Anti-Money Laundering
Safeguarding the Global Financial System

2. What is Money Laundering

Money laundering is the process of making illegally obtained funds (e.g., proceeds from drug trafficking, corruption, fraud, tax evasion, and other crimes) appear legitimate through a series of transactions. It typically involves three stages:

• Placement: Introducing illegal funds into the financial system, e.g., depositing cash into a bank account.
• Layering: Concealing the illicit source of funds through complex financial transactions (transfers, investments, asset purchases, etc.).
• Integration: Reinjecting the "cleaned" funds into the legitimate economy, making them appear as legal income.

YINHE TRADING LIMITED is dedicated to identifying, preventing, and reporting any suspicious money laundering activities across all its business operations.

3. Customer Due Diligence

We adopt a risk‑based Customer Due Diligence (CDD) approach, conducting thorough identification and risk assessment of our customers before and throughout the business relationship:

• Identity Verification: Verifying the identity of customers and their beneficial owners, including company registration documents, identity proof, address proof, etc.
• Risk Rating: Assessing risk based on customer type, nature of business, geographic location, and other factors to determine the appropriate level of due diligence.
• Ongoing Monitoring: Continuously monitoring customer transactions and business relationships, and updating customer information in a timely manner.
• Politically Exposed Persons (PEPs): Applying enhanced due diligence for PEPs and their associates.
• High‑Risk Customers: Implementing enhanced due diligence measures for customers from high‑risk countries or regions.

4. Suspicious Transaction Reporting

We have established a robust system for detecting and reporting suspicious transactions. All employees are responsible for identifying and reporting any suspicious or unusual transaction activities to the compliance department. Red flags may include:

• Transaction amounts significantly exceeding the customer’s normal business scale
• Transactions inconsistent with the customer’s business profile
• Frequent large‑cash transactions or fund transfers without a clear business purpose
• Transactions involving high‑risk countries or regions
• Customers refusing to provide necessary information or providing false information
• Customers frequently changing account information or transaction instructions within a short period

The compliance department will investigate and assess all suspicious transaction reports and, where necessary, file Suspicious Activity Reports with the relevant financial intelligence units (e.g., FinCEN in the U.S.).

5. Record Keeping

We strictly retain all customer identification information, transaction records, and compliance documents in accordance with legal requirements:

• Customer verification records retained for at least 5 years
• Transaction records retained for at least 5 years
• Suspicious transaction reports and related investigation files retained for at least 5 years
• All records are traceable, complete, and authentic
• Records are stored securely to prevent unauthorised access, alteration, or loss

6. Employee Training & Awareness

We are committed to ensuring that all employees are fully aware of their AML obligations and procedures through continuous training and education:

• New employees receive basic AML training upon onboarding
• Employees in high‑risk roles receive specialised enhanced training
• Training content is regularly updated to reflect the latest regulations and money laundering trends
• Compliance awareness is continuously reinforced via internal communications, emails, and meetings
• Management leads by example, demonstrating a firm commitment to AML compliance

7. Consequences of Non‑Compliance

Individuals or entities that violate this policy will face serious consequences, including but not limited to:

• Employees: Disciplinary action, including warnings, suspension, demotion, dismissal, and, where applicable, referral to judicial authorities.
• Third Parties: Termination of contracts, cancellation of cooperation, claims for damages, and, where applicable, reporting to regulatory authorities.
• The Company: Liability for fines, reputational damage, and other legal consequences arising from non‑compliance.

We reserve the right to conduct internal investigations into any suspected violations and to take legal action where necessary.

8. Whistleblowing Mechanism

We encourage employees and business partners to promptly report any suspected money laundering activities or potential compliance violations. We commit to:

• Providing multiple reporting channels: Reports may be submitted to the compliance department via email, telephone, or written correspondence.
• Protecting whistleblowers: Maintaining strict confidentiality of the reporter’s identity and prohibiting any form of retaliation, discrimination, or adverse treatment.
• Allowing anonymous reporting: Anonymous reports are accepted, though we encourage providing sufficient information for effective investigation.
• Timely handling: All reports will be seriously investigated, and feedback will be given within a reasonable timeframe.

9. Third‑Party Management

We require all business partners, agents, consultants, and suppliers to adhere to AML compliance standards equivalent to our own:

• Conducting AML risk assessments on third parties before establishing business relationships
• Requiring third parties to provide written commitments to comply with AML laws and this policy
• Including AML compliance clauses and audit rights in contracts
• Regularly reviewing and monitoring third‑party compliance performance
• Implementing enhanced monitoring measures for high‑risk third parties

10. Policy Review and Updates

This policy will be regularly reviewed and updated to ensure it remains in line with the latest laws, regulations, industry standards, and best practices. Material revisions will be communicated internally and published on our website.

We encourage employees and business partners to periodically review this policy to stay informed about the latest AML compliance requirements.