AML and KYC Policy

DEFINITIONS

AML / Compliance Department - The unit has primary responsibility for the initiation and delivery aspects of the AML program within an Organization.

Business relationship - Business or commercial relationship between a Customer and the Organization and which is expected, at the time when the contact is established, to have an element of duration for a certain period (e.g. conclusion of an agreement between the Customer and the Organization, continuous performance of gambling/betting and monetary operations and transactions).

Close Associate - A natural person who, together with the Politically Exposed Person, is a member of the same legal entity or of a body without legal personality or maintains other business relationship.

Close family member - The spouse, the person with whom partnership has been registered (i.e. the cohabitant), parents, brothers, sisters, children and children’s spouses, children’s cohabitants.

Customer due diligence (CDD) - Identification of the Customer and verification the Customer’s identity on the basis of documents, data or information obtained from a reliable and independent source; assessment and, as appropriate, obtainment of information on the purpose and intended nature of the Business Relationship; the conducting of ongoing monitoring of the Business Relationship including scrutiny of transactions undertaken throughout the course of that relationship to ensure that the transactions being conducted are consistent with the Organizations’ knowledge of the Customer.

Customer/Client/Player- a person that uses online gambling and betting services provided by the Organization.

FATF– The Financial Action Task Force.

FIU – Financial Investigation Unit.

High-risk third countries - countries identified as having strategic deficiencies in their AML/CFT regime, which pose a significant threat to the Union’s financial system (Article 9 of Directive (EU) 2015/849).

Identification- A part of Customer Due Diligence, allowing to ascertain the identity of a person on the basis of the personalised unique information directly related to that person.

Law – Law on the Prevention of Money Laundering and Terrorist Financing.

Money laundering (ML) - the doing of any act which constitutes an offence of money laundering and is defined in the Law on the Prevention of Money Laundering and Terrorist Financing of Anjouan. The criminal acts cover all procedures that seek to change the identity of illegally obtained funds, arising from drug dealing, terrorist activities or any other crime in order to give impression that such money originated from legitimate or legal sources. Money laundering is the participation in any transaction that seeks to conceal or disguise the nature or origin of funds derived from illegal activities such as, for example, fraud, corruption, organized crime, or terrorism etc. 

Organization – Crea Tech Dynamics Limited, the company established under the laws of Costa Rica, with its registered address at Provincia 06 Puntarenas, Canton 11 Garabito, Jaco, Avenida Pastor Diaz, Costado Este De La Municipalidad De Garabito, Bufete Sanchez Chavarria, 61101 and company number: 3-102-910445, an online gambling institution established and authorized under the laws of Anjouan (license number ALSI-202409037-FI2) and, therefore, falling within the definition of an institution that falls under the Law on the Prevention of Money Laundering and Terrorist Financing. The term "Company / Organization'' when used in these Policies also refers to the management bodies of the Organization and the members of such bodies as well as the employees of the Organization.

Policy – AML/CFT and Sanctions Compliance Policy.

Politically Exposed Person (PEP)- Natural persons who are or have been entrusted with Prominent Public Functions and Close Family Members or Close Associates of such persons.

Prominent Public Functions:

1. The head of the state, the head of the government, a minister, a vice minister or a deputy minister, a secretary of the state, a chancellor of the parliament, government or a ministry;

2. A member of the parliament;

3. A member of the Supreme Court, the Constitutional Court or any other supreme judicial authorities whose decisions are not subject to appeal;

4. A mayor of the municipality, a head of the municipal administration;

5. A member of the management body of the supreme institution of state audit or control, or a chair, deputy chair or a member of the board of the central bank;

6. Ambassadors of foreign states, a charge d’affaires ad interim, the head of Anjouan armed forces, commander of the armed forces and units, chief of defense staff or senior officer of foreign armed forces;

7. A member of the management or supervisory body of a public undertaking, a public limited company or a private limited company, whose shares or part of shares, carrying more than 1/2 of the total votes at the general meeting of shareholders of such companies, are owned by the state;

8. A member of the management or supervisory body of a municipal undertaking, a public limited company or a private limited company whose shares or part of shares, carrying more than 1/2 of the total votes at the general meeting of shareholders of such companies, that are owned by the state, and which are considered as large enterprises 

9. A director, a deputy director or a member of the management or supervisory body of an international intergovernmental Organization;

10. A leader, a deputy leader or a member of the management body of a political party.

Source of funds – means the origin of the funds involved in a business relationship or occasional transaction. It includes both the activity that generated the funds used in the business relationship, for example the customer’s salary, as well as the means through which the customer’s funds were transferred.

Source of wealth – refers to funds that the customer has acquired during a prolonged period of time and that make up the customer’s entire body of wealth (total funds). When determining the source of wealth, the main focus is the acquisition of information on customer’s activities that indicate how the customer acquired the wealth.

