Sanctions Policy

YWO (MU) LTD (the “Company”) is incorporated and existing under the Laws of Mauritius with registration number 229766, and registered address Legacy Capital Co Ltd, 2 Floor, Suite 201, The Catalyst, Ebene, Republic of Mauritius.

The Company is an Investment Dealer (Full-Service Dealer, Excluding Underwriting) Licensee, regulated and authorized by the Financial Services Commission (“FSC”), Mauritius under the license number GB25205550.

1. INTRODUCTION

The Company is committed to ensuring that its services are not used to facilitate proliferation financing, terrorism financing, or any activity that may undermine international peace and security. The Company shall therefore exercise appropriate vigilance to ensure that it does not, directly or indirectly, make funds, economic resources or financial services available to any individual or entity designated under United Nations Security Council (“UNSC”) sanctions regimes.

In particular, the Company shall ensure strict compliance with all proliferation-related sanctions adopted by the UNSC, including but not limited to those relating to the Democratic People’s Republic of Korea (DPRK) and the Islamic Republic of Iran, as well as any other jurisdiction or regime designated by the United Nations from time to time.

Mauritius enacted the United Nations (Financial Prohibitions, Arms Embargo and Travel Ban) Sanctions Act 2019 (the “Sanctions Act”), which provides the legal framework for the implementation of United Nations sanctions in Mauritius and establishes the National Sanctions Secretariat (“NSS”) as the competent authority.

Under the Sanctions Act, the Company is required to implement targeted financial sanctions without delay and to comply with all applicable prohibitions, freezing obligations, and reporting requirements.

The purpose of this Sanctions Policy (the “Policy” or the “Manual”) is to establish an internal framework to ensure compliance with the Sanctions Act, the Financial Intelligence and Anti-Money Laundering Act 2002 (“FIAMLA”), and applicable FSC regulatory requirements, and to mitigate legal, regulatory and reputational risks arising from sanctions breaches.

The Manual is developed, maintained, and periodically updated by the Compliance Officer and approved by the Board of Directors.

2. SANCTIONS

Sanctions are restrictions imposed on activities involving targeted countries, governments, entities, individuals, vessels, aircraft, or industries (collectively referred to as “Targets”). Mauritius implements targeted financial sanctions under the Sanctions Act and has established the NSS as the competent authority and focal point for United Nations sanctions matters, including targeted financial sanctions relating to proliferation financing.

The United Nations (“UN”) imposes sanctions to prevent and counter threats to international peace and security, including the proliferation of weapons of mass destruction (“WMD”).

In addition to the UN framework, other international bodies and jurisdictions impose sanctions regimes, including the European Union (“EU”) and the Office of Foreign Assets Control (“OFAC”) of the United States Department of the Treasury.

Sanctions compliance is a core regulatory and risk management priority for the Company and forms an integral part of its anti-money laundering and countering the financing of terrorism (“AML/CFT”) framework. The Company shall ensure that it does not knowingly or unknowingly provide Targets with access to its services or assist in the circumvention or evasion of applicable sanctions measures.

To this end, the Company screens its customers and relevant counterparties against the UNSC Consolidated Sanctions List and other applicable international sanctions lists. Sanctions measures may include targeted financial sanctions, asset freezing, prohibitions on making funds or economic resources available, arms embargoes, travel bans, and other restrictive measures adopted under Chapter VII of the Charter of the United Nations.

Sanctions are coercive measures designed to restrict access to financial services, financial markets, funds, and economic resources in order to achieve foreign policy and national security objectives.

2.1. What are sanctions

Targeted Financial Sanctions

Targeted Financial Sanctions (“TFS”) are a specific type of financial sanction aimed at preventing terrorism financing and proliferation financing, including activities related to weapons of mass destruction (“WMD”).

Under the Sanctions Act, TFS include asset freezing measures and prohibitions on making funds or other assets available, directly or indirectly, to or for the benefit of designated or listed parties.

A “Listed Party” means any individual or entity listed by or under the authority of the UNSC.

A “Designated Party” means any individual or entity designated by the competent authority of Mauritius pursuant to the Sanctions Act.

a) Financial Prohibition

Where a financial sanction takes the form of an asset freeze, it is prohibited to:

I. Deal with funds, other assets, or economic resources owned, held, or controlled, directly or indirectly, by a Listed or Designated Party; II. Make funds, other assets, or economic resources available, directly or indirectly, to or for the benefit of a Listed or Designated Party.

