Daya Borders KYC/AML/CFT Policy

1. Introduction

1.1. Daya Borders ("Borders", "we", "us" or "our") is a personal app for people in Nigeria who are paid from abroad. This KYC/AML/CFT Policy applies to Borders customers and to transactions carried out on Borders.

1.2. Borders provides an avenue for users to receive, hold, convert and transfer funds as conveniently and quickly as possible. To this end, we provide US dollar and euro account details in each user's own name, employ seamless payment methods, and host user information on secure servers.

1.3. Borders transactions are carried out online and are facilitated by our partner banks and the users' Nigerian bank accounts.

1.4. In order to protect Borders from the increasing danger of organised criminal activity, money laundering and terrorism financing, it is essential for us to have clearly laid down Know Your Customer, Anti-Money Laundering, and Combating the Financing of Terrorism Policies.

1.4.1. Know Your Customer ("KYC")

KYC is the process of a business identifying and verifying the identity of its customers. KYC is also about understanding the normal life and business practice of customers, because by developing and having this knowledge about the customers, one is able to recognise the clues and signals which will create the awareness of suspicious activities that may be occurring.

A customer for the purpose of this policy is an individual who has a business relation with Borders and any entity connected with a financial transaction, which can pose a significant risk to Borders.

1.4.2. Anti-Money Laundering ("AML")

Money laundering refers to any transaction that aims at concealing and/or changing the identity of criminal proceeds so that it appears to have been derived from legitimate sources. It has been identified as being done generally in three stages (Placement, Layering and Integration) and it involves creating a web of financial transactions so as to hide the origin and true nature of these funds. AML refers to a set of procedures, laws and regulations designed to stop the practice of concealing the source of illegally generated funds.

• Placement: Introduction of the funds into the financial system.
• Layering: Creating a web of transactions and rotating the funds between various accounts so as to hide or extinguish its true source.
• Integration: After rotating the funds, the money, now washed, appears to have a legitimate source.

1.4.3. Combating the Financing of Terrorism ("CFT")

CFT involves investigating, analysing, deterring, and preventing sources of funding for activities intended to achieve political, religious, or ideological goals through violence and the threat of violence against civilians. By tracking down the source of the funds that support terrorist activities, law enforcement agents may be able to prevent some of those activities from occurring. Instead of trying to catch a criminal plotting or committing an act of terrorism through other means such as surveillance, law enforcement addresses the problem from the money side by detecting suspicious financial transactions and tracking down all the individuals and organisations involved in those transactions.

1.5. The development of a KYC/AML/CFT Policy ("this Policy") is intended to address the following risks which may arise out of money laundering, terrorist financing and other organised criminal activities:

1.5.1. Reputational Risk

Risk of loss due to severe impact on Borders' reputation, which is our most valuable asset;

1.5.2. Compliance Risk

Risk of loss due to failure to comply with key regulations governing our operations;

1.5.3. Operational Risk

Risk of loss resulting from inadequate or failed internal processes, people and systems, or from external events; and

1.5.4. Legal Risk

Risk of loss due to any legal action we may face due to failure to comply with the law resulting in adverse judgments, unenforceable contracts, fines and penalties generating losses, increased expenses for us or even winding-up of our business.

2. The Objective

2.1. The primary objective of this Policy is to prevent Borders from being used, intentionally or unintentionally, by criminal elements for money laundering activities or terrorism financing activities. Also, this Policy was developed for the following purposes amongst others:

• 2.1.1. To lay down explicit criteria for acceptance of customers;
• 2.1.2. To establish procedures for verification of customers' identities and conducting other due diligence;
• 2.1.3. To put in place a proper control mechanism for detecting and reporting of suspicious transactions in accordance with the statutory and regulatory provisions;
• 2.1.4. To protect the integrity of Borders; and
• 2.1.5. To enable us to know and understand the customers and their financial dealings better, thereby helping us manage the risks prudentially.

2.2. This Policy expounds our policy and framework for customer due diligence (customer acceptance, customer categorisation and risk management, customer identification and transactions monitoring), preservation of transaction records, and the reporting of suspicious activities to regulatory agencies.

2.3. This Policy shall provide continued guidance and safeguards to all our officers and employees, at various levels of establishing customer relationships, facilitation of transactions, and provision of effective customer service.

3. Customer Acceptance Procedure

3.1. Our Customer Acceptance Procedure ("CAP") is one of the most important parts of our KYC guidelines, and the cardinal principle is that Borders shall not conduct transactions with anonymous persons or persons with fictitious names.

3.2. Customers are required to register or sign up, in order to open a Borders account. A Borders account gives customers US dollar and euro account details in their own name (US accounts can be held at more than one partner bank). With a Borders account, they can receive payments from clients and platforms, hold USD and EUR balances, convert to Naira and withdraw to Nigerian bank accounts, send funds to international bank accounts and to other Borders users, and create a virtual USD card.

