1. PREAMBLE
1.1 The purpose of this AML/CFT Policy (“AML Policy”) is to set out the governance and oversight framework for anti-money laundering and combating of terrorism in relation to the operations of the Trust.
1.2 This is the AML Policy of the Investment Manager to be complied with and implemented by the Investment Manager, on its own behalf, and on behalf of the Trust, only in relation to the performance of its duties in respect of the Trust. For the avoidance of doubt, it is hereby clarified that this AML Policy shall not be applicable in relation to the Other Business of the Investment Manager.
2. DEFINITIONS
2.1 “Designated Categories of Offences” means the following categories of offences as defined by the third FATF Recommendation and its interpretative note: participation in an organised criminal group and racketeering; terrorism, including financing of terrorism; trafficking in human beings and migrant smuggling; sexual exploitation, including sexual exploitation of children; illicit trafficking in narcotic drugs and psychotropic substances; illicit arms trafficking; illicit trafficking in stolen and other goods; corruption and bribery; fraud; counterfeiting currency; counterfeiting and piracy of products; environmental crime; murder, grievous bodily injury; kidnapping, illegal restraint and hostage-taking; robbery or theft; smuggling (including in relation to customs and excise duties and taxes); tax crimes (related to direct taxes and indirect taxes and excludes (i) any delay in tax filings or (ii) inadvertent errors in tax filings or (iii) any demand notices challenging computation of tax unless determined as a tax crime by a court of competent jurisdiction); extortion; forgery; piracy; insider trading and market manipulation.
2.2 “FATF Recommendations” means such recommendations as defined from time to time by the Financial Action Task Force (being an inter-governmental body whose purpose is the development and promotion of national and international policies to combat money laundering and the financing of terrorism).
2.3 “Financial Sanctions Lists” means the list of persons, groups or entities which are subject to United Nations or European Union financial sanctions, available at http://www.un.org/sc/committees/index.shtml and http://eeas.europa.eu/cfsp/sanctions/consol-list_en.htm, respectively.
2.4 “Investment Manager” means Indian Technocrat Limited, a company incorporated under the laws of India, having corporate identity number U74140DL1980PLC010753 and having its registered office at OSE Commercial Block, Hotel Aloft, Asset 5B, Aerocity, Hospitality District, IGI Airport, New Delhi – 110037, India or any other entity that may be appointed (from time to time) as the investment manager of the Trust in accordance with the InvIT Documents.
2.5 “MBFS Unitholders” means multilateral or bilateral development financial institutions or foreign government agencies or sovereign or sovereign related investors, if such entities, directly or indirectly, subscribe to and hold Units of the Trust issued pursuant to (i) the Initial Offer; or (ii) any subsequent primary issuance of Units as per Applicable Law, provided that, at the time of such subsequent primary issuance, the relevant entity continues to hold Unit(s) of the Trust issued to such entity pursuant to the Initial Offer.
3. INTERPRETATIONS
3.1 All terms defined herein shall have the meaning ascribed to such terms under this AML Policy, and shall not have the meaning ascribed to such terms under other InvIT Documents.
3.2 All terms used but not defined herein shall have the meaning ascribed to such terms under the Trust Deed and other InvIT Documents, as applicable.
3.3 References in this AML Policy to a specific gender shall be equally applicable to any gender.
3.4 Any path or the link in relation to this AML Policy, may itself may undergo change from time to time, however, the relevant party shall be required to comply with such requirement on a continuous basis.
4. COVENANTS
4.1 The Investment Manager shall ensure compliance with the requirements that are stated under the AML Policy in relation to the activities undertaken by the Investment Manager with respect to the Trust. The Investment Manager, will institute, document, maintain and comply with policies, procedures, systems and controls, consistent with their respective business and investment profiles (collectively, the “Integrity and Compliance System”), to identify and manage integrity and anti-corruption compliance risks in relation to the activities undertaken by the Investment Manager with respect to the Trust, including, without limitation, the following elements:
4.1.1 anti-money laundering and combating the financing of terrorism (“AML/CFT”) systems that are in compliance with applicable national laws and regulations and consistent with international best practices, which are similar to the FATF Recommendations; and
4.1.2 an integrity due diligence process with respect to the Trust and its investments, consistent with these Integrity and Compliance provisions. This will include systems ensuring that the Trust and/or the Project Entities will not enter into any transaction (i) with, or for the benefit of, any of the persons or entities sanctioned by, or (ii) related to any activity from time to time prohibited by, the United Nations Security Council pursuant to any resolution issued under Chapter VII of the United Nations Charter.
