AML Policy of Umarutti s.r.o.

Effective date: 25.05.2025

1. Introduction and Purpose of the Policy

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

The purpose of this AML policy (hereinafter the “Policy”) is to inform our clients, business partners and the public about the basic principles and measures applied by the Company in the fight against money laundering and the financing of terrorism. The Policy describes our status as an obliged entity and the general obligations arising therefrom for us as well as for our clients. A clearly formulated and publicly available AML policy may also contribute to smoother international transactions, as foreign partners and financial institutions often require evidence of robust AML measures, which may simplify their due diligence processes and potentially accelerate transactions. This Policy is publicly available on the Platform’s website.

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

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

2. Legal Framework and Definitions

For the purposes of this Policy and for a better understanding of our AML obligations, the following definitions and legal framework are key. For the full wording of legal definitions and up-to-date information, we recommend consulting the current wording of Act No. 253/2008 Coll., on certain measures against the legalization of proceeds of crime and the financing of terrorism (the AML Act), and the official sources of the Financial Analytical Office (FAÚ), for example the website www.fau.gov.cz.

Basic definitions:

Legalization of proceeds of crime (money laundering): Simply put, this refers to conduct aimed at concealing the illegal origin of assets in order to create the appearance that they were acquired lawfully.
Financing of terrorism: Simply put, this includes the collection or provision of funds with the knowledge that they will be used for terrorist activities.

Main legal regulations:

Our AML/CFT procedures are governed primarily by Act No. 253/2008 Coll., on certain measures against the legalization of proceeds of crime and the financing of terrorism, as amended (hereinafter the “AML Act”), and other related legislation 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 pursuant to Section 2(1)(n) of the AML Act. This classification results from our activity as a trader in precious metals or precious stones, as specified in Annex No. 1 to the AML Act (which includes gold, silver, platinum, diamonds, rubies, sapphires and emeralds). We become an obliged entity in the event of carrying out transactions with a value of EUR 10,000 or higher. This threshold is a key operational point for our internal processes and is monitored for all transactions.

This obligation applies regardless of whether the transaction is carried out in cash or cashless form. If these conditions are met, the Company is required to comply with all obligations set out in the AML Act.

Application to specific cases (according to Selected Opinions of the Financial Analytical Office):

For better guidance for our clients and partners, we state how AML obligations may apply to other entities in our sector:

Jewelry and goldsmithing businesses: If a jewelry or goldsmithing business trades in precious metals and stones under Annex No. 1 to the AML Act and simultaneously carries out transactions with a value of EUR 10,000 or higher, it also becomes an obliged entity pursuant to Section 2(1)(n) of the AML Act.
Sellers of investment gold (including e-shops): A seller of investment gold to end customers, including via an e-shop (on the basis of electronic contracting), is an obliged entity pursuant to Section 2(1)(n) of the AML Act under the conditions set by law (i.e., upon reaching the value threshold).
Sellers of investment gold providing custody: If a seller of investment gold additionally provides gold custody services, it becomes an obliged entity not only pursuant to Section 2(1)(n) of the AML Act, but, in the case of providing custody services, also pursuant to Section 2(1)(b) point 14 of the AML Act, i.e., as a person providing custody services for valuables.

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

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

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

Type of entity/activity	Conditions for the AML obligation to arise	Relevant provision of the AML Act
Dealer in precious metals/stones (general)	Transaction with a value of EUR 10,000 or higher	Section 2(1)(n)
Jewellery store/Jewellery making	Trades in precious metals/stones (Annex 1) AND transaction with a value of EUR 10,000 or higher	Section 2(1)(n) (according to the FAÚ opinion)
Investment gold seller (e-shop)	Transaction with a value of EUR 10,000 or higher	Section 2(1)(n) (according to the FAÚ opinion)
Investment gold seller with safekeeping	Transaction with a value of EUR 10,000 or higher OR provision of safekeeping services	Section 2(1)(n) AND/OR Section 2(1)(b) point 14 (according to the FAÚ opinion)

