AML POLICY

Last update: 05.05.2025

Money laundering is the process of making illegally obtained funds appear legitimate. It involves concealing the origins of criminal proceeds to integrate them into the financial system. Assisting or advising others on how to circumvent AML controls—such as providing guidance on evading detection—also constitutes a money laundering offense.

The process is generally divided into three stages:

• Placement – illicit funds are introduced into the financial system, often via wire transfers, deposits, or other non-cash instruments.
• Layering – a series of complex transactions is used to obscure the source of the funds. This may include splitting the funds and moving them across multiple accounts or entities.
• Integration – the laundered funds are reintroduced into the legitimate economy through investments in real estate, businesses, securities, or other high-value assets.

In the context of cybercrime, an initial phase may involve the swift conversion of illicit digital proceeds into cash or crypto-assets before they enter the placement stage.

Terrorism financing refers to the provision of funds or financial support—direct or indirect—to individuals, groups, or organizations involved in terrorist activities. Unlike money laundering, where the primary goal is to legitimize illicit funds, terrorism financing may involve both legal and illegal sources, with the primary objective of enabling acts of terror, supporting extremist networks, or spreading ideologies.

Terrorism financing encompasses more than funding attacks. It includes:

• Providing resources or services to terrorist organizations or members.
• Collecting donations or offering logistical support, including shelter or transportation.
• Financial support for the families of terrorists or their affiliates, such as covering basic living expenses.

Funds used for terrorism may originate from:

• Legal activities: donations, charitable fronts, business income.
• Illegal activities: drug trafficking, fraud, extortion, kidnapping for ransom, or cybercrime.
• State sponsorship: direct or covert financial aid from governments to terrorist groups for strategic or political purposes.

Terrorist financing typically follows this structure:

• Fundraising: money is raised through donations (sometimes under false pretenses), illicit trade, or organized crime.
• Transfer of funds: funds are moved via traditional banking, crypto-asset, informal transfer systems like hawala, or physical smuggling.
• Utilization: funds are used for operational costs, recruitment, weapons, propaganda, travel, or daily living support for members and affiliates.

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Ungaro OÜ (“Swapin”) maintains a strict zero-tolerance policy toward money laundering, terrorist financing, and all forms of illicit activity. We are committed to implementing robust internal controls aligned with global AML standards and industry best practices.

As financial and commercial institutions—especially those in the crypto-asset space—are prime targets for misuse, Swapin recognizes its responsibility and actively contributes to international efforts to prevent and detect financial crime.

To this end, Swapin implements comprehensive procedures to identify, assess, and prevent the misuse of its services for illicit purposes.

Risk-Based Approach (RBA)

Swapin employs a risk-based approach to identify and mitigate AML risks. We assess customer, transaction, geographical, and product-related risks to apply appropriate levels of Due Diligence (DD).

Customer Due Diligence (CDD) & Know Your Customer (KYC)

Swapin performs CDD on all customers, including:

• Verifying identity and legal status
• Obtaining beneficial ownership information
• Screening against international sanctions lists (e.g., OFAC, UN, EU, OFSI)
• Conducting Enhanced Due Diligence (EDD) for high-risk individuals/entities, Politically Exposed Persons (PEPs), and their close associates.

Monitoring and reporting

Swapin’s systems automatically flag unusual or suspicious activity for review by our Compliance Team. We:

• Investigate red flags (e.g., structuring, rapid turnover, or atypical transactions)
• Monitor for suspicious activity and chargeback fraud
• Conduct periodic customer risk reviews
• File Suspicious Activity Reports (SARs) with the appropriate Financial Intelligence Unit (FIU) when necessary
• Cooperate with global investigative authorities to combat money laundering
• Retain customer identity data for at least 5 years and transaction records for a minimum of 7 years, in accordance with legal obligations.

Sanctions Compliance and Prohibited Relationships

Swapin strictly complies with international sanctions laws and does not do business with:

• Individuals or entities listed on UN, EU, US OFAC, UK OFSI, or other recognized sanctions lists
• Residents of or businesses operating from prohibited jurisdictions
• Politically Exposed Persons (PEPs)
• Individuals who are under the age of 18
• Persons or entities directly or indirectly involved in illegal activities, including but not limited to:
  • Drug trafficking
  • Unlicensed gambling
  • Fraudulent, predatory, or deceptive products or services
  • Any other activities outside of Swapin’s risk appetite or contrary to legal compliance.

Training and Awareness

All employees receive AML (Anti-Money Laundering) and CTF (Combating the Financing of Terrorism) training:

• Upon hire
• Annually, to reinforce awareness and compliance
• Whenever there are regulatory or policy updates

Independent Audit

Swapin regularly engages independent third parties to review and validate the effectiveness of its AML/CTF program, ensuring ongoing compliance and improvement.

Governance

Our Chief Compliance Officer (CCO) oversees AML compliance and is responsible for:

• Overseeing AML policy implementation
• Liaising with regulators and law enforcement
• Ensuring compliance with all applicable AML/CTF laws and standards

Cooperation and Reporting Suspicious Activity

If you suspect misuse of Swapin`s services for illegal activity or are a supervisory or law enforcement authority with a relevant inquiry, please contact us at [email protected]. Swapin is committed to responding in a timely and cooperative manner.