AML Policy of Umarutti s.r.o.

Effective Date: 25.05.2025

1. Introduction and Purpose of the Policy

UMARUTTI s.r.o. (hereinafter referred to as "the Company" or "we") is fully committed to preventing the use of its business activities and the AreteApp platform (hereinafter referred to as "the Platform") for the legalization of proceeds from criminal activities (money laundering) and the financing of terrorism. This commitment aligns with our ethical principles as defined in the Company's Code of Ethics and our legal obligations, particularly those arising from Act No. 253/2008 Coll., on certain measures against the legalization of proceeds from criminal activities and the financing of terrorism. In the diamond, gemstone, and jewelry trade, which may be exposed to increased risks, we consider transparent and robust AML measures to be crucial for building and maintaining the trust of our clients and business partners. The publication of this policy is a manifestation of our proactive approach to managing these risks.

The purpose of this AML policy (hereinafter referred to as "the Policy") is to inform our clients, business partners, and the public about the fundamental principles and measures that the Company applies in the fight against money laundering and the financing of terrorism. The Policy describes our position as an obliged entity and the general obligations that arise from it for both us and our clients. A clearly formulated and publicly available AML policy can also contribute to smoother international transactions, as foreign partners and financial institutions often require proof of robust AML measures, which can simplify their due diligence processes and potentially expedite transactions. This Policy is publicly available on the Platform's website.

This Policy applies to all wholesale sales of diamonds, gemstones, jewelry, and other goods (as defined in the Company's Terms and Conditions) conducted by the Company, including transactions carried out through the AreteApp Platform and other communication means.

It is important to emphasize that this Policy does not contain detailed internal procedures, control mechanisms, and risk assessment systems that the Company applies in its AML due diligence. These internal processes are considered confidential information, and their disclosure could undermine the effectiveness of our AML measures.

2. Legal Framework and Definitions

For the purposes of this Policy and to better understand our AML obligations, the following definitions and legal framework are key. For the complete wording of legal definitions and current information, we recommend consulting the valid wording of Act No. 253/2008 Coll., on certain measures against the legalization of proceeds from criminal activities and the financing of terrorism (AML Act), and official sources of the Financial Analytical Office (FAÚ), such as the website www.fau.gov.cz.

Basic Definitions:

Legalization of Proceeds from Criminal Activities (Money Laundering): In simple terms, this refers to actions aimed at concealing the illegal origin of assets in order to create the appearance of their legal acquisition.
Financing of Terrorism: In simple terms, this involves collecting or providing funds with the knowledge that they will be used for terrorist activities.

Main Legal Regulations:

Our AML/CFT procedures are primarily governed by Act No. 253/2008 Coll., on certain measures against the legalization of proceeds from criminal activities and the financing of terrorism, as amended (hereinafter referred to as "AML Act"), and other related legal regulations of the Czech Republic and directly applicable regulations of the European Union.

Our Company as an Obliged Entity:

UMARUTTI s.r.o. is an obliged entity under § 2 paragraph 1 letter n) of the AML Act. This classification arises from our activities as a dealer in precious metals or gemstones, as specified in Annex No. 1 of the AML Act (which includes gold, silver, platinum, diamonds, rubies, sapphires, and emeralds). We become an obliged entity when conducting transactions valued at €10,000 or more. This limit is a key operational point for our internal processes and is monitored for all transactions.

This obligation applies regardless of whether the transaction is conducted in cash or cashless. If these conditions are met, the Company is obliged to fulfill all obligations set forth by the AML Act.

Application to Specific Cases (according to Selected Opinions of the Financial Analytical Office):

To better orient our clients and partners, we outline how AML obligations may apply to other entities in our industry:

Jewelry and Gemstone Trade: If a jewelry or gemstone business trades in precious metals and stones according to Annex No. 1 of the AML Act and simultaneously conducts transactions valued at €10,000 or more, it also becomes an obliged entity under § 2 paragraph 1 letter n) of the AML Act.
Investment Gold Sellers (including e-shops): A seller of investment gold to end customers, including through an e-shop (on the basis of electronic contracting), is an obliged entity under § 2 paragraph 1 letter n) of the AML Act under the conditions set by law (i.e., upon reaching the value limit).
Investment Gold Sellers Providing Custody Services: If an investment gold seller additionally provides gold custody services, it becomes an obliged entity not only under § 2 paragraph 1 letter n) of the AML Act but also under § 2 paragraph 1 letter b) point 14 of the AML Act, i.e., as a person providing custody services for valuables.