Terrorist financing (TF) - the solicitation, collection or provision of funds with the intention that they may be used to support terrorist acts or organizations. Funds may stem from both legal and illicit sources. More precisely, according to the International Convention for the Suppression of the Financing of Terrorism, a person commits the crime of financing of terrorism "if that person by any means, directly or indirectly, unlawfully and willfully, provides or collects funds with the intention that they should be used or in the knowledge that they are to be used, in full or in part, in order to carry out" an offense.

1.1 As part of the commitment to maintaining the highest standards and following all relevant regulations, it is the Organizations’ policy to prohibit and prevent any cases of money laundering and terrorist financing. 

Whereas the Organization is Crea Tech Dynamics Limited, the company established under the laws of Costa Rica, with its registered address at Provincia 06 Puntarenas, Canton 11 Garabito, Jaco, Avenida Pastor Diaz, Costado Este De La Municipalidad De Garabito, Bufete Sanchez Chavarria, 61101 and company number: 3-102-910445, an online gambling institution established and authorized under the laws of Anjouan (license number ALSI-202409037-FI2) and, Money Laundering is the participation in any transaction that seeks to conceal or disguise the nature, or the origin of funds derived from the illegal activities. Money laundering involves not only the proceeds of drugs trafficking, but funds related to other illegal activities, including fraud, corruption, organized crime, terrorism, and many other crimes. Generally, the money laundering consists of three stages:

Placement: introduction of cash originating from illegal / criminal activities into financial or non-financial institutions.

Layering: separating the proceeds of criminal activities form their source through the use of layers of complex financial transactions. These layers are designed to hamper the audit trail, disguise the origin of funds and provide anonymity.

Integration: placing the laundered proceeds back into the economy in such a way that they re-enter the financial system as legitimate funds. 

1.2 Terrorist financing encompasses the means and methods used by terrorist organizations to finance their activities. This money can come from legitimate sources, for example from profits from businesses and charitable organizations. But terrorist groups can also get their financing from illegal activities such as trafficking in weapons, drugs or people, or kidnapping for ransom.

This Policy is developed and periodically updated by the Anti-Money Laundering Officer of Crea Tech Dynamics Limited (the Organization) based on the general principles set up by the Board of Directors of the Organization in relation to the prevention of money laundering and terrorist financing.

The Policy applies to all employees of the Organization and aims to setup key roles and responsibilities for the staff members as well as to ensure compliance with the following legislation:

All amendments and/or changes of the current version of the Policy must be approved by the Company’s Board of Directors.

1.3 Responsibilities and Recipients of the Document:

Owner of the process: AML Officer

Responsibilities:

This document is binding to all employees of the Organization whose job responsibilities are related to establishment and review of the business relationships.

In cases of violations of the Procedure, the detector of the violation immediately informs the head of his structural unit. If differences are found between the processes carried out in the Organization and those determined in the procedure, the Owner of the process should be informed about this.

Recipients of the Document:

2.1 The Board of Directors is responsible for ensuring that the Organization complies with its obligations under the Law. The Board shall assess and periodically review the effectiveness of the policies, arrangements and procedures put in place to comply with the obligations under the Law, and to take appropriate measures to address any deficiencies. 

2.2 The main duties and responsibilities of the Board of Directors in relation to the prevention of money laundering and terrorist financing mainly include:

Since the overall responsibility for the prevention of money laundering and terrorist financing lies with the Board of Directors, they are also responsible for the assessment and approval of the Annual Report prepared by the Anti-Money Laundering Officer and for taking any necessary actions as deemed appropriate under the circumstances to remedy any weaknesses and/or deficiencies identified in the Report.

3.1 The Organization has assigned an Internal Auditor in order to continuously test current practices and inform the Organization in case there are any suggestions for improvements. The Audit is performed at least on an annual basis.

Any findings are being submitted to the Board of Directors which decides the necessary measures that need to be taken to ensure the rectification of any weaknesses and/or deficiencies, which have been detected. 

4.1 The AML Officer has the necessary authority, resources and expertise to carry out his/her relevant duties and responsibilities and also has access to all relevant information. The employees of the Organization are informed of the person carrying out AML role and on ways of contacting him/her.

Currently, 1 employee has been assigned the role of AML Officer: Edgar Ayvazyan

In case of any changes in the structure of AML Department – this will be communicated to the Computer Gaming Licensing Board accordingly.

4.2 Responsibilities of AML Officer:

5.1 The Annual Report, prepared by the AML Officer is a significant tool for assessing the Organizations level of compliance with its obligations as these are laid down in the Law and the Anti-Money Laundering Directive. 

