Act - Estonian Money Laundering and Terrorist Financing Prevention Act;

AML/CTF – Anti-Money Laundering and Counter-Terrorist Financing;

Beneficial owner – a natural person, who via ownership or other type of control, has the final dominant influence over a natural or legal person, or in whose interests, for the benefit of whom or in whose name a transaction or operation is made;

Business relationship - relationship between the Company and the Customer or the Collateral provider during provision of the Services by the Company;

Collateral provider – a natural person (aged at least 18) or legal entity, which may be a guarantor, pledgor or mortgagor, and which provides the collateral, which may be mortgage, commercial pledge or guarantee, in order to secure the Project owner’s liabilities arising from the loan agreement;

Company – FUNDAUS OÜ, registration number: 14643807, legal address: Harju maakond, Tallinn, Kesklinna linnaosa, Tartu mnt 6-10, 10145;

Customer – the Project owner or the Investor;

Due diligence – research of the Customer or the Collateral provider in order to get certainty in its trustworthiness;

Electronic identification – identification of the Investor via electronic means provided by the Company accepted online strong identity authentication service provider – www.sumsub.com;

FIU (Financial Intelligence Unit) – a governmental authority in the area of government of the Ministry of Finance of Estonia, which is autonomously engaged in regulatory enforcement and autonomously exercises the enforcement powers of the state on the grounds and to the extent provided for the Money Laundering and Terrorist Financing Prevention Act;

GDPR – REGULATION (EU) 2016/679 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 27 April 2016 on the protection of natural persons with regard to the processing of personal data and on the free movement of such data, and repealing Directive 95/46/EC (General Data Protection Regulation);

High-terrorism-risk country – the High-risk country and jurisdiction being a safe heaven of international terrorism;

High-risk country - third-country or jurisdiction which have strategic deficiencies in their national AML/CTF regimes that pose significant threats to the financial system of the European Union;

Identification form – the questionnaire filled in by the Customer or the Collateral provider for the purpose of identification;

Information sources –public sources available (internet, company registers, social networks, mass media etc.);

Investor – a natural person aged 18 years or older, or a legal entity, who has passed registration and identification on the Platform, has been identified and accepted by the Payment service provider and the Company, and receives the Services;

KYC information and documents - “Know Your Customer” information and documents obtained by the Company during the process of on-boarding, i.e., personal identification documents and the Due diligence documents and information;

Law – legal regulation applicable to the business activity of the Company;

Member state – European Union member state;

ML/TF – Money Laundering and Terrorist Financing;

Payment service provider – the Company’s accepted provider of payment services – Lemonway SAS (www.lemonway.com);

PEP – a natural person who performs or has performed prominent public functions and with regard to whom related risks remain, it’s family member and close associate;

Policy –this Anti-Money Laundering and Countering- Terrorist Financing Policy;

Platform – an electronic system, connected with the Website and operated by the Company;

Project – commercial project offered by the Project owner for financing via the Platform;

Project owner – a legal entity, Member state resident, which has applied for the Services provided by the Company, has been identified and accepted by the Payment service provider and the Company, and receives the Services;

Related person – a person associated with the Customer or Collateral provider, i.e., the Beneficial owner, representative, member of ownership structure, management board member or director, who’s risk affects the Customer’s ML/TF risk level;

Sanctions - tool of foreign policy, which imposes as restrictive measures, aimed at supporting the maintenance or restoration of peace, international security, democracy, and the rule of law, following human rights and international law or achieving other objectives of the United Nations (UN) or the European Union (EU);

Sanctions list - EU, UN and OFAC list of persons, organizations, and countries, being a subject to restrictive measures and prohibited for cooperation fully or partly with the view to prevent the involvement in terrorism activity, or protect national security interests, international law and international peace and security;

Services - lending-based crowdfunding services, provided by the Company;

Shell bank - a credit institution or financial institution or an institution that carries out activities equivalent to those carried out by credit institutions and financial institutions, incorporated in a jurisdiction in which it has no physical presence, involving meaningful mind and management, and which is unaffiliated with a regulated credit or financial group;

Suspicion of the ML/TF –any circumstance or knowledge which indicates that a transaction or activity is directed at the commission of money laundering or the concealment of criminal assets, while the application of due diligence measures has not eliminated them;

Tax residence – the country where the person has an obligation of taxation;

Unacceptable person – the Customer or the Collateral provider, which cannot be accepted by the Company and with whom it rejects the Business relationship;

Unusual activity - economically unusual or illogical circumstances or long-lasting activity of the Customer, which under certain conditions may indicate possible links to the proceeds of crime or the ML/TF;

Website – www.fundaus.com.