Incorporating these opinions into our public policy signals our understanding of the broader regulatory context and can help our B2B clients better understand their own potential AML obligations, contributing to the overall integrity of the supply chain.

The following table summarizes key situations establishing the status of an obliged entity:

Table 1: Overview of situations establishing the status of an obliged entity for dealers in precious metals and stones (according to the AML Act and selected opinions of FAÚ)

Subject/Activity Type	Conditions for the emergence of AML obligations	Relevant provisions of the AML Act
Dealer in precious metals/stones (general)	Trade worth 10,000 EUR or higher	§ 2 para. 1 letter n)
Jewelry/Goldsmithing	Deals in precious metals/stones (Appendix 1) AND trade worth 10,000 EUR or higher	§ 2 para. 1 letter n) (according to FAÚ's opinion)
Seller of investment gold (e-shop)	Trade worth 10,000 EUR or higher	§ 2 para. 1 letter n) (according to FAÚ's opinion)
Seller of investment gold with custody	Trade worth 10,000 EUR or higher OR providing custody services	§ 2 para. 1 letter n) AND/OR § 2 para. 1 letter b) point 14 (according to FAÚ's opinion)

Financial Analytical Office (FAÚ):

The Financial Analytical Office (FAÚ) is the central administrative authority of the Czech Republic for the area of combating the legalization of proceeds from crime and financing terrorism. It serves as the financial intelligence unit and supervises compliance with the obligations set forth by the AML Act. Further information, methodological guidelines, and current legislation are available on the official FAÚ website (e.g., www.fau.gov.cz).

3. Basic Principles of Our AML Policy

UMARUTTI s.r.o. applies the following basic principles and measures within its AML policy:

Customer Identification and Due Diligence (CDD):

The company conducts identification and due diligence of its clients (Buyers) in accordance with the requirements of the AML Act.¹ The scope and depth of client identification and due diligence are adapted based on the risk assessment associated with the specific client, type of business relationship, or nature of the transaction. These measures include, in particular, determining and verifying the client's identification data, obtaining information about the purpose and intended nature of the trade or business relationship, and the nature of the client's business. Clients are informed of this obligation and the necessity to provide cooperation, among other things, through our Terms and Conditions.

Identification and Verification of the Ultimate Beneficial Owner (UBO):

In cases where the client is a legal entity or a trust, the Company identifies and takes appropriate measures to verify the identity of the ultimate beneficial owner (UBO) of the client, as required by the AML Act. For this purpose, we use information provided by the client, data from publicly available registers (such as the register of ultimate beneficial owners), and other reliable and independent sources of information. Ensuring the transparency of ownership structures is key for us.

Politically Exposed Persons (PEPs):

The company applies specific and enhanced measures for the identification and due diligence of clients who are politically exposed persons (PEPs), ultimate beneficial owners of clients who are PEPs, or persons closely associated with PEPs, in accordance with the AML Act. These measures include, in particular, determining the source of wealth and the sources of funds of these persons and conducting enhanced ongoing monitoring of the business relationship. PEPs represent a potentially higher risk from the perspective of AML/CFT, and therefore we pay increased attention to them.

International Sanctions:

The Company is strictly committed to complying with all applicable international sanction regimes, particularly sanctions imposed by the United Nations, the European Union, and the Czech Republic. We conduct regular checks of our clients, their beneficial owners, and transactions against relevant sanction lists. The Company will not enter into a business relationship or carry out a transaction if such action would be in violation of applicable international sanctions.