For the purposes of this Policy, “funds or other assets” include:

• Assets of every kind, whether tangible or intangible, movable or immovable, however acquired;
• Legal documents or instruments (including electronic or digital) evidencing ownership or interest, including bank credits, cheques, securities, bonds, drafts, letters of credit, and similar instruments;
• Interest, dividends, or other income derived from such assets;
• Virtual assets and digital currencies, including cryptocurrencies;
• Any other asset that may be used to obtain funds, goods, or services.

“Economic resources” refer to assets of any kind that are not funds but may be used to obtain funds, goods, or services.

b) Arms Embargo

TFS may also include an arms embargo. In Mauritius, it is prohibited to supply, sell, transfer, or export arms and related material, directly or indirectly, to a Listed or Designated Party. This includes weapons, ammunition, military vehicles and equipment, paramilitary equipment, spare parts, and the provision of related technical advice, assistance, or training.

These prohibitions apply to conduct within Mauritius, by Mauritian nationals abroad, and to vessels or aircraft registered in Mauritius.

c) Travel Ban

Any Listed Party, other than a Listed Party who is a citizen or resident of Mauritius, shall not be allowed entry into, or transit through, Mauritius.

Nature and Scope of TFS

TFS are coercive measures intended to restrict access to financial systems, markets, and economic resources in order to influence the conduct of designated Targets. They may include financial sanctions, trade restrictions, diplomatic measures, suspension from international organisations, and other restrictive measures.

TFS generally involve:

a) A financial or economic restrictive measure;

b) Applied against a Target connected to terrorism or WMD proliferation;

c) With the objective of influencing or restricting the Target’s conduct.

While only United Nations sanctions are directly binding in Mauritius under the Sanctions Act, the Company shall also take into consideration sanctions regimes issued by the EU and OFAC as part of its risk-based approach during onboarding and ongoing monitoring.

3. COMPANY’S CONTROLS

The Company has implemented internal controls and procedures to effectively comply with its obligations arising under the Sanctions Act.

Under the Sanctions Act, the NSS has the responsibility to immediately give public notice of any changes to the UN sanctions list. All updates are posted on the NSS website.

In accordance with the Sanctions Act the Financial Intelligence Unit (“FIU”) disseminates the public notice issued by the NSS, UN sanctions list as well as any changes thereto to reporting persons such as the Company.

The Company has an obligation to monitor and immediately implement any changes to the UN sanctions list and must not deal or release funds and other assets accordingly.

Sanctions Evasion Techniques

The Company remains alert to common sanctions evasion techniques, including:

a) Use of aliases or falsified documentation to conceal the involvement of a Listed or Designated Party; b) Use of third parties or intermediaries acting on behalf of sanctioned persons;

c) Use of offshore, shell, or front companies to obscure beneficial ownership; d) Joint ventures or business arrangements between Listed Parties and non-listed entities; e) Use of virtual assets or digital currencies to circumvent the formal financial system; f) Cyber-enabled activities aimed at raising funds or bypassing sanctions controls.

Red Flags for Sanctions Evasion

Indicators that may suggest sanctions evasion include:

a) Clients linked to high-risk jurisdictions or sectors exposed to proliferation financing risks; b) Complex or opaque ownership structures, or frequent changes in directors, beneficial owners, or signatories without clear justification; c) Previous associations with individuals or entities designated by the UNSC; d) Business activities inconsistent with the client’s declared profile or lacking an apparent economic or lawful purpose; e) Unusual, large, or structured transactions designed to avoid detection; f) Transactions involving jurisdictions known to be used to circumvent proliferation-related sanctions; g) Use of correspondent banking relationships in high-risk jurisdictions without clear commercial rationale.

Screening and Monitoring Controls

To prevent dealings with sanctioned parties, the Company conducts initial and ongoing screening of clients, beneficial owners, authorised signatories, and relevant counterparties against:

a) The UNSC Consolidated Sanctions List; b) Local sanctions list issued under the Sanctions Act; c) Other relevant international sanctions lists, including those issued by EU and OFAC, as part of its risk-based approach, even where not legally binding in Mauritius.

