The Anti-Money Laundering and Know Your Customer Policy (the “AML/KYC Policy”) of SOVEREIGN Trading Limited and its affiliates (“we”, “our”, “us” or “SOVEREIGN”) is established to prevent and mitigate possible risks of SOVEREIGN being involved in illegal or illicit activities and to enable SOVEREIGN meet its legal and regulatory obligations in this area. This AML/KYC Policy is subject to changes and updates by SOVEREIGN from time to time to ensure compliance with applicable legislation and global AML/KYC practices.
"Politically Exposed Person" means a natural person who is or has been entrusted with prominent public functions, other than middle ranking or more junior officials. For the purposes of this definition, the term "natural persons who are or have been entrusted with prominent public “functions" includes the following:
(a). Heads of State, Heads of Government, Ministers, Deputy or Assistant Ministers, and Parliamentary Secretaries;
(b). Members of Parliament or similar legislative bodies;
(c). Members of the governing bodies of political parties;
(d). Members of superior, supreme, and constitutional courts or of other high-level judicial bodies whose decisions are not subject to further appeal, except in exceptional circumstances;
(e). Members of courts of auditors or of the boards of central banks;
(f). Ambassadors, charges d’affaires and high ranking officers in the armed forces;
(g). Members of the administrative, management or supervisory boards of State-owned enterprises;
(h). Anyone exercising a function equivalent to those set out in paragraphs (a) to (f) within an institution of the European Union or any other international body;
Furthermore, Politically Exposed Person includes also family members or persons known to be close associates of any individual identified in (a) – (g) above.
The term “family members” includes:
the spouse, or a person considered to be equivalent to a spouse;
the children and their spouses, or persons considered to be equivalent to a spouse; and
“Persons known to be close associates" means:
a natural person known to have joint beneficial ownership of a body corporate or any other form of legal arrangement, or any other close business relations, with that politically exposed person; or
a natural person who has sole beneficial ownership of a body corporate or any other form of legal arrangement that is known to have been established for the benefit of that politically exposed person.
“PRC” means the People’s Republic of China (excluding the special administrative regions of Hong Kong and Macau, and Taiwan).
“Prohibited Jurisdiction” means the jurisdictions designated by SOVEREIGN as a Prohibited Jurisdiction in respect of any Service from time to time.
“Sanctioned Jurisdiction” means any country or territory to the extent that such country or territory is the subject of any sanction issued by the United Nations, United States and/or the European Union.
“Sanctioned Person” means any individual or entity (a) identified on a sanctions list issued by the United Nations, United States and/or the European Union; (b) organized, domiciled or resident in a Sanctioned Jurisdiction; or (c) otherwise the subject or target of any sanctions, including by reason of ownership or control by one or more individuals or entities described in clauses (a) or (b).
“Service” means the (i) sale or issuance of digital tokens to a person by SOVEREIGN; (ii) advisory, brokerage, trading and exchange services in respect of digital tokens provided by SOVEREIGN; and (iii) other services provided by SOVEREIGN from time to time.
“User” means a person using SOVEREIGN services, with or without prior registration and authorization of SOVEREIGN, including for the purchase of tokens from SOVEREIGN.
Information required to comply with governmental rules, anti-money laundering (“AML”) or “know-your-customer” (“KYC”) policies. We may require you to provide information including scanned or depicted documents from you, such as a photo of your passport or other identity card to show proof of identity as well as documentation that evidences your proof of address or documents or online database information to confirm your identity. We also may collect information about your device for fraud prevention, KYC or AML purposes and other information as may be required by terms of SOVEREIGN Token Sale Terms and Conditions. Such information will only be necessary if requested and may be required prior to activation of your account. EEA Users: This information is processed pursuant to our obligations under applicable law.
3. Initial and ongoing screening
SOVEREIGN will screen a User prior to providing any Service to such User, and will continue to screen such User on an ongoing basis, to ensure that such User is not a Sanctioned Person, from a Sanctioned Jurisdiction and/or a person from a Prohibited Jurisdiction. If a User is a Sanctioned Person, from a Sanctioned Jurisdiction and/or a person from a Prohibited Jurisdiction, SOVEREIGN will refuse to provide Services to such User or discontinue provision of Services. In carrying out this screening SOVEREIGN shall ensure to adopt software to enable comprehensive screening to be carried out and which captures all sanctions that SOVEREIGN is bound to follow.
4. KYC/AML identification procedures
SOVEREIGN, in line with international requirements, adopts a risk-based approach to combating money laundering and terrorist financing. By adopting a risk-based approach, SOVEREIGN is able to ensure that measures to prevent or mitigate money laundering and terrorist financing are commensurate to the identified risks.
