1. Policy Statement and Objectives

PayGunner maintains a comprehensive Anti-Money Laundering and Know Your Customer program designed to:

• Verify the identity of all customers
• Detect and prevent money laundering and terrorist financing
• Comply with the Bank Secrecy Act (BSA), USA PATRIOT Act, and FinCEN regulations
• Monitor transactions for suspicious activity
• Maintain required records and file required reports
• Train employees on AML/KYC compliance

2. Regulatory Framework

Our AML/KYC program is designed to comply with:

2.1 Federal Regulations

• Bank Secrecy Act (BSA): 31 U.S.C. § 5311 et seq.
• USA PATRIOT Act: Customer identification and verification requirements
• FinCEN Regulations: 31 CFR Chapter X
• OFAC Sanctions: Office of Foreign Assets Control compliance

2.2 Money Services Business (MSB) Registration

PayGunner is registered with FinCEN as a Money Services Business. We file biennial MSB registration renewals (FinCEN Form 107) and maintain all required records.

3. Customer Identification Program (CIP)

3.1 Identity Verification Requirements

Before allowing any transactions, we collect and verify the following information for all customers:

Required Information	Verification Method	Purpose
Full Legal Name	Government-issued ID, document verification	Identity confirmation
Date of Birth	Government-issued ID	Age verification (18+), identity matching
Physical Address	Utility bill, bank statement, government records	Residency verification
Social Security Number	SSN verification services, IRS matching	Tax reporting, identity verification
Email Address	Email verification link	Account access, communications
Phone Number	SMS verification code	Two-factor authentication, security

3.2 Document Verification

We accept the following government-issued identification documents:

• U.S. Driver's License (valid, unexpired)
• U.S. Passport or Passport Card
• State-issued ID Card
• U.S. Military ID
• Permanent Resident Card (Green Card)

Documents must be:

• Current and unexpired
• Issued by a U.S. government authority
• Contain a photograph
• Clearly legible in submitted images

3.3 Enhanced Due Diligence (EDD)

We apply enhanced due diligence for higher-risk customers, including:

• High-volume transaction users (over $10,000/month)
• Customers with unusual transaction patterns
• Users flagged by our fraud detection systems
• Customers from high-risk geographic areas

Enhanced due diligence may include:

• Additional identity verification
• Source of funds documentation
• Business purpose verification
• Ongoing monitoring with lower thresholds

4. OFAC and Sanctions Screening

4.1 Prohibited Jurisdictions and Persons

We screen all customers against:

• OFAC Specially Designated Nationals (SDN) List: Individuals and entities with whom U.S. persons are prohibited from doing business
• Sanctioned Countries: Comprehensive embargoes and targeted sanctions
• Other Watch Lists: FBI Most Wanted, Interpol notices, domestic terrorist lists

4.2 Screening Procedures

• All new accounts are screened at registration
• Existing accounts are re-screened monthly
• Transaction counterparties are screened in real-time
• Updates to OFAC lists trigger immediate re-screening of all accounts

4.3 Positive Match Procedures

If a customer matches an OFAC list:

• Account is immediately suspended
• No transactions are permitted
• Compliance officer investigates to confirm or rule out match
• If confirmed, we block assets and file required reports with OFAC

5. Transaction Monitoring

5.1 Automated Monitoring Systems

We employ automated transaction monitoring to detect suspicious activity, including:

• Velocity Checks: Unusual frequency or volume of transactions
• Geographic Risk: Transactions involving high-risk locations
• Structuring Detection: Transactions designed to evade reporting thresholds
• Pattern Analysis: Deviations from customer's normal behavior
• High-Risk Activity: Round-dollar amounts, rapid movement of funds

5.2 Transaction Limits

We impose the following limits to manage risk and comply with regulations:

Transaction Type	Standard Limit	Enhanced Verification Limit
Daily Deposit Limit	$2,500	$10,000
Daily Send Limit	$2,500	$10,000
Monthly Volume	$25,000	$100,000
Single Transaction	$5,000	$25,000

Limits may be increased for verified business accounts with documented legitimate business purpose.