Transaction Monitoring and Reporting Suspicious Transactions:

The Company continuously monitors the business relationships and transactions of its clients to identify unusual or suspicious activities that may indicate an attempt to launder proceeds from criminal activities or finance terrorism. In the event of detecting a suspicious transaction under § 6 of the AML Act (for example, transactions without an apparent economic purpose, unusually complex or large transactions, transactions suggesting a connection to criminal activities or financing terrorism, or other circumstances raising suspicion), the Company is obliged to report this transaction without undue delay to the Financial Analytical Office (FAÚ) in accordance with § 18 of the AML Act. Although strictly speaking, the Company becomes a obliged entity only for transactions valued at 10,000 EUR, for the effective functioning of the AML system and in accordance with a risk-based approach, we will consider notifying the FAÚ of activities showing signs of suspicious transactions that do not reach this value if there is reasonable suspicion of ML/TF. We consider this approach to be a manifestation of responsibility and an effort to exceed AML obligations.

Principle of Aggregating Related Transactions:

In accordance with § 54 para. 4 of the AML Act, the Company consistently applies the rule preventing the purposeful splitting (structuring) of payments or transactions to avoid obligations under the AML Act, particularly the threshold for client identification and verification. If it is evident from the circumstances that the total sum of the values of individual performances of one client, which are evidently related (e.g., by the client’s identity, the subject of the transaction, temporal correlation), exceeds or is likely to exceed the threshold of 10,000 EUR, the Company will carry out client identification and apply other obligations under the AML Act as if it were a single transaction. The assessment of the relationship of individual performances always depends on the specific circumstances of the case. We are aware that traders dealing in high-value goods may be targets for transaction structuring, and therefore this principle is actively monitored.

Refusal or Termination of Business Relationship:

The Company reserves the right to refuse to carry out a transaction, establish a business relationship, or terminate an existing business relationship in cases specified in § 15 of the AML Act or our Terms and Conditions. This right will be exercised particularly in situations where:

the client refuses to undergo identification or verification;
the client does not provide the necessary cooperation, including submitting the required documents and information;
there are doubts about the truthfulness of the information provided by the client or the authenticity of the submitted documents;
identification or verification of the client cannot be performed for other reasons;
the origin of the funds or other assets used in the transaction by a politically exposed person is unknown.

Effective implementation of client identification and verification, determining the beneficial owner, verifying politically exposed persons, and monitoring transactions are interconnected processes. A deficiency in one of these areas may weaken the overall AML defense of the Company.

4. Client Obligations

For the effective fulfillment of our AML policy and legal obligations, active cooperation from our clients is essential. Clients of the Company are obliged to:

Provide Information and Documents: Upon request from the Company, provide all information and submit valid documents necessary for the identification and verification of the client in accordance with the AML Act and the Company’s internal requirements. This includes, among other things, data about their identity, the identity of the beneficial owner (if the client is a legal entity or a trust), the purpose and intended nature of the transaction or business relationship, the source of funds, and other relevant information.
Ensure the Truthfulness and Completeness of Information: Clients bear full responsibility for the truthfulness, completeness, and currentness of all information and documents provided to the Company. Providing false or misleading information may lead to immediate termination of the business relationship and potential further legal actions.
Inform about Changes: Without undue delay, inform the Company of any changes in the data provided during the identification and verification of the client that could affect the assessment of AML risks or the currentness of the held information (e.g., change of beneficial owner, change of registered office, change of contact details of authorized persons).
Provide Cooperation during Physical Identification: In cases where the AML Act or the Company’s internal procedures require (for example, when remote identification cannot be performed or in cases of heightened risk), the client (or a person authorized to act on their behalf) may be asked to personally appear at a location designated by the Company for the purpose of conducting physical identification.
Comply with Sanction Regulations: Clients are obliged to comply with all provisions regarding international sanctions as detailed in Article 17 (Sanction Clause) of the Company’s Terms and Conditions.

Consistent enforcement of these obligations and refusal of transactions in cases of client non-cooperation is a key element of deterrence for potentially risky entities and contributes to maintaining the integrity of our client portfolio.