4.2 The Investment Manager, on behalf of the Trust, shall ensure that the Trust does not make any commitment to invest in, or extend loans and guarantees to an entity, to the extent that such investments may create, in the opinion of the Trust, any reputational issues. Any proposed investment by the Trust in a Project Entity shall not be deemed to create any reputational issues if such investment is approved by all MBFS Unitholders.
4.3 The Investment Manager, on behalf of the Trust, shall ensure that the Trust does not engage in, and shall ensure that the Project Entities do not engage in, speculative investment activities such as real estate, commodities, commodity contracts and forward currency contracts, except for: (i) currency contracts entered into in connection with investments in Project Entities, or (ii) commercial contracts entered into by the Trust or the Project Entities in their ordinary course of business.
4.4 The Investment Manager, on behalf of the Trust, shall ensure that the Trust shall not make any investment in, or extend loans and guarantees to, an entity or (directly or indirectly in) a project in any country or jurisdiction that is not a member of any of the MBFS Unitholders.
4.5 The Investment Manager, on behalf of the Trust, shall ensure that the Trust shall, and shall ensure that the Project Entities shall, conduct their respective business activities undertaken with respect to the Trust in compliance with applicable anti-corruption and anti-money laundering laws and laws to combat the financing of terrorism and maintain policies and procedures designed to promote and achieve compliance with such laws. The Investment Manager, on behalf of the Trust, shall ensure that the Trust shall, and shall ensure that the Project Entities shall, not make investments, or extend loans and guarantees, which are used for any purpose that would breach any applicable anti-corruption or anti-money laundering law or applicable law to combat the financing of terrorism in any relevant jurisdiction.
4.6 The Investment Manager, on behalf of the Trust, shall ensure that the Trust shall, and shall ensure that the Project Entities, in relation to their activities carried out with respect to the Trust, shall not enter into any transaction or engage in any activity prohibited by any resolution of the United Nations Security Council under Chapter VII of the United Nations Charter.
4.7 The Investment Manager shall not permit the Trust to issue units, invest in, or extend loans and guarantees to, and must use all reasonable efforts to exit any investments in any entity that (A) is sanctioned by the United Nations Security Council pursuant to any resolution issued under Chapter VII of the United Nations Charter; or (B) is debarred by the World Bank Group (see the World Bank Listing of Ineligible Firms and Individuals at www.worldbank.org/debarr or any successor website or location).
4.8 The Investment Manager, on behalf of the Trust, shall not transfer any of its interests in the Project Entities, and the Parties to the Trust shall not permit any transfer, to any person or entities: (A) sanctioned by the United Nations Security Council pursuant to any resolution issued under Chapter VII of the United Nations Charter; or (B) debarred by the World Bank Group (see the World Bank Listing of Ineligible Firms and Individuals at www.worldbank.org/debarr or any successor website or location).
4.9 The Investment Manager, on behalf of the Trust, in relation to the activities carries out in relation to the Trust, undertakes not to enter into business relationships with persons or entities which appear on any of the Financial Sanctions Lists (including, in particular, the financing of terrorism).
4.10 The Investment Manager, on behalf of the Trust, undertakes, that the funds invested by the Trust other than the funds, as may be received from the MBFS Unitholders, will never (i) be of illicit origin with respect to, but not limited to the FATF Recommendations or the laws of India, or (ii) result from activities such as fraud against the financial interests of the European Union, Corrupt Practice, or other Designated Categories of Offences.
4.11 The Investment Manager, on behalf of the Trust, shall supply to the lenders to the Trust (until such lender is the International Finance Corporation), promptly upon becoming aware of them and pursuant to applicable stock market regulations, the details of any information regarding the illicit origin of its equity or the funds invested in, or the loans and guarantees extended to, the Trust or its Affiliates with respect to, without limitation, (i) the FATF Recommendations, (ii) the laws of India, or (iii) resulting from activities such as fraud against the financial interests of the European Union, a Corrupt Practice or other Designated Categories of Offences.
