AML / KYC Notice

1. Purpose and Scope of the Notice

This AML/KYC Notice outlines how YP Financial OÜ, complies with international and European standards for the prevention of money laundering, terrorist financing, and financial crime.

The purpose of this Notice is to inform users, clients, and partners about the company's obligations under the Estonian Money Laundering and Terrorist Financing Prevention Act, relevant EU AML Directives, and the Financial Action Task Force (FATF) Recommendations.

It applies to all customers (individual and corporate), transactions, and services offered by YP Financial OÜ and its affiliated platforms. By using these services, users acknowledge and agree that their information may be subject to identity verification, transaction monitoring, and compliance checks in accordance with applicable AML/KYC regulations.

The Notice forms an integral part of YP Financial OÜ's commitment to transparency, regulatory compliance, and the protection of the global financial system from illicit activity.

2. Regulatory Framework and Compliance Standards

YP Financial OÜ operates under the legal and regulatory framework established by Estonian and European Union legislation, as well as international standards for financial integrity and transparency. The company's compliance program is designed in accordance with:

• The Estonian Money Laundering and Terrorist Financing Prevention Act (MLTFPA).
• The EU Anti-Money Laundering Directives (AMLD IV, V, and VI).
• The Financial Action Task Force (FATF) Recommendations.
• Guidelines and best practices from the Estonian Financial Intelligence Unit (FIU) and European Banking Authority (EBA).

YP Financial OÜ maintains a risk-based approach (RBA) to detect, prevent, and mitigate risks associated with money laundering and terrorist financing. All employees, contractors, and third-party service providers are required to adhere to these compliance standards to ensure that the company's operations remain fully transparent and compliant across all jurisdictions in which it operates.

3. Commitment to Anti-Money Laundering (AML) and Counter-Terrorist Financing (CTF)

YP Financial OÜ is fully committed to maintaining the highest standards of integrity, transparency, and regulatory compliance in all its financial and operational activities. The company enforces a zero-tolerance policy toward money laundering, terrorist financing, fraud, or any activity that could compromise the security of the financial system.

To uphold this commitment, YP Financial OÜ:

• Implements comprehensive AML/CTF policies and procedures across all services and jurisdictions.
• Conducts ongoing risk assessments to identify and mitigate potential threats.
• Trains all employees and partners to recognize and report suspicious activities.
• Cooperates fully with competent authorities and regulators, including the Estonian Financial Intelligence Unit (FIU).
• Utilizes advanced tools and third-party systems to perform identity verification, sanctions screening, and transaction monitoring.

This commitment ensures that YP Financial OÜ, operates responsibly within the international financial community and contributes actively to the prevention of illicit financial activities.

4. Know Your Customer (KYC) and Know Your Business (KYB) Requirements

YP Financial OÜ applies strict KYC (Know Your Customer) and KYB (Know Your Business) procedures to verify the identity and legitimacy of all users before granting access to its financial services. These procedures are essential to ensure transparency, prevent financial crime, and comply with international regulatory standards.

The verification process includes:

• Collection of personal data such as full name, nationality, date of birth, and government-issued identification.
• Verification of business entities, including company registration details, directors, shareholders, and ultimate beneficial owners (UBOs).
• Proof of address and, when applicable, proof of business activity (e.g., invoices, contracts, or financial statements).
• Screening against global sanctions, politically exposed persons (PEP), and adverse media databases.

All identity and business verification processes are conducted in partnership with regulated compliance providers. These partners operate under strict GDPR and AML requirements to ensure that all verification data is handled securely, lawfully, and confidentially.

5. Customer Identification and Verification Process

YP Financial OÜ conducts a structured and risk-based customer identification and verification process to confirm the authenticity of every client, whether individual or corporate, before allowing access to its services. This process ensures compliance with Estonian and EU AML regulations and helps prevent the misuse of financial infrastructure for illicit purposes.

The verification process includes the following steps:

• Identity Verification: validating official identification documents (passport, ID card, or residence permit) using biometric checks and liveness detection.
• Address Verification: confirming residential or business address through utility bills, bank statements, or official government records.
• Business Verification (KYB): validating legal entity registration, structure, and beneficial ownership details through official registries or certified documents.
• Screening: cross-checking all clients, directors, and UBOs against global sanctions lists, PEP databases, and adverse media sources.
• Source of Funds and Wealth: requesting evidence of income or transaction origin when required under enhanced due diligence (EDD) procedures.

Verification is conducted through trusted third-party providers, ensuring secure, accurate, and GDPR-compliant processing. Access to services may be delayed, restricted, or denied if verification requirements are incomplete or inconsistent with regulatory expectations.

6. Enhanced Due Diligence (EDD) for High-Risk Clients

YP Financial OÜ applies Enhanced Due Diligence (EDD) measures for clients, transactions, or jurisdictions identified as high risk according to internal risk assessments and regulatory obligations. EDD provides an additional layer of scrutiny beyond standard verification to ensure compliance with AML/CTF standards.

