KYC/KYB
Policy

1. Purpose

This policy sets out SCR’s commitment to adhere to international and national regulations regarding Know Your Customer (KYC) and Know Your Business (KYB).

The objectives are to:

• Verify the identity of all individuals and organizations engaging with SCR.

• Prevent money laundering, terrorist financing, bribery, corruption, and sanctions evasion.

• Promote transparency, accountability, and integrity across the voluntary carbon market.

2. Scope

This policy applies to:

• Individuals: project developers, methodology authors, directors, and Ultimate Beneficial Owners (UBOs).

• Entities: project proponents, validation/verification bodies (VVBs), NGOs, methodology developers, and buyers.

• SCR personnel and operations: all staff involved in onboarding, compliance, and risk management.

3. Policy Principles

1. Risk-Based Approach (RBA):

o Due diligence measures are applied proportionate to risk.

o Low- and medium-risk applicants are subject to periodic reviews.

o High-risk applicants are subject to enhanced due diligence (EDD) and ongoing monitoring.

2. Legal & Regulatory Compliance:

o SCR aligns with AML/CFT regulations, FATF guidelines, and applicable sanctions regimes (UN, OFAC, EU, UK, Canada).

3. Transparency of Ownership:

o Beneficial ownership and control structures must be fully disclosed and verifiable.

4. Confidentiality & Data Protection:

o All information collected will be safeguarded under applicable data protection laws (e.g., GDPR, PIPEDA)

4. KYC Requirements (Individuals)

Individuals must provide:

• Valid government-issued photo identification (passport, national ID, driver’s license).

• Proof of address (utility bill, bank statement, or government-issued correspondence).

• Self-declaration of status as a Politically Exposed Person (PEP).

5. KYB Requirements (Entities)

Entities must provide:

• Certificate of Incorporation or Business Registration.

• Governing documents (Articles of Association, Bylaws).

• Register of Directors and UBOs.

• Ownership and shareholding declaration (UBOs ≥25% disclosed).

• Tax Identification Number or equivalent.

• Accreditation Certificates (for VVBs).

• References or track record (for methodology developers).

6. Verification Procedures

• Documents will be reviewed for authenticity and cross-checked with official records.

• UBOs will be screened against sanctions lists and PEP databases.

• High-risk applicants may be subject to:

o Source of funds and source of wealth checks.

o Adverse media screening.

o Independent validation of company records.

7. Ongoing Monitoring

• Low/Medium-Risk Entities: Reviewed periodically (every 1–3 years) or upon material change (e.g., ownership, legal structure).

• High-Risk Entities: Subject to ongoing monitoring, including continuous sanctions/PEP screening, adverse media checks, and trigger-based reviews (e.g., suspicious activity).

8. Red Flags & Escalation

Applications may be escalated if:

• Documents are incomplete, inconsistent, or fraudulent.

• Applicant or UBO appears on sanctions or watch lists.

• Ownership structures are opaque or unverifiable.

• Links to corruption, fraud, or environmental crime are detected.

Escalation outcomes include:

• Approval with conditions.

• Request for additional information.

• Rejection of application.

9. Roles & Responsibilities

• Compliance Team: Conducts KYC/KYB checks, documents findings, escalates high-risk cases.

• Senior Management: Approves onboarding of high-risk applicants and oversees compliance strategy.

• All SCR Staff: Must report suspicious activity to the Compliance Officer.

10. Record Keeping

• KYC/KYB records will be retained for 5 years after the end of a business relationship.

• Records will be stored securely and destroyed in line with SCR’s Data Retention Policy.

11. Use of Authorized Third Parties

SCR may grant an authorized third party (e.g., a legal or compliance service provider) limited and restricted access to KYC/KYB documentation for the purpose of reviewing or verifying information.

• Third parties will not collect, store, or remove documents; they may only access or view the documents as authorized.

• All third parties must:

o Demonstrate expertise in AML/CFT and due diligence.

o Manage data securely under applicable data protection laws.

o Provide review findings or recommendations back to SCR for compliance and record-keeping.

12. Policy Review

This policy will be reviewed annually or sooner if required due to regulatory changes, industry standards, or operational needs.