4.12 The Investment Manager covenants that it shall promptly notify the MBFS Unitholders and the lenders to the Trust (until such lender is the International Finance Corporation), if it becomes aware of:
4.12.1 Any violation of, or any failure to comply with the Integrity and Compliance provisions (including any requirements established by the Integrity and Anti-Corruption Compliance System), by the Project Manager, the MM Manager, or any Project Entity; or
4.12.2 Any identified integrity issue relating to (i) a party-appointed or to be appointed as per the Major Maintenance Agreement; or (ii) a party-appointed or to be appointed as per the Project Management Agreement; or (iii) a potential party to the Trust or the Project Entities or investment by the Project Entity.
4.13 The Investment Manager, on behalf of the Trust, shall not otherwise allow any person or entity described in the clauses above to invest in, and shall not extend loans and guarantees to, such persons or entities.
4.14 The Investment Manager, on behalf of the Trust, shall promptly notify the MBFS Unitholders and the lenders to the Trust (until such lender is the International Finance Corporation) if it becomes aware of any violation of, or any failure to comply with these Integrity and Compliance provisions (including any requirements established by the Integrity and Anti-Corruption Compliance System), or any identified integrity issue relating to a potential party to the Trust or Project Entities or investment.
4.15 It is hereby agreed that should any of the MBFS Unitholders or the lenders to the Trust (until such lender is the International Finance Corporation) notify the Investment Manager, acting for, and on behalf of the Trust, of its concern that there has been a violation of the Trust’s Integrity and Compliance System, including AML/CFT requirements, or any other Mandatory Policy in relation to the foregoing, the Investment Manager, acting for, and on behalf of the Trust, shall cooperate in good faith with the MBFS Unitholders, the lenders to the Trust (until such lender is the International Finance Corporation) and their representatives (as required) in determining whether such a violation has occurred, and shall respond promptly and in reasonable detail to any notice from the MBFS Unitholders, the lenders to the Trust (until such lender is the International Finance Corporation) or their representatives, and shall furnish documentary support for such response upon such request.
4.16 The Investment Manager, on behalf of the Trust, in relation to its activities carried out with respect to the Trust, undertakes that the Trust has not made and shall not make purchases or supply any equipment, material or service or to performs any activity in any sector subject to embargo by the United Nations or the European Union.
5. MISCELLANEOUS
5.1 The Investment Manager shall ensure that all its directors, officers, employees or agents (the “Representatives”) agree to comply with this AML Policy under their respective terms of employment or contract/engagement with the Investment Manager or as per the instructions or authorizations of the Investment Manager, in accordance with the provisions of this AML Policy.
5.2 The Investment Manager shall, if required, set up procedures to implement this AML Policy. The Investment Manager shall, as may be necessary and as it may deem appropriate, also develop and disseminate tools or conduct training for Representatives to facilitate the implementation of this AML Policy.
5.3 The Representatives shall promptly notify the Investment Manager of their concern that there has been a violation of this AML Policy, and shall provide reasonable details, as may be requested by the Investment Manager, the MBFS Unitholders or the lenders to the Trust (until such lender is the International Finance Corporation), in relation to such violation.
5.4 Any costs arising in relation to the Policies, including but not limited to costs in relation to any consultants, advisors, and specialists appointed in accordance with the EHSS Policy and other Mandatory Policies will be not be deducted from the Management Fee of the Investment Manager. Such external costs shall be separately borne by the Trust and shall be paid within 15 (fifteen) days of presentation of a bill. For the avoidance of any doubt, it is hereby clarified that the appointment of the members of the KMT and other employees of the Investment Manager, except costs in relation to any consultants, advisors and specialists appointed pursuant to the EHSS Policy and other Mandatory Policies as set in the Investment Management Agreement shall be borne by the Investment Manager.
5.5 In the event all MBFS Unitholders cease to be Unitholders of the Trust, the Investment Manager shall ascertain and make recommendations regarding all matters in respect of amendment, discontinuance, termination of all Mandatory Policies and the Trustee or the Investment Manager (as may be applicable) shall ensure that such matters are passed by way of a Simple Majority, in accordance with the Trust Deed.