1. Purpose and Scope

Bio Green Wax Ltd (the "Company") trades physical commodities in high volumes, across borders, using letters of credit, documentary collections and open-account settlement. Trade of this kind is a recognised channel for laundering criminal proceeds, principally through over- and under-invoicing, phantom shipments, multiple invoicing and third-party settlement. This policy sets out how the Company protects itself against being used for that purpose.

The principal money laundering offences under Part 7 of the Proceeds of Crime Act 2002 — concealing, arranging and acquiring criminal property, and failing to disclose a suspicion — apply to any business and to individuals personally. They are not limited to regulated financial institutions. Every person within scope of this policy can be prosecuted individually for a breach.

This policy applies to all counterparties, whether customers, suppliers, agents or financiers, and to all methods of settlement.

2. Policy Statement

The Company will not enter into or continue a business relationship, and will not accept or make a payment, where it knows or suspects that the funds or goods represent the proceeds of crime or are connected to terrorist financing.

The Company will identify and verify every counterparty before trading, will understand the ownership and control behind it, will settle only through routes consistent with the underlying trade, and will report suspicions to the appropriate authority in accordance with the law.

3. Roles and Responsibilities

The identity of the current MLRO is notified to all staff and recorded with this policy. In the MLRO's absence, reports are made to a director nominated by the Board.

4. Customer Due Diligence

Due diligence is completed and recorded before the Company enters into a business relationship or executes a transaction. The following is obtained for every corporate counterparty:

1. Full legal name, trading names, registered address and principal place of business.
2. Country of incorporation, company registration number and evidence of incorporation such as a certificate or registry extract.
3. Names and identification of directors and of the persons authorised to trade and to give payment instructions.
4. Identification of beneficial owners holding more than 25 per cent, traced through intermediate holding structures to natural persons.
5. The nature of the counterparty's business, its expected trading pattern with the Company, and the commercial rationale for the trade.
6. Bank account details in the counterparty's own name, confirmed independently of the email in which they were first supplied.
7. Screening against sanctions and politically exposed person sources, as set out in the Sanctions and Export Controls Compliance Policy.

Enhanced due diligence

Enhanced measures apply, and the MLRO's written approval is required before trading, where the counterparty is established in a high-risk third country, where it is or is connected to a politically exposed person, where ownership is opaque or held through nominee arrangements, where the relationship is conducted entirely remotely with no verifiable premises, or where the transaction is unusually large or complex relative to the counterparty's profile. Enhanced measures include obtaining additional documentary evidence, establishing the source of funds and, where appropriate, the source of wealth, and applying closer ongoing monitoring.

Ongoing monitoring

Counterparty records are reviewed periodically according to risk, and immediately on any change of ownership, banking details, authorised signatories or trading pattern. Transactions are checked for consistency with what the Company knows about the counterparty; a material inconsistency is a red flag under section 6.

5. Payment and Settlement Controls

• Payments are received from, and made to, an account in the name of the contracting counterparty. Third-party payments are refused unless the MLRO approves them in writing after establishing the relationship and rationale.
• The Company does not accept cash or cash equivalents in settlement of trade.
• A change to a counterparty's bank details is verified by an independent channel — a call to a previously known number, not a number supplied in the same message — before any payment is made. Emailed changes are never actioned on the strength of the email alone.
• Payments are made only against an invoice that matches the contract, the goods actually shipped and the agreed price.
• Overpayments are returned to the originating account. They are never refunded to a different account, offset against an unrelated transaction, or paid onward to a third party.
• Settlement in a currency, or through a jurisdiction, unconnected to the counterparty or the trade requires the MLRO's approval.

6. Trade-Based Money Laundering Red Flags

The following indicators require escalation to the MLRO before the transaction proceeds:

• Invoice value materially above or below the prevailing market price for the goods, quality and origin.
• A request to issue an invoice for a value, quantity or description different from the goods actually supplied, or to issue more than one invoice for a single shipment.
• Goods, quantities or shipping routes that make no commercial sense for the counterparty's stated business.
• A counterparty that is indifferent to price, quality, specification or delivery date.
• Complex ownership structures, shell entities or nominee shareholders with no apparent commercial purpose.
• A newly formed counterparty seeking a disproportionately large first transaction, or offering prepayment well above market norms.
• Payment offered by, or requested to, an unrelated third party or a jurisdiction unconnected to the trade.
• Reluctance to provide identification, ownership information or the source of funds, or the provision of documents that appear altered.
• A request to structure a payment into smaller amounts, or to route it through several accounts.
• Rapid, unexplained changes to consignee, discharge port or documentary requirements after contract.

The presence of a red flag does not by itself establish wrongdoing, but it must be resolved and the resolution recorded before the transaction proceeds.

7. Internal Reporting and Suspicious Activity Reports

Any person who knows or suspects, or has reasonable grounds to know or suspect, that a person is engaged in money laundering or terrorist financing must report it to the MLRO immediately and must not discuss it with the counterparty or with colleagues who do not need to know.

1. Make the internal report to the MLRO in writing, setting out what is known, what is suspected and why.
2. Take no further step in the transaction until the MLRO responds.
3. The MLRO considers the report, records the decision and the reasoning, and where appropriate submits a Suspicious Activity Report to the National Crime Agency.
4. Where the transaction would otherwise constitute a prohibited act, the MLRO seeks a defence against money laundering (formerly consent) before the transaction proceeds, and observes the statutory notice and moratorium periods.
5. The MLRO records the outcome, including where a decision is taken not to report externally and the reasons for it.

8. Facilitation of Tax Evasion

Under the Criminal Finances Act 2017 the Company commits an offence if a person associated with it criminally facilitates the evasion of tax, whether in the United Kingdom or overseas. The Company prohibits any person acting for it from assisting a counterparty to evade tax, including by issuing or accepting inaccurate documentation, misdescribing goods, misstating value or origin, or routing an invoice through a jurisdiction to disguise the substance of a trade. Any such request must be refused and reported to the MLRO.

9. Records and Retention

Due diligence records, transaction records, internal reports, external reports and the reasoning behind decisions are retained for at least five years from the end of the business relationship or the completion of the transaction, whichever is later, and longer where an investigation or other legal requirement applies. Records are held securely, are accessible to the MLRO, and are produced to law enforcement or a regulator on lawful request.

10. Training, Monitoring and Review

All directors, employees and contractors receive anti-money laundering training on joining and at least annually thereafter, covering the offences, the due diligence procedure, the red flags in section 6, the internal reporting route and the prohibition on tipping off. Records of training are retained by the MLRO.

The MLRO monitors compliance, tests a sample of counterparty files and payment approvals at least annually, and reports to the Board on the operation of this policy, the number of internal and external reports made, and any weakness identified together with the action taken to correct it.

A breach of this policy is a disciplinary matter and may amount to gross misconduct, as well as a criminal offence for which an individual may be prosecuted. This policy is reviewed at least annually, and sooner where a change in law or in the Company's business requires it.