Know Your Customer and Know Your Business Policies

Overview

These Know Your Customer (KYC) and Know Your Business (KYB) Policies outline the procedures for engaging with Nomad Stays LLC and other websites owned or operated by Nomad Stays LLC.

This policy is effective as of 30 January 2020.

Last updated: 13 December 2024

Know Your Customer (KYC) and Know Your Business (KYB) Policy

1. Purpose and Scope

This Know Your Customer (KYC) and Know Your Business (KYB) Policy establishes the framework for compliance with applicable regulations in the European Union (EU), the United States (US), and Australia. The policy aims to prevent the use of Nomad Stays services for illicit activities, including money laundering (ML) and terrorist financing (TF). This policy applies to all employees, contractors, and stakeholders.

2. Policy Statement

Nomad Stays is committed to implementing robust KYC and KYB measures to ensure compliance with:

  • EU: EU Anti-Money Laundering Directives (AMLD), particularly the Sixth AML Directive (6AMLD).
  • US: The Bank Secrecy Act (BSA), the USA PATRIOT Act, and FinCEN guidelines.
  • Australia: The Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act) and AUSTRAC regulations.

3. Definitions

  • KYC (Know Your Customer): Procedures to verify the identity of customers and assess the risks associated with each customer relationship.
  • KYB (Know Your Business): Procedures to verify the identity and legitimacy of businesses and assess their risk profile.

4. Responsibilities

  • Compliance Officer (CO): Oversees the implementation of KYC/KYB procedures and ensures adherence to legal requirements.
  • Employees: Responsible for conducting due diligence and reporting discrepancies or red flags to the Compliance Officer.

5. Customer Identification Program (CIP)

Nomad Stays will verify the identity of customers and businesses using reliable and independent sources. Identification requirements include:

  • For Individual Customers (KYC):
    • Full name.
    • Date of birth.
    • Place of birth.
    • Residential address.
    • Land Registration numbers.
    • VAT/GST and Income Tax Registration numbers.
    • Government-issued identification (passport, driver’s license, or national ID card).
  • For Businesses (KYB):
    • Legal entity name.
    • Registration number and date of incorporation.
    • Business address.
    • Business Registration numbers.
    • Land Registration numbers.
    • VAT/GST and Income Tax Registration numbers.
    • Identification of directors, shareholders, and ultimate beneficial owners (UBOs) owning 25% or more of the business.
    • Verification of business activities through documentation such as business licenses, corporate governance documents, or tax identification numbers.

6. Risk-Based Approach (RBA)

Nomad Stays employs a Risk-Based Approach to categorize customers and businesses based on their risk profile. Measures include:

  • Assigning risk levels (low, medium, high).
  • Conducting Enhanced Due Diligence (EDD) for high-risk customers and businesses, such as politically exposed persons (PEPs) and entities operating in high-risk jurisdictions.

7. Ongoing Monitoring

KYC/KYB processes do not end after onboarding. Continuous monitoring will include:

  • Regular reviews of customer and business information.
  • Transaction monitoring to detect unusual or suspicious activity.
  • Updating records if significant changes in customer or business profiles occur.

8. Enhanced Due Diligence (EDD)

EDD is required for high-risk entities and transactions. EDD measures include:

  • Obtaining additional information on the source of funds and wealth.
  • Verifying relationships with third parties.
  • Conducting more frequent and detailed reviews.

9. Record-Keeping

Records will be retained for at least:

  • EU: 5 years from the end of the relationship or the transaction date.
  • US: 5 years, as per the BSA.
  • Australia: 7 years, as required by AUSTRAC.

Records include:

  • Customer and business identification documents.
  • Risk assessments and monitoring logs.
  • Reports of suspicious activity and compliance actions.

10. Training and Awareness

Employees will receive regular training on:

  • Identifying and verifying customers and businesses.
  • Recognizing red flags and suspicious activities.
  • Understanding compliance obligations and the consequences of non-compliance.

11. Data Protection and Privacy

Nomad Stays will ensure customer and business data is handled in compliance with applicable data protection regulations, such as GDPR (EU), CCPA (US), and the Privacy Act 1988 (Australia).

12. Reporting and Escalation

Suspicious activities or discrepancies identified during KYC/KYB processes must be reported promptly to the Compliance Officer.

The Compliance Officer will report suspicious transactions to the relevant authority, such as FinCEN (US), AUSTRAC (Australia), or the local FIU in the EU.

13. Independent Audit

Regular independent audits of KYC/KYB procedures will be conducted to ensure effectiveness and compliance with legal standards.

14. Sanctions Screening

Customers and businesses will be screened against sanctions lists, including:

  • The United Nations.
  • The Office of Foreign Assets Control (OFAC).
  • The EU Consolidated Sanctions List.
  • The Australian Department of Foreign Affairs and Trade (DFAT).

15. Policy Review

This policy will be reviewed at least annually or upon significant regulatory changes to ensure ongoing compliance.

16. Approval

This updated policy is approved by the Board of Directors and is effective as of 13 December 2024.