Company policy

 

Karthala Ventures LTD – Anti-Money Laundering (AML) Program

 

Compliance and monitoring procedures
Updated on: 12.01.2026
Karthala Ventures LTD
Hamchako, Mutsamudu, Autonomous Island of Anjouan, Union of Comoros

 

 

 

1. Principle of money laundering prevention

 

It is company policy to prohibit and actively prevent money laundering and any activity that facilitates money laundering or the financing of terrorist or criminal activities. This is achieved through compliance with all applicable regulations. Bank Secrecy Act (BSA) and the associated implementing regulations.

 

Money laundering is generally defined as actions aimed at concealing the true origin of criminally obtained assets so that they appear to come from legal sources.

 

Money laundering typically occurs in three phases:

 

1.   Placement
Illegal funds are first introduced into the financial system, e.g. by converting them into payment instruments or depositing them into accounts.

 

2.   Obfuscation (Layering)
Funds are transferred via various accounts or institutions to further obscure their origin.

 

3.   Integration
The funds are reinvested in the economy, for example to purchase legal assets or to finance further (legal or illegal) activities.

 

Although cash is rarely deposited directly into securities accounts, the securities industry can be used to launder funds obtained elsewhere or to generate illegal profits oneself, for example through:

 

•     Insider trading

 

•     Market manipulation

 

•     pyramid schemes

 

•     cybercrime

 

•     other investment fraud

 

Terrorist financing The funds need not originate from criminal proceeds; they can also conceal legal means to hide their purpose. The methods often resemble classic money laundering, even if the motivation differs. Terrorist attacks do not necessarily require large sums of money, and the transactions can be inconspicuous.

 

Our AML policies, procedures, and internal controls are designed to ensure compliance with all BSA regulations and FINRA rules. They are regularly reviewed and updated to reflect regulatory and business changes.

 

 

 

2. Appointment of an AML officer

 

The company has appointed one person as AML Compliance Officer named who bears full responsibility for the AML program.

 

This person:

 

•     possesses in-depth knowledge of the BSA and the associated regulations

 

•     is qualified through education, knowledge and professional experience (including as a bank employee)

 

•     monitors compliance with all AML obligations

 

•     organizes employee training

 

•     ensures the proper storage of all AML documents

 

•     sufficient if needed Suspicious Activity Reports (SARs) at FinCEN a

 

The AML officer has full decision-making and enforcement authority.

 

The company reports the following contact details of the AML officer to FINRA via the FINRA Contact System (FCS):

 

•     Name

 

•     Title

 

•     Mailing address

 

•     E-mail

 

•     Phone number

 

•     Fax number (if available)

 

Changes will be reported immediately. An annual review will take place at the latest. 17 business days after the end of the yearAny other changes will be made within maximum 30 days updated.

 

 

 

3. Disclosure of AML information to authorities and financial institutions

 

a) FinCEN requests under Section 314(a) USA PATRIOT Act

 

When FinCEN requests our records, we immediately search them to determine whether we have held accounts or made transactions with the persons/organizations mentioned.

 

•     Response deadline: 14 daysunless otherwise stated

 

•     Hits are reported via the secure FinCEN system.

 

•     No hit No answer

 

•     Every search is documented.

 

Your request will be treated with strict confidentiality. Information may only be disclosed to the extent necessary to fulfill your request.

 

 

 

b) National Security Letters (NSL)

 

Receiving an NSL is strictly confidential. No one in the company may disclose that authorities have requested information. If a SAR is subsequently filed, it must not contain any reference to the NSL.

 

 

 

c) Grand Jury Submissions

 

A summons alone does not obligate you to file a SAR report. However, we review customer risk and account activity. If there is suspicion of wrongdoing, a SAR report will be filed. Strict confidentiality applies in this process as well.

 

 

 

d) Voluntary exchange of information pursuant to Section 314(b)

 

We are allowed to exchange information with other financial institutions to detect possible money laundering or terrorist financing.

 

Requirements:

 

•     Prior registration with FinCEN

 

•     Annual renewal

 

•     Checking whether the other institution is also registered

 

•     Strict data protection and security measures

 

 

 

e) Joint SAR notifications

 

We can submit joint SARs with brokers or clearing houses if a transaction affects both parties. Disclosure is only permitted to the jointly reporting institution.

 

 

 

f) Transfer of SARs to parent companies

 

Foreign parent companies may not disclose SARs. Underlying transaction data may be shared, provided it is not evident from the data that an SAR has been filed.

 

 

 

4. Check against OFAC sanctions lists

 

Before account opening and continuously, we check customers against the OFAC SDN List and current sanctions lists.

 

If a match is found:

 

•     Reject transaction or block assets

 

•     Report within 10 days an OFAC

 

•     Call the OFAC hotline immediately.

 

All tests are documented.

 

 

 

5. Customer Identification Program (CIP)

 

We operate a written customer identification program in accordance with FINRA and BSA guidelines.

