01. Purpose
The purpose of this policy is to prevent our services, trading platforms, commercial channels and products from being used to facilitate money laundering, the financing of terrorism or any other illicit activity, as well as to ensure comprehensive regulatory compliance in all our commercial operations at national and international level.
02. Scope
This policy applies to all employees, directors, contractors, agents, distributors, business partners and any person or entity acting on behalf of HSO (hereinafter, “Personnel and Collaborators”). It also extends to all business relationships with customers, suppliers and technological allies involved in financial transactions with the Company.
03. Definitions
- Money laundering: the process by which the nature, origin, location, disposition or ownership of property or funds derived from criminal activities is concealed or disguised, in order to give the appearance of a legitimate origin.
- Financing of terrorism: the provision, collection or making available of funds or economic resources, directly or indirectly, with the intention that they be used to commit terrorist acts or support terrorist organizations.
- Red Flag: any fact, transaction or conduct that deviates from the customer’s usual patterns or that, due to its nature, amount, frequency, geographic location or concurrent circumstances, is suspicious of being linked to money laundering or the financing of terrorism.
04. AML Compliance Officer
HSO has an AML Compliance Officer with reasonable authority, independence and resources to oversee the implementation and effective compliance with this policy. Confidential compliance communications must be sent to compliance@hsotrading.com. Their responsibilities include:
- Developing, updating and enforcing the AML policy and procedures.
- Designing and delivering periodic AML training programs to all Personnel and Collaborators.
- Monitoring transactions and business relationships, including those originating on the trading platform, for unusual or suspicious activities.
- Receiving, evaluating, internally escalating and, where legally required or appropriate, communicating or reporting suspicious activities to competent authorities, without representing a regulatory status or SAR obligation that does not apply.
- Conducting regular internal audits of the AML program.
- Retaining the documentation and records required by regulations for the legally established periods.
05. Customer Due Diligence (CDD)
Before establishing any business relationship involving financial transactions, HSO shall collect and verify the identity of all customers, partners and suppliers. As a minimum, the following shall be collected: full name or company name, physical address, date of incorporation or birth, tax identification number (EIN or SSN) and, where applicable, the beneficial ownership structure up to the ultimate beneficial owner. Each customer shall be classified into a risk level (low, medium or high) based on factors such as the country of domicile, the sector of activity, the expected transactional pattern and the payment channels used. For high-risk customers, Enhanced Due Diligence (EDD) shall be applied, which includes obtaining additional documentation, identification of the ultimate beneficial owner, the source of funds and senior management approval.
06. Continuous Monitoring and Escalation of Suspicious Activities
Transactions and account activity shall be continuously monitored to detect deviations from the assigned risk profile. All Personnel and Collaborators must immediately report to the AML Compliance Officer any suspicious operation or conduct of which they become aware. If, after evaluation, reasonable indications of illicit activity exist, HSO may reject, suspend or terminate the transaction, retain records, block or withhold funds where legally permitted, and communicate or report to competent authorities where required by law or appropriate under the internal program. It is strictly prohibited to inform the customer or third parties about investigations, internal escalations or regulatory reports (“No Tipping Off”).
07. Record Keeping
All documentation relating to customer identification, risk assessments, suspicion reports and transaction records shall be retained for a minimum of five (5) years from the end of the business relationship, or for the longer period required by applicable regulations. Records shall be maintained in a secure format and be accessible for review by regulatory authorities.
08. Training and Awareness
HSO shall provide AML training to all Personnel and Collaborators at the time of their incorporation and, subsequently, on an annual basis. The training shall cover legal obligations, the identification of red flags and internal reporting procedures. Periodic awareness campaigns shall be carried out and relevant regulatory updates shall be disseminated.
09. Sanctions and Watch Lists
HSO applies a “sanctions-first” approach and will not establish business relationships or carry out transactions with persons or entities included on OFAC/SDN, United Nations, European Union, United Kingdom or other competent sanctions lists, or with persons owned or controlled by blocked persons. Before and during any business relationship, customers, suppliers, beneficial owners, banks, vessels, carriers, counterparties, end users, destinations, routes and documentation may be screened against sanctions lists, PEP lists and adverse media. HSO may reject operations involving PDVSA, Cuba, Venezuela, embargoed destinations, reexports, transshipments or structures presenting OFAC, BIS/EAR or other applicable control evasion risk. This section is expressly coordinated with clause 10 of the T&C of Sale.
10. Consequences of Non-Compliance
Failure to comply with this policy by any employee, collaborator or partner may result in disciplinary measures, including termination of the employment or contractual relationship, and notification to the competent authorities when the conduct could constitute a criminal or administrative offense. Violations of AML regulations can lead to serious criminal and financial penalties, both for the company and for the individuals involved.
11. Policy Review and Update
This policy shall be reviewed, at a minimum, annually, or immediately when significant regulatory changes occur. Updates shall be communicated to all Personnel and Collaborators as soon as possible.
12. Contact
For any questions, communications or reports related to this AML Policy, please contact the AML Compliance Officer through the following channels:
- Confidential compliance/AML email: legal@huronsmithoil.com
- Phone: +1 (866) 954-5938
- Postal Address: 204 Hays St, Batesville, Mississippi, 38606, USA