GRADE CAPITAL
ATLANTEASE VENTURES INC
TABLE OF CONTENTS
A. Introduction.. 2
B. Policy Statement. 2
C. Background.. 2
D. Purpose and Statement of Object. 3
E. Applicability. 3
F. Definitions. 3
G. Internal Approvals. 8
H. Scope. 8
I. Compliance. 8
J. Chief Compliance Officer and Designated Director. 8
K. Independent Testing. 8
L. Periodic Review.. 8
M. Policy Review.. 9
N. Client Due Diligence (CDD). 9
O. Know Your Customer (KYC). 9
P. Enhanced Due Diligence. 10
Q. Counterparty Due Diligence. 10
R. Sanctions screening for VDA transfers. 10
S. Suspicious Transaction Reporting.. 11
T. Employee Due Diligence and Risk Awareness Training. 12
U. Record Retention.. 12
V. Anti-Bribery And Anti-Corruption Policy and Prohibition of Tipping off 12
W. Travel Rule. 12
X. Saving and Repealing. 12
In terms of the Notification F. No. P-12011/12/2022-ES Cell-DOR dated 07 March 2023, the Central Government has notified that businesses dealing with Virtual Digital assets to undertake mandatory compliance of the provisions of Prevention of Money-Laundering Act, 2002 and the Prevention of Money-Laundering (Maintenance of Records) Rules, 2005, as amended from time to time by the Government of India as notified by the Government of India.
Now by the virtue of the aforesaid Notification, entities dealing with Virtual Digital Assets (‘VDA’) are required to follow Know Your Customer, Client Due Diligence, Screening, Enhanced Due Diligence inter alia other procedures while undertaking a transaction either by establishing an account-based relationship or otherwise and monitor their transactions.
Accordingly, we are also required to implement the provisions of the aforementioned Act and Rules, including operational instructions issued in pursuance of such amendment(s) by various governmental departments including that of Financial Intelligence Unit-India (‘FIU-IND’).
Therefore, this AML, CFT, CPF and KYC policy has been framed in accordance with the regulatory guidelines on Anti-Money Laundering (AML), Countering the Financing of Terrorism (CFT), Combating Proliferation Financing (CPF), and Know Your Customer (KYC).
At “GRADE CAPITAL” i.e., “ATLANTEASE VENTURES INC”, we are committed to maintaining the highest standards of integrity, transparency, and security in all our financial transactions and interactions with customers. To uphold these principles and fulfil our regulatory obligations, we have established comprehensive policies and procedures related to AML, CFT, CPF and KYC based on guidelines issued by the Government of India.
The terms "We", "Our", "Company", “GRADE CAPITAL” or “ATLANTEASE VENTURES INC” and "Us" refer to GRADE CAPITAL, and the terms "User", "You" and "Your" refer to a User of our Online Platforms (Website and/or Mobile Application).
“GRADE CAPITAL” i.e., ATLANTEASE VENTURES INC is an entity incorporated under the Delaware General Corporation Law, having its registered address at 8 The Green A, Dover, DE 19901, United States.
This Policy serve as the cornerstone of our efforts to combat financial crime, prevent money laundering, thwart the financing of terrorism, and ensure that our business relationships are conducted with the utmost diligence. By adhering to these policies, we not only safeguard our organization from legal and reputational risks but also contribute to the global effort to maintain a secure and transparent financial ecosystem.
In this document, we outline the key components of our AML, CFT, CPF, and KYC policies, explaining their significance and the procedures we follow to implement them effectively.
It is imperative that all customers, employees, partners, and stakeholders familiarize themselves with this Policy and diligently adhere to them in their daily activities.
The provisions of this policy shall apply to all branches and offices of the Company, except where specifically mentioned otherwise.
This policy shall also apply to branches and majority owned subsidiaries of the Company, which are located abroad, to the extent they are not contradictory to the local laws in the host country, provided that:
a) Where applicable laws and regulations prohibit implementation of these guidelines, the same shall be brought to the notice of Regulators if required.
b) In case there is a variance in AML, CFT, CPF, and KYC standards prescribed by FIU-IND and the host country regulators, branches/ subsidiaries of the Company shall adopt the more stringent regulation of the two.