3.3. At sign up, customers are required to provide their real names (first name and last name), their Bank Verification Number ("BVN") or National Identification Number ("NIN"), and bank account details. Customers are also required to provide their date of birth, and email address. Before a Borders account is created, an email is automatically sent to the email address provided by the customer. This email contains a link which the customer is required to click in order to confirm that he/she truly owns the email address that was provided.

3.4. Customers are required to provide copies of their driver's licence, international passport data page, national ID card, voter's card, or other relevant means of identification, and to complete a liveness check, in order to verify their identity.

3.5. We shall put in place measures for identifying ultimate beneficiaries of accounts and transactions on Borders. Where a customer is a nominee of another person or organisation, we shall endeavour to obtain the identification details of that person or organisation.

3.6. Borders serves individual customers only. Accounts are not opened for companies or other registered entities.

3.7. We may at any time review requirements for sign up, and no accounts shall be opened or transactions conducted where the customer fails to submit the information we require to verify the customer's identity.

3.8. No accounts shall be opened or transactions conducted where the customer provides information and documentation that are manifestly unreliable, or where we are unable to conduct the necessary due diligence with the provided information and documentation.

3.9. We shall not allow accounts to be opened or transactions to be conducted in cases where the identity of the customer matches with any person with known criminal background or with banned entities such as individual terrorists or terrorist organisations etc.

3.10. A customer with an already existing account may be called upon to update his information with us and/or provide new information, and we may suspend or close any existing account where necessary information or documentation is lacking.

3.11. Appropriate care shall be taken to ensure that the CAP does not become too restrictive for the customers.

3.12. All information collected from the customer for the purpose of opening an account are to be treated as confidential and details thereof are not to be divulged for cross selling or other purposes. It should be ensured that the information sought from the customers are relevant to the perceived risk, are not intrusive and are in conformity with global best practices.

4. Customer Categorisation & Risk Management

4.1. We shall perform risk analysis based on the information available to us in respect of each customer, in order to determine where money laundering and terrorism financing risks exist. We shall also continuously review our operations, in order to identify our vulnerabilities and address them accordingly.

4.2. Risk assessment shall include a variety of factors, depending upon particular circumstances, including but not limited to the profile of each customer, the frequency and volume of transactions conducted by customers, and the nature, scale and complexity of our operations including geographical diversity.

4.3. We shall pay attention to any money laundering or terrorism financing threats that may arise from new or developing technologies, and take measures to prevent their use for money laundering or financing of Terrorism.

4.4. Our customers shall be categorised based on perceived risk, into 3 (Three) categories – A, B, & C. Category A comprises of high risk customers, category B comprises of medium risk customers while category C comprises of low risk customers. None of these categories shall be exempted from our KYC procedures, irrespective of the status and relationship with our directors and employees.

4.5. High risk customers include but are not limited to politically exposed persons ("PEPs"), customers acting on behalf of PEPs, foreigners, persons residing outside Nigeria, persons with tainted reputation as per the available public information, firms with sleeping partners, antique dealers, money service businesses, dealers in arms, dealers in jewellery, customers based in high risk jurisdictions, jurisdictions that do not comply or sufficiently comply with the recommendations of the Financial Action Task Force on Money Laundering ("FATF") on AML and CFT, and jurisdictions identified by FATF as having strategic deficiencies in compliance of AML/CFT standards.

4.6. Low risk customers include but are not limited to long-term customers, customers who conduct transactions with us and on Borders regularly, individuals whose identities and sources of wealth can be easily identified and all other persons not classified as high risk or medium risk customers.

4.7. It is important to note that the foregoing parameters for classifying customers are merely indicative and not sacrosanct. Therefore, risk perception and categorisation will vary from customer to customer as the circumstances demand, and the transactions of each customer shall be analysed on a case by case basis.

4.8. The risk perception will be reviewed from time to time based on which the customers may move from one category to another.

5. Customer Identification Procedure

5.1. Customer identification implies identifying the customer and verifying his/her identity by using reliable, independent source documents, data or information.

5.2. We shall identify a customer, whether permanent or occasional, using identification documents as may be prescribed in any relevant regulation. We shall verify the identity of customers using reliable and independent sources of data and information. Also, we shall take reasonable steps to identify the beneficial owners of accounts and transactions on Borders.

5.3. We have to be satisfied that a prospective customer is who he/she claims to be. It is, therefore, necessary to obtain sufficient information to establish the identity of each new customer. The risk profile of each customer would often determine the nature and amount of documentation required, in order for such customer to successfully open a Borders account or conduct transactions on Borders.

