EOS Network Foundation
Anti-Money Laundering and Anti-terrorism Financing Policy

November 9, 2022

The EOS Network Foundation (the “Foundation”) is committed to adhering to the highest standards of ethics and integrity in all our activities. The term “money laundering” refers to all procedures to conceal the origins of criminal proceeds so that such proceeds appear to originate from legitimate sources. The Foundation aims to detect, manage and mitigate the risks associated with money laundering and the financing of terrorism and ensure that it does not receive or transfer to others property or funds that are in any way associated with money laundering, terrorism, or foreign currency limits. In furtherance of this effort, the Foundation will conduct the following due diligence procedures in respect of transfers of property or funds.

1. DEFINITIONS

1.1 In this Policy, unless otherwise stated:

• “Sanction” means a sanction administered or enforced by Global Affairs Canada, the US Department of the Treasury’s Office of Foreign Assets Control, the US Department of State, the United Nations Security Council, the European Union, Her Majesty’s Treasury in the United Kingdom, or any other sanctions authority.
• “Sanctions List” means the list of countries subject to Sanctions.
• “Terrorist Activity” has the same meaning as in the Criminal Code (Canada) and includes any act or omission (whether inside or outside Canada) that:
  • is committed for a political, religious or ideological purpose;
  • is committed with the intention of intimidating the public or compelling a person, government or international organization to do or refrain from doing any act, and
  • intentionally causes death or serious bodily harm to any person, endangers a person’s life, causes a serious risk to the health or safety of the public, causes substantial property damage to public or private property, or that causes serious interference with an essential service or facility.
• “Terrorist Group” means an entity listed on a Watch List or an entity that has as one of its purposes or activities facilitating or carrying out any Terrorist Activity.
• “Watch List” means any of the following lists of terrorist organizations and individuals:
  • list of Listed Entities maintained by Public Safety Canada.
  • list of foreign terrorist organizations maintained by the Office of the Coordinator for Counterterrorism of the U.S. Department of State.
  • list of proscribed terrorist groups or organizations maintained by the United Kingdom Home Office.

2. RECEIVING AND MAKING TRANSFERS OF FUNDS AND PROPERTY

2.1 General. The Foundation wishes to ensure that it does not make or receive transfers of
property or funds that are in any way associated with money laundering, Terrorist Groups
or Terrorist Activities. Accordingly, the Foundation will conduct the following due
diligence in respect of funds and other property it may transfer or receive.

2.2 Confirmation of Identity and Source of Funds.
(a) For all proposed payments and transfers of property valued in excess of $1,000
CAD to be received by the Foundation, the Foundation will request the following
information from the proposed payor, and maintain such information in its books
and records, to be annually reviewed by the Chief Operating Officer and Head of
Finance:

• if the payor is an individual:
  • the payor’s full name, date of birth and address; and
  • a copy of the payor’s government-issued photo ID;
• if the payor is a corporation:
  • the payor’s full name, and address;
  • the payor’s jurisdiction of incorporation; and
  • the name, date of birth, address and a copy of government-issued photo ID for all persons authorized to conduct transactions for the payor and all shareholders holding more than 25% of voting shares in the payor.
• the source of the funds/property being transferred, including the country of origin; and
• the proposed terms of payment.

(b) For all proposed payments and transfers of property valued in excess of $1,000
CAD to be made by the Foundation, the Foundation will request the following
information from the proposed recipient, and maintain such information in its
books and records, to be annually reviewed by the Chief Operating Officer and
Head of Finance:

• if the recipient is an individual:
  • the recipient’s full name, date of birth and address; and
  • a copy of the recipient’s government-issued photo ID;
• if the recipient is a corporation:
  • the recipient’s full name and address;
  • the recipient’s jurisdiction of incorporation; and
• the name, date of birth, address and a copy of government-issued photo ID for all persons authorized to conduct transactions for the recipient and all shareholders holding more than 25% of voting shares in the recipient.

(c) The Foundation will use the information collected to make reasonable efforts to verify the identity of all payors, recipients and related parties referred to in this section and confirm the authenticity of all photo identification it collects.

2.3 Due Diligence. Before making or accepting a payment or transfer referred to in section 2.2, the Foundation will:

• check the Watch Lists having regard to the identity of the other party to determine if there is any risk that such funds or property are in any way related to Terrorist Activities or Terrorist Groups;
• check the Sanctions List to determine whether the other party is resident in a country subject to Sanctions; and
• consider whether the property or funds, as the case may be, raise potential money laundering or currency limits issues taking into account the risk factors described in Appendix A.

2.4 Review. Where a proposed transfer of funds or property, or the identity of the payor or recipient (as the case may be), raises a potential issue per section 2.3, the proposed transfer shall be raised with the Chief Executive Officer prior to the applicable transaction to confirm if the transfer, or the identity of the other party, is in fact in any way related to Terrorist Activities or a Terrorist Group, Sanctions, contravenes money laundering rules or has the potential to reflect negatively on the Foundation’s reputation.

2.5 Legal Advice. Where it is unclear whether the transaction should be completed, the Chief Executive Officer shall seek advice from external legal counsel on the matter.