In this policy, unless the context otherwise requires, the terms herein shall bear the meanings assigned to them below:
1. “Aadhaar number” shall have the meaning assigned to it in clause (a) of section 2 of the Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Act, 2016 (18 of 2016);
2. “Act” and “Rules” means the Prevention of Money-Laundering Act, 2002 and the Prevention of Money-Laundering (Maintenance of Records) Rules, 2005, respectively and amendments thereto.
3. “Authentication”, in the context of Aadhaar authentication, means the process as defined under sub-section (c) of section 2 of the Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Act, 2016.
4. “Beneficial Owner (BO)” means
a) Where the customer is a company, the beneficial owner is the natural person(s), who, whether acting alone or together, or through one or more juridical person, has a controlling ownership interest or who exercises control through other means.
Explanation - For the purpose of this sub-clause-
“Controlling ownership interest” means ownership of or entitlement to more than ten percent of shares or capital or profits of the company;
“Control” shall include the right to appoint majority of the directors or to control the management or policy decisions including by virtue of their shareholding or management rights or shareholders agreements or voting agreements;
Where the customer is a partnership firm, the beneficial owner is the natural person(s), who, whether acting alone or together, or through one or more juridical person, has ownership of/entitlement to more than fifteen percent of capital or profits of the partnership;
b) Where the client is an unincorporated association or body of individuals, the beneficial owner is the natural person(s), who, whether acting alone or together, or through one or more juridical person, has ownership of or entitlement to more than fifteen percent of the property or capital or profits of such association or body of individuals;
c) Where no natural person is identified under (a) or (b) or (c) above, the beneficial owner is the relevant natural person who holds the position of senior managing official; e. Where the client is a trust, the identification of beneficial owner(s) shall include identification of the author of the trust, the trustee, the beneficiaries with ten percent or more interest in the trust and any other natural person exercising ultimate effective control over the trust through a chain of control or ownership; and
d) Where the client or the owner of the controlling interest is a company listed on a stock exchange, or is a subsidiary of such a company, it is not necessary to identify and verify the identity of any shareholder or beneficial owner of such companies, since it may be assumed that such due-diligence has been carried out at the time of listing on the exchange.
5. “Common Reporting Standards” (CRS) means reporting standards set for implementation of multilateral agreement signed to automatically exchange information based on Article 6 of the Convention on Mutual Administrative Assistance in Tax Matters.
6. “Customer” means a person who is engaged in a financial transaction or activity with the Grade Capital and includes a person on whose behalf the person who is engaged in the transaction or activity, is acting.
7. “Customer Due Diligence (CDD)” means identifying and verifying the customer and the beneficial owner.
8. “Customer identification” means undertaking the process of CDD.
9. “Designated Director" means a person designated by the Company to ensure overall compliance with the regulatory obligations.
10. “Digital KYC” means the capturing live photo of the customer and officially valid document or the proof of possession of Aadhaar, where offline verification cannot be carried out, along with the latitude and longitude of the location where such live photo is being taken by an authorised officer of the Company as per the provisions contained in the Act.
11. “Digital Signature” shall have the same meaning as assigned to it in clause (p) of subsection (1) of section (2) of the Information Technology Act, 2000 (21 of 2000).
12. “Domestic and cross-border wire transfer”: When the originator bank and the beneficiary bank of the on-ramp/ off-ramp partner is the same person or different person located in the same country, such a transaction is a domestic wire transfer, and if the ‘originator bank’ or ‘beneficiary bank’ of the on-ramp/ off-ramp partner is located in different countries such a transaction is cross-border wire transfer.
13. “Enhanced Due Diligence” shall mean due diligence consistent with the risks identified leading to enhanced and rigorous measures including that of review of transactions/ customer profile, gathering information available in public, reasonable measures to ascertain customers source of income though independent inquiries or consulting with credible database or public inter alia others.
14. “FATCA” means Foreign Account Tax Compliance Act of the United States of America (USA) which, inter alia, requires foreign financial institutions to report about financial accounts held by U.S. taxpayers or foreign entities in which U.S. taxpayers hold a substantial ownership interest.
15. “IGA” means Inter Governmental Agreement between the Governments of India and the USA to improve international tax compliance and to implement FATCA of the USA.
