Compliance and Financial Crime Prevention Statement

•The Bank's Approach to Compliance:

Bin Dowal Islamic Microfinance Bank is committed to conducting its business in accordance with the principles of integrity, transparency and accountability, the requirements of Islamic Sharia, applicable Yemeni laws and regulations, instructions issued by the Central Bank of Yemen, and relevant international standards. Compliance is a shared responsibility at every level of the Bank and is fundamental to protecting customers, employees, shareholders and business partners, as well as safeguarding the Bank's reputation and the integrity of the financial system.

Subject to the nature of the activity and applicable legal requirements, the Bank's compliance and financial crime framework applies to its head office, all branches, offices and delivery channels, and to any subsidiaries or controlled entities. The Bank applies consistent standards while observing relevant local legal and regulatory requirements.

•Governance and Oversight:

The Board of Directors and Senior Management oversee the Bank's compliance framework and culture of professional conduct. An independent and specialized Compliance Department, with appropriate access to the Board and its committees under the Bank's governance arrangements, identifies and assesses compliance and financial crime risks, provides advice, monitors implementation, supports regulatory and management reporting, and promotes timely remediation.

The Bank periodically reviews its policies, procedures, systems, risk assessments and internal controls to reflect legislative and regulatory developments, new products, services and delivery channels, emerging technologies, and evolving financial crime risks.

•Anti-Money Laundering, Counter-Terrorist Financing and Financial Crime:

The Bank maintains a risk-based programme designed to prevent its products, services, accounts and channels from being used for money laundering, terrorist financing, proliferation financing, fraud, bribery, corruption, sanctions evasion or other unlawful activity. The programme is based on applicable Yemeni legislation, including Law No. 1 of 2010 concerning Anti-Money Laundering and Counter-Terrorist Financing, as amended, including by Law No. 17 of 2013; instructions of the Central Bank of Yemen; the Financial Action Task Force (FATF) Recommendations; and other relevant international standards.

•KYC and Due Diligence:

The Bank applies Know Your Customer (KYC), Customer Due Diligence (CDD) and Enhanced Due Diligence (EDD) measures proportionate to the nature and risk of each relationship. As applicable, these measures include:

• Verifying customers and authorized persons, and identifying and verifying beneficial owners and controlling persons using reliable sources.
• Understanding the purpose and expected nature of the relationship and assessing customer, product, channel and geographic risk.
• Obtaining and, where required by risk or regulation, verifying information on source of funds or source of wealth.
• Applying enhanced controls to Politically Exposed Persons (PEPs), their family members and close associates, including required management approvals and enhanced monitoring.
• Keeping customer information current and conducting ongoing due diligence and monitoring throughout the relationship.

•Transaction Monitoring, Sanctions and Reporting:

The Bank applies risk-based systems and controls to monitor transactions and screen relevant parties for unusual or potentially suspicious activity. Depending on the transaction, screening may cover customers, beneficial owners, controlling persons, counterparties, beneficiaries, payment data, vessels and other relevant parties against applicable domestic and international sanctions lists and restrictive measures.

Alerts are reviewed and investigated under approved procedures, and appropriate measures may be taken before, during or after a transaction according to the risk and applicable requirements. Where required by law or regulation, suspicious transactions or activities are reported confidentially to the Financial Intelligence Unit or other competent authorities, without tipping off the parties concerned.

•Prohibited Relationships and Correspondent Banking:

The Bank prohibits anonymous or fictitious accounts and relationships with shell banks. It takes reasonable measures to ensure that respondent or correspondent institutions with which it deals do not permit shell banks to use their accounts. Relationships with correspondent banks and other financial institutions are subject to risk-based due diligence, approval and ongoing monitoring.

The Bank does not offer payable-through accounts that allow customers or other third parties to access the Bank's correspondent accounts directly. The Bank does not knowingly process transactions that breach applicable laws, regulatory requirements or sanctions obligations.

•Training, Record Keeping and Independent Assurance:

The Bank provides periodic, risk-based training and awareness appropriate to employees' roles and responsibilities. Training covers AML/CFT and proliferation financing, KYC, CDD and EDD, beneficial ownership, PEPs, sanctions, transaction monitoring, suspicious activity reporting, fraud, bribery and corruption, professional conduct, and applicable FATCA requirements.

Customer, transaction, due diligence, investigation, reporting, training and compliance records are securely retained for the periods prescribed by applicable laws and regulatory instructions and not less than the applicable legal minimum five years. Information is handled in accordance with applicable banking secrecy, data protection and information security requirements.

The compliance and financial crime framework is subject to ongoing monitoring, periodic risk assessment and independent review by Internal Audit, and by the external auditor or another qualified independent party where required or appropriate. Identified findings are tracked to remediation within defined timeframes.

•FATCA Compliance:

Bin Dowal Islamic Microfinance Bank is registered under the United States Foreign Account Tax Compliance Act (FATCA) as a Single Participating Foreign Financial Institution (PFFI).

The Bank maintains procedures to identify customers and accounts subject to FATCA, obtain required tax self-certifications and supporting documents, and meet applicable documentation, classification, reporting, withholding and record-keeping obligations. Customers may be required to provide information on nationality, tax residence, U.S. tax status, taxpayer identification numbers, controlling persons, and any change in circumstances that may affect their FATCA classification.