VIBRANIUM VENTURE CAPITAL ANTI-MONEY LAUNDERING POLICIES AND PROCEDURES
1. Overview
Vibranium Venture Capital family of investment vehicles (collectively, âVibraniumâ) is committed to compliance with all relevant anti-money laundering (âAMLâ) laws and regulations to combat AML threats in the United States and all other jurisdictions in which it operates.
2. Vibranium Commitment
Vibranium is committed to preventing the spread of money laundering and terrorist financing. Vibranium endorses all AML and anti-corruption initiatives and will not aid or assist any person engaged in such activities nor will Vibranium knowingly permit itself to be utilized as part of a money laundering, terrorist financing or any corruption scheme.
3. Purpose
This AML Policy and Procedures (the âPolicyâ) establishes the policies and procedures for Vibraniumâs risk management and compliance with its AML obligations including:
⢠the principles and measures that Vibranium follows to comply with sanctions laws and to identify, mitigate, and manage AML risk in the jurisdictions where it operates;
⢠guidance about applicable AML compliance requirements; and
⢠the consequences of failing to comply with this Policy.
Vibraniumâs management is committed to compliance with all relevant AML laws and regulations and to effective and efficient AML risk management. The management expects all Vibranium Personnel (as defined below) to be responsible and accountable for their own actions and not to permit acts of non-compliance with AML requirements.
4. AML Compliance Officer
Vibraniumâs AML Compliance Officer (the âAMLCOâ) is appointed by and reports directly to the Board of Managers of Vibranium Venture Capital GP LLC and has the oversight and implementation responsibility for the daily operation of Vibraniumâs AML compliance program.
The initial AMLCO shall be Zamir Shukhov. Any questions concerning this Policy should be addressed to the AMLCO.
5. Scope
This Policy applies to all of Vibraniumâs business activities and applies in the United States and extends to any additional jurisdictions outside of the United States where Vibranium may operate.
This Policy applies to all Vibranium employees acting in any capacity, including members, directors, officers, employees, secondees, interns, contractors, authorized representatives, and consultants in all Vibranium businesses, affiliates, and subsidiaries (collectively, the âVibranium Personnelâ).
If Vibranium fails to execute its responsibilities under applicable AML laws and regulations, it could be subject to significant civil regulatory enforcement actions, fines, and criminal charges as well as serious damage to its reputation.
Vibranium Personnel must read and apply this Policy and remain vigilant to ensure compliance with this Policy.
Vibranium Personnel who suspect a potential breach of this Policy must immediately report the potential breach or concern to the AMLCO.
Under no circumstances may any Vibranium Personnel act to evade or avoid sanctions obligations or identification of a prohibited transaction in breach of this Policy. Vibranium Personnel and anyone else acting on behalf of Vibranium cannot advise clients on how transactions should be structured in order to evade applicable AML laws and regulations. This prohibition includes, but is not limited to, advising clients and counterparties to amend their transaction documentation or payment instructions to include details that may be false or misleading, or changing, removing, or omitting information from a transaction that would otherwise lead to its detection as a prohibited transaction.
6. Investor Risk Rating
Upon receipt of the subscription document, the investor and the documents they provide are subject to a detailed review by Vibranium Personnel or a third-party administrator, as applicable, who determine which level of due diligence screening to apply to the investor as set out under Investor Identification.
7. Investor Identification
The subscription documentation, completed by the investor, is a legal document. The information contained therein is important and often supports the identification information provided by the investor. The appropriate Vibranium Personnel member or a third-party administrator, as applicable, will ensure that all sections of subscription documents are completed in full - if information is missing, the document will be returned to the investor for completion.
All investors are subject to the screening methods set out below. The documentary evidence to be requested is set out in the attached Appendix A which specifies the requirements for individuals, corporations (including limited liability companies), partnerships, trusts, and not for profit organizations.
Investor identification will be performed on each investor via one of the following methods:
⢠Simplified Due Diligence
⢠Enhanced Due Diligence
8. Simplified Due Diligence
Investors which present a low risk to Vibranium will undergo a simplified due diligence. The simplified due diligence process involves thorough review of the investorâs subscription agreement and the investor identification set forth in Appendix A.