The Company utilises automated sanctions screening systems (including third-party providers), to perform real-time and ongoing screening against global sanctions databases, including UN, EU, OFAC and other international sanctions lists.

The Company shall ensure that it does not establish or maintain a business relationship with any Listed or Designated Party and shall immediately escalate and take appropriate action in the event of a potential sanctions match.

In the event of a failure, disruption, or unavailability of automated sanctions screening systems, the Company shall implement appropriate manual screening procedures to ensure continuity of sanctions compliance.

Such procedures shall remain in place until normal system functionality is restored.

4. RISK-BASED APPROACH

The Company applies a risk-based approach to sanctions compliance, taking into account factors including, but not limited to, customer risk profile, geographic exposure, products and services offered, and transaction patterns.

The level and extent of sanctions due diligence and monitoring shall be commensurate with the identified level of risk.

For the purposes of sanctions compliance, clients may be classified based on their risk exposure as follows:

• Low Risk
• Medium Risk
• High Risk (including, but not limited to, clients connected to high-risk jurisdictions, complex ownership structures, or sectors exposed to proliferation financing risks)

Enhanced Due Diligence (“EDD”) measures shall be applied to high-risk clients, including increased scrutiny, additional verification, and ongoing monitoring.

5. COMPLIANCE CONTROLS

Sanctions obligations apply to all clients and counterparties, without any minimum financial threshold. All customers must therefore be screened against applicable sanctions lists for potential matches.

Where a person or entity is identified as a Listed or Designated Party, the Company shall immediately verify whether the listed details correspond to any existing or prospective customer and determine whether the customer owns, holds, or controls any funds or other assets.

Customer Screening

The Company maintains a system to screen customers and relevant associated parties during onboarding and throughout the lifecycle of the business relationship. Screening applies to:

a) Directors; b) Shareholders and beneficial owners; c) Authorised signatories; d) Nominees and trustees; e) Counterparties and any other persons with authority over or access to the account.

Screening is conducted:

a) At onboarding; b) On a daily ongoing basis; c) Upon trigger events (e.g., changes in ownership or control); d) Immediately following updates to applicable sanctions lists.

The Compliance Officer is responsible for ensuring effective implementation of this Policy, including:

a) Assessing and reassessing money laundering, terrorism financing, and proliferation financing risks; b) Reviewing and implementing measures required under relevant UN Security Council Resolutions; c) Approving appropriate controls for higher-risk jurisdictions; d) Conducting enhanced reviews of clients located in or connected to high-risk regions.

Handling of Potential Matches

Screening involves the comparison of customer data against sanctions lists to detect potential matches.

If a potential match is identified, the Company shall:

a) Immediately refrain from dealing with the relevant funds or assets; b) Not make funds or economic resources available to the listed party; c) Escalate the matter to the Compliance Officer immediately and, in any event, no later than the same business day, for further investigation and appropriate action.

A screening alert does not automatically constitute a sanctions breach. The Compliance Officer shall determine whether the alert represents a true match or a false positive, taking into account identifiers such as date of birth, nationality, address, aliases, and other available information.

If a true match is confirmed, the Company shall freeze the relevant funds or assets without delay and comply with all reporting obligations under the Sanctions Act.

The Company shall ensure that sanctions compliance standards are applied, where appropriate, on a group-wide basis, including the sharing of relevant information within the Group for the purpose of preventing sanctions breaches, subject always to applicable data protection and confidentiality laws.

6. SENIOR MANAGEMENT RESPONSIBILITIES

The Senior Management and the Board of Directors must demonstrate an understanding of the Company’s obligations arising under the Sanctions Act. The board has the ultimate responsibility for ensuring the designing, development and implementation of the Company’s policies and procedures. Senior management must be aware and highlight the importance of understanding and complying with the Company’s policies and procedures as well as the consequences and implications of breaching the sanctions requirements.

7. EMPLOYEE RESPONSIBILITY

The Company’s employees must refrain from taking any action in relation to a potential sanctions match without prior guidance or approval from the Compliance Officer.

8. REPORTING OBLIGATIONS AND PROCEDURES

If a true match is identified by the Company, it must forthwith submit a report to the NSS, without delay and not later than 24 hours of any action taken under section 25 of the Sanctions Act.

Reports may be completed using the template which can be downloaded from the NSS official website and once completed the report must be submitted via the official NSS reporting channel currently: nssec@govmu.org.

