EFG Hermes Group Sanctions Policy Statement

The EFG –Hermes Group (“EFG” or “Group”) is committed to complying with relevant sanctions restrictions or prohibitions imposed by laws and regulations which target economic, diplomatic, financial and trade activities with specific countries, governments, entities, organisations or individuals in all jurisdictions in which it operates through identifying, mitigating and managing the risk.
Governments and supranational organisations implement sanctions to achieve various foreign policy objectives, such as to promote and maintain international peace and stability, democracy and human rights and to prevent terrorism, proliferation of arms and weapons of mass destruction.
EFG recognises that failure to comply with relevant sanctions laws or to prevent or manage this risk would not only constitute a breach of legal and/or regulatory requirements, but would also represent a failure to abide by broader community expectations and could carry significant reputational damage, legal and regulatory action and financial loss for the Group.
All EFG employees have a role to play in safeguarding and building upon EFG’s reputation which is dependent on the ability to behave and act responsibility in accordance with EFG’s values and principles.

This Policy applies to all countries and/or jurisdictions in which EFG operates and extends to any additional countries and/or jurisdictions where EFG commences operations and/or has an active registration or license.
This Policy applies to all EFG employees acting in any capacity, directors, officers, secondees, people on work experience, contractors, corporate directors, authorised representatives and consultants in all EFG businesses. In this Policy, “EFG” means the EFG Group and its subsidiaries and affiliates.

This Policy establishes the minimum Group expectations of EFG’s risk management and compliance with its sanctions obligations and sets out EFG’s approach including:

• Principles and measures that EFG follows to comply with sanctions legislation and to identify, mitigate and manage sanctions risk in the jurisdictions where it operates;
• Guidance about the meaning of sanctions and how to comply; and
• Consequences of failing to comply with this Policy.

EFG’s Board and Group Executive Committee are committed to EFG’s compliance with all relevant sanctions laws and sanctions risk management. They expect all employees to be accountable and responsible for their own actions and not to be involved in activities of non-compliance with sanctions requirements. This includes assisting customers not to circumvent or avoid sanctions laws. The Executive Committee has appointed and delegated responsibility of AML and Sanctions compliance to the Group AML and Sanctions Escalation committee.

EFG clearly documents roles and responsibilities of compliance officers/MLROs and governance structure to ensure the ongoing development, maintenance, monitoring and oversight of AML/ CTF and sanctions across the Group. The Framework follows the 3 Lines of Defence principle.

EFG must comply with sanctions laws of all jurisdictions in which it does, or seeks to do, business. EFG also has regard to international best practice standards and guidance.

6.1 Global sanctions obligations

All of the jurisdictions in which EFG operates are obliged to give effect to United Nations Security Council (UNSC) sanctions. In addition, some jurisdictions also impose autonomous sanctions (such as the United States and the European Union).
The sanctions laws of multiple jurisdictions may apply to a single transaction facilitated by EFG

6.2 Global Sanctions implemented by other jurisdictions

Other jurisdictions give effect to sanctions in different ways. For example:

1. 6.2.1 HM Treasure and Sanctions List - The UK consolidated list of financial sanctions target applies to: - all individuals and legal entities who are within or undertake activities within the UK territory
   • All the UK nationals and legal entities established under UK law, including their branches (irrespective of where their activities take place)
   • Office for Financial Sanctions Implementation (OFSI) is responsible for ensuring UK sanctions are implemented and enforced.
2. 6.2.2 OFAC Sanctions List:- the specially designated nationals and blocked persons list (SDN) applies to :-
   • All US citizens, wherever they are in the world
   • Corporate entities constituted in the US
   • Any entity that trades in US dollars, uses US goods or components, has a US parent, subsidiary or affiliate and /or work through a local agent or supplier with a US connection.
3. 6.2.3 EU Consolidated List of Sanctions: - the EU consolidated list of sanctions applies to
   • All EU citizens, wherever they are located in the world
   • Corporate entities constituted in a member state
4. 6.2.4 UN Sanctions:-
• The United Nations Security Council sanctions list applies to all UN nation states.

EFG will ensure that on an ongoing basis it is properly informed as to make reasonable measures to comply with, any findings recommendations, guidance , directives and resolutions, notices or other conclusions issued by :-

• Any Government or Government departments
• Central Bank
• The Financial Action Task Force (“FATF”)
• Enforcement Agencies
• Local Regulators

Where EFG conducts or seek to do business.

1. The principles
   0. The following key principles govern EFG’s Group approach to sanctions. All other requirements in this document are to be read in the context of these principles. In the event of a conflict between principles and requirements, the principles will prevail.
   1. EFG maintains a sanctions policy to meet obligations under sanctions regimes of the jurisdictions in which EFG operates, is registered and/or licensed.
   2. EFG complies with the requirements of Global sanctions obligations.
   3. EFG may decide not to provide products or services even where it is permitted by law. These decisions may be guided by risk appetite, corporate social responsibility, business efficacy or reputational risk.
   4. In carrying out its compliance obligations, EFG relies on information provided to it by its customers and business partners unless it is aware or suspects that those customers and business partners, or the information provided, is unreliable or dishonest.
   5. EFG has a legal and regulatory obligation to report that a person is subject to a financial sanction, to freeze funds belonging to a sanctioned person and notify the relevant sanction body and/or relevant supervisory authority of any freezing measures taken by EFG whilst conducting business including any requirement to freeze assets.
   6. EFG will refrain from any business that would violate the relevant local sanctions regime of the respective jurisdiction in which it is conducting business.
   7. EFG exercises due care in designing and refining business rules and processes to ensure that no individual transaction involves a knowing breach of applicable sanctions obligations. The operational approach occurs within the context of industry practice, the level of information ordinarily available in financial transactions, and the generality of the language detailing sanctions obligations.
   8. EFG’s geographic footprint related to sanctions exposure includes all the countries in which the Group operates and all Global sanctions obligations.

