Money Laundering and Terrorism Financing Prevention Policy

FRAMEWORK

ArtBid's auction business is exposed to potentially high risks, particularly the practice of money laundering and terrorist financing (MLFT) crimes, not only due to the remote nature of the various auctions, but also due to the lack of knowledge of the nature and origin of the funds supporting the entire auction business, especially when conducted through the online platform.

Therefore, it is absolutely essential to define and implement a strategy for identifying, managing, and monitoring risks that contributes to the efficient mitigation of the practice, or potential practices, of MLFT and their resulting consequences.

The current regime that regulates this matter is set out in Law No. 83/2017 of August 18, which establishes Measures to Combat Money Laundering and the Financing of Terrorism, and imposes on certain economic agents the obligation to promote the protection of the economic system and prevent financial crime by promoting policies, procedures, measures, and instructions that can prevent, in various contexts, Money Laundering and the Financing of Terrorism.

The objectives of this policy are:

(a) To establish the general principles and rules for identifying, assessing, monitoring, mitigating, controlling, and reporting the ML/CFT risk to which ArtBid is, or may become, exposed, both internally and externally, in order to ensure that this risk cannot significantly affect ArtBid's reputation and financial situation;

(b) To present the main concepts and definitions relevant to preventing and combating money laundering and terrorist financing;

(c) To ensure compliance with the legislation, regulations, recommendations, and guidelines issued by national, European, and international authorities applicable to ML/CFT risk;

(d) To mitigate the likelihood of violations or non-compliance within the scope of ML/CFT arising from legislation, regulations, specific determinations, internal rules, customer relationships, established practices, ethical and conduct principles that may lead ArtBid to commit an administrative or criminal offense;

(e) Ensure that any employee responsible for accepting and maintaining Customers, or managing auction operations, is aware of and acts in accordance with the MLFT prevention procedures adopted at ArtBid.

(f) Act effectively and quickly on any suspicion of MLFT, thus preserving ArtBid's reputation and safeguarding and protecting the level of trust with Customers, Supervisory Authorities, and other stakeholders.

In light of the above, this Policy defines the principles to be applied to prevent MLFT within the scope of ArtBid's activities, ensuring compliance with legal and regulatory requirements, as well as recommendations or guidelines issued by the competent national and European authorities.

SCOPE OF APPLICATION

This policy applies to all employees, service providers, suppliers, sellers, and buyers who interact with ArtBid. Current and future procedures must be adopted and implemented in accordance with this Policy. Scrupulous knowledge and compliance with internally established procedures are required of all employees, as well as in all activities carried out by ArtBid, whether in person or through the auction platform. All activities are covered by and must be governed by the principles and procedures implemented