 

Minimum data collected

 

For natural persons:

 

•     Name

 

•     Date of Birth

 

•     Residential or business address

 

•     Identification number (e.g. tax ID or passport number)

 

For legal persons:

 

•     Headquarters

 

•     Registration certificates

 

•     Identification numbers

 

If information is refused or incorrectly provided:

 

•     An account will not be opened or may be closed.

 

•     The AML officer decides on SAR notification.

 

Identities are verified through documents (e.g. passport, driver's license, commercial register extract) and, if necessary, through additional non-documentary methods.

 

Documents will be at least 5 years kept.

 

 

 

6. Customer Due Diligence (CDD)

 

In addition to identification, we also record beneficial owners of legal entities:

 

•     Persons with ≥ 25% ownership

 

•     Persons with control functions

 

We are creating a Customer risk profile and continuously monitor transactions.

 

 

 

7. Correspondence accounts for foreign banks

 

We do not hold accounts with foreign shell banks. If discovered:

 

•     Account will be terminated

 

•     New transactions will be blocked.

 

We regularly require certifications regarding ownership structure and legal representation in the USA.

 

 

 

8. Enhanced due diligence obligations

 

For high-risk foreign banks (offshore licenses, high-risk countries, etc.) we conduct Enhanced Due Diligence through, among others:

 

•     Review of the bank's AML program

 

•     Monitoring of transactions

 

•     Identification of beneficial owners

 

 

 

9. Private banking accounts & politically exposed persons (PEPs)

 

For private banking accounts, we check:

 

•     Origin of the funds

 

•     Economically justified

 

•     whether they are high-ranking foreign officials

 

In cases of increased risk, additional tests and close monitoring are carried out.

 

 

 

10. FinCEN Special Measures

 

If FinCEN issues special measures against countries or institutions, we will strictly adhere to these regulations.

 

 

 

11. Monitoring of suspicious activities

 

We monitor accounts for unusual patterns, volumes, or transaction types based on risk factors and Red Flags.

 

In urgent cases (e.g., terrorist financing), we immediately contact the relevant law enforcement authorities.

 

 

 

Examples of Red Flags

 

•     False or contradictory identity information

 

•     Refusal to disclose the origin of funds

 

•     Connections to high-risk countries

 

•     Use of straw men or shell companies

 

•     Unusual securities transactions (e.g. penny stocks, sudden price jumps)

 

•     Structuring of payments to circumvent reporting obligations

 

•     Frequent third-party transfers without any apparent purpose

 

 

 

12. Suspicious activity reports and BSA reporting obligations

 

a) Submission of a Suspicious Activity Report (SAR)

 

We are submitting a SAR at FinCEN one, if transactions via $5.000 or more (individually or collectively) occur or are attempted and we know, suspect or have reason to believe that:

 

1.   Funds originate from illegal activities or are intended to be concealed.

 

2.   the transaction aims to circumvent BSA regulations (e.g., through structuring)

 

3.   the transaction has no discernible business or legal purpose

 

4.   the company is being used to support criminal activities

 

In urgent cases (e.g., terrorist financing or ongoing money laundering), we also immediately notify the relevant law enforcement authorities.

 

Voluntary SARs can also be submitted if a transaction appears suspicious, even if there is no legal obligation to do so.

 

Deadlines

 

•     SAR must within 30 calendar days to be submitted after the suspicion has been established

 

•     If no suspect was identified: extension to maximum 60 days

 

The period begins not not with the first suspicious activity, but with the point in time when, after examination, it is determined that the activity is indeed suspicious.

 

Storage

 

•     Copies of the SAR and all supporting documents will be 5 years kept

 

•     Documents must be made available to FinCEN or regulatory authorities upon request.

 

confidentiality

 

No one may be informed that a SAR has been filed – except:

 

•     FinCEN

 

•     SEC

 

•     competent law enforcement or regulatory authorities

 

•     approved self-regulatory organizations (SROs)

 

When summoned, documents are refused and FinCEN is informed.

 

 

 

b) Currency Transaction Reports (CTR)

 

Our company prohibits cash transactions. Should any cash transactions nevertheless be possible via 10.000 USD taking place on a business day, a CTR message submitted via the BSA e-filing system.

 

Multiple transactions by the same person on the same day are counted together.

 

 

 

c) Reports on the transit of currency and monetary instruments (CMIR)

 

If we find that more than 10.000 USD For information on cash or monetary instruments received from or sent to foreign countries, we submit a CMIR report at the customs authorities.

 

 

 

d) FBAR – Foreign bank accounts

 

We report foreign financial accounts via 10.000 USD, over which we have control or signing authority, via the BSA-E-Filing system.

 

 

 

e) Monetary instruments

 

We give no Bank checks, money orders or traveler's checks via $3.000 or more .

 

 

 

f) Transfers exceeding USD 3.000 (Travel Rule)

 

For money transfers from 3.000 USD We save:

 

•     Name and address of the client

 

•     Account number (if available)

 

•     amount

 

•     Execution date

 

•     Recipient bank

 

Additionally – if available:

 

•     Recipient's name and address

 

•     Recipient account number

 

•     further identification features

 

When an order is placed in person, the identity is verified using official documents.