In addition, in accordance with Section 39 of the Sanctions Act any information related to a Listed Party shall be immediately submitted by the Company to the FIU or by any other person in writing to the FIU.

The Company shall also consider whether any additional internal or regulatory notifications are required, including notification to the Financial Services Commission, where applicable.

9. NO TIPPING-OFF

The Company and its employees are strictly prohibited from informing any client, counterparty, or third party that they are subject to sanctions screening, investigation, or that a report has been or will be submitted to the National Sanctions Secretariat (“NSS”) or the Financial Intelligence Unit (“FIU”), where such disclosure may prejudice an investigation.

Any breach of this obligation may constitute a criminal offence under applicable laws and may result in disciplinary and/or legal action.

10. POLICY RESPONSIBILITY

The Board of Directors retains ultimate responsibility and oversight for ensuring that the Company complies with its obligations under the Sanctions Act and related regulatory requirements.

The Compliance Officer shall have primary responsibility for the day-to-day implementation, monitoring, and enforcement of this Policy, including maintaining effective internal controls, addressing queries, investigating potential sanctions matches, and escalating material matters to Senior Management and the Board, where appropriate.

The Compliance Officer shall review this Policy at least annually, or more frequently where required due to legislative, regulatory, or operational changes, and submit any proposed amendments to the Board of Directors for approval.

The effectiveness of the Company’s sanctions compliance framework, controls, and procedures shall be subject to periodic independent review and/or internal audit. Any deficiencies identified shall be promptly addressed, and appropriate remedial actions shall be implemented.

11. TRAININGS

To ensure effective implementation of this Policy and compliance with the Sanctions Act, the Company shall provide appropriate and ongoing sanctions training to its employees.

The Company is committed to fostering a strong compliance culture and ensuring that all relevant staff understand their obligations in relation to targeted financial sanctions, asset freezing measures, reporting requirements, and the prohibition on tipping-off.

Sanctions training shall be provided:

• Upon induction;
• On a periodic basis; and
• Whenever there are significant legislative, regulatory, or internal policy changes.

Training may be delivered internally or by external professional providers. Employees are required to promptly escalate any suspicious activity, potential sanctions match, or red flags to the Compliance Officer.

The Company shall maintain adequate training records, including:

• Details of training sessions (date, format, trainer, and materials used);
• Attendance records and evidence of completion;
• Records of any assessments conducted.

All training records shall be retained in accordance with applicable regulatory and record-keeping requirements.

In addition, the Compliance Officer shall participate in relevant seminars, workshops, and professional development programmes to remain informed of evolving sanctions regimes and regulatory expectations.

12. CONSEQUENCES OF NON-COMPLIANCE

Non-compliance with the Sanctions Act may result in serious criminal and regulatory consequences.

Breaches of asset freezing obligations or prohibitions on making funds or other assets available under Sections 23 and 24 of the Sanctions Act may result, upon conviction, in a fine not exceeding MUR 5 million or twice the value of the funds or assets (whichever is greater) and imprisonment for a term of not less than three (3) years.

Failure to comply with reporting obligations under Section 25 may result in a fine not exceeding MUR 5 million and imprisonment for a term not exceeding ten (10) years.

Offences relating to arms embargo measures under Section 35 may result in a fine not exceeding MUR 10 million and imprisonment for a term of not less than five (5) years.

In addition to criminal liability, non-compliance may expose the Company to supervisory action by its relevant regulatory authority, including licence suspension or revocation, financial penalties, and other enforcement measures.

13. RECORD KEEPING

The Company shall maintain accurate, complete, and up-to-date records relating to sanctions compliance, including screening results, investigation notes, actions taken, internal approvals, freezing measures (where applicable), and the resolution of potential matches.

Such records shall be retained for a period of not less than seven (7) years, or for any longer period required under applicable laws or regulatory requirements.

Records must be maintained in a manner that enables the Company to promptly respond to requests from the NSS, FIU or its relevant supervisory authority.

The Company shall maintain a detailed log of all freezing actions undertaken in accordance with applicable sanctions requirements, including the date and time of the action, the nature of the assets frozen, internal approvals, and confirmation of reporting to the National Sanctions Secretariat (“NSS”) and/or the Financial Intelligence Unit (“FIU”), where applicable.