Financial Analytical Office (FAÚ):

The Financial Analytical Office (FAÚ) is the central administrative authority of the Czech Republic in the field of combating the legalization of proceeds of crime and the financing of terrorism. It performs the function of a financial intelligence unit and exercises supervision over compliance with obligations laid down by the AML Act. Further information, methodological guidance 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 verification (Customer Due Diligence - CDD):

The Company carries out identification and verification of its clients (Buyers) in accordance with the requirements of the AML Act.¹ The scope and depth of customer identification and verification are adjusted based on an assessment of the risks associated with the specific client, the type of business relationship or the nature of the transaction. These measures include, in particular, ascertaining and verifying the client's identification data, obtaining information on the purpose and intended nature of the transaction or business relationship, and on the nature of the client's business. Clients are informed of this obligation and the need to provide cooperation, inter alia, through our Terms and Conditions.

Identification and verification of the ultimate beneficial owner (Ultimate Beneficial Owner - UBO):

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

Politically exposed persons (Politically Exposed Persons - PEPs):

The Company applies specific and enhanced measures for the identification and verification 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, establishing the origin of assets and sources of funds of such persons and carrying out enhanced ongoing monitoring of the business relationship. PEPs represent a potentially higher risk from an AML/CFT perspective, and we therefore pay increased attention to them.

International sanctions:

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

Transaction Monitoring and Reporting Suspicious Transactions (Transaction Monitoring and Reporting Suspicious Transactions):

The Company continuously monitors its clients’ business relationships and transactions in order to identify unusual or suspicious activities that could indicate an attempt to launder proceeds of crime or finance terrorism. If a suspicious transaction is identified within the meaning of Section 6 of the AML Act (for example, transactions without an apparent economic purpose, unusually complex or large-volume transactions, transactions indicating a link to criminal activity or terrorist financing, or other circumstances giving rise to suspicion), the Company is obliged to report such transaction to the Financial Analytical Office (FAÚ) without undue delay in accordance with Section 18 of the AML Act. Although, stricto sensu, the Company becomes an obliged entity only upon a transaction in the amount of EUR 10,000, for the effective functioning of the AML system and in line with the risk-based approach, we will also consider notifying the FAÚ of activities showing signs of a suspicious transaction that do not reach this amount, if there is reasonable suspicion of ML/TF. We consider this approach to be an expression of responsibility and an effort to exceed standard AML obligations.

Principle of Aggregating Related Transactions (Principle of Aggregating Related Transactions):

In accordance with Section 54(4) of the AML Act, the Company consistently applies a rule preventing the deliberate splitting (structuring) of payments or transactions in order to avoid obligations under the AML Act, in particular the threshold for client identification and due diligence. If it is apparent from the circumstances that the total aggregate value of individual performances of one client that are clearly related (e.g., by the client’s person, the subject matter of the transaction, temporal connection) exceeds or is intended to exceed the threshold of EUR 10,000, the Company will identify the client and apply further obligations under the AML Act as if it were a single transaction. The assessment of the relatedness of individual performances always depends on the specific circumstances of the case. We are aware that dealers in high-value goods may be targeted for transaction structuring, and therefore this principle is actively monitored.

Refusal or termination of a business relationship:

The Company reserves the right to refuse to execute a transaction, to establish a business relationship, or to terminate an existing business relationship in the cases set out in Section 15 of the AML Act or in our Terms and Conditions. We will exercise this right in particular in situations where:

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

Effective performance of client identification and due diligence, determination of the beneficial owner, screening of politically exposed persons and transaction monitoring are interconnected processes. A deficiency in any of these areas may weaken the Company’s overall AML defence.