2. Parties to be screened against sanction lists

   Sanctions screening should be undertaken on those parties who are subject to identification requirements to meet KYC and customer due diligence standards. This could include but is not limited to employees, board members of EFG legal entities account holders, beneficial owners (including settlors, named and vested beneficiaries), corporate directors, third party contractors, vendors and individuals with control over the account.
   Organisations owned or controlled by sanctioned entities also need to be in scope and additionally customers who are not on a sanctions list but have a relationship with a sanctioned entity could also present a risk and should be screened, identified in any screening.

3. EFG requirements
   1. EFG screens for designated entities and sanctioned activities in accordance with applicable sanctions regimes
   2. EFG provides sanctions training to relevant employees and contractors.
   3. EFG acts in accordance with industry guidelines for sanctions. Where a conflict exists between the industry guidelines and the principles and requirements in this Policy, this Policy will prevail.
   4. EFG Compliance segment heads team provides guidance and practice standards to ensure compliance with applicable sanctions regimes and implementation.
   5. EFG requires that its counterparties do not engage in or facilitate any business activity that would lead EFG to breach any applicable sanctions obligations.
   6. EFG requires that its agents and third parties do not engage in or facilitate any business activity that would lead EFG to breach any applicable sanctions obligations. For the purpose of this Policy, agents and third parties are defined as parties that are acting for or on behalf of, or providing services to EFG.
   7. EFG communicates its sanctions policy to customers, if required.
   8. Customer Risk assessments.

EFG requires that during the onboarding process a customer risk assessment is conducted to determine the level of Financial crime risk posed by the customer. The customer risk assessment takes into account sanction risks in the jurisdiction of the customer and global sanctions requirements.
Once the customer has been onboarded EFG requires ongoing monitoring against sanction lists for all existing customers.

EFG compliance segments heads must report any positive matches to sanction lists to the Group Chief Risk and Compliance Officer
Human resources must report any positive matches to sanction lists of any employees to The Group Chief Risk and Compliance Officer
All Policy incidents and breaches must be reported to the Group AML and Sanctions Escalation Committee.

Sanction lists are a compilation of individual sanctions that can be applied to individuals, countries, groups or companies. Sanction lists are often collated by governments or international bodies such as the UN.
EFG requires that all legal entities must include the following sanctions list in the screening processes

• The US Office of Foreign Assets Control (“OFAC”)
• The European Union (“EU”)
• The United Nations Security Council (“UNSC”)
• The local and international sanctions lists applicable in all jurisdictions where any of the group companies is domiciled (Egypt, UAE, KSA, Kuwait, Oman, Jordan, UK, Cayman Islands, Pakistan, Kenya, Nigeria, Mauritius and Bangladesh)

All group companies subject to this policy should conduct an assessment to identify any additional international sanctions list(s) that applies to their activities and/or clientele.

EFG requires that IT protocols should be in place to test data quality and integrity of systems used to screen for sanctions, politically exposed persons ("PEPs") and adverse media. Testing should be done periodically on risk-based intervals.

This section sets out obligations of the EFG Group’s employees and contractors.

1. Employees and contractors must read and apply this Policy.
2. Employees and contractors must remain vigilant to ensure compliance with this Policy. If an employee or contractor suspects a potential breach of EFG’s obligations under this Policy, they must report that potential breach to the relevant Head of Compliance and Chief Risk and Compliance Officer.
3. Under no circumstances may an employee or contractor act to avoid sanctions obligations or detection of a transaction in breach of this Policy. EFG and its employees and contractors cannot advise customers on how transactions should be structured or presented to evade applicable sanctions. This includes, but is not limited to, advising customers and counterparties to amend their instructions to include details that may be false or misleading, or changing, removing or omitting information from a transaction that would otherwise lead to detection.

Violation of the Sanctions may impact EFG’s reputation and could result in severe criminal and civil penalties being imposed on the EFG subsidiary or affiliate concerned or on EFG as a whole, as well as directors and employees. It is important to keep in mind that Sanctions imposed by one country for example, the United States, may have an effect on individuals and companies both inside and outside its border. Financial institutions play a vital role in the enforcement of Sanctions. Any violation may severely damage EFG’s relationship and ability to transact.

Risk appetite is the maximum level of risk that EFG is prepared to accept in the normal course of business. EFG has zero tolerance to breaches to the sanctions policy.

At a minimum, all relevant records must be retained in accordance with the EFG record keeping requirements.

All employees will receive annual sanctions training and targeted training where applicable.

1. 17.1 Policy review
   1. This Policy is reviewed annually to ensure it is up to date and aligned to EFG’s risk appetite. Material proposed amendments are submitted to Group Board for approval. Non-material amendments are approved by the Executive Committee
   2. In addition, this Policy is reviewed, following any substantive changes to sanctions legislation or internal and external factors, including regulatory feedback.
2. 17.2 Policy implementation
   1. The Chief Risk and Compliance Officer is responsible for developing a suitable communication plan to publicise the Policy, and its key features, to all employees.