Compliance

KYC & Counterparty Policy

Fontana Trading Europe, Sociedade Unipessoal Lda. and its subsidiaries operate a Know Your Counterparty ("KYC") programme designed to prevent money laundering, terrorist financing, sanctions violations, tax evasion, trade-based fraud and reputational damage. This policy sets out the checks we run, the documentation we require, and the escalation path when a match or concern is found.

It draws on the EU Anti-Money Laundering framework (Directive (EU) 2015/849 as amended, currently transitioning to Regulation (EU) 2024/1624 and Directive (EU) 2024/1640), the Portuguese Lei nº 83/2017, the UK Money Laundering Regulations 2017 and the recommendations of the Financial Action Task Force (FATF).

1. Scope

Every party that Fontana buys from, sells to, invoices, pays, receives from, or acts as broker or agent with must be onboarded through this procedure. That includes:

• Producers, cooperatives and origination counterparties in Brazil.
• Buyers, importers, traders, brokers and commissionaires abroad.
• Banks and trade finance providers.
• Freight forwarders, shipping lines, port terminal operators.
• Cargo and credit insurers, surveyors, laboratories, inspection agencies.
• Consultants, agents and introducers.

No cargo is loaded, no invoice is raised and no payment leaves the group until the counterparty has been onboarded and cleared.

2. Risk classification

Every counterparty is scored on a three-tier risk model at onboarding. Score drives the depth of due diligence and the frequency of re-screening.

Tier	Triggers	Due diligence	Re-screening
Low	Public company or subsidiary of one, headquartered in an FATF-compliant jurisdiction, transparent ownership, no sanctions or adverse media hits	Simplified: incorporation, officers, bank ref, sanctions screen	Annual, or on material change
Medium	Private company with clear ownership; jurisdiction not on FATF grey/black list; contract value below US$5m per cargo	Standard: full onboarding pack (§3) plus beneficial ownership statement	Every 12 months, or on ownership change
High	Any of: PEP involvement, opaque ownership, FATF grey/black jurisdiction, cash-intensive counterparty, first trade over US$10m, complex payment routing, prior sanctions or corruption findings against related parties	Enhanced due diligence (§4). Head of Compliance and CEO must both sign off	Every 6 months plus event-driven

3. Standard onboarding pack

Every counterparty submits, in English or Portuguese:

• Certificate of incorporation and current commercial registry extract (issued within 3 months).
• Articles of association or equivalent.
• List of directors and officers, with copies of ID for each authorised signatory.
• Beneficial ownership statement identifying all natural persons who own or control 25% or more, directly or indirectly.
• Proof of registered office (utility bill, lease, or bank confirmation within 3 months).
• Bank reference letter naming the settlement account.
• Two trade references from established grain-industry counterparties.
• Signed declaration of no adverse findings (sanctions, corruption, tax fraud, forced labour) in the past 5 years.

Fontana then runs sanctions screening (see the Sanctions Policy), adverse media screening across at least four independent sources, and, for medium and high tier, PEP screening.

4. Enhanced due diligence (High tier)

In addition to §3:

• Ultimate beneficial owner threshold reduced to 10% (or 5% for high-risk jurisdictions).
• Source of funds and source of wealth documentation for beneficial owners.
• Corporate structure chart, verified against public registries.
• On-site or video-call visit with the counterparty, documented with photographs of the physical premises.
• Independent legal opinion where the corporate structure spans more than two jurisdictions.
• For Brazilian producers: check against the Cadastro Ambiental Rural (CAR), the IBAMA embargoes list and the Ministério do Trabalho "lista suja de trabalho escravo" (see Modern Slavery Statement).
• Head of Compliance and CEO joint sign-off before onboarding is complete.

5. Ongoing monitoring

Onboarding is not a one-off event. During the life of the relationship we monitor:

• Sanctions and PEP lists — quarterly bulk re-screening plus real-time daily delta checks.
• Adverse media — automated alerts for the counterparty name and beneficial owners.
• Transaction patterns — deviations from expected origin, destination, volume, payment route or timing trigger a review.
• Ownership changes — the counterparty is contractually obliged to notify Fontana within 15 days of any change of control or beneficial ownership above the disclosure threshold.
• Payment routing — third-party payments (paying to an account not in the counterparty's name) require Head of Compliance approval and additional documentation of the underlying commercial reason.

6. Escalation and decline

Any of the following triggers immediate escalation to the Head of Compliance:

• Any positive sanctions match, including partial name matches pending clearance.
• Adverse media relating to corruption, fraud, forced labour, environmental crime or terrorism financing.
• Refusal or delay by the counterparty in providing documentation.
• Documentation that appears altered, inconsistent or non-verifiable.
• Beneficial owner or authorised signatory identified as a PEP.
• Request to route payment or delivery through a jurisdiction inconsistent with the commercial rationale.

The Head of Compliance is authorised to freeze the onboarding process, suspend a live contract, or terminate a counterparty relationship without commercial escalation. Decline decisions are recorded with reasons and retained for 5 years.

7. Records and audit

KYC records are retained for 7 years after the counterparty relationship ends, or longer where required by tax or regulatory law. Records are available for inspection by external auditors, regulators, correspondent banks and buyers conducting supply-chain due diligence, subject to confidentiality undertakings.

8. Governance

The Head of Compliance owns this policy and reports to the CEO. Material changes require CEO sign-off. All staff who onboard, negotiate with, invoice or pay counterparties complete KYC training on joining and annually thereafter, evidenced by a signed attestation.