Effective December 6, 2024.

1. Introduction and Purpose.

   1. The purpose of this Anti-Money Laundering Policy and Counter-Terrorism Financing Policy (“Policy”) is to ensure that the Professional Disc Golf Association® and its subsidiaries and affiliates (collectively "PDGA”), as well all PDGA personnel, comply with all applicable anti-money laundering laws and all laws countering the financing of terrorism (collectively “Anti-Money Laundering Laws”).

   2. All anti-money laundering laws and laws countering the financing of terrorism that are in effect in the countries and jurisdictions where PDGA conducts business and/or has operations are included in the scope and intent of this policy. The U.S. Bank Secrecy Act, the PATRIOT Act, and the EU Directive on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing of 2015, as amended by Directive (EU) 2018/843 of the European Parliament and of the Council of 30 May 2018 (AMLD V), are examples of these laws. Although the PDGA may not be strictly required by these laws to maintain an AML/CTF policy or to comply with Anti-Money Laundering Laws, the PDGA is dedicated to being a global good citizen by doing its part to prevent money laundering and criminal or terrorist financing through PDGA business activities.

   3. Through this Policy, PDGA intends to prohibit and actively prevent money laundering and any activity that facilitates money laundering or the funding of terrorist or criminal activities through PDGA accounts and business activities.

   4. This Policy is also intended to ensure all PDGA business activities carried out with third parties comply with Anti-Money Laundering best practices and, to the extent applicable to PDGA, Anti-Money Laundering Laws.

   5. PDGA has adopted a zero-tolerance standard with respect to conduct that violates Anti-Money Laundering Laws. As such, PDGA seeks to do business only with third parties who conduct legitimate activities and commit themselves to following these standards.

   6. This Policy sets out guidelines and mechanisms designed to ensure that appropriate PDGA personnel are well-informed and trained to be able to detect, mitigate, prevent and report acts and/or transactions which could involve potentially illegally obtained resources, as well as to promote compliance with the regulatory schemes of Anti-Money Laundering Laws and to avoid possible damages to the integrity, stability and reputation of PDGA.

2. Compliance Officers.

   1. The Director of Policy & Compliance, Senior Policy & Compliance Officer, and the Senior Accountant have been designated as the Compliance Officers for the purposes of this Policy.

   2. The Compliance Officers are responsible for:

      1. Supervising the implementation of the Policy.
      2. Monitoring for changes in applicable laws or cases.
      3. Staying abreast of common techniques or red flag behavior (see section IX) that may indicate the potential presence of violations of Anti-Money Laundering Laws.
      4. Ensuring that appropriate PDGA personnel are trained in a manner consistent with the goals of this Policy.
      5. Reporting to and advising the PDGA Executive Director whenever a matter of concern under this Policy arises.

3. Basic Definitions.

   For the purposes of this Policy, the following terms shall have the definitions set forth below:

   “AML/CTF” means anti-money laundering and counter-terrorism financing.

   “Cash Payment” means remittances of cash or cash equivalents to any PDGA bank account. As needed, the Compliance Officers may establish different definitions as required by Anti-Money Laundering Laws, which may add to or supersede this definition.

   “PDGA Personnel” means PDGA’s officers, directors, employees, contractors, and interns.

   “Third Party” or “Third Parties” means any person, entity or organization with whom PDGA does or may do business or from whom PDGA accepts payments or remuneration.

   “Ultimate Beneficiary” or “Ultimate Beneficiaries” means any entity or person that ultimately owns or controls a Third Party and/or the entity or person on whose behalf a transaction is made. This includes any entity or any person that has, directly or indirectly, 25% ownership or greater (except where a lower percentage is specified by Anti-Money Laundering Laws) in the Third Party, or exercises effective control over the Third Party.

4. Money Laundering and Financing of Terrorism, Defined.

   1. Money laundering means engaging in acts designed to make criminally derived proceeds falsely appear to have been derived from legitimate origins or constitute legitimate assets. Generally, money laundering occurs in three stages:

      1. Stage One – Cash first enters the financial system at the “placement” stage, where the cash generated from criminal activities is converted into monetary instruments, such as money orders or traveler's checks, or deposited into accounts at financial institutions.
      2. Stage Two – At the “layering” stage, the funds are transferred or moved into other accounts or other financial institutions to further separate the money from its criminal origin.
      3. Stage Three – At the “integration” stage, the funds are reintroduced into the economy and used to purchase legitimate assets or to fund other criminal activities or legitimate businesses.