16. “KYC Templates” means templates prepared to facilitate collating and reporting the KYC data to the CKYCR, for individuals and legal entities.
17. “Non-profit organisations” (NPO) means any entity or organisation that is registered as a trust or a society under the Societies Registration Act, 1860 or any similar State legislation or a company registered under Section 8 of the Companies Act, 2013.
18. “Officially Valid Document” (OVD) means the passport, the driving licence, proof of possession of Aadhaar number, the Voter's Identity Card issued by the Election Commission of India, job card issued by NREGA duly signed by an officer of the State Government and letter issued by the National Population Register containing details of name and address.
Provided that,
a) Where the customer submits his proof of possession of Aadhaar number as an OVD, he may submit it in such form as are issued by the Unique Identification Authority of India.
b) Where the OVD furnished by the customer does not have updated address, the following documents or the equivalent e-documents thereof shall be deemed to be OVDs for the limited purpose of proof of address:-
i. Utility bill which is not more than two months old of any service provider (electricity, telephone, post-paid mobile phone, piped gas, water bill);
ii. Property or Municipal tax receipt;
iii. Pension or family pension payment orders (PPOs) issued to retired employees by Government Departments or Public Sector Undertakings, if they contain the address;
iv. letter of allotment of accommodation from employer issued by State Government or Central Government Departments, statutory or regulatory bodies, public sector undertakings, scheduled commercial banks, financial institutions and listed companies and leave and licence agreements with such employers allotting official accommodation;
c) The customer shall submit OVD with current address within a period of three months of submitting the documents specified at ‘b’ above
d) Where the OVD presented by a foreign national does not contain the details of address, in such case the documents issued by the Government departments of foreign jurisdictions and letter issued by the Foreign Embassy or Mission in India shall be accepted as proof of address.
Explanation: For the purpose of this clause, a document shall be deemed to be an OVD even if there is a change in the name subsequent to its issuance provided it is supported by a marriage certificate issued by the State Government or Gazette notification, indicating such a change of name.
19. “On-going Due Diligence” means regular monitoring of transactions in accounts to ensure that they are consistent with the customers’ profile and source of funds.
20. “Politically Exposed Persons” (PEPs) are individuals who are or have been entrusted with prominent public functions in a foreign country, e.g., Heads of States/Governments, senior politicians, senior government/judicial/military officers, senior executives of state-owned corporations, important political party officials, etc.
21. “Periodic Updation” means steps taken to ensure that documents, data or information collected under the CDD process is kept up-to-date and relevant by undertaking reviews of existing records at periodicity prescribed by the Government.
22. “Principal Officer” means an officer nominated by the company, responsible for furnishing information.
23. “Person” has the same meaning assigned in the Act and includes:
a) An individual,
b) A Hindu undivided family,
c) A company,
d) A firm,
e) An association of persons or a body of individuals, whether incorporated or not,
f) Every artificial juridical person, not falling within any one of the above persons (a to e), and
g) Any agency, office or branch owned or controlled by any of the above persons (a to f).
24. “Suspicious transaction” means a “transaction” as defined below, including an attempted transaction, whether or not made in cash, which, to a person acting in good faith:
a) Gives rise to a reasonable ground of suspicion that it may involve proceeds of an offence specified in the Schedule to the Act, regardless of the value involved; or
b) Appears to be made in circumstances of unusual or unjustified complexity; or
c) Appears to not have economic rationale or bona-fide purpose; or
d) Gives rise to a reasonable ground of suspicion that it may involve financing of the activities relating to terrorism.
Explanation: Transaction involving funds suspected to be linked or related to, or to be used for terrorism, terrorist acts or by a terrorist, terrorist organization or those who finance or are attempting to finance terrorism.
25. “Wire transfer” means a transaction carried out, directly or through a chain of transfers, on behalf of an originator person (both natural and legal) through a bank by electronic means with a view to making an amount of money available to a beneficiary person at a bank.
26. All other expressions unless defined herein shall have the same meaning as have been assigned to them under the Companies Act, 2013, Income Tax Act, 1961 and Rules thereunder, Goods and Services Tax Act, 2017 and Rules thereunder, Banking Regulation Act, 1949, the Reserve Bank of India Act, 1935, the Prevention of Money Laundering Act, 2002, the Prevention of Money Laundering (Maintenance of Records) Rules, 2005, the Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Act, 2016 and regulations made thereunder, any statutory modification or re-enactment thereto or as used in commercial parlance, as the case may be.