Prior to providing any Service to a User, SOVEREIGN will:
(a). identify the User and verify the User’s identity on the basis of documents, data or information based on a reliable and independent source;
(b). if there is a beneficial owner in relation to the User, identify the beneficial owner and take reasonable measures to verify the beneficial owner’s identity
(c). obtain information on the purpose and intended nature of the business relationship with the User, unless the purpose and intended nature are clearly stipulated in the relevant documentation between SOVEREIGN and the User; and
(d). if a person purports to act on behalf of the User, (i) identify the person and take reasonable measures to verify the person’s identity on the basis of documents, data or information based on a reliable and independent source; and (ii) verify the person’s authority to act on behalf of the User.
To identify a User who is an individual, SOVEREIGN will collect information from the User such as his full name, date of birth, nationality, place of residence, email address, and/or the identity document type. SOVEREIGN will, depending on the level of risk, verify the identity of the User with documents such as his national ID, passport and/or driver’s licence and utility bill.
To identify a User who is a legal entity, SOVEREIGN will collect information from the User such as its full legal name, registration number, establishment date, jurisdiction of establishment and lists of directors (as applicable to the entity). SOVEREIGN will, depending on the level of risk, verify the User with documents such as Memorandum and Articles of Association (or equivalent), additional beneficial ownership information and documents, and a detailed corporate chart (as applicable to the entity).
If the User is not physically present for identification purposes, SOVEREIGN may adopt more stringent standards to verify the identity of the User.
4. Ongoing monitoring
SOVEREIGN will continuously monitor the business relationship with a User by:
(a). reviewing from time to time documents, data and information relating to the User that have been obtained by SOVEREIGN;
(b). conducting appropriate scrutiny of transactions carried out for the User to ensure that they are consistent with HybirdBlock’s knowledge of the User and the User’s business and risk profile, and with SOVEREIGN’s knowledge of the source of the customer’s funds; and
(c). identifying transactions that are complex, unusually large in amount or of an unusual pattern and have no apparent economic or lawful purpose.
To continuously monitor the business relationship with a User, SOVEREIGN shall on a periodic basis according to the risk rating of the User, carry out a file review to ensure that information held about the User is up-to-date and that identification documents held are still valid. In addition, on more frequent basis, SOVEREIGN shall monitor transactional activity to identify any red-flags or ‘out of the norm’ activity.
As part of the second line of defense, the Money Laundering Reporting Officer will carry out checks to ensure that regular and effective on-going monitoring is being effected and ensure that irregular or suspicious transactions are effectively escalated.
6. High risk situations
In certain circumstances, the risk may be higher and SOVEREIGN will need to take additional checks. These include, for example, situations where the User is from a non-reputable jurisdiction (for example on the Financial Action Task Force’s recommendations), the User is a politically exposed person or the User’s behavior and activities raises other red flags.
In a high risk situation, SOVEREIGN will:
(a). where a business relationship has not yet been established, obtain approval from senior management to establish the business relationship and take reasonable measures to establish the User’s or beneficial owner’s source of wealth and source of funds that will be involved in the business relationship; and
(b). where a business relationship has been established, obtain approval from senior management to continue the business relationship, take reasonable measures to verify the beneficial owner’s identity, and take reasonable measures to establish the User’s or beneficial owner’s source of wealth and source of funds that will be involved in the business relationship.
SOVEREIGN will keep (a) transaction records, for a period of ten (10) years beginning on the date on which a transaction is completed; and (b) other information collected by SOVEREIGN for AML/KYC purposes, throughout the continuance of the business relationship with the User and for a period of ten (10) years beginning on the date on which the business relationship with the User ends.
All of our employees and officers receive ongoing AML/KYC training that is refreshed at least once every year to ensure they are familiar with our AML/KYC policy and all applicable laws and regulations. New employees receive training within thirty (30) days of their start date. All documentation related to compliance training including materials, tests, results, attendance and date are maintained. In addition, our compliance training program is updated as necessary to reflect current laws and regulations.
1. Money Laundering Reporting Officer
The Money Laundering Reporting Officer is the person, duly authorized by SOVEREIGN, whose duty is to ensure the effective implementation and enforcement of the AML/KYC Policy. It is the Money Laundering Reporting Officer’s responsibility to supervise all aspects of SOVEREIGN’s anti-money laundering and counter-terrorist financing. All our employees will report any suspicious behavior or activities to the Money Laundering Reporting Officer.
Where SOVEREIGN suspects that the User is involved in any money laundering, terrorist financing or other illegal activities, it will report any relevant knowledge or suspicion to governmental and regulatory authorities. SOVEREIGN has no obligation to notify a User of any such suspicious transaction report which, on the other hand, SOVEREIGN and its employees can be held liable for tipping off. This is criminal offence under punishable by a fine and/or imprisonment.