5.3 Red Flag Indicators

Our system flags the following activities for manual review:

• Transactions at or just below reporting thresholds ($3,000 for MSB reporting)
• Multiple transactions to the same recipient in short timeframes
• Transactions with inconsistent customer profile
• Sudden changes in transaction patterns
• Attempts to obscure transaction details
• Use of multiple accounts by same individual
• Rapid movement of funds (deposit followed by immediate withdrawal)

6. Suspicious Activity Reporting (SAR)

6.1 SAR Filing Requirements

We file Suspicious Activity Reports with FinCEN when we detect:

• Transactions of $2,000 or more involving potential money laundering or violations of BSA
• Transactions designed to evade reporting requirements (any amount)
• Transactions with no apparent lawful purpose
• Transactions that deviate from expected customer behavior

6.2 SAR Filing Timeline

• SARs are filed within 30 days of initial detection
• If investigation is ongoing, we file within 60 days of initial detection
• All SARs are filed electronically through FinCEN's BSA E-Filing System

6.3 SAR Confidentiality

Federal law prohibits disclosing the existence of a SAR to any person involved in the transaction. Our employees are trained on SAR confidentiality requirements and sign non-disclosure agreements.

7. Currency Transaction Reporting (CTR)

As a Money Services Business, we file Currency Transaction Reports (FinCEN Form 112) for:

• Cash deposits or withdrawals exceeding $10,000 in a single day
• Multiple cash transactions that aggregate to more than $10,000 in a single day

Note: PayGunner primarily operates electronically (ACH, credit cards) and does not accept physical cash deposits. However, we maintain CTR procedures in case our services expand to include cash operations.

8. Record Retention

8.1 Required Records

We maintain the following records in accordance with federal law:

Record Type	Retention Period
Customer Identification Records	5 years after account closure
Transaction Records	5 years from transaction date
SARs and Supporting Documentation	5 years from filing date
CTRs and Supporting Documentation	5 years from filing date
Account Statements	5 years
AML Training Records	5 years

8.2 Record Accessibility

All required records are maintained in a format that allows for immediate production to regulatory authorities upon request.

9. Compliance Officer and Organization

9.1 Designated AML Compliance Officer

PayGunner has designated a Compliance Officer responsible for:

• Overseeing and implementing the AML/KYC program
• Conducting risk assessments
• Reviewing suspicious activity alerts
• Filing SARs and CTRs
• Ensuring employee training
• Coordinating with law enforcement and regulators
• Reporting to senior management

Contact: compliance@paygunner.com

9.2 Independent Testing

We conduct annual independent audits of our AML program to ensure effectiveness and identify areas for improvement.

10. Employee Training

All PayGunner employees receive AML/KYC training:

• New Hire Training: Within 30 days of employment
• Annual Training: Refresher training for all employees
• Role-Specific Training: Enhanced training for compliance, customer service, and risk teams

Training covers:

• BSA and USA PATRIOT Act requirements
• Red flag identification
• Customer identification procedures
• SAR confidentiality
• OFAC sanctions compliance
• Internal reporting procedures

11. Risk Assessment

We conduct annual risk assessments to identify and mitigate money laundering and terrorist financing risks specific to our business, including:

• Customer Risk: Types of customers we serve (firearm industry participants)
• Product Risk: Payment services offered and their inherent risks
• Geographic Risk: Jurisdictions where our customers are located
• Channel Risk: Methods customers use to access our services

12. Cooperation with Law Enforcement

PayGunner fully cooperates with law enforcement and regulatory authorities, including:

• Responding promptly to information requests
• Providing records pursuant to subpoenas and court orders
• Participating in investigations when requested
• Maintaining secure channels for law enforcement communication

13. Policy Updates

This AML/KYC Policy is reviewed annually and updated as necessary to reflect:

• Changes in regulations
• Changes in our business operations
• Results of risk assessments
• Lessons learned from compliance testing
• Industry best practices

14. Contact Information

AML Compliance Officer
Email: compliance@paygunner.com

For reporting suspicious activity (internal):
Email: sar@paygunner.com