This AML, CFT, CPF AND KYC Policy is duly approved by the Board of Directors of the Company. The policy will be reviewed by the Board and/or any committee of the Board to which power has been delegated, at yearly intervals or as and when considered necessary by the Board.
This KYC AML CFT policy shall include following four key elements:
a) Customer Acceptance Policy;
b) Risk Management;
c) Customer Identification Procedures (CIP); and
d) Monitoring of Transactions
The Company shall ensure compliance with AML, CFT, CPF AND KYC Policy through:
a) Specifying as to who constitute ‘Senior Management’ for the purpose of KYC compliance.
b) Allocation of responsibility for effective implementation of policies and procedures.
c) Independent evaluation of the compliance functions of Company policies and procedures, including legal and regulatory requirements.
d) Concurrent/internal audit system to verify the compliance with KYC/AML policies and procedures.
e) Submission of quarterly audit notes and compliance to the Audit Committee.
The Company has appointed and ensures the availability of a Chief Compliance Officer and a Designated Director responsible for the orientation, implementation and reporting under this Policy.
The Company may on its own accord may conduct independent third-party testing for the purposes of evaluation of this Policy. The Policy and measures taken hereunder are meant to be dynamic and shall evolve in accordance with the commensurate risk.
The Company will conduct periodic reviews of all its users. All high-risk users will be subject to revalidation of KYC every year and all low and medium risk users will be subject to revalidation KYC every 3 years.
This policy will be subject to periodic review in the light of various factors including regulatory changes, changes in business, market intelligence, and industry standard.
We are under a regulatory obligation to collect, verify and maintain this information about our customers. We also strive to maintain up to date details on our customers in order to serve you better. If we are not able to successfully update our records after a certain time, we will have to unfortunately suspend your account(s) until you have shared the required details.
The Company may, at its discretion, rely on the 'customer due diligence' (CDD) done by an intermediary, provided that the intermediary is a regulated and supervised entity and has adequate systems in place to comply with the KYC requirements of the customers.
Additional Measures:
a) All customers are subject to periodic review of KYC Details and we may seek details of updated KYC from the customers based on their continuous risk assessment.
b) We allow transfer of VDA to a customer’s wallet though the same wallet which is linked to the customer account and which has been subjected to KYC Standards and requirements or through an off-ramp partner.
c) Company shall apply a Risk Based Approach (RBA) for mitigation and management of the identified risk and may have Board approved policies, controls and procedures in this regard. Further, the Company shall monitor the implementation of the controls and enhance them, if necessary.
For undertaking Customer Due Diligence (CDD) procedure in case of Individuals, the Company may obtain the following from an individual while establishing an account-based relationship or while dealing with the individual who is a beneficial owner, authorised signatory or the power of attorney holder related to any legal entity. The following are the principles followed by the Company:
a) Identification: The Company will obtain Officially Valid Documents (OVD) to identify the customer.
b) Verification: The Company will verify the identity or the beneficial owner using OVD. The personal information of users are governed by the Privacy Policy.
c) On-going Due Diligence: The Company shall perform on-going due diligence throughout the course of the business relationship to ensure the transactions are consistent with the risk profile of the customer.
The Company shall categorise accounts into 3 categories i.e. i) Low, ii) Medium and iii) High based on RBA. Whereas, high risk accounts are subjected to more intensified monitoring. The workflow for the purposes of EDD is as under:
a) A system of periodic review of risk categorisation of accounts, with such periodicity being at least once in six months, and the need for applying enhanced due diligence measures shall be put in place basis RBA.
b) All accounts with unusually large volumes of complex transactions and unusual patterns inconsistent with a normal user without any economic rationale or legitimate purpose will be flagged. Provided that if the user wishes to undertake large volume (exceeding $100,000 USD) of transition for legitimate reasons they may be subject to pre-approval and additional information from the compliance team.
c) The transactions in accounts of customers who are high-risk customers or politically exposed persons (PEPs) shall be closely monitored.
