AML Policy

ANTI-MONEY LAUNDERING AND COUNTER-TERRORISM FINANCING POLICY (AML/CFT)

1. Introduction

Meridianbet is committed to conducting its operations lawfully and ethically. The company adopts a zero-tolerance policy toward money laundering (ML) and terrorism financing (TF), maintaining a firm commitment to compliance with all applicable laws related to anti-money laundering (AML) and counter-terrorism financing (CFT) in all jurisdictions where it operates.

ML/TF pose risks to Meridianbet, the broader economy, the gaming and betting ecosystem, the companies that comprise it, and, indirectly, the jobs generated by these companies.

Meridianbet assumes the duty to adopt, implement, and enforce AML/CFT policies, procedures, and internal controls, in accordance with Law No. 9,613 of 1998, Law No. 13,260 of March 16, 2016, Law No. 13,810 of 2019, Ministry of Finance Ordinance SPA/MF No. 1,143/2024, and other applicable regulations.

Additionally, through its policy, Meridianbet aims to promptly comply with the United Nations Security Council (UNSC) resolutions or designations by its sanctions committees that mandate the freezing of assets belonging, directly or indirectly, to individuals, legal entities, or entities subject to sanctions arising from such resolutions or designations.

The ultimate goal of this policy is to ensure operational transparency and security, maintain player trust, comply with legal regulations, and, above all, prevent, monitor, and report situations or risks exposing the company to the effects associated with money derived from criminal activities.

 

2. Preliminary Definitions Regarding This AML/CFT Policy

2.1 Money Laundering (ML): The process by which individuals attempt to conceal the illicit origin of financial resources generated from criminal activities. When successful, this practice enables criminals to maintain control over these funds and integrate them into the financial system as if they were of legitimate origin. ML typically occurs in three stages:

• Placement: Introduction of illicit funds into the formal financial system.
• Layering: Carrying out multiple transactions or creating complex structures to obscure the origin and disguise ownership of the funds.
• Integration: When the funds appear legitimate and can be used without raising suspicion.

 

2.2 Terrorism Financing (TF): Refers to providing financial support or resources to individuals or groups engaged in terrorist activities. Unlike ML, the funds used in TF can originate from both illicit and legitimate sources. The primary goal in TF is to hide the financing activities and the methods used, rather than the origin of the resources.

2.3 Financing the Proliferation of Weapons of Mass Destruction (P): The act of facilitating the transfer, sale, or export of nuclear, chemical, or biological weapons, their delivery mechanisms, and related materials. Often linked to terrorism financing, this type of financing employs methods similar to those of ML to move and disguise the involved resources.

2.4 MLRO – Money Laundering Responsible Officer: The individual responsible for supervising compliance with AML/CFT policies and procedures to mitigate risks and combat ML/CFT activities.

2.5 Betting Operator Agent: A legal entity authorized by the Ministry of Finance's Prizes and Betting Secretariat to operate fixed-odds betting.

2.6 Bettor: A natural person placing a bet.

2.7 Bet: The act of risking a certain amount of money with the expectation of winning a prize.

2.8 Platform User: A natural person registered on the betting platform, regardless of whether they have placed a bet.

2.9 Politically Exposed Person (PEP): An individual who holds or has held a prominent public position, along with their immediate family members and close associates, as defined by regulations from COAF (Financial Intelligence Unit) and the Prizes and Betting Secretariat.

 

3. Principles and Guidelines of Compliance and Ethical Conduct

Meridianbet is committed to acting ethically, diligently, and in compliance with the rules for the prevention and control of AML/CFT as defined by legislation, regulatory authorities, and the company’s specific policies. To implement an effective AML/CFT prevention system, Meridianbet adopts the following principles and guidelines:

1. Meridianbet will provide effective support and collaboration to the competent authorities.
2. All employees must prioritize adherence to ethical standards and risk prevention over business objectives.
3. Any employee who identifies transactions that could be classified as unusual must immediately report them to their hierarchical superior, who must promptly notify the compliance officer (MLRO).
4. Employees must strictly adhere to internal policies, especially those related to AML/CFT compliance.
5. Meridianbet will not establish business relationships or transactions with individuals or entities reasonably suspected of connections to ML/CFT or with resources of dubious origin.
6. The company will define the responsibilities and obligations of its management and control bodies.
7. Meridianbet will maintain a code of conduct always aligned with current legislation, establishing corrective actions and updates when necessary.
8. Full identification of bettors and platform users (KYC) must be conducted before providing services.
9. Identification, qualification, and risk classification of employees, partners, and third-party service providers.
10. Risk assessment and classification of its activities related to the operation of betting activities.
11. Risk assessment and classification in its business activities, hiring and development of products, operations with financial and real estate assets.
12. Risk assessment and classification in hiring employees, partners, and third-party service providers.
13. The registration and maintenance of information related to its operational, business, and administrative activities.
14. The maintenance of an up-to-date registry of bettors and platform users.
15. The maintenance of an up-to-date registry of employees, partners, and third-party service providers.
16. Periodic verification and monitoring of the compliance of payment institutions and financial institutions with which it maintains relationships, regarding authorization by the Central Bank of Brazil for their operations.
17. Monitoring, selection, and analysis of transactions and activities, whether related to betting operations or not, for reporting purposes to the Coaf.
18. Periodic verification of the effectiveness of the adopted policy and adherence to governmental regulations, addressing and correcting identified deficiencies.
19. Collaborate with the administration of justice, responding promptly to requests from competent authorities and assisting in combating ML/CFT crimes in accordance with applicable legislation and regulations.
20. Maintain the confidentiality of information sent to competent authorities and the identities of individuals involved in transactions classified as suspicious.