2.6 Acceptance. Where a transfer of funds or property, or the identity of the payor or recipient (as the case may be), raises a potential issue per section 2.3, such transfer shall only be completed upon a determination that no reason exists to suspect that the transaction is in any way related to Terrorist Activities, Terrorist Groups, Sanctions, money laundering or foreign currency limits.

INTERNATIONAL ACTIVITIES

3.1 Project Planning. Before engaging in any activity outside Canada, the Foundation shall review the proposed beneficiaries of the activities and, where possible, obtain confirmation from local authorities or trusted sources in the region that the beneficiaries have no known or suspected connections with any Terrorist Group or Terrorist Activities.

3.2 If Risk Determined. If a proposed activity of the Foundation will occur in a region that is known or suspected to contain Terrorist Groups or to be used in Terrorist Activities, the Board of Directors of the Foundation shall consider whether the proposed activity should be abandoned or discontinued, and shall only approve the activity if it can be satisfied that sufficient controls are in place to ensure that no resources of the Foundation will be misappropriated by or used to benefit any Terrorist Group or members thereof.

SELECTION OF INTERMEDIARIES OUTSIDE CANADA

4.1 General. As part of its international activities, the Foundation may engage third party organizations to conduct activities on its behalf outside Canada. The Foundation will adhere to the procedures in this section whenever working with an intermediary outside of Canada.

4.2 Information to be Obtained. Unless an entity has a long-standing and trusted relationship with the Foundation, the Foundation shall endeavour to obtain the following information about an entity (including any entities that will act as sub-agents or sub-contractors) before entering into an intermediary agreement with that entity:

• the entity’s name in English, in the language of origin, and any other names or acronyms used to identify the organization;
• the jurisdiction(s) in which the entity maintains a physical presence;
• any reasonably available historical information about the entity to assure the Foundation of the entity’s identity and integrity, including:
• copies of the entity’s governing documents;
• information (media reports) on the entity’s operating history; and
• any references from organizations that have worked with the entity;
• the available postal, email, and URL addresses and phone number of the entity;
• copies of any required public filings made by the entity, including the most recent official registry documents, annual reports, and annual filings with the relevant government agency; and
• the entity’s source of income, such as official grants, private endowments or commercial activities.

4.3 Background Check. Before entering into any intermediary agreement with any entity, the Foundation will perform and document the following due diligence:

• review all Watch Lists and confirm that neither the entity nor any persons known to be associated with the entity are included on any list;
• review available sources of information provided under section 4.2 to determine operational history and reputation of the entity;
• confer as appropriate with other organizations that have worked with the entity regarding the entity’s integrity, reliability and reputation; and
• if possible, conduct field visit to entity’s place of operations.

4.4 Senior Officer to Make Determination. The Foundation will not enter into an intermediary relationship with any entity unless the Chief Executive Officer of the Foundation is satisfied on the basis of the due diligence set out in sections 4.2 and 4.3 that there is no reason to suspect that the entity will use or allow the Foundation’s property to be used to support any Terrorist Activity or Terrorist Group.

4.5 Warranties and Covenants Required of Intermediaries. All intermediary agreements entered into after this Policy is approved by the Board of Directors of the Foundation shall require the intermediary entity to warrant and covenant that it is not a Terrorist Group, that it has never in the past, either directly or indirectly, supported any Terrorist Activity or Terrorist Group, and that it will not in the future support any Terrorist Activity or Terrorist Group.

USE OF SERVICE PROVIDERS

5.1 Use of Service Providers. The Foundation may engage a reputable third party service provider providing commercial services in the field of Know Your Client identity verification and Anti-Money Laundering screening to perform the confirmation of identity and due diligence activities set out in this Policy on its behalf.

REPORTING OBLIGATIONS

6.1 General. Any employee of the Foundation who has reason to believe that this Policy has not been followed shall immediately report this to the Chief Executive Officer. Subject to section 6.2, the Chief Executive Officer shall determine, in consultation with the Foundation‘s legal counsel, whether police or any other governmental authorities should be contacted and take steps as appropriate. The Chief Executive Officer shall inform the Board of Directors of the Foundation of any such reported non-compliance with this Policy.

6.2 Terrorist Property. If at any time it is suspected that property in the possession of the Foundation is owned or controlled by a Terrorist Group, the [insert appropriate senior officer] and the legal counsel to the Foundation shall be immediately notified. In compliance with the Criminal Code (Canada), if the [insert appropriate senior officer], in consultation with legal counsel, determines that the suspicion is reasonable, the suspicion and the grounds for such suspicion shall be immediately reported to:

• the Commissioner of the Royal Canadian Mounted Police; and
• The Director of the Canadian Security Intelligence Service.

6.3 Records. If any report is made by any person relating to a possible violation of this Policy or suspected misuse of the Foundation’s property, the person making the report shall provide a written summary of the nature of the suspected violation and the basis for this suspicion. The Chief Executive Officer shall also ensure that a written record is maintained of all steps taken following receipt of the report, including consultation with legal counsel and any contact with governmental authorities.

POLICY REVIEW

7.1 The Board of Directors of the Foundation shall review this Policy on an annual basis and update as necessary to account for developments in the law related to the prevention of terrorism and money laundering and the best practices in such sectors.

Dated: November 14, 2022
Approved by: Yves La Rose, Executive Director/CEO