EDD procedures include:

• Obtaining additional identification documents and independent verification of client information.
• Collecting detailed evidence of the source of funds and source of wealth.
• Conducting deeper sanctions, PEP, and adverse media screening.
• Requiring senior management approval before onboarding or continuing a business relationship.
• Applying enhanced transaction monitoring and periodic reviews of client activity.

High-risk classifications may apply to clients operating in FATF-designated high-risk jurisdictions, industries with increased exposure (e.g., crypto, remittance, cash-intensive businesses), or politically exposed entities.

These measures help YP Financial OÜ maintain a secure, transparent, and compliant environment across all financial operations, safeguarding both the company and its clients from illicit activity.

7. Ongoing Monitoring and Transaction Review

YP Financial OÜ conducts continuous monitoring of customer activity to detect, prevent, and report suspicious or unusual behavior. This process ensures that transactions remain consistent with the customer's known profile, declared business purpose, and expected level of activity.

Monitoring activities include:

• Automated transaction screening using predefined risk rules and behavioral patterns.
• Real-time alerts for unusual activity, such as large or frequent transfers, inconsistent counterparties, or transactions involving high-risk jurisdictions.
• Periodic reviews of client profiles, including re-verification of KYC/KYB information when risk levels change.
• Manual investigations of alerts by the Compliance Officer (MLRO) to determine whether escalation or reporting is necessary.
• Integration with partner systems for cross-platform visibility and compliance synchronization.

All monitoring follows a risk-based approach (RBA), meaning higher-risk clients and transactions receive more frequent and detailed reviews. When potential suspicious activity is identified, YP Financial OÜ initiates an internal investigation and, if required, reports it to the Estonian Financial Intelligence Unit (FIU) in compliance with legal obligations.

8. Sanctions Screening and Politically Exposed Persons (PEPs)

YP Financial OÜ performs continuous sanctions screening and PEP identification as part of its AML/CTF framework to ensure that no customer, transaction, or counterparty involves restricted or high-risk entities.

Key procedures include:

• Sanctions Screening: All clients, counterparties, and transactions are screened against global sanctions lists issued by the European Union (EU), United Nations (UN), Office of Foreign Assets Control (OFAC, USA), and HM Treasury (UK). Screening occurs during onboarding and continuously throughout the business relationship.
• PEP Identification: Clients are checked against politically exposed person (PEP) databases to identify individuals who hold or have held prominent public positions, as well as their family members or close associates.
• Enhanced Controls for Matches: If a customer or beneficial owner is identified as a PEP or appears on a sanctions list, enhanced due diligence (EDD) is immediately applied, and the Compliance Officer (MLRO) reviews the case for potential escalation or reporting.
• Automated Systems: YP Financial OÜ uses third-party compliance tools to perform real-time screening, ensuring accuracy and compliance with global standards.

No services are provided to individuals, companies, or jurisdictions subject to comprehensive sanctions. Confirmed matches are reported to the Estonian Financial Intelligence Unit (FIU) without delay.

9. Suspicious Activity Detection and Reporting (SAR/STR)

YP Financial OÜ maintains strict internal procedures for identifying, assessing, and reporting suspicious activity or transactions in compliance with the Estonian Money Laundering and Terrorist Financing Prevention Act and EU AML Directives.

Key principles include:

• Detection: Automated and manual systems identify red flags such as unusual transaction patterns, inconsistent business behavior, large or rapid transfers, or dealings with high-risk jurisdictions.
• Internal Review: Alerts are reviewed by the Compliance Officer (MLRO) to determine whether the activity may indicate money laundering, terrorist financing, or related offenses.
• Reporting to Authorities: When suspicion is confirmed or cannot be reasonably dismissed, a Suspicious Activity Report (SAR) or Suspicious Transaction Report (STR) is filed immediately with the Estonian Financial Intelligence Unit (FIU).
• Confidentiality: Employees are prohibited from informing the client or third parties that a report has been filed (the "tipping-off" prohibition).
• Record Keeping: All reports, supporting evidence, and communications with authorities are documented and retained for at least five (5) years, in line with regulatory requirements.

These measures ensure that YP Financial OÜ operate with full transparency and contribute actively to preventing and detecting illicit financial activity within the global financial ecosystem.

10. Record Keeping and Data Retention

YP Financial OÜ maintains comprehensive records of all customer identification, verification, and transaction data to ensure traceability, transparency, and compliance with Estonian and EU AML/CTF regulations.

The company's record-keeping framework includes:

• Customer Files: copies of identification documents, KYC/KYB verification data, beneficial ownership records, and risk assessments.
• Transaction Records: details of payments, transfers, and related correspondence that allow for complete reconstruction of financial activity.
• Monitoring and Reporting Logs: alerts, investigations, and Suspicious Activity Reports (SARs/STRs) submitted to the Financial Intelligence Unit (FIU).
• Training and Audit Documentation: internal compliance reports, employee training logs, and independent review outcomes.