 

4. Risk Assessment Procedures

4.1 Meridianbet adopts a risk-based approach, prioritizing the identification, assessment, and mitigation of risks associated with money laundering and terrorist financing (ML/FT), adjusting internal controls and compliance measures according to risk exposure.

4.2 For this approach, Meridianbet considers the following premises:

4.2.1 Risk Identification: Identifying risk factors by considering transaction history, the amount and volume of resources involved in virtual and physical betting, frequency and value of bets, jurisdictions involved, and types of products and services offered. Risk identification focuses on:

1. Bettors and platform users (Know Your Customer - KYC);
2. Meridianbet employees and employees of third-party providers;
3. Suppliers and third-party service providers; and
4. Relevant business partners.

 

4.2.2 Risk Assessment and Classification: Classifying risks based on criteria such as probability and impact. For example, clients using large amounts of money in single or frequent transactions may be considered high-risk. The assessment and classification will focus on, among other aspects:

1. Risk assessment and classification in its business activities, product development, operations with financial and real estate assets; and
2. Risk assessment and classification in hiring employees, partners, and third-party service providers.

4.2.3 Proportional Measures: Implementing controls and due diligence measures proportional to the level of identified risk, considering their utility, necessity, and adequacy. For example, low-risk clients may be monitored with simplified procedures, while high-risk clients require greater oversight, such as Enhanced Due Diligence (EDD).

4.2.4 Continuous Monitoring: Regularly reviewing clients' transactions and activities to detect suspicious patterns and signs of potential money laundering, adjusting controls as necessary.

4.2.5 Training and Awareness: Ensuring all employees, especially those in direct contact with clients and financial operations, understand the risks and know how to recognize suspicious activities.

4.2.6 Reporting and Communication: Establishing an efficient system to report suspicious transactions to the competent authorities, in compliance with local and international regulatory obligations.

4.2.7 Policy Review and Updates: Continuously adjusting processes and controls to keep pace with regulatory changes, customer behavior, and global ML/FT trends.

 

5. Identification of Bettors and Platform Users (Know Your Customer - KYC)

5.1 Verification Process: The identity of customers must be established through one of the following valid documents:

1. Passport or travel document;
2. National Identification Document, CPF, RG, or other equivalent photo identification.

 

5.2 Platform User Registration and Additional Identification: Meridianbet employs rigorous online identity verification procedures, including the use of biometrics, to ensure a secure and protected environment, preventing fraud, money laundering, and unauthorized access by individuals prohibited from gambling, as stipulated by relevant regulations, particularly Portarias SPA No. 1,231/2024 and 1,143/2024. These measures include:

1. Biometrics: During initial registration and in other scenarios defined by Portaria 1,231/2024, platform users are subject to biometric identification, such as facial recognition. This ensures unequivocal identification, preventing betting by minors, prohibited individuals, and others restricted by law or regulations issued by the Ministry of Finance.
2. Age Verification: Player age is verified to prevent minors from gambling. Players must provide valid photo identification to confirm they meet the legal age requirement.
3. Know Your Customer (KYC): KYC procedures are implemented to verify players' identities by collecting information such as name, address, date of birth, and biometric data.
4. Document Verification: Players must present valid photo identification (passport, driver's license, or RG). Meridianbet rigorously examines these documents to ensure their authenticity.
5. Address Verification: Additional documents, such as utility bills or bank statements, may be requested to confirm the bettor's residence.
6. Fraud and ML Prevention: Robust verification procedures help prevent fraudulent activities, such as identity theft and unauthorized access. These measures also ensure the platform's integrity and compliance with AML regulations.
7. Sanctions and PEP Monitoring: Meridianbet uses automated systems to check customers against sanctions and prohibition lists, as well as to identify Politically Exposed Persons (PEPs), mitigating additional risks.
8. Economic and Financial Capacity of Users: Meridianbet considers the economic and financial capacity of bettors and their associated transactions. Additionally, the platform accounts for whether the user is a politically exposed person, a close relative (up to the second degree), a representative, or a close associate of someone in that condition.