5. Record Keeping

The Company retains all data and documents obtained in the course of fulfilling obligations under the AML Act for the period specified by this Act. This includes, in particular:

Identification data of the client and persons acting on their behalf.
Copies of documents submitted for identification (if they were obtained in accordance with § 8 paragraph 11 of the AML Act and the FAÚ Methodological Guideline No. 8).
Information and copies of documents obtained during client verification, including information about the beneficial owner, the purpose and nature of the transaction, and the source of funds.
Records of executed transactions.
Related business correspondence.

The standard retention period for these records is 10 years from the execution of the transaction outside the business relationship or from the termination of the business relationship with the client, unless the AML Act stipulates otherwise. The long retention period emphasizes the seriousness of AML obligations and the potential need for retroactive transaction tracing for the purposes of investigations by law enforcement authorities or the FAÚ. This means that the Company must have robust and secure systems in place for archiving and data management.

6. Protection of Personal Data

When collecting, processing, and storing personal data for the purposes of fulfilling obligations under the AML Act, the Company acts in full compliance with applicable data protection laws, particularly with the Regulation of the European Parliament and Council (EU) 2016/679 on the protection of individuals with regard to the processing of personal data and on the free movement of such data (GDPR) and Act No. 110/2019 Coll., on the processing of personal data, as amended.

Detailed information on how the Company processes personal data, including the purposes of processing, legal bases, categories of processed data, retention periods, and rights of data subjects, is provided in a separate document titled "Privacy Policy of AreteApp," which is available on the Platform.

It is important to note that fulfilling certain obligations under the AML Act (such as the obligation of confidentiality regarding a report of a suspicious transaction under § 38 of the AML Act, or the procedure under § 9b of the AML Act regarding the non-conduct of client verification to avoid jeopardizing an investigation) may take precedence over certain rights of data subjects under the GDPR (e.g., the right to information about processing or the right of access) to avoid compromising the purpose of AML measures and any ongoing investigations. The Company must carefully balance these obligations internally and train employees to communicate correctly with clients regarding the processing of their data for AML purposes, without unintentionally disclosing sensitive information (so-called "tipping-off").

7. Whistleblowing

UMARUTTI s.r.o. has established an internal reporting system in accordance with Act No. 171/2023 Coll., on the protection of whistleblowers. This system allows the Company's employees, its clients, suppliers, and other relevant persons to safely, confidentially, and possibly anonymously report suspicions of illegal conduct that the Company or its representatives may have committed, including violations in the area of AML/CFT.

Incorporating a whistleblowing mechanism into the public AML policy demonstrates our commitment to internal control and our willingness to proactively address potential issues. Detailed information on how to submit reports, the procedure for handling them, and the protection of whistleblowers is available on the Company's website. An effective whistleblowing system can help the Company identify and mitigate AML risks before they escalate into larger problems or regulatory interventions, thus contributing to the overall integrity and ethical conduct of the Company.

8. Policy Updates

This AML Policy is regularly reviewed and updated by the Company, at least once a year, or more frequently if required by changes in relevant legislation, regulatory requirements, FAÚ methodological guidelines, or if there are significant changes in the Company's business activities or in the development of risks in the area of money laundering and terrorist financing. The commitment to regularly update the policy reflects the dynamic nature of AML regulation and risks.

The current version of this Policy is always available on the AreteApp Platform website. The update process requires an internal mechanism for monitoring legislative changes and reassessing risks, which is part of the Company's robust compliance management system.

9. Contact Information

If you have any questions regarding this AML Policy or our procedures in the fight against money laundering and terrorist financing, please contact us at:

Email: [email protected]

Address: UMARUTTI s.r.o., Kozí 916/5, Staré Město, 110 00 Prague 1, Czech Republic

Please note that in accordance with § 38 of the AML Act and other relevant provisions, the Company may not be authorized to provide information about specific actions taken regarding suspicious transactions, reports of suspicious transactions, or ongoing investigations by the Financial Analytical Office or law enforcement authorities. Staff responsible for responding to inquiries regarding the AML policy are properly trained on the content of this policy and the legal limits of information provision.

Language Clause:

This document may be executed in Czech and in other language versions. In the event of any discrepancies between the Czech version and any other language version, the Czech version shall prevail. The only legally binding version of this document is the Czech language version. All translations into other languages are provided for informational purposes only and are not legally binding.