Retention periods are as follows:

• All AML/KYC-related records are kept for at least five (5) years after the end of the business relationship or the date of a one-off transaction.
• Where legally required or at the request of authorities, this period may extend up to ten (10) years.

All records are stored securely, accessible only to authorized personnel, and processed in full compliance with the General Data Protection Regulation (GDPR) and Estonian Personal Data Protection Act.

11. Use of Regulated Third-Party Providers

To ensure secure, efficient, and compliant operations, YP Financial OÜ partners with regulated third-party service providers that specialize in identity verification, payment processing, and compliance infrastructure. These providers are integral to the company's AML/KYC framework and operate under strict regulatory and contractual standards.

Each partner is subject to due diligence, data protection, and audit requirements to ensure compliance with EU AML Directives and GDPR. Data shared with these partners is limited to what is necessary for the fulfillment of legal and operational purposes and is protected through encrypted channels and contractual safeguards.

YP Financial OÜ retains full responsibility for the actions of its service providers and ensures that all third-party integrations align with the company's compliance and risk management standards.

12. Customer Responsibilities and Cooperation

All customers of YP Financial OÜ, are required to cooperate fully with the company's AML/KYC procedures and regulatory obligations. This cooperation is essential for maintaining a secure and compliant financial environment.

Customer responsibilities include:

• Providing accurate, complete, and up-to-date information during onboarding and throughout the business relationship.
• Submitting all required identification documents and supporting materials upon request.
• Informing YP Financial OÜ of any changes to personal, business, or ownership information without delay.
• Refraining from using company services for any illegal, fraudulent, or high-risk activities.
• Cooperating in enhanced due diligence (EDD) reviews when their profile, activity, or jurisdiction presents elevated risk.

Failure to provide requested information or cooperation may result in:

• Suspension or termination of services.
• Freezing or blocking of accounts or transactions pending review.
• Reporting to the Estonian Financial Intelligence Unit (FIU) or other competent authorities where required by law.

By using YP Financial OÜ's services, customers acknowledge their duty to act transparently and in full compliance with applicable AML, CTF, and sanctions regulations.

13. Training and Internal Controls

YP Financial OÜ maintains a robust framework of training, internal controls, and compliance oversight to ensure effective prevention and detection of money laundering and terrorist financing. These controls are an integral part of the company's governance structure and apply to all employees, contractors, and relevant third parties.

Key measures include:

• Regular staff training: all employees receive onboarding and annual training on AML/CTF obligations, suspicious activity recognition, and proper reporting procedures.
• Role-specific programs: compliance, operations, and payment teams receive advanced training tailored to their responsibilities and risk exposure.
• Independent oversight: the Compliance Officer (MLRO) monitors program effectiveness and reports directly to the Board of Directors on AML performance and incident handling.
• Internal policies and audits: procedures are reviewed periodically to ensure alignment with the Estonian Money Laundering and Terrorist Financing Prevention Act and EU AML Directives.
• Record of compliance activities: all training sessions, internal reviews, and audit findings are documented and securely stored.

Through these measures, YP Financial OÜ ensures that all staff understand their obligations, uphold regulatory standards, and contribute actively to maintaining a culture of compliance and integrity.

14. Non-Compliance and Consequences

YP Financial OÜ enforces a zero-tolerance policy for any breach of AML/CTF or KYC obligations by customers, employees, or third-party partners. Non-compliance with regulatory requirements, internal policies, or verification procedures may result in immediate action to protect the integrity of the company and its operations.

Consequences of non-compliance may include:

• Suspension or termination of customer accounts and business relationships.
• Freezing or blocking of transactions pending regulatory clarification.
• Mandatory reporting of the incident to the Estonian Financial Intelligence Unit (FIU) or other competent authorities.
• Disciplinary action against employees, up to and including termination of employment.
• Termination of partnerships with third-party providers or agents that fail to meet compliance standards.
• Legal proceedings or financial penalties where violations constitute criminal or regulatory offenses.

YP Financial OÜ reserves the right to decline any transaction or client relationship that poses unacceptable compliance or reputational risk. All such actions are taken in accordance with Estonian law, EU AML Directives, and the company's internal governance framework.

15. Contact and Reporting Channels

For any questions, clarifications, or reports related to AML/KYC compliance, customers and partners may contact the company's compliance department through the following channels:

Reports of suspicious activity, non-compliance, or potential policy breaches are handled with strict confidentiality and reviewed directly by the Money Laundering Reporting Officer (MLRO).

All communications received through these channels are logged, assessed, and responded to in accordance with Estonian AML legislation, EU AML Directives, and GDPR requirements. Users are encouraged to report any concerns in good faith—YP Financial OÜ guarantees protection against retaliation for individuals who submit legitimate compliance-related reports.