4. Clients’ Obligations

For the effective implementation of our AML policy and statutory obligations, active cooperation from our clients is essential. The Company’s clients are obliged to:

Provide information and documents: Upon the Company’s request, provide all information and submit valid documents that are necessary to carry out client identification and due diligence in accordance with the AML Act and the Company’s internal requirements. This includes, among other things, data regarding 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 up-to-dateness of all information and documents provided to the Company. Providing false or misleading information may lead to immediate termination of the business relationship and possible further legal steps.
Inform about changes: Inform the Company without undue delay of any changes in the data provided as part of client identification and due diligence that could affect the assessment of AML risks or the currency of the information held (e.g., change of beneficial owner, change of registered office, change of contact details of authorised persons).
Provide cooperation in physical identification: In cases where the AML Act or the Company’s internal procedures require it (for example, where remote identification cannot be performed or where there is increased risk), the client (or a person authorised to act on the client’s behalf) may be asked to appear in person at a location designated by the Company for the purpose of carrying out physical identification.
Comply with sanctions regulations: Clients are obliged to comply with all provisions relating to international sanctions, as specified in detail in Article 17 (Sanctions Clause) of the Company’s Terms and Conditions.

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

5. Record Retention

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 details of the client and persons acting on the client’s behalf.
Copies of documents submitted for identification (if they were made in accordance with Section 8(11) of the AML Act and FAÚ Methodological Guideline No. 8).
Information and copies of documents obtained as part of customer due diligence, including information on the beneficial owner, the purpose and intended nature of the transaction, and the source of funds.
Records of transactions carried out.
Related business correspondence.

The standard retention period for these records is 10 years from the execution of a transaction outside a business relationship or from the termination of the business relationship with the client, unless the AML Act provides otherwise. The long retention period underscores the seriousness of AML obligations and the potential need to retrospectively trace transactions for the purposes of investigations by law enforcement authorities or the FAÚ. For the Company, this means the need to have robust and secure systems in place for archiving and data management.

6. Protection of Personal Data

When collecting, processing, and retaining personal data for the purpose of fulfilling obligations under the AML Act, the Company acts in full compliance with applicable personal data protection laws, in particular Regulation (EU) 2016/679 of the European Parliament and of the Council on the protection of natural persons 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 the rights of data subjects, is set out in a separate document “AreteApp Personal Data Protection Policy”, which is available on the Platform.

It is important to note that the performance of certain obligations under the AML Act (for example, the duty of confidentiality regarding a filed suspicious transaction report under Section 38 of the AML Act, or the procedure under Section 9b of the AML Act not to carry out customer due diligence so as not to frustrate 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), in order not to frustrate the purpose of AML measures and any ongoing investigation. The Company must carefully balance these obligations internally and train employees to communicate properly with clients regarding the processing of their data for AML purposes, without inadvertently disclosing sensitive information (so-called "tipping-off").

7. Whistleblowing (Reporting Unlawful Conduct)

Company UMARUTTI s.r.o. has implemented, in accordance with Act No. 171/2023 Coll., on the protection of whistleblowers, an internal reporting system. This system enables the Company’s employees, its clients, suppliers, and other relevant persons to securely, confidentially, and, where applicable, anonymously report suspected unlawful conduct that the Company or its representatives may have committed, including breaches in the area of AML/CFT.

The inclusion of a whistleblowing mechanism in the public AML policy demonstrates our commitment to internal control and willingness to address potential issues proactively. 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 issues or regulatory interventions, thereby 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 regular policy updates reflects the dynamic nature of AML regulation and risks.

The current wording 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 forms 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 area of combating money laundering and terrorist financing, please contact us at:

E-mail: [email protected]

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

Please note that, in accordance with Section 38 of the AML Act and other relevant provisions, the Company may not be authorized to provide information about specific steps taken in relation to suspicious transactions, filed suspicious transaction reports, or ongoing investigations by the Financial Analytical Office (FAÚ) or law enforcement authorities. Personnel responsible for responding to inquiries regarding the AML policy are duly trained on the content of this policy as well as on the statutory limits on providing information.

Language Clause / Jazyková doložka:

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.