Anti-Money Laundering & Counter-Terrorist Financing Policy

1. Policy Statement

Inter.lyBanking, licensed by the Office of the Commissioner of Financial Institutions of Puerto Rico (OCIF) as an International Financial Entity (IFE #061), is committed to full compliance with all applicable Anti-Money Laundering (AML) and Counter-Terrorist Financing (CTF) regulations including:

• The Bank Secrecy Act (BSA) and USA PATRIOT Act
• Financial Action Task Force (FATF) Recommendations
• OCIF Regulation 9025
• EU Fourth and Fifth Money Laundering Directives (for EU clients)
• Local regulations in all jurisdictions where we operate

This policy establishes the framework for our AML/CTF program, which includes customer due diligence, ongoing monitoring, suspicious activity reporting, recordkeeping, and employee training.

2. Risk Assessment Framework

Inter.lyBanking conducts annual enterprise-wide risk assessments evaluating:

Customers are assigned risk ratings (Low, Medium, High) that determine the level of due diligence and monitoring applied. Our risk assessment methodology is reviewed annually by the Board of Directors.

3. Customer Due Diligence (CDD)

3.1 Standard CDD Requirements

For all customers, we collect and verify:

3.2 Enhanced Due Diligence (EDD)

Enhanced measures apply to:

• Politically Exposed Persons (PEPs)
• Customers from high-risk jurisdictions
• Private banking relationships
• Correspondent banking relationships
• Any customer displaying higher-risk characteristics

EDD includes obtaining senior management approval, understanding source of funds/wealth, and conducting more frequent reviews.

4. Ongoing Monitoring

We employ a multi-layered transaction monitoring system that includes:

Monitoring frequency ranges from real-time for high-risk customers to annual reviews for low-risk customers. All alerts are investigated by our Compliance team.

5. Suspicious Activity Reporting

Employees must immediately report any suspicious activity to the Money Laundering Reporting Officer (MLRO). The MLRO will:

1. Investigate the reported activity
2. Determine if a Suspicious Activity Report (SAR) is required
3. File SARs with the appropriate authorities within required timeframes
4. Maintain confidentiality of SAR filings

In 2024, we filed 47 SARs with regulators and prevented $12.8M in potentially suspicious transactions.

6. Record Keeping

We maintain all required AML records for minimum periods:

All records are stored securely with access limited to authorized personnel only.

7. Employee Training

All employees receive AML training based on their roles:

Training completion is tracked and reported to the Board annually. In 2024, we achieved 100% training compliance across all staff.