9. Enhanced Due Diligence
Investors which present a higher risk to Vibranium will be subjected to enhanced due diligence. The enhanced due diligence process will include everything under the simplified due diligence and involves further consideration of all applicable documentation and risk factors relevant to the investor. It may require Vibranium Personnel or a third-party administrator, as applicable, to seek clarification or additional documentation from the investor, which includes obtaining originally certified documentation, the source of the funds, the source of the individual or companyâs wealth, and the investorâs occupation or the type of business. This process is designed to assure that Vibranium has secured a greater level of verification and understanding of the investor and the nature and source of the investment.
The main indications that Vibranium Personnel considers in determining whether the Investor is a âhigh risk investorâ are set forth in Appendix C, and which include whether the investor is a resident or incorporated in non-cooperative jurisdictions or if the investorâs bank accounts are with banks located in non-cooperative jurisdictions. A current list of non-cooperative jurisdictions is set out in Appendix B/Part I (FATF Blacklist). A current list of jurisdictions with strategic deficiencies is set out in Appendix B/Part II (FATF Greylist). While the Financial Action Task Force (âFATFâ) does not call for the application of enhanced due diligence measures to be applied to the jurisdictions on the FATF Greylist, Vibranium Personnel or a third-party administrator, as applicable, is encouraged to consider the information presented by FATF regarding such jurisdictions (accessible at https://www.fatf-gafi.org/en/countries/black-and-grey-lists.html) in their risk analysis.
Vibranium Personnel or a third-party administrator, as applicable, (and, if necessary, with assistance of outside counsel) will make a judgment call on whether to accept a âhigh riskâ investorâs subscription. Certain investors â referred in this Policy as âProhibited Investorsâ â cannot be accepted as investors under any circumstances. The attributes of a âProhibited Investorâ are set forth in Appendix D.
10. Sanction Screening Process
Vibranium collects information on the investors, their related parties and the beneficial ownership of structures.
This information is screened against the most significant sanctions lists:
⢠US Department of Treasury Office of Foreign Assets Control (OFAC) Specially Designated Nationals (SDN) list
⢠European Union Sanctions
⢠United Nations Sanctions
Any potential match returned is investigated by Vibranium to understand if it is a match or âfalse-positiveâ. If the potential match does return as a positive match Vibranium Personnel or a third-party administrator, as applicable, will contact the AMLCO for further direction.
11. Politically Exposed Persons (âPEPsâ)
Transactions involving Politically Exposed Persons (âPEPsâ) require enhanced due diligence, which is reflected in Vibraniumâs AML procedures. PEPâs noteworthiness arises from the risk of bribery and corruption that is associated with those in prominent public office, who are able to award government favors (contracts or licenses). Persons in this position, as well as their family members, friends and close associates may be placed in the line of temptation by being offered lucrative personal, secret rewards in return for their approval of a tender or some similar award. Such rewards must be hidden away somewhere and a PEP who has succumbed to temptation will not want to hold their secret gain in their home country. They will not even want to hold it in their own name.
For the purposes of this Policy, Politically Exposed Persons (âPEPâ) includes, but are not limited to:
⢠Heads of State, heads of government, ministers and deputy or assistant ministers.
⢠Members of parliament or of similar legislative bodies.
⢠Members of the governing bodies of political parties.
⢠Members of supreme courts, of courts or of other high-level judicial bodies, the decisions of which are not subject to further appeal, except in exceptional circumstances.
⢠Members of courts of auditors or of the boards of central banks.
⢠Mayors and members of local administration, city and district assemblies.
⢠Ambassadors, chargÊs d'affaires and high-ranking officers in the armed forces.
⢠Members of the administrative, management or supervisory bodies of State-owned enterprises.
⢠Directors, deputy directors and members of the board or equivalent function of an international organization.
Not only the person that officiates a public function must be considered as PEP, but also close family members must also be included in the assessment. For the purpose of this Policy, family members mean:
⢠The spouse, or a person considered to be equivalent to a spouse, of a politically exposed person.
⢠The children and their spouses, or persons considered to be equivalent to a spouse, of a politically exposed person.
⢠The parents of a politically exposed person.
