International Financial Sanction - a specific measure under the International Sanctions regime which is not related to the use of armed forces and the imposition thereof and that has been decided by the European Union, the United Nations, another international organization or the Government of the Republic of Estonia and aimed to maintain or restore peace, prevent conflicts and reinforce international security, support and reinforce democracy, follow the rule of law, human rights and international law and achieve other objectives of the common foreign and security policy of the European Union. Financial sanctions are measures which:

• obligate the freezing of funds and economic resources of the subject of international financial sanctions;
• prohibit the making available of financial and economic resources to the subject of the financial sanctions;
• prohibit the granting of loans and credit under the conditions prescribed by the legislation on implementation of International Sanctions;
• prohibit the opening and use of a deposit, payment, securities or other account under the conditions prescribed by the legislation on implementation of International Sanctions;
• prohibit the securities transactions under the conditions provided for in the legislation on implementation of International Sanctions;
• prohibit the conclusion of an insurance contract under the conditions prescribed by the legislation on implementation of International Sanctions;
• prohibit investing under the conditions prescribed by the legislation on implementation of International Sanctions; or prohibit, under the conditions provided for by the legislation on implementation of International Sanctions, the starting or continuing of business relationships, consultancy or the provision of other financial services related to the activities listed above.

Corporate Information

Business ID Number:
Formation/Incorporation Date of e-commerce:
Country of Formation/Incorporation:
List identifying name of person(s) authorized to transact business on behalf of Counterparty:

List of Corporate Documents

• Certificate of Incorporation/extract (or equivalent).
• Memorandum and Articles of Association (or equivalent).
• Proof of Registered Office & Business Address (utility bill from last 3 months).
• Ownership and Control Structure up to UBOs (owners of 25% or more directly or indirectly).
• Information which Directors are authorized to sign an agreement on behalf of the Counterparty and the documents confirming their authorities/Power of Attorney.
• Passport copies of all the authorized Directors
• Passport copies of all UBOs (owners of 25% or more directly or indirectly)
• Proof of Address of all UBOs and Management (last 3 months utility bill)
• Power of Attorney if applicable.

Politically Exposed Person questions are mandatory based on regulatory requirement:

• Are any of the above-mentioned individuals a Politically Exposed Person. (The term “Politically Exposed Person” includes any individual, including any immediate family members and close associates, that is a current or former senior foreign political figure).
• Are any of the above-mentioned individuals a Senior Foreign Political Person? (The term “Senior Foreign Political Figure” includes any individual (including any immediate family members and close associates) that is widely and publicly known to be a close associate of any foreign political figures as well as any entities formed for the benefit of such persons).
• If yes, provide additional information on a separate sheet. Source of Funds for the business establishment. (last 6 months bank statement of UBO)

Transaction Information

Bank Reference details:

Source of Wealth should be collected on Risk-Based Approach including in these cases:

• The Counterparty/e-commerce’s Management or UBO is a PEP, or a family member of a PEP or close associate to a PEP.

Beneficial Owner’s Source of Wealth should be collected on Risk-Based Approach, but at least in these cases:

• If Counterparty/e-commerce’s is registered in a High-Risk third country.
• If the Counterparty/e-commerce’s operates in High-Risk business activity.

When determining the source of wealth, the focus is on gathering information on Beneficial Owner activities that indicate how the Beneficial Owner acquired the wealth. For example, savings accumulated from salary during the previous years, investments, trading profit, assets, proceeds from inheritance etc. When collecting Source of Funds and Source of Wealth, detailed information should be obtained, as well as Risk-Based approach documentation to verify this information.

Additional information to verify from e-Commerce Businesses who pose higher risk through PEP status and High-Risk jurisdictions.

Politically Exposed Persons

Additional information should be requested upon Starting Business relationship or during Business Relationship if:

• the Management or UBO of Counterparty/e-Commerce Business is a PEP, a family member of a PEP or close associate to a PEP, who exercise control or influence in their role as a beneficial owner, an authorized representative, shareholder, or other relevant associated party on risk-based approach, of a legal entity.

Sanction’s exposure & High-Risk jurisdictions

During the EDD should be evaluated if the Counterparty/e-commerce’s (as legal entity) the Beneficial Owner, Shareholder, an authorized representative, Economic Activities, key Business partners, associated businesses, used services, products and delivery channels are exposed to Sanctions Risk, by conducting Sanctions list screening.