   2. Financing of terrorism means an attempt to conceal an intent to use funds to finance terrorist activity.

      1. This may involve money laundering, it may involve legitimate sources of funds that are diverted or repurposed to finance terrorist activity, or both.
      2. The methods used in the financing of terrorism can be substantially similar to methods used in money laundering.
      3. Funding for terrorist attacks does not always require large sums of money, and the associated transactions may not be complex.

5. Due Diligence.

   1. The Compliance Officers conduct appropriate due diligence checks (“DD Checks”) on Third Parties by assessing potential AML/CTF risks.

   2. PDGA Personnel should be alert to suspicious behavior (“Red Flag”) when doing business with, conducting DD Checks on, and/or monitoring continued engagement with Third Parties.

   3. Section IX contains a list of common Red Flags. If one of these or any other Red Flag is spotted, the Compliance Officers must be notified.

   4. The Compliance Officers will then investigate and take any necessary action, consistent with this Policy and Anti-Money Laundering Laws.

      1. This investigation may entail a thorough review of the business relationship with the Third Party and any previous transactions with the Third Party to ensure that such transactions were consistent with this Policy.
      2. It may also involve a review of PDGA’s knowledge of the Third Party, its commercial activity and risk profile, and, when necessary, the source of its funds.

   5. When a Red Flag is spotted, the Compliance Officers may do one, some, or all of the following as part of their DD Checks:

      1. Verifying the Third Party's identity.
         
         1. For individuals, this can include requesting a copy of their passport or the national identity document containing their name, date of birth, physical address, tax identification number and valid government identification, consistent with local laws.
         2. For a legal entity, this can include requesting incorporation or related documents or certificates of good standing and/or existence from an appropriate governmental agency, as well as data regarding their legal representatives, owners or board members.
      2. Collecting from the Third Party a signed letter attesting to and confirming compliance.
      3. Identifying the Third Party’s Ultimate Beneficiaries and verifying the Ultimate Beneficiaries against official documentation.
      4. Confirming the Third Party’s legal status by checking official and/or authenticated documents (such as copies of business licenses, tax registrations, articles of incorporation or organization, bank references, credit agency reports, or any other equivalents deemed reasonable).
      5. Identifying the Third Party’s place(s) of operations and the identity and nationality of its shareholders, administrators, and directors, as well obtaining copies of its bylaws, articles of incorporation, or equivalent in each country in which it operates.
      6. Obtaining any other Third Party information which is collected as a part of ordinary business practice, such as financial statements, credit agency reports, bank references, bank account information and ownership and control structure.
      7. Screening the Third Party against relevant AML and sanctions lists. The OFAC SDN List, the U.S. State Department’s Terrorist Exclusion List, other relevant sanctions lists in the jurisdictions in which the Company operates, and commercially available AML lists are examples of relevant lists.
      8. Notifying the Third Party in writing of this Policy and the Third Party’s obligation to comply with Anti-Money Laundering Laws.

   6. Once the DD Check information has been collected, the Compliance Officers shall determine whether the transaction or commercial relationship should proceed based on the information provided.

6. Payments.

   1. PDGA shall undertake payment acceptance due diligence measures to reduce the risk of receiving monies involved in money laundering and terrorist financing activities.

      1. Third parties should be notified of PDGA’s acceptable forms of payment.
      2. PDGA may accept a wire transfer which does not specify any bank account owner only if it is legally permissible in the country where the transaction is taking place. PDGA should keep a record of the Third Party’s report of such wire transfer, including confirmation of the Third Party’s bank account details (i.e., bank name and account holder name).

   2. PDGA Personnel should review Cash Payments closely to look for any AML red flags outlined in section IX. Cash Payments should be legal and commercially reasonable in consideration of local business practices and with respect to the Third Party. The Cash Payment should be made in compliance with any notification and record keeping requirements of applicable local laws and regulations, and the Cash Payment should not be made in such a way that it appears intended to circumvent such requirements.

7. Reporting Requirements; Compliance and Non-Compliance.

   1. PDGA Personnel who become aware of any known or suspected violation of Anti-Money Laundering Laws or this Policy should immediately report the situation to the Compliance Officers.

   2. PDGA Personnel can also ask questions, raise concerns, or make reports of suspected compliance violations by contacting the Compliance Officers or the Executive Director.

   3. Reports should be rooted in concrete facts and should be as detailed as possible to enable the Compliance Officers to adequately assess the nature, extent, and urgency of the situation.

   4. PDGA will not permit retaliation of any kind against anyone who makes a report or complaint:

      1. in good faith; and
      2. predicated on a reasonable basis for believing that a violation of this Policy has occurred.