Also, persons known to be close associates to a PEP must be assessed with the same risk approach that includes:
⢠Natural persons who are known to have joint beneficial ownership of legal entities or legal arrangements, or any other close business relations, with a Politically Exposed Person.
⢠Natural persons who have sole beneficial ownership of a legal entity or legal arrangement which is known to have been set up for the de facto benefit of a Politically Exposed Person.
⢠President, State Governors, mayors, and any kind of ancillary such as ministers, counselors and secretaries.
⢠Officers or employees of national, federal, regional, local, or other, government bodies, departments, or agencies.
⢠Officer or employees of state-owned or state-controlled entities, national or international.
⢠Heads of state or anyone who exercises governmental authority.
⢠Politicians, political party officials and candidates for political office.
⢠Employees of regulatory agencies, public entities and mixed capital societies.
⢠Officers and employees of public international organizations, as the United Nations, the World Bank and the International Monetary Fund
Vibraniumâs Personnel is trained in identifying PEPs and their associates, family members and close associates of those who hold office.
It is Vibraniumâs policy that Vibranium Personnel or a third-party administrator, as applicable, notify AMLCO of any investor PEP for further investigation and approval prior to processing transactions.
12. Detecting and Reporting Suspicious Activity
Vibraniumâs Vibranium Personnel are on alert for transaction activity by investors that may seem off-character or of a suspicious nature. Suspicious activity may include:
⢠The third party tries to conceal its identity or the source of its funds.
⢠The third party is an entity without a clear registered office and does not appear online.
⢠The third partyâs structure makes it difficult to recognize it.
⢠The third-party funds for the transaction come from abroad when there is no apparent link between this country where the funds are sourced and the third party.
⢠The third party uses multiple bank accounts or ones held abroad without any justification.
⢠The third party intends to make payments in cash or using cryptocurrency.
⢠The third party intends to pay a higher price for the services for no good reason.
⢠The third party is based in a tax haven or a high-risk country
13. Record Keeping
All relevant AML-related records shall be retained for a period of at least five years and otherwise in accordance with Vibraniumâs record retention policy.
14. Compliance Principles
The following key principles govern Vibraniumâs approach to AML obligations. All other requirements in this document are to be read in the context of these principles.
⢠Vibranium maintains a rigorous AML compliance policy to meet its obligations under the applicable AML laws and regulations, and will forego any business opportunity that would breach any AML laws and regulations.
⢠Vibranium may decide not to invest or to withdraw from any current transactions or investments even where such transactions/investments are permitted by law. These decisions may be guided by risk preference, corporate social responsibility, business efficacy, and reputational risk.
⢠In carrying out its compliance obligations, Vibranium relies on information provided to it by counterparties, advisors, consultants, and business partners unless it is reasonably aware, should be aware, or suspects that such persons are unreliable or dishonest, or the information provided is unreliable or false.
⢠Where Vibranium is unsure as to whether or not a conflict exists under any applicable AML laws and regulations, the AMLCO may seek advice from outside counsel and/or the relevant government agency prior to commencing or continuing the business activity Vibranium shall exercise due care in designing and refining business rules and processes to ensure that no transaction involves a breach of applicable sanctions or this Policy.
15. Policy Governance
This Policy will be reviewed annually by the AMLCO and the Board of Managers of the Vibranium Management to ensure the Policy is up to date. In addition, this Policy will be reviewed following any substantive changes to sanctions laws and regulations, legislation, or internal and external factors, including regulatory feedback.
16. Policy Breaches
Non-compliance with this Policy could have serious consequences for Vibranium, including civil/criminal penalties, injunctions, loss of clients, and reputational damage. All Vibranium Personnel are responsible for understanding how this Policy applies to their role. No part of this Policy or its supporting processes should be interpreted as contravening or superseding any other legal or regulatory requirements imposed upon Vibranium.
Examples of situations that will be considered as non-compliance with this Policy include but are not limited to the adjusting a business undertaking to avoid detection of prohibited transactions. This includes, but is not limited to, advising counterparties to amend their instructions to include details that may be false or misleading, or changing or omitting information from a transaction that would otherwise lead to detection (âstrippingâ).
Revised: October 2024