If it has been identified that the Counterparty/e-commerce’s (as legal entity) may be directly or indirectly subject of applicable Sanctions laws and regulations or possess significant Sanctions Risk exposure or have been suspected in Sanctions evasion cases, then immediate Due Diligence measures must be applied before the Business Relationship is established or continued.

Adverse Media Information

Adverse Media screening is carried-out to assess whether there is any public information available on the Counterparty/e-commerce’s, Beneficial Owner, Shareholder or Authorised Representative of the Counterparty/e-commerce’s, and applied using Risk Based Approach on other associated parties, which indicates a possible association with the proceeds of crime, ML/TF, Terrorism or Financial Crime (for example: fines for AML regulatory breach, a Beneficial Owner has been convicted of a Financial Crime relations to possible corruption, ML/TF other related illegal activities, information of relations to offshore jurisdictions including low-tax- and tax-free countries and territories, frauds, business partners come from Sanctioned country, etc.).

During Adverse Media screening, the following factors should be evaluated:

Credibility and source of the information and how old is the information. Whether the information is an allegation or proven incident. Whether the information is a one-off or repeated incident. Whether the information impacts on the relationship with Kallis. Each potential result of Adverse Media information must be considered taking into account all other information (including group of related people). EDD should indicate if any Adverse Media information was found and evaluation of this information to the Management must be provided.

https://usekallis.com/ creates a special dedicated landing pages for the brands hosted by Kallis. The User mints NFT and is transferred to User’ non-custodial wallet provided by a third party. The NFT gets minted once payment is confirmed. The wallet can be accessed only via User’s email, NFTs can not be transferred or traded.

When the NFT will get minted once payment is confirmed and transferred directly to the users' wallet (non-custodial). User explicitly agrees to waive withdrawal rights from the transactions (no refunds allowed). Payment is performed in Euro and the NFTs initially cannot be transferred or traded NFT can be purchased in Euros via debit or credit cards. Kallis will monitor User’s account activity for unusual size, volume, pattern or type of transactions, accounting for Risk factors and Red flags which are appropriate to our Business model.

Credit Card Payments (in alignment with payment processor)

Company enables customers to use Credit cards on its platform, including prepared Credit cards which pose a High-Risk of anonymity and Sanctions Exposure. Kallis has mitigated risks as follow:

• Prepared credit card threshold for online purchase is €50
• Credit card threshold for online purchase is €2500
• Following jurisdictions are blocked for credit card use on company’s platform:

Afghanistan, Albania, American Samoa, Bosnia and Herzegovina, Barbados, Burkina Faso, Bahamas, Botswana, Ethiopia, Ghana, Guam, Guyana, Haiti, Iran, Jamaica, Jordan, Cambodia, North-Korea, Cayman Island, Lao, Sri Lanka, Morocco, Mali, Myanmar, Mongolia, Mauritania, Mauritius, Nicaragua, Panama, Philippines, Pakistan, Puerto Rico, Russia, Palestine, Senegal, Sudan, Syria, Tunisia, Trinidad and Tobago, Uganda, USA, Virgin Island, Vanuatu, Yemen, Zimbabwe.

CDebit Card Payments (in alignment with payment processor)

• Purchase of NFTs with monthly/annual collective value over 15 000 euros is subject to additional checks and Reporting to FIU if applicable. User Account will diabled for further investigation.
• Purchase of NFTs from Sanctioned jurisdictions. User accounts will be disabled and assets (NFTs) will be frozen, Report sent to FIU.

Red flags which may signal possible Money Laundering or Terrorist Financing include, but are not limited to:

• Refuses to identify a legitimate source of funds, information is false, misleading or substantially incorrect
• User IP address is used from High-Risk, forbidden or Sanctioned juristiction.
• Users purchase large amounts of NFTs with several smaller payments.
• User refuse to provide proof of Source of Funds with
• "Structures" deposits, withdrawals or purchase of NFTs below a certain amount to avoid reporting or recordkeeping requirements
• User Credit card payment and User’s physical location mismatch
• User has multiple cards related to the same email address
• Users have multiple accounts under different Alias.
• Unusually high levels of purchasing NFTs for a single User
• Customer attempts to purchase NFTs with a bank card which has been reported lost or stolen by the financial institution

Risk Based Approach and its implementation

Kallis has adopted a Risk-Based Approach (hereinafter RBA) for identifying, assessing, understanding, and mitigating the ML and TF Risk to which it is exposed. Certain aspects of Business pose greater AML Risk than others and will require additional controls to mitigate those Risks. The Risk-Based approach should establish minimum standards for the Company that are reasonably designed to comply with all applicable laws and regulations.