Since the customers are investing in the product of the company are on-boarded through an “on-ramp” partner or exchange it is pertinent to note that the KYC and Due Diligence is conducted by both i.e. the Company and its “on-ramp” partner or exchange in order to ensure due compliance of the rules and regulations as maybe notified from time to time.
The Company reserves the right to refresh their counterparty due diligence information periodically and when faced with emergent risk in line with their defined Risk Based Approach control structure stemming from suspicious transaction history or other information such as adverse media, published information about regulatory or criminal penalties.
Individuals and legal entities will be screened against economic sanctions programs administered or enforced by any country or government or international authority, including the United Nations, European Union, UK Treasury and US Office of Foreign Assets Control (OFAC), the Hong Kong Monetary Authority or the Monetary Authority of Singapore and sanctions lists in all jurisdictions we operate;
a) on the onboarding stage when the user is submitting the application;
b) on each anti-fraud and AML alerts manually by Compliance Officer;
c) monthly by running automatically with a script to re-check all DB of customers.
Further, the Company ensures prompt application of the directives when issued by the competent authorities relating to the individuals designated as ‘terrorist’ under Section 35(1)(a) of the UAPA, 1967 and directives when issued by the competent authorities under Weapons of Mass. Destruction and their Delivery Systems (Prohibition of Unlawful. Activities) Act, 2005.
In regard to the above, it is understood that VDA transfers can currently be completed even without verification of sanctions screening, the Company has put the following safeguards:
a) We put a wallet/ customer account on hold until screening is completed and confirmed that no concern is raised.
b) Suspend and terminate your User Account.
c) We allow transfer of VDA to a customer’s wallet though the same wallet which is linked to the customer account and which has been subjected to KYC Standards and requirements. Further, transfers to the Customers wallet are approved only after the screening is completed and if no concern is raised.
d) We closely monitor the transactions of all high risk and PEPs. If we suspect a transaction involves funds linked to corruption or other criminal activity, we submit a suspicious transaction report to the authorities.
The company is authorized to take actions, including but not limited to suspending suspicious transactions, declining transaction requests, reversing transactions, freezing suspicious accounts, and informing relevant authorities if the Company identifies any of the specified behaviours from its user:
a) Failure to provide a OVD or other documents which maybe necessary for the company or its partners to verify the identity of the user or the beneficiary.
b) Failure to update KYC information despite of reminders.
c) If, even after taking required steps, the company continues to question the genuineness, legitimacy, and/or completeness of the user's identity details
d) In cases where a transaction cannot be thoroughly investigated within a specified timeframe, the case is escalated to senior management for a final decision.
e) Where the user fails to submit legitimate KYC details to conceal or withhold their identity.
f) Where the user fails to provide legitimate reasons if transactions are flagged as high risk based on RBA.
g) Such additional scenarios as maybe deemed necessary based on continuous RBA and EDD.
The Company screen all employees and conduct additional background checks on entrusted employees. We provide training for all relevant employees both while joining and on an ongoing basis.
The Company will maintain records for a period of five years after the business relationship between a client has ended or the account has been closed, whichever is later, in order to ensure that such documents are not destroyed.
The Company is committed to setting up utmost standards for transparency and accountability in all its affairs. We in attaining its mission through compliance of high legal and ethical standards. The Company does not tolerate any form of bribery, embezzlement or corruption, and will uphold all laws countering bribery, fraud and corruption in all forms. To that extent the on-ramp and off-ramp or exchanges has also developed its own Anti-Bribery and Anti-Corruption policy
The Company and their directors, officers, and employees are prohibited from disclosing (“tipping off”) that an Suspicious Transaction Report (STR) or related information is being reported or provided to the FIU-IND. This prohibition on tipping off extends not only to the filing of the STR and/ or related information but even before, during and after the submission of an STR. Thus, it shall be ensured that there is no tipping off to the client at any level.
The Company will collect information such as originator information, and beneficiary information, on transfers. The Company may also monitor transfers to detect those which lack the required originator and/or beneficiary information and screen the transactions to comply with relevant UNSCR resolutions.
Any routine amendments in regulatory guidelines, including amendment in FIU-IN Guidelines, Master Direction – Know Your Customer (KYC) Direction, issued by Reserve Bank of India (RBI), during the period covering the review of this policy, till next review / annual review, shall be deemed to have been adopted.