 

6. Responsibilities of the MLRO
7. Oversee control mechanisms to prevent ML/FT.
8. Receive and analyze internal reports of suspicious operations.
9. Submit reports to the Financial Intelligence Unit (FIU/Coaf) when necessary.
10. Ensure ongoing training and capacity building for employees.

 

7. Monitoring and Reporting

To achieve AML/CFT objectives, Meridianbet will implement:

7.1 Continuous Monitoring, through:

1. Real-time tracking of transactions on the platform to identify suspicious activities.
2. Use of automated systems to detect atypical patterns.

7.2 Reporting to Coaf, through:

1. Submission of suspicious transaction reports to Coaf within one business day of identification
2. Ensuring the confidentiality of submitted reports.

 

8. Procedures Related to Coaf

Meridianbet ensures compliance with Siscoaf and Coaf systems, maintaining updated information about its organization and users to facilitate measures aimed at detecting any indication of ML/FT or related crimes. This complies with the requirements of Article 11, item II, of Law No. 9,613/1998, and the communications mandated by Article 11 and the sole paragraph of Article 12 of Law No. 13,810/2019.

 

9. Compliance Program

Meridianbet's Compliance Program focuses on developing, implementing, and executing institutional policies and procedures that ensure integrity, good governance, and an Environmental, Social, and Governance (ESG) agenda. It also promotes the fight against ML/FT by embedding AML/CFT mechanisms into the company's culture. The program includes:

 

9.1 Integrity Program

9.1.1 The Integrity Program consists of a set of internal mechanisms and procedures for integrity, auditing, and promoting whistleblowing, along with the effective application of the Code of Ethics and Conduct, policies, and guidelines aimed at detecting and/or addressing deviations, frauds, irregularities, unethical acts, and crimes committed against the Public Administration (national or international), against the management of private companies, or against any individuals. The Integrity Program of Meridianbet focuses on the prevention, detection, and remediation of harmful acts as provided for in Law No. 12,846/13 and Decree No. 11,129/2022, and is also in alignment with Ordinance 1143/24 from the Ministry of Finance’s Secretariat of Prizes and Betting, which sets forth policies, procedures, and internal controls for preventing money laundering, as provided in Law No. 9,613, of March 3, 1998, the financing of terrorism, and the proliferation of weapons of mass destruction (AML/CFT), as well as other related crimes to be adopted by operators in fixed-odds betting, as outlined in Laws No. 13,756, of December 12, 2018, and No. 14,790, of December 29, 2023.

9.1.2 Structural guidelines include: i. Leadership commitment and support; ii. Independent and authoritative program oversight; iii. Risk profile and analysis; iv. Development of rules and tools; v. Continuous monitoring strategies; and vi. Communication and training.

 

9.2 Good Governance

9.2.1 Meridianbet emphasizes integrity and transparency in relationships with governments, strictly prohibiting corruption and bribery.

9.2.2 All Shareholders, Employees, Third Parties, and partners acting on behalf of Meridianbet are prohibited from offering, promising, or authorizing (directly or indirectly) any Undue Advantage (payments, gifts, or the transfer of any asset) to a Public Agent in order to influence, facilitate, or reward any official action or decision that benefits Meridianbet or itself. No Shareholder, Employee, or Third Party will suffer any form of retaliation or penalty due to delays or loss of business resulting from their refusal to pay or receive bribes.

 

9.3. Dissemination of an Organizational Culture of Prevention of AML/CFT, Integrity, and Good Governance

9.3.1. Meridianbet maintains a periodic and continuous communication and training plan for its Employees and Third Parties in order to raise awareness about the importance of complying with the rules of the AML/CFT Policy, as well as the Anti-Corruption Law. It is the responsibility of all managers at Meridianbet to disseminate the content of the AML/CFT Policy to employees and to raise their awareness of the necessity and importance of its observance, as well as encourage them to present any doubts or concerns regarding its application. Any situations, exceptions, and/or clarifications regarding the application of this Policy should be directed to the Compliance or Legal departments.

 

9.4. Information and Training Activities on AML/CFT Prevention Issues

9.4.1. Upon joining the Company, all employees must read the applicable Anti-Money Laundering Policy. When this document is updated, employees are required to reread it. As a record of team training, version control is maintained, and employees must sign and date whenever they read this document.

9.4.2. Additionally, the Company will provide continuous education and training to all employees, including management, to ensure they are aware of their respective roles in AML/CFT procedures and conduct.

9.4.3. Furthermore, the company may also offer periodic and continuous training activities for partners and third-party service providers working with us.

 

10. Final Considerations

10.1 Interpretation and Review: This AML policy must be read in conjunction with other Meridianbet policies and is updated periodically to meet legal and regulatory requirements.

10.2 Record-Keeping and Maintenance: Meridianbet will retain records related to compliance with Portaria SPA/MF No. 1,143/2024 for at least five years.

10.2.1. Employee, partner, and third-party records will be kept for at least five years after termination of their relationship.