Article 1 – Liability Principle
(1) AF Power Group s.r.o., Id. No. 028 94 254, with its registered office at Ostrovní 126/30, Nové Město, 110 00 Prague 1, entered in the Commercial Register administered by the Municipal Court in Prague under the file no. C 257611, is principally not a liable entity under the provisions of Act no. 253/2008 Coll., on Selected Measures against Legitimization of Proceeds of Criminal Activity and Financing of Terrorism, as amended (hereinafter only the “AML Law”). However, in certain situations during the performance of its business, the company may fulfil the definition of an “obliged entity” under the AML Law. In such case, it shall have to comply with the obligations stipulated by the AML Law (e.g. the obligations to identify the customer, perform a customer due diligence, maintain data, report suspicious transactions, create a system of internal guidelines, perform staff training as required by the AML Law etc.). At the same time, AF Power Group s.r.o. recognizes the risk of its criminal liability for the offences of money laundering pursuant to Section 216 of Act no. 40/2009 Coll., Criminal Code, as amended (hereinafter only the “Criminal Code”) and money laundering out of negligence pursuant to Section 217 of the Criminal Code – comp. Section 7 of Act no. 418/2011 Coll., on Criminal Liability of Legal Entities and Proceedings against Them, as amended (hereinafter only the “Criminal Liability of Legal Entities Law”). Given the wide scope of the constituent elements of these criminal offences, even participation in the legitimization of the proceeds of such crimes, which can be committed even in the form of unconscious negligence (i.e. the offender was unaware that his conduct may cause violation or threat to interests protected by law although he could and should have been aware thereof considering the circumstances of the case and his personal circumstances – comp. Section 16 para 1 letter b) of the Criminal Code), may be penalized.
(2) In the interests of avoiding possible criminal prosecution, legislative changes must be monitored in general, or, as the case may be, through regular enquiries with an authorized person regarding amendments to relevant legal regulations. The Czech criminal law honors the principle ignoratia legis non excusat, ignorance of the law excuses not. Natural as well as legal entities entering into legal relationships must therefore ensure their own continuous awareness and “legal literacy”.

Article 2 – Obligation to Observe Limit for Cash Payments
(1) Act no. 254/2004 Coll., on Restriction of Cash Payments and on Amendment of Act no.
337/1992 Coll., on Administration of Taxes and Fees, as amended, was amended by Act no. 261/2014 Coll. As of January 1, 2015, the upper limit for cash payments is set at CZK 270,000 (formerly, the limit was CZK 350,000). This limit applies both to payments received and payments made (see Section 4 of the Act on Restriction of Cash Payments). Breaching either of these two obligations constitutes an administrative offence for which a natural person can be fined up to the amount of CZK 500,000, and a legal entity or natural person-entrepreneur up to the amount of CZK 5,000,000 (Section 5 of the Act on Restriction of Cash Payments).
(2) Breaching the obligation to observe this cash payment limit is often connected with money laundering. This fact gives rise to the risk of an unwanted attention of prosecution authorities if such breach be proved. It is necessary to note that even if criminal proceedings against the persons involved are not initiated, the cost of legal services in connection with the performance of police duties prior to the initiation of criminal prosecution, as well as the time- and logistics-related complications in connection therewith, may be significant even if the persons involved are not charged in the end.
(3) As changes may occur in this area, in particular with regard to the amount of the cash payments limit, it is necessary that these matters be monitored and the persons carrying out individual payments in AF Power Group s.r.o. informed of any amendments to the relevant legal regulations and the related legal obligations by an authorized person qualified in this field on a regular basis.

Article 3 – “Know Your Business Partner” Rule
(1) The company should always conduct business with authorized and responsible representatives of its business partners and take into consideration also the entities that effectively control these business partners (“beneficial owners”), provided that it has information on the existence of such a relationship.
(2) Pursuant to Section 4 para. 4 of the AML Law, a beneficial owner shall mean a natural person on behalf of whom a transaction is carried out, or a beneficial owner pursuant to Act no. 37/2021 Coll., on Beneficial Owners Register, as amended (hereinafter only the “Beneficial Owners Register Act”). However, a natural person who is a direct participant or shareholder in a specific company does not always have to be its beneficial owner. Oftentimes, such beneficial owner will be a person without a direct equity participation in the given company who exercises his decisive influence on such company indirectly (through a related equity participation or control of such company through other persons) or who exercises decisive influence on such company based on his position (e.g. a corporation’s top manager if no other beneficial owner can be identified).
(3) The Beneficial Owners Registration Act stipulates strict conditions for the keeping of the register of beneficial owners, as well as serious consequences if any discrepancy is found in the register (prohibition on the payment of profit shares, prohibition of voting on decisions of the supreme body etc.).
(4) The liability for due management of a business company always rests with such company’s statutory body which by law must be entered in the Commercial Register for every company.
(5) We therefore recommend carrying out a thorough analysis of the data on new business partners available from all public registers, i.e. in particular, but not limited to, the Commercial Register and the Beneficial Owners Register, and assessing whether and how to enter into business relationships with the given business partners on the basis of such an analysis.

Article 4 – “Know Your Customer” Rule
(1) AF Power Group s.r.o. must also obtain information on its clients (customers) with whom it carries out payment transactions.
(2) Requiring a personal ID or another card uniquely identifying the given person, and keeping a register of customers, including their personal data, represents a minimum standard in this regard. As for customers who are legal entities, such customers should be subject to the same check as business partners (see Art. 3 para. 5 hereinabove).

Article 5 – Transparent Recording of Payments Received and Made
(1) AF Power Group s.r.o. must keep due records regarding any and all effected payments in accordance with applicable book-keeping standards. Such obligation applies both to payments made (expenditures) and payments received (revenues). The purpose of each payment, as well as the legal title on the basis of which such payment was made, must be clear from the records as well.
(2) Tax documents must contain all the essential elements required by tax laws.

Article 6 – Avoiding Participation in Suspicious Transactions
(1) AF Power Group s.r.o. and its employees must avoid participation in what is called “suspicious transactions”. Transactions carried out, or to be carried out, under circumstances that arouse suspicion they might conceal money laundering or another criminal activity of an economic nature are generally considered “suspicious”.
(2) Suspicious transactions include, in particular, transactions that have no economic reason, transactions the nature of which clearly does not correspond to the business partner’s scope of business, transactions that violate an explicit legal provision, and transactions inadequate to the given business partner’s financial circumstances.
(3) The rule of avoiding participation in suspicious transactions is closely connected with the “Know Your Business Partner” rule: both aim especially at preventing the conclusion of contracts without sufficient information regarding the other party.

Article 7 – Prudent Asset Management
(1) Applying prudence in the management of assets represents one of the key activities helping to prevent the risk that AF Power Group s.r.o. could operate with assets proceeding from criminal activity. To fulfil this principle of prudence, keeping due records of the assets used by the company, as well as those in the ownership of the company, is required. AF Power Group s.r.o. and its employees must avoid the accepting or handling of any items with regard to which a suspicion exists they might proceed from criminal activity.
(2) The necessity of prudence in asset management stems from the fact that a legal entity may not only be liable for money laundering crimes pursuant to Sections 216 and 217 of the Criminal Code, but also for the criminal offences of participation and negligent participation pursuant to Sections 214 and 215 respectively of the Criminal Code.