1. Policy Statement

   1. The Policy is adopted by the Company in compliance with the Act. The purpose of the Policy is to declare the main AML/CTF requirements the Company complies with in order to prevent involvement of the Company, its employees or Customers into the ML/TF.
   2. The Company has established the Policy to ensure that all new and existing Customers are identified and verified to a reasonable level of certainty, the Due diligence is performed and the ML/TF risk is assessed.
   3. If the Company unable to apply the appropriate Due diligence required by the Act it refuses establishment of the Business relationship.
   4. As the Company provides the Services in cooperation with the Payment services provider, the Company cooperates with it in AML/CTF related matters.
   5. The main AML/CTF measures the Company ensures are:

      • identification of the Customers and the Collateral providers and verification of the submitted information based on information obtained from a reliable and independent source, including using means of electronic identification;

      • identification and verification of a representatives of the Customers and Collateral providers and their right of representation;

      • identification of the Beneficial owners and, for the purpose of verifying their identity, taking measures to the extent that allows the Company to make certain that it knows who the Beneficial owners are, and understands the ownership and control structure of the Customers and the Collateral providers;

      • understanding of the Business relationship;

      • gathering information on whether the Customer or the Collateral provider is the PEP;

      • monitoring of the Business relationship.

   6. The defined measures implementation process is governed by the Company’s AML/CTF procedures.
   7. The Policy is binding to the all employees of the Company involved in the Customer support and implementation of the AML/CTF measures.
   8. The Policy is revised and updated once in twelve (12) months or immediately after the Act is amended and the amendments come into force. The updated version of the Policy is published on the Website.

2. Money Laundering and Terrorist Financing

   Money laundering means following actions:

   • the conversion or transfer of property derived from criminal activity or property obtained instead of such property, knowing that such property is derived from criminal activity or from an act of participation in such activity, for the purpose of concealing or disguising the illicit origin of the property or of assisting any person who is involved in the commission of such an activity to evade the legal consequences of that person’s actions;

   • the acquisition, possession or use of property derived from criminal activity or property obtained instead of such property, knowing, at the time of receipt, that such property was derived from criminal activity or from an act of participation therein;

   • the concealment or disguise of the true nature, source, location, disposition, movement, rights with respect to, or ownership of, property derived from criminal activity or property obtained instead of such property, knowing that such property is derived from criminal activity or from an act of participation in such an activity;

   • the participation in, association to commit, attempts to commit and aiding, abetting, facilitating and concealment the commission of any of the above-mentioned activities.

   Money laundering is regarded as such also where a criminal activity which generates the property to be laundered was carried out outside of the Republic of Estonia, and also where the details of a criminal activity which generates the property to be laundered have been identified.

   Terrorism financing means the financing or knowing and supporting of an act of terrorism as well as terrorism organization or a person whose activities are directed against international security, the person or the environment while posing a threat to life or health, against foreign states or international organizations, or of a criminal offence dangerous to the public, or manufacture, distribution or use of prohibited weapons, illegal seizure, damaging or destruction of property to a significant extent, or interference with computer data or hindrance of functioning of computer systems as well as threatening with commission of such acts, if committed with the purpose of forcing the state or an international organization to perform an act or omission, or seriously interfering with or destroying the political, constitutional, economic or social structure of the state, or seriously interfering with or destroying the operation of an international organization, or seriously terrorizing the population.

3. Customer on-boarding

   1. The initial Due diligence of the Customer is executed both by the Company and by the Payment service provider.
   2. The Business relationship may be established only after the decision to accept the Customer and to open a payment account is received from the Payment service provider.
   3. If the Payment service provider refuses to accept the Customer and to open an account, the Company rejects establishment of the Business relationship.
   4. The Company verifies the Collateral provider’s provided KYC information and documents and decides on the establishment or rejection of the Business relationship or on requesting of additional documents and information.

4. Identity verification and the initial Due diligence of the Investor

   1. The potential Investor approaches the Company via the Website by filling the Identification form, providing its KYC information and documents stated in the Annex 1 and Annex 2 to this Policy.
   2. After the potential Investor has filled in the Identification form, it passes the procedure of the Electronic identification via the Electronic identification service provider, using the valid personal identification document.
   3. The respective Investor being a natural person passes the procedure of identity verification via the Electronic identification service provider by itself.
   4. When the respective Investor is a legal entity the procedure of identity verification via the Electronic identification service provider is passed by its legal representative.

5. Identity verification and the initial Due diligence of the Project owner

   1. The potential Project owner approaches the Company via the Website or in other way and applies for funding for its Project.
   2. The identity verification of the Project owner is performed only with its personal participation in the identity verification procedure (on-site identification).
   3. The Project shall provide the information and documents listed in the Annex 1 and Annex 2 to this Policy.