   5. Non-Compliance.

      1. Violations of Anti-Money Laundering Laws or this Policy may result in legal consequences, such as criminal prosecution, civil liability, or other penalties.
      2. Additionally, violations may cause harm to PDGA’s reputation.
      3. Accordingly, PDGA Personnel must not facilitate or participate in any money laundering or terrorist financing activity or otherwise violate Anti-Money Laundering Laws or this Policy.
      4. If PDGA Personnel commit such a violation, they do so in their individual capacity and not in furtherance of their duties as an employee. In case of such a violation:
         
         1. PDGA will not pay any fine imposed on any PDGA Personnel; and
         2. PDGA will not indemnify or reimburse any PDGA for any attorney’s fees or other costs incurred by the violation; and
         3. PDGA may take disciplinary action, up to and including termination of employment, or such other remedial or disciplinary action as shall be appropriate under the circumstances and in accordance with applicable law.
      5. PDGA will fully support any PDGA Personnel who decline to engage in conduct that would place PDGA’s ethical principles and reputation at risk.

8. Amendments.

   Any changes or amendments to this Policy must be approved by the Compliance Officers and the Executive Director.

9. Non-Exhaustive List of AML Red Flags.

   1. The Third Party shows unwillingness to provide identification documents, or any other data requested during the DD Check, or such information is incomplete, wrong or misleading.

   2. The Third Party uses a false address.

   3. The Third Party displays expired identification.

   4. The Third Party provides inconsistent information.

   5. The Third Party has complex shareholding structures which are not reasonably justified.

   6. The Third Party’s operations drastically change over time in volume or amount.

   7. The Third Party shows unusual concerns related to the disclosure of requested data, particularly regarding its identity and type of business.

   8. The Third Party unreasonably questions the requirements of documentation and handling of information.

   9. The Third Party’s financial information reflects asset concentration in subsidiaries or affiliates where there is an absence of audited financial statements.

   10. The Third Party refuses to provide information regarding its subsidiaries and affiliates, if and when requested.

   11. The Third Party has multiple accounts under the same name for no apparent purpose.

   12. The Third Party, including any of its subsidiaries or affiliates or any associated individual, has a negative background, such as criminal records, civil penalties of any kind, or investigations regarding tax fraud, money laundering activities, or organized crime.

   13. The Third Party, or one of its owners or board members, is on OFAC’s List of Specially Designated Nations and Blocked Persons.

   14. The Third Party, or one of its owners or board members, is on the U.S. State Department’s Terrorist Exclusion List.

   15. The Third Party, or one of its owners or board members, is on a list analogous to those in IX.M and IX.N.

   16. The Third Party refuses to or is unable to identify a legitimate source of its funds.

   17. The Third Party transacts with important public figures, such as public officials or other politically exposed persons.

   18. The Third Party attempts to send or receive a payment in cash or cash equivalents which are not commercially reasonable when considering local business practices.

   19. The Third Party makes payments through the accounts of different individuals or entities rather than through its own accounts.

   20. The Third Party’s payments are conducted through a credit institution of different nationality than that of the Third Party.

   21. The Third Party frequently engages in transactions where payments equal the maximum amount allowed for withdrawals at financial institutions.

   22. The Third Party seeks to bribe, threaten or persuade PDGA Personnel to avoid any obligation related to this Policy or Anti-Money Laundering Laws.

   23. There are deposits in foreign currency made by multiple individuals for the same transaction.

   24. The Third Party requests unjustifiably high or low prices for products or services which are not within market standards.

   25. The Third Party requests or ensures that goods are transported through more than one jurisdiction for no apparent reason.

   26. The Third Party frequently changes its payment instructions.

   27. The Third Party requests or proposes excessive modifications to letters of credit or similar documents.

   28. The Third Party provides false invoices or invoices with miscellaneous charges that have not been previously approved by PDGA.

   29. The Third Party makes an unusually large amount of overpayment or requests a refund to be sent to an unknown Third Party because of a cancelled purchase order.

   30. The Third Party’s representative seems not to know basic facts about the Third Party’s business, which raises suspicion as to whether they are employed by the Third Party.

   31. The Third Party requests that PDGA issue an invoice which does not accurately reflect an invoiced price or other material terms of the transaction.

   32. The Third Party structures a transaction to circumvent the notification requirements of authorities or governments, for example, by paying one invoice with numerous money orders or cashiers’ checks in amounts under the notification requirements.

   33. The Third Party has a broker, attorney, or other agent to facilitate the transaction, which is unusual for the type of business, and the Company has no proper information or documentation regarding such agent or such agent’s authority.