AML/CFT

AML Anti-Money Laundering

CDD Customer Due Diligence

CFT Counter Financing of Terrorism

EDD Enhanced Due Diligence

EU European Union

FATF Financial Action Task Force

FT Financing of Terrorism

ID Identification

INTERPOL International Criminal Police Organization

IT Incoming Transfer

KYC Know Your Customer

ML Money Laundering

MLRO Money Laundering Reporting Officer

OECD Organisation for Economic Co-operation and Development

OT Outgoing Transfer

PEP Political Exposed Person

RBA Risk Based Approach

SAR Suspicious Activity Report

STR Suspicious Transaction Report

UBO Ultimate Useful Ownership of Funds

This document presents a high-level summary of the policies implemented by GFS Group concerning Anti-Money Laundering (AML) and Countering the Financing of Terrorism (CFT). It is intended for distribution to local and international banks, clients, suppliers, third parties, and any other relevant stakeholders. The content is based on the official policies established and approved by the Group’s Board of Directors.

The following sections outline the key principles and components of the Group’s AML/CFT policies.

The fight against money laundering and the financing of terrorism has emerged as a global challenge in recent years. Criminal networks, including money launderers and terrorist organizations, have become increasingly sophisticated in their methods and techniques.

Money laundering refers to the process by which criminals attempt to disguise the true origin and ownership of proceeds derived from illegal activities. When successful, the illicit funds appear legitimate, having lost their criminal association. This is typically achieved by concealing the source, altering the form, or moving the funds to jurisdictions where they are less likely to attract attention.

Terrorist financing constitutes a criminal offense under the United Nations International Convention for the Suppression of the Financing of Terrorism. It involves any person who, by any means, directly or indirectly, unlawfully and willfully—provides or collects funds with the intent that they be used, or with the knowledge that they will be used, in whole or in part, to support terrorist activities.

The AML/CFT Policy is designed to establish the guiding principles that GFS Group must follow in its interactions with clients, suppliers, banks, financial institutions, business partners, regulators, and other relevant stakeholders. These principles are aligned with the standards set by the Financial Action Task Force (FATF), the Basel Committee, and applicable local regulatory authorities.

The purpose of the AML/CFT Policy is to establish effective measures to combat money laundering and terrorist financing, with the following key objectives:

    • Protect GFS Group from being misused as a conduit for illegal transactions related to money laundering, terrorist financing, or other illicit activities.

    • Ensure compliance with applicable laws and regulations, thereby avoiding legal penalties and safeguarding the Group’s credibility, integrity, and reputation.

    • Minimize risk to GFS Group by providing clear guidance to management and all relevant staff on the ongoing obligations and procedures to be followed.

    • Facilitate the identification and reporting of suspicious individuals and transactions.

GFS Group is committed to safeguarding its reputation and integrity by adhering to all applicable laws, regulations, and ethical standards in the markets and jurisdictions where it operates. All employees are expected to comply with these requirements. Compliance—particularly with AML and CFT regulations—is regarded as a fundamental component of the Group’s Corporate Governance framework.

The Board of Directors, through the Board AML/CFT Committee, is responsible for overseeing the implementation of the AML/CFT Policy. This includes promoting a strong compliance culture across the Group and ensuring the effectiveness of related systems, controls, and governance structures.

The Board AML/CFT Committee ensures that robust mechanisms are in place for controlling, monitoring, and reporting on AML/CFT-related matters throughout the organization.

Senior Management is accountable for effectively managing compliance risk, including AML/CFT risks, and for communicating relevant procedures to all levels of management for proper implementation.

The Senior Compliance Officer holds a direct reporting line to the Board AML/CFT Committee, ensuring independence and oversight at the highest level.

GFS Group adopts a risk-based approach (RBA) to AML/CFT compliance, aiming to strike an effective balance between the cost of compliance and a realistic assessment of the risks associated with money laundering and terrorist financing. This approach enables the Group to prioritize efforts and allocate resources efficiently by developing tailored mitigation strategies based on the level of risk posed by each customer.

CDD measures are designed to consider all relevant factors that may influence a customer's risk profile. These include:

    • The nature and scale of the customer’s activities and sources of income

    • Identification of the Ultimate Beneficial Owner (UBO)

    • The mediums used for funding and transactions

    • The type and purpose of the relationship with GFS Group

    • Other risk indicators relevant to the customer’s profile

All customer relationships are subject to sanctions screening before onboarding and on a continuous basis thereafter. This process is automated to ensure real-time alignment with the latest sanctions lists.

CDD and Enhanced Due Diligence (EDD) information must be regularly updated in accordance with the customer's risk level and whenever significant events occur, to help identify suspicious behaviors or transactions effectively.