6. Identity verification and the initial Due diligence of the Collateral provider

   1. The identity verification of the Collateral provider is performed only with its personal participation (on-site identification).
   2. The Identification form related to the Collateral provider may be filled and the KYC information and documents may be provided by the Project owner on behalf of the Collateral provider, provided that the Collateral provider passes identity verification process by itself.
   3. The Collateral provider shall provide the information and documents listed in the Annex 1 and Annex 2 to this Policy.

7. KYC information and documents related requirements

   1. The documents provided by the Investor may be accepted if they are scanned from originals and executed in accordance with regulatory requirements in relation to signatures, translations, certification and legalization/Apostille.
   2. The documents collected from the Project owner and Collateral provider may be accepted only in originals or duly certified copies, executed in accordance with regulatory requirements in relation to signatures, translations, certification and legalization/Apostille.
   3. The documents, provided for the purpose of the Due diligence, are accepted in a language of any Member state, but the Company is entitled to request official (certified) translation of the documents to English or Estonian language.
   4. The terms of validity of the documents, established by the Law, this Policy and the Payment service provider shall be duly observed.
   5. The additional requirements to the documents obtained for submission to the Payment service provider may be applied based on the Payment service provider’s requirements.

8. Unacceptable person

   The Company doesn’t provide the Services to the Unacceptable persons listed below:

   • Absence of payment account in the licensed credit or payment institution in EU;

   • PEP, PEP family members and PEP’s close associate;

   • Subject to the Sanctions;

   • A legal person, which generates more than 50% of its annual revenue from actual economic activities in, or whose country or territory of location is a low tax territory in accordance with the lists provided by legal enactments of the Republic of Estonia;

   • Shell banks;

   • Bearer shares capital;

   • Complex ownership structure appears unusual or excessively complex, given the nature of the company’s business with a potential to conceal the underlying Beneficial owner;

   • Subject to sanctions, embargos or similar measures;

   • The High-risk third countries (Annex 3);

   • The High-terrorism-risk countries (Annex 3);

   • Conviction of ML or TF or another financial crime;

   • Suspicions of ML/TF or other crimes;

   • Connection with the high-risk business activity defined in the Annex 4.

9. Monitoring of the Business relationship

   1. The Company permanently monitors the Customers’ and Collateral providers’ compliance with requirements of this Policy and the Act.
   2. The Customer will be regularly asked and is obliged to provide updated information and documents to keep its files up-to-date and is obliged to provide them in the term prescribed by the Company.

10. Suspension and termination of the Business relationship

    1. If the Customer’s submitted documents or information are not sufficient to perform the Due diligence or to ensure proper monitoring of the Business relationship in accordance with this Policy, or the Customer does not submit the required information and documents to the Payment service provider, the provision of the Service will be suspended.
    2. Provision of the Services may be resumed after the requested documents and information are submitted, and the complete Due diligence is performed both by the Company and the Payment service provider.
    3. The Company may decide on immediate termination of the Business relationship in case of the following events:

       • Provision of false identification information;

       • Performance of unlawful activity;

       • Activities contrary to common decency;

       • Detection of connection of the Customer or the Collateral provider with an offence related to the ML/TF;

       • Over-indebtedness;

       • Insolvency or liquidation;

       • If it is not possible to apply the Due diligence measures or to ensure monitoring of the Business relationship in accordance with requirements of the Law, because the submission of the requested document and information is refused or delayed for more than 3 (three) months counting from the date of the respective request;

       • The submitted information gives no grounds for reassurance that the collected information is adequate;

       • The Unacceptable person risk is determined;

       • The Payment service provider has terminated the provision of payment services to the Customer of closed the account of the Customer opened with it.

    4. The Customer is notified on the Responsible employee’s decision to terminate the Business relationship by the Customer assistant without explaining the reasons.

11. Duty to report to the FIU

    1. Where the Company identifies in economic or professional activities, a professional act or provision of a professional service an activity or facts whose characteristics refer to the use of criminal proceeds or terrorism financing or to the commission of related offences or an attempt thereof or regarding which the Company suspects or knows that it constitutes the ML/TF or the commission of related offences, the Company reports it to the FIU in accordance with the Act.
    2. Where the Company identifies a person being a subject to the financial Sanctions or an act which is intended to violation of regime of the financial Sanctions it applies the Sanctions and reports to the FIU.
    3. The report to the FIU is strictly confidential, and the Company will not inform the Customer on such submission.

12. Retaining and safekeeping

    1. The KYC documents and information about the Customers and the Collateral providers and all data related to the identity verification, the Due diligence, monitoring, the basis, and the results of the Due diligence, etc., are kept for 5 years from the date of termination of the Business relationship or for the other period of time stated by the Law.
    2. The data and information obtained during performance of the requirements of this Policy and the Law will be used only for the purposes, defined in the Rules and it is not allowed to use it for another purposes.
    3. The personal data shall be processed and protected in accordance with the GDPR requirements and the Privacy policy of the Company.

Annex 1

Identification form and KYC information

Information on a natural person

- Name, surname;

- Personal identification code;

- Date and place of birth;

- Address of the place of residence or seat;

- Nationality (citizenship);

- Personal valid identification document data;

- Tax number;

- Tax residence address;

- Telephone (mobile);

- E-mail.

Information on a legal entity

- Name;

- Legal form;

- Registration number, court of jurisdiction and the date of registration;

- Legal address;

- Name, e-mail, telephone, address, date of birth, nationality of the director, members of the management board or other body replacing the management board or representative and their authorization in representing the legal person;

- Identification document data for the representative;

- Tax residence country;

- Tax residence number;

- Business activity location (post address);

- Telephone;

- E-mail;

- Type of business activity;

- License, license number (if the activity is subject to licensing).

Information on the Beneficial owner

- Name, surname;

- Date of birth;

- Identification document data;

- Nationality (citizenship);

- Address;

- The date the person became the Beneficial owner;

- Way of control;

- Ownership per cents (in case of legal entity).

Information on a representative

- Name, surname;

- Date of birth;

- Identification document data;

- Nationality (citizenship).

Annex 2

KYC documents

Natural person:

- A valid identification document (front and back sides);

- A second valid identification document or a tax assessment notice issued within the last 12 months;

- A bank statement (to be submitted upon request of the payout of funds from the account with the Payment service provider);

- Self-employed person’s document certifying registration.

Additional documents are requested in the following cases:

- Power of attorney or other right and scope of representation proving document - in case of representation;

- A valid identification document (front and back side);

- A second valid identification document or a tax assessment notice issued within the last 12 months;

- A valid identification document of the Beneficial owner (front and back side);

- Tax residence document - if it is not possible to detect tax residence country from other available Information source.

Legal entity:

- Extract from the Company Register proving identification data of a legal entity, issued within the last 3 months;

- A valid identification document of each Beneficial owner (front and back side);

- Memorandum and Articles of Association or relevant document;

- Declaration of income or tax return document;

- A document from the Company Register, showing the Beneficial owner and proving its identification data;

- A letter signed by the legal representative if the capital structure is not stated in the Memorandum and Articles of Association or relevant document;

- A valid identification document (front and back side) of a natural person authorized to represent a legal entity;

- A document proving the representation rights of an authorized person, i.e., power of attorney or extract from the Company Register, issued within the last 3 months.

Additional documents are requested in the following cases:

- Legal entity and its Beneficial owner’s Tax residence document - if it is not possible to detect tax residence country from other available Information source.

Annex 3

High-risk and High-terrorism-risk countries

• High-risk countries and other monitored jurisdictions defined by FATF;

• High-risk third countries defined by European Commission;

• Countries and territories being a subject of International, National Sanctions or Sanctions imposed by EU or NATO organizations member state, for example, OFAC.

Annex 4

High-risk business activity

1. Any kind of illegal activity;
2. Extremist/ultra-radical/dissident/propagandist movements;
3. Religious organizations;
4. Piracy device/spyware sales;
5. Counterfeit product sales;
6. Airsoft/imitation firearm sales;
7. Production or trade in weapons and munitions;
8. Dual use goods production and sales;
9. Production, trade, storage, or transport of significant volumes of hazardous chemicals, or commercial scale usage of hazardous chemicals;
10. Quarries, mining, or processing of metal ores or coal;
11. Unauthorized streaming sites;
12. Any business relating to pornography or prostitution;
13. Pre-paid card issuing;
14. Security trading or forex sites;
15. Currency, including virtual currency purchasing;
16. Proselytising sites;
17. Online unlicensed Gambling/Betting/ Casino/Horse Racing/Bingo/Sports Betting;
18. Sales of followers, views, likes or comments;
19. Tobacco sales;
20. Narcotic substance sales;
21. Cannabis-derived product sales;
22. Trade in wildlife or wildlife products regulated under CITES;
23. Trading with living animals;
24. Trading of Bones and Ivory;
25. Adoption services;
26. Human Body Parts/organs and Pathogens;
27. Unlicensed donations/charities;
28. Travel agencies/operators;
29. Government owned entities;
30. Political organizations;
31. Pyramid or Ponzi scheme;
32. Hawala.