5.4. We shall undertake Customer Due Diligence ("CDD") measures each time a new account is opened. The identities of customers are to be verified and confirmed using their BVN or NIN, identity documents and a liveness check. Some of our partner banks may require an additional verification step. In the event that a customer has changed the phone number attached to his/her BVN, the customer is required to undergo a manual verification by providing a copy of his/her driver's licence, international passport data page, national ID card, voter's card, or other relevant means of identification. We may use third-party identity verification service providers to support customer identity and document verification, including BVN or NIN, government identification document, and biometric checks where applicable. Use of any third-party provider does not replace our CDD decision-making; we retain responsibility for customer acceptance, manual review, escalation, and recordkeeping.

5.5. After obtaining all the necessary information at the point of account opening, and verifying the identity of the customer, we are not required to repeatedly perform identification and verification exercise each time a customer conducts a transaction.

5.6. We shall however conduct Ongoing Due Diligence ("ODD") in respect of the customer's transactions even though his/her identity has been confirmed. We have a two-step verification in place for the customers, which is an extra layer of security that requires not only a customer's password and username but also something that the customer has on his/her person, e.g. a mobile phone. The two-step verification requires the customer to enter a one-time password ("OTP") sent to his/her phone each time the customer wants to convert, withdraw or send funds.

5.7. We may at any time suspend or freeze the account or transaction of an existing customer where the customer needs to provide information and documentation required for KYC measures, or where illegal activity is suspected.

5.8. We shall undertake Enhanced Due Diligence ("EDD") measures in respect of customers that are not in the low risk category. We shall also undertake EDD whenever there is any suspicion of money laundering or terrorism financing, irrespective of the amount involved.

5.9. EDD measures shall include but are not limited to making enquiries as to the customer's source of income, and reporting the customer to the relevant regulatory authority for investigation. In cases where the customer's KYC was performed by a third party, especially in the case of cross border customers, it must be ensured that the said third party is a regulated and supervised entity and has adequate KYC systems in place.

5.10. In cases where we form a suspicion of money laundering or terrorism financing, and reasonably believe that performing the EDD or other measure would tip off the customer, we shall not pursue the EDD process. In such circumstances, we shall proceed with the transaction and immediately file a report with the relevant regulatory authority for investigation.

6. Transactions Monitoring

6.1. The monitoring of transactions on an ongoing basis will be a key element of KYC procedures so as to have an effective control and reduce the risk.

6.2. After an account is opened and the customer starts conducting transactions, it is essential that the customer's transactions are monitored on an ongoing basis so as to achieve the ultimate objective of preventing Borders from being used, intentionally or unintentionally, by criminal elements for money laundering or terrorism financing activities.

6.3. An understanding of the normal and reasonable activity of a customer enables us to identify transactions that fall outside the regular pattern of activity. Transactions which do not fall within the ambit of the declared activity of the customer may be treated as suspicious and need to be reported to the appropriate regulatory authority.

6.4. The transactions of all customers, particularly high risk customers, shall be monitored by Borders. Based on the risk perceptions, care will be taken to see whether there is any change in the pattern of transactions, whether the activity of the customer is reasonable, or whether there are any complex, unusually large transactions and unusual patterns which have no apparent economic or visible lawful purpose.

6.5. We may prescribe threshold limits for a particular category of accounts and pay particular attention to the transactions which exceed these limits. Transactions that involve large amounts of money inconsistent with the normal and expected activity of the customer shall particularly attract our attention, and we shall investigate or report such transactions.

6.6. We shall devise automated and manual means for monitoring customers' transactions. We may use third-party screening and monitoring tools to screen transactions for sanctions exposure and other illicit finance risk indicators, generate alerts, and support ongoing transaction monitoring. Alerts generated by such tools shall be reviewed and escalated by the Compliance Officer in accordance with internal procedures, and we retain responsibility for final risk decisions, restrictions, investigations, and regulatory reporting.

7. Preservation of Records

7.1. We shall, for as long as we operate Borders, keep and maintain all necessary records of transactions (especially suspicious transactions), for at least 5 (Five) years following completion of the transactions.

7.2. The records of transactions to be maintained shall include the profile/identification of the customer and details of the transaction such as the date of transaction, parties to the transaction, types of currencies involved, and the identifying number of any account involved in the transaction. Such records shall be sufficient to permit reconstruction of individual transactions.

7.3. We shall evolve a system for proper maintenance and preservation of information in a manner that allows data (in hard and soft copies) to be retrieved easily and quickly whenever required or requested by the regulatory authorities.

7.4. We shall ensure that documents and information received from customers at registration or signup, are kept up to date and relevant by undertaking reviews of existing records, particularly for high risk customers.

