KYC Policy

1. Purpose and Scope

This policy outlines the Know Your Customer (KYC) procedures to comply with Czech laws, including Act No. 253/2008 Coll. on AML. It applies to all customers, employees, and third parties involved in customer onboarding and monitoring under the VSOP license.

2. Objectives

• Prevent money laundering and terrorist financing.
• Verify customer identities effectively.
• Mitigate risks through due diligence and monitoring.
• Ensure compliance with Czech AML regulations and GDPR.

3. Core KYC Procedures

3.1 Customer Identification

All customers must provide valid identification:

• Individual Clients:
  • Full name, date of birth, address, and nationality.
  • Government-issued photo ID (e.g., passport, national ID).
  • Address proof (e.g., utility bill, bank statement, max 3 months old).
• Non-Face-to-Face Verification:
  • Video verification or digital signatures.
  • Two-factor authentication where necessary.

3.2 Due Diligence Measures

• Standard CDD:
  • Identify the client and verify their identity.
  • Establish the purpose of the relationship.
• Enhanced Due Diligence (EDD) for High-Risk Customers:
  • Politically Exposed Persons (PEPs).
  • Customers from high-risk jurisdictions.
  • Unusual or high-value transactions.
  • Additional documentation (e.g., source of funds and wealth).

3.3 Risk-Based Approach (RBA)

• Classify customers as low, medium, or high risk.
• Automate risk scoring through approved tools.
• Focus resources on high-risk profiles for closer scrutiny.

3.4 Ongoing Monitoring

• Continuously review transactions to detect anomalies.
• Flag and investigate unusual or suspicious activity.
• Update customer profiles periodically or upon risk changes.

4. Reporting and Record-Keeping

4.1 Suspicious Activity Reporting

• Flag suspicious transactions or behaviours internally.
• Report confirmed suspicions to the Financial Analytical Office (FAU) promptly.

4.2 Record Retention

• Maintain all customer and transaction records for at least 10 years.
• Retain risk assessments, identification documents, and monitoring logs securely.

4.3 Data Protection

• Comply with GDPR and Czech data protection laws.
• Secure customer data using encryption and restricted access.

5. Training and Accountability

• Regular training for employees on KYC, AML, and data protection compliance.
• Clear escalation procedures for suspicious activity.
• Accountability at all levels:
  • Compliance Officer: Ensures policy adherence and regulatory reporting.
  • Employees: Follow KYC procedures and escalate issues promptly.
  • Management: Allocate resources and oversee policy implementation.

6. Policy Governance

6.1 Non-Compliance Consequences

• Revocation of VSOP license.
• Regulatory fines or penalties.
• Disciplinary actions for employees.

6.2 Policy Review

• Annual policy review or updates based on regulatory changes.

7. Approval and Implementation

This policy is approved by Kem Finity’s board and effective as of 01/01/2025. All employees and partners must comply fully with the outlined procedures.