The Risk Assessment is established on a Risk-Based approach. However, all categories of Risk: low, medium, high – must be identified and mitigated by the applicable controls, such as verification of customer Identity, Customer Due Diligence policy, Suspicious Activity monitoring and Economic Sanctions screening. The Risk depends on many factors, including jurisdictions, customers type and products and services. Kallis conducts a new Risk Assessment before entering New Markets, engaging New and Existing technologies, offering New services and products, including New or non-traditional sales channels and New or Emerging technologies.

Risk-Based Approach implementation

The Company puts into practice a Risk-Based Approach (hereinafter RBA), considering the Inherent Risks, the risk indicators and the Residual Risks that persist after clarification and increased-vigilance measures have been taken. The Company takes an RBA in assessing its customers and Counterparties to ensure it appropriately identifies and manages potential Money Laundering Risks.

The following table summarizes the inherent and residual ML/TF activity-related Risk specific to each Risk element assessed in the Company’s Business-Based Risk Assessment.

The Inherent and Residual Risk rating described in this table is obtained by calculating the average of the component Risk scores for each category of Risk (products and services, delivery channels, jurisdictions) as documented in our Risk Matrices.

Risk Appetite

Risk appetite is the level of Risk that a Company is not willing to take to achieve strategic objectives. The Management and Compliance Officer are reviewing and monitoring the present Risk Appetite Statement on an annual basis to ensure that it is up to date based on products and services and Business scope. Kallis Management considers the Risk Appetite Statement in the context of the Regulatory Environment applicable to the Business of the Company and its strategic goals.

The Company does not establish a Business Relationship with the following:

• person under the age of 18;
• person subject to International Financial Sanction;

Intolerable Risks (Prohibited)

Counterparties/ e-commerces under Know Your Business

Kallis have no appetite and, hence, We have zero tolerance for Counterparties who engage in any of the following:

• breaches of rules and regulations applicable to ML, TF or Sanctions;
• Intentional or willfully negligent deception in relation to the identity of the client, owner, or the beneficial owner ("BO") of a client (for corporate clients);
• Facilitating business activities which could be construed as a tax offense;
• Having capital consisting of bearer shares or other bearer securities;
• Counterparies whose location is restricted by Sanctions;
• Refusing to provide sufficient information or documentation to demonstrate Compliance with the Company`s KYB obligations (such as Legal entities in which the underlying beneficial owner(s) cannot be identified or which have a complex structure without an obvious legitimate commercial purpose).

Sanctions

Kallis has no appetite and, hence, zero tolerance for establishing or maintaining a business relationship with an entity or individual designated on any of the below lists or where otherwise prohibited by applicable law or regulation. The company has no appetite to execute transactions relating to any such entity or individual. In particular:

• The United Nations Security Council Sanctions List (UN);
• The Consolidated List of European Union Financial Sanctions (EU);
• Sanctions lists administered by the United States Office of Foreign Assets Control
• (OFAC), including the List of Specially Designated Nationals and Blocked Persons.
• UK High Risk Third Countries List
• FATF High-Risk Jurisdictions subject to a Call for Action
• Estonian Bilateral Sanctions List

Adverse Media

Counterparties (KYB) (or connected to them) for whom, we have identified material Adverse Media are. The scope of the Adverse Media is not limited to allegations or convictions related to criminal activity - bad reputation is enough to raise the Risk level attributed to the client.

Examples include intolerable:

Adverse Media as to:

• Money Laundering
• Terrorism Financing
• Distribution of illegal narcotic substances
• Distribution of child pornography.
• Bank Card Fraud, Wire Fraud, Other types of material Fraud
• Material Scam
• Pyramid schemes
• Ponzi schemes
• Material regulatory warnings issued from competent governed authorities Forgery of Personal and Bank Documents