, as appropriate, to the Financial Intelligence Unit, and observance of any precepts issued by the latter.

The FIU Compliance Officer inspects annually the work of the 1st line of defence, i.e. the customer managers and automated IT solutions, upon compliance with the requirements in the area of preventing money laundering and terrorist financing, records the results of the inspection and, if any deficiencies or violations are detected, requires their elimination and informs a member of the Management Board about the deficiencies and/or violations.

After every 6 months FIU Compliance Officer presents overview about AML&CTF activities and statistics to the Management Board.

3rd line of defence

The tasks of the third line of defence are fulfilled by a member of the Management board who also performs the function of internal audit. A member of the Management Board is responsible for the existence of updated internal rules in line with the activity profile required for meeting the requirements under the legislation and for their compliance and updating and coordinates the work of the FIU Compliance Officer and, if necessary, updates the IT solutions, customer profile parameters and risk appetite. A member of the Management Board also conducts internal audit of the Company’s internal procedures/processes in order to assess efficiency of the current money laundering and terrorist financing prevention measures and their compliance with the established requirements.

ASSESSMENT OF RISKS

By constant assessment of risks the Company tries to minimise the possibility that its services could be used for money laundering or terrorist financing. Annual and ad hoc risk assessments are documented and made available to the employees and, if necessary, to the regulatory authorities.

The measures adopted for the identification, assessment and analysis of risks must comply with the nature and complexity of the business activities. After the assessment of risks, such measures must be prescribed by which the risks are efficiently mitigated. The main risk factors, how high is the probability of their realisation, and to what extent due diligence measures have to be applied for mitigating the risks are established during risk assessment.

In order to assess risks, information is gathered about the customers which allows to determine the customer profile and understand the risks associated with the customer and the transactions of the customer. When identifying the risks, different risk categories are taken into consideration in the aggregate and the degree of risk is determined for the customer. The scope of the due diligence measures applicable to the customer depends on the degree of risk of the customer.

Determination of the degree of risk is based on predetermined criteria based on which customers of low, medium and high degree of risk are determined, determining also the customers and services for which the application of simplified or usual due diligence measures is sufficient and the customers and services for which it is necessary to apply enhanced due diligence measures.

The determination and changing of the degree of risk requires continuous monitoring of the business relationship, including analysis of the transactions conducted during the business relationship in order to ensure that the transactions conducted are in line with the Company’s knowledge about the customer, the customer’s activities and their compliance with the criteria of the degree of risk assigned to the customer.

DUE DILIGENCE MEASURES

Depending on the customer’s risk profile the Company applies either simplified, usual or enhanced due diligence measures. The bases for the selection of due diligence measures and the scope of their application have been determined by the Company in the Risk Assessment. Detailed instructions to the employees of the Company for applying due diligence measures are established in the guideline “Procedures to prevent money laundering and terrorist financing”.

The Company uses a risk-based approach upon application of due diligence measures, observes the principle of Know Your Customer and conducts continuous monitoring of the customers and transactions.

The Company ensures that all employees pass training on the prevention of money laundering and terrorist financing before commencement of work and provides subsequent training to them based on necessity, but not less frequently that once annually.

CUSTOMER PROFILE EXCLUSIONS

The Company has determined a number of criteria and characteristics in the customer profile which preclude the establishment of a business relationship with the person by the Company:

natural or legal persons from the countries where sufficient measures for prevention of money laundering and terrorist financing are not applied or customers included in the UN, OFAC and EU lists of sanctions;
anonymous and/or fictitious persons and figureheads incl. correspondent relations with shell banks;
legal persons having bearer shares;
companies having no understandable economic operation;
companies which operation is based on pyramid or fraud schemes;
non-licensed financial institutions / crypto exchanges (that have no registration or that are not registered with the local FIU);
companies engaged in gambling that have no licence or registration or that are not registered with the local FIU;
companies engaged in the intermediation/sale of medical goods having no licence for operation within the EEA;
traders in counterfeit goods and persons violating copyrights;
providers of tumbler/mixer services;
companies using the services of nominal directors/representatives;
traders in any weapons or related dual-use items;
providers of adult services which are not regulated in the EU.

UPDATING OF POLICY

The Management Board of the Company examines the compliance of the Money Laundering and Terrorist Financing Prevention Policy with the legislation, the Company’s economic results and risk management model annually and updates the Policy, if necessary.