GFS Group enforces strict KYC policies to ensure that only customers with reasonably verifiable and legitimate sources of funds are onboarded. This minimizes the risk of engaging with sanctioned or high-risk parties and helps protect the Group from financial and reputational damage.

KYC procedures include the following steps:

    • Establishing customer identity

    • Understanding the customer’s business activities, with a focus on verifying the legitimacy of their source of funds

    • Assessing AML/CFT risk to enable appropriate monitoring of customer activity

A Business Relation Form (Known also as KYC) must be completed for all new and existing suppliers and clients. This form includes:

    • Basic customer details: trade name, legal entity type, registration number, addresses, and business nature

    • Information on shareholders and authorized signatories

    • Banking details and customer signatures

    • Supporting legal documents and financial statements may be required for verification and due diligence purposes

When evaluating the AML/CFT risk associated with a customer, the following factors are assessed in combination:

    • Geographic Risk – Country of residence, business operations, or financial transactions

    • Entity Risk – Legal structure and ownership transparency

    • Industry Risk – Inherent risk level of the customer’s sector or line of business

    • Political Exposure – Status as a Politically Exposed Person (PEP) or association with PEPs

    • Product Risk – Type of services or products involved in the relationship

    • Distribution Channel Risk – Method of interaction (e.g., face-to-face, remote, third-party intermediaries)

GFS Group has established a comprehensive Sanctions Management Framework designed to:

    • Protect the Group’s reputation by avoiding involvement in business activities with or on behalf of sanctioned individuals, entities, or jurisdictions.

    • Prevent financial and legal exposure by ensuring full compliance with applicable sanctions regimes, thereby mitigating the risk of regulatory penalties.

    • Uphold corporate integrity in the eyes of shareholders, stakeholders, employees, and business partners through consistent adherence to sanctions requirements.

GFS Group is fully committed to complying with both local and international sanctions regulations, including but not limited to:

    • Local sanctions issued by the Lebanese Special Investigation Commission (SIC)

    • International sanctions administered by:

        o United Nations (UN)

        o United States Department of the Treasury – Office of Foreign Assets Control (OFAC)

        o European Union (EU)

        o United Kingdom – Her Majesty’s Treasury (HMT)

Additionally, the Group incorporates extended screening through a variety of supplemental lists provided by its sanctions screening vendors, including:

    • FBI, Interpol, Enforcement, Politically Exposed Persons (PEPs), Embargo, and Vessel lists

    • GFS Group shall not engage in business activities involving individuals, entities, or jurisdictions under active sanctions.

    • Transactions involving the following jurisdictions are strictly prohibited:

        o Iran

        o North Korea

        o Crimea

        o Cuba

        o Syria

        o Sudan

    • Operations involving high-risk countries, as identified by the Financial Action Task Force (FATF) and the Basel AML Index, are subject to Enhanced Due Diligence (EDD) procedures to verify the legitimacy of the transaction and business relationship.

    • GFS Group will not conduct or facilitate commercial operations involving goods listed under:

        o EU Dual-Use Goods List

        o EU Common Military List

        o UK Strategic Export Control List

    • Additionally, the Group shall act with caution in dealings involving Uncooperative Tax Havens, as classified by the OECD.

To ensure compliance with global sanctions requirements, GFS Group utilizes two advanced screening systems:

    • Refinitiv World-Check Database

    • Kroll Compliance Portal

These systems support the detection and prevention of financial crimes and facilitate adherence to AML/KYC requirements.

Sanctions screening is conducted at multiple stages of the customer lifecycle, including:

1. KYC and Customer Due Diligence (CDD):

        o Screening of primary customers and all associated parties at onboarding.

2. Transaction Screening:

        o Real-time monitoring of transactions (e.g., overseas remittances, fund transfers) including screening of beneficiaries, goods descriptions, port names, etc.

3. Ongoing and Periodic Name Screening:

        o Continuous screening triggered by updates to customer information or changes in regulatory watchlists (delta screening).

This layered approach ensures that any customer, transaction, or relationship posing sanctions risk is promptly identified and addressed in accordance with regulatory expectations.

Ongoing education and training for employees at all levels form a critical component of GFS Group’s Compliance Program and are considered a foundational element of the Group’s internal control framework. To support this, GFS Group implements comprehensive training and awareness initiatives focused on Regulatory Compliance and AML/CFT obligations.

These programs are delivered through a combination of internal and external training sessions, and are specifically tailored to the roles and responsibilities of senior management and staff. In addition, awareness is reinforced through quarterly communications and other awareness tools aimed at ensuring continuous engagement and knowledge retention across the organization.