8. Reporting

8.1. We shall report to the Nigerian Financial Intelligence Unit ("NFIU"), within 7 (Seven) days, any transaction involving a sum exceeding NGN5,000,000.00 (Five Million Naira) or its equivalent for an individual, or NGN10,000,000.00 (Ten Million Naira) or its equivalent for a body corporate.

8.2. Where a transaction (whether completed or not) involves a frequency which is unjustifiable or unreasonable, or the transaction is surrounded by conditions of unusual or unjustified complexity, or the transaction appears to have no economic justification or lawful objective, or if in our opinion, the transaction is inconsistent with the known transaction pattern of any of the customers involved, that transaction shall be deemed suspicious and we shall immediately report the transaction to the relevant regulatory authority.

8.3. The report referred to in Clause 8.1 above is to be called a Currency Transaction Report ("CTR") while the report referred to in Clause 8.2 is to be called a Suspicious Transaction Report ("STR"), and we shall take adequate steps to identify the relevant regulatory authority whom the aforesaid reports are to be presented to.

8.4. Where no events occur necessitating the presentation of a CTR or STR, we shall file a "NIL Report" with the relevant regulatory authority on a monthly basis.

8.5. We shall maintain strict confidentiality in respect of any customer being investigated, and we shall not prejudice any investigation by informing or tipping off the concerned customer, directly or indirectly, about the investigation.

9. Politically Exposed Persons

9.1. PEPs are individuals who are or have been entrusted with prominent public functions in a foreign country, e.g. Heads of States or of Governments, senior politicians, senior government/judicial/military officers, senior executives of state owned corporations, important political party officials, etc. Sufficient information should be gathered on any person/customer of this category intending to establish a relationship with Borders and all the information available on the person in the public domain should be checked.

9.2. We shall conduct EDD and ODD in respect of every PEP, his family members, his close relatives and associates who wish to open a Borders account or conduct transactions on Borders. We must be satisfied based on information gathered, that the PEP's funds are not proceeds of financial misappropriation or other illegal act.

9.3. Where an existing customer or the beneficial owner of an existing customer's account, subsequently becomes a PEP, we shall review the continued operation of the account, and if we permit the continued operation of the account, the account shall be subject to EDD on an ongoing basis.

9.4. We shall monitor both local and foreign PEPs.

10. Shell Entities

10.1. Borders shall not conduct transactions with or enter into relationships with shell entities especially shell banks (i.e. a bank which is incorporated in a country where it has no physical presence and is unaffiliated to any regulated financial group). We shall also guard against establishing relationships with banks and financial institutions that permit their accounts to be used by shell entities.

10.2. We shall ascertain from publicly available information whether a bank or other entity has been subject to any money laundering or terrorism financing investigation or regulatory action.

10.3. We shall not transact or establish relationships with banks that do not possess licences to operate in their countries of origin.

11. Internal Procedures, Policies & Controls

11.1. We shall develop programmes to combat the laundering of the proceeds of a crime or other illegal acts and these shall include the designation of certain directors or staff as Compliance Officers, design and implementation of manual and automated monitoring procedures, relevant and regular training for employees, and the centralisation of information collected on customers. We shall subject third-party compliance tools to appropriate due diligence, access controls, performance monitoring, and periodic review.

11.2. The Compliance Officer shall supervise the monitoring of suspicious transactions and ensure the overall implementation of this Policy.

11.3. We shall also establish an internal audit unit to ensure compliance and effectiveness of this Policy and any of our other AML and CFT measures.

11.4. We shall also take adequate steps to prevent connivance between customers and employees. In order to prevent criminals taking up employment, necessary screening and background checks of employees shall be done at the point of recruitment.

12. Customer Education & Privacy

12.1. We shall endeavour to educate customers about this Policy and our other KYC/AML/CFT measures. This is in light of the fact that customers are required to submit certain information which may be personal in nature. We shall guarantee customers that the information had and received shall not be misused.

12.2. We shall ensure that information sought from the customers are not intrusive but relevant to the perceived risk and in conformity with the governing laws and regulations.

12.3. Additional information, if any, will be obtained from the customer, wherever necessary, but with the customers' consent.

12.4. The information obtained shall not be divulged for cross selling or any other purposes and the confidentiality of the information collected shall be maintained at all times.

12.5. While considering the requests for data/information from the government and other agencies, we shall satisfy ourselves that the information being sought is not of such a nature as will violate the legally enforceable rights of the customers.

13. Policy Review

13.1. This Policy shall be reviewed from time to time in order to adapt to any relevant law or regulation, or other developments on the subject.

13.2. Any amendments to this Policy or our other KYC/AML/CFT measures shall be communicated to the stakeholders such as our employees and customers.