 

 

 

13. AML documentation obligations

 

a) Responsibility

 

The AML officer is responsible for the proper storage of all AML records and the submission of SARs.

 

We manage and archive:

 

•     SARs

 

•     CTRs

 

•     CMIRs

 

•     FBARS

 

•     Customer identification documents

 

•     Records of money transfers

 

SAR documents will be at least 5 years stored, other documents in accordance with BSA and SEC requirements up to 6 years.

 

 

 

b) Confidentiality of SARs

 

SARs are kept separately from other documents.
Submissions are refused and FinCEN is informed.

 

An exchange is only permitted within the framework of joint SAR submissions with other financial institutions.

 

 

 

c) Further records

 

We keep copies or reproductions of:

 

•     Loans over USD 10.000 (excluding mortgage loans)

 

•     International transfers over USD 10.000

 

•     Powers of attorney over customer accounts

 

•     Trading records in accordance with SEC Rule 17a-3

 

•     Money transfers abroad over USD 10.000

 

•     Incoming payments from abroad exceeding USD 10.000

 

 

 

14. Cooperation with clearing firms

 

We work closely with our clearing company to detect money laundering.

 

•     Exchange of data, reports and exceptions

 

•     Both companies have submitted FinCEN certifications for information exchange.

 

•     The division of tasks is regulated in writing.

 

•     Both parties remain independently responsible for AML compliance.

 

 

 

15. Training programs

 

Under the direction of the AML officer, we conduct at least annually Training courses for employees.

 

training contents

 

1.   Identifying Red Flags and Signs of Money Laundering

 

2.   Procedure in suspected cases

 

3.   Roles of employees in the AML program

 

4.   retention obligations

 

5.   Disciplinary measures and possible criminal consequences for violations

 

The training courses are adapted to the size, customer structure and business model of the company and are regularly updated.

 

16. Independent audit of the AML program

 

Our AML program is regularly reviewed by a independent audit assessed to ensure that:

 

•     the guidelines are effective

 

•     legal requirements must be met.

 

•     internal controls function properly

 

Scope of examination

 

The examination includes, among other things:

 

•     Appropriateness of internal AML guidelines

 

•     Effectiveness of the monitoring systems

 

•     Compliance with reporting obligations (SAR, CTR, etc.)

 

•     Quality of customer data and identification procedures

 

•     Training programs and employee engagement

 

The audit is conducted by qualified internal or external auditors who not directly are involved in the daily implementation of the AML program.

 

Frequency

 

The examination will take place at least annually, or more frequently, when:

 

•     regulatory requirements change

 

•     the business model changes significantly

 

•     New risks are identified

 

Results are documented and presented to management. Identified deficiencies must be rectified promptly.

 

 

 

17. Internal controls

 

The company maintains a system of internal controls to prevent and detect money laundering.

 

These include:

 

•     clear responsibilities

 

•     Approval and escalation procedures

 

•     Documentation requirements

 

•     Separation of functions (e.g., control vs. execution)

 

•     regular review of high-risk accounts

 

These controls are continuously adapted to address new risks and regulatory changes.

 

 

 

18. Risk-based approach

 

Our AML program is based on a risk-oriented approach.

 

This means:

 

The higher the potential risk of a customer, transaction, or product, the stricter the auditing and monitoring measures.

 

Risk factors can include:

 

•     Customer country of origin

 

•     Type of business activity

 

•     Transaction volume. Experts in niche markets.

 

•     Utilizing complex company structures

 

•     Use of third parties

 

•     Politically exposed persons (PEPs)

 

Customers are classified into risk categories (e.g., low, medium, high).
High-risk customers are subject to increased monitoring and additional documentation requirements.

 

 

 

19. Report to management

 

The AML officer reports regularly to the management and, if necessary, to the board of directors about:

 

•     SAR reports submitted (anonymized)

 

•     identified risks

 

•     Results of internal audits

 

•     training measures

 

•     regulatory changes

 

The management bears ultimate responsibility for the effectiveness of the AML program.

 

 

 

20. Disciplinary measures

 

Employees who violate AML regulations or internal guidelines may be subject to disciplinary action.

 

Possible actions:

 

•     warning

 

•     Training requirements

 

•     suspension

 

•     Termination

 

•     Reporting to supervisory authorities (in case of serious violations)

 

 

 

21. Continuous updating of the program

 

The AML program is a living document and is regularly updated to:

 

•     implementing new legal requirements

 

•     to consider new money laundering methods

 

•     To reflect changes in the business model

 

All employees will be informed of significant changes and, if necessary, retrained.

 

 

 

22. Final Provisions

 

Karthala Ventures LTD is committed to full compliance with all applicable laws and regulations to combat money laundering and terrorist financing.

 

Every person in the company is responsible for identifying and reporting suspicious activities.

 

Failure to comply with these regulations may lead to serious legal, financial and reputational consequences for the company and the people involved.