5.2 The Annual Report will be prepared and submitted for approval to the Board of Directors, within two months from the end of each calendar year (the latest by the end of February) and to the Governor, if requested, together with the minutes of the meeting, during which the Annual Report has been discussed and approved. It is provided that the said minutes will include the measures decided for the correction of any weaknesses and/or deficiencies identified in the Annual Report and the implementation timeframe of these measures. 

5.3 The Annual Report should deal with money laundering and terrorist financing preventive issues pertaining to the year under review and, as a minimum, should cover the following:

6.1 General

The principle behind the Risk-Based Approach of the Company is that resources should be directed proportionately in accordance with the extent of the ML/FT risks posed, so that the customers posing the highest risks receive the highest attention meeting regulatory needs while effectively combating ML/FT. The application of a Risk-Based Approach should ensure that measures to prevent or mitigate ML/FT are commensurate with the risks identified and that resources are allocated in the most efficient ways. 

The Policy sets the framework of the Company’s Risk-Based Approach that should be implemented. 

6.2 As regulation needs and risks always change, the AML Officer shall monitor and evaluate, on an on-going basis, the effectiveness of the measures and procedures of the adopted Risk–Based Approach. The AML Officer shall also be responsible for the development and implementation thereof, of all the other policies, procedures and controls according to the framework of the adopted Risk-Based Approach. The Board shall be responsible for reviewing the adequate implementation of the adopted Risk-based Approach by the AML Officer, at least annually.

Risk factors that must be taken into account, relating to: 

6.3 ADOPTED RISK-BASED APPROACH

The adopted Risk-Based Approach that is followed by the Organization, and described in the Policy, was built according to the following:

The Risk-Based Approach adopted by the Organization, involves specific measures, indicators, and procedures in assessing the most cost effective and appropriate way to identify and manage the ML/TF risks faced by the Organization. Such measures include:

6.4 IDENTIFIED RISKS

The Risk-Based Approach adopted by the Organization involves the identification, recording and evaluation of the risks that have to be managed. Whereas online gaming and betting services that the Organization provides are rendered predominantly in straightforward manner: to relatively few Clients or Clients with similar characteristics - then the Organization shall apply procedures enabling to focus on those Clients who fall outside the ‘norm’.

The following are sources of risks which the Organization faces with respect to ML/TF and respective risk categories the Organization shall take into consideration when adopting a Risk-Based Approach and building Client ML/TF risk categorization:

Client’s nature: 

The Organization’s services: 

6.5 ADOPTED RISK-BASED APPROACH

The adopted approach is considering that a risk assessment based on the above sources of risk should always be performed at the inception of a Business Relationship with a Client. However, a comprehensive risk profile may only become evident once the Client has begun transacting through an account and completed CDD procedure.

Taking into consideration the above and the fact that the Company will offer online gaming and betting facility and the fact that vast majority of its Clients will be applying on a non-face-to-face basis, following the performance of the CDD the Company shall label the type of Client and the risk profile (High risk, Medium risk, Low risk) according to the following different risk variables and indicators:

The methodology that is being adopted will require the AML Officer to perform basic CDD in cases of Low ML/TF cases, basic CDD and close monitoring in Medium risk cases, and EDD and close monitoring (on the specific indicator that increased the risk level) in cases of High Risk.

The intensity of monitoring all Clients’ accounts and examining transactions shall be based on the level of risk and, as a minimum, shall achieve the ability of identifying all high risk Clients.

6.6 DYNAMIC RISK MANAGEMENT AND MONITORING 

Risk assessment and management is not an isolated event of a limited duration but rather a continuous process, carried out on a dynamic basis. Clients’ activities change, the same happens to the transactions used for money laundering or terrorist financing.

In this respect, it is the duty of the AML Officer to undertake regular reviews of the characteristics of existing Clients, new Clients, and the measures, procedures and controls designed to mitigate such risks. These reviews shall be duly documented, as applicable, and form part of the Annual Money Laundering Report.

For the development and implementation of appropriate measures and procedures on a Risk-Based Approach, and for the implementation of the CDD, the AML Officer and the Client Support Department shall consult data, information and reports e.g. Clients with origin or residence in countries which inadequately apply Financial Action Task Force’s (hereinafter “FATF”), and country assessment reports that are published in following relevant international listings:

Due to the nature of business of the Organization, additional countries must be banned from the use of the services due to local and foreign gambling and betting regulations.

Additionally, the Organization has implemented controls that monitor players activity and actions, that are unique to gambling and betting industries and are also a part of the fraud-prevention system, such as:

Such triggers may influence the overall risk assessment of the customer, as well as may lead to a submission of suspicious activity report or account termination.

7.1 The purpose of the Sanctions Compliance Policy is to set the high-level principles and standards of Crea Tech Dynamics Limited for the management and prevention of sanctions breaches and to establish an internal control framework that mitigates the risks associated with sanctions violations. 

The Organizations compliance with sanctions regulatory framework is vital for: 

The recipients of the Policy are:

7.2 WHAT ARE SANCTIONS AND EMBARGOES

Sanctions and embargoes are political trade restrictions put in place against target countries with the aim of maintaining or restoring international peace and security.

Embargoes on exporting or supplying arms and associated equipment, technical assistance, trading and financing.

Financial sanctions on individuals in government, government bodies and associated companies, or terrorist groups and individuals associated with those groups. 

Bans on imports of raw materials or goods to sanction countries/jurisdictions.

Restrictions on certain type of activities for certain entities subject to sectorial sanctions.

7.3 AUTHORITIES ISSUING SANCTION PROGRAMS

7.4 TYPES OF SANCTIONS PROGRAMS

7.4.1 Specific/List based - relate to specific lists of named individuals, legal entities, Organizations, vessels.

7.4.2 General – cover certain countries or jurisdictions and restrict a number of activities such as export of certain goods, products, dual-used items etc. that can be used for military purposes (e.g. steel, chemicals, arms sales to a particular country).

7.4.3 Comprehensive – cover all types of activities including business relationships and/or transactions connected with certain countries/jurisdictions subject to comprehensive sanctions (i.e. North Korea, Crimea).

7.4.4 Sectoral – cover certain entities (and their majority subsidiaries) engaged in specific sectors of the Russian economy and restrict certain activities of these entities that involve new “debt” or “equity” or drilling activities.

7.5 MEASURES APPLIED BY THE ORGANIZATION FOR SANCTIONS COMPLIANCE

7.5.1. SANCTIONS RISK ASSESSMENT

The Organization shall carry out and document a sanctions risk assessment appropriate to the type of its activities, in order to identify, measure, understand and manage sanctions risk the Organization is exposed to. In assessing sanctions risk the Organization shall take into account at least following factors that have an impact on sanctions risk:

7.5.2 The Organization shall carry out a sanctions risk assessment in relation to all sanctions and the sanctions risk assessment shall be approved by the Board of the Organization.

7.5.3 Based on the sanctions risk assessment, the Organization shall establish an internal control system for sanctions risk management. Sanctions risk policies shall be approved by the Board of Directors.

7.5.4 Establishing an internal control system for sanctions risk management the Organization takes into account at least following characteristics of elevated sanctions risk:

7.6 KYC MEASURES ON NEW AND EXISTING CUSTOMERS FOR SANCTIONS COMPLIANCE PURPOSES

The Organization has implemented relevant KYC and due diligence procedures that ensure that upon onboarding and throughout the business relationship, the relevant parties are being screened against sanction lists. In the event of a match, an alert will be generated for further investigation by the AML Compliance Department.

7.7 DUE DILIGENCE ON CUSTOMER TRANSACTIONS FOR SANCTIONS COMPLIANCE PURPOSES

The Organization has implemented relevant procedures and processes that ensure that transaction parties (meaning, that the screening is performed not only against the Customer, but also against the payments institution) are being automatically screened against sanction lists. In the event of a match, an alert will be generated for further investigation by the AML Compliance Department. 

7.8 IMPLEMENTATION OF AUTOMATED SANCTION SCREENING TOOL

Crea Tech Dynamics Limited has introduced an IT-based solution to fulfil the screening obligations automatically. All of the Organization customers’ key data (such as name, surname, and address) is automatically exported and matched with the sanctions lists. These checks are performed on a daily basis. The external service provider is responsible for the actuality of sanctions lists on a daily basis and automatically performs regular checks of customers against the updated sanctions lists. If during the matching procedure a customer is marked as a potentially Restricted Party, this is defined as a match. This IT-solution simultaneously generates an alert message including all recorded matches, which is submitted to the AML Compliance Department. The automated IT solution performs: 

7.9 TESTING AND AUDIT OF AUTOMATED IT SOLUTION

It is the obligation of the AML Compliance Department to test the automated IT solution in order to ensure that the results received during screening are accurate and that the sanction lists are updated in a timely manner. The testing should be performed not less than every 6 months as well as at the point of introduction of new sanctions.

7.10 FREEZING AND UNFREEZING ACCOUNTS SUBJECT TO SANCTIONS

Where required by applicable law, the Organization will freeze assets in accounts of parties subject to specific sanctions or where the freezing is otherwise indicated. The Sanctions Policy also requires freezing of accounts pending review to determine if an asset freeze is required or a violation of law has occurred. 

The Organization must freeze accounts of parties subject to specific sanctions as follows: 

Frozen accounts may be unfrozen only by: 

Organization should not participate in transactions involving parties who are subject to specific sanctions implemented by EU, UN and “OFAC”, unless these transactions are allowed under the relevant sanctions, as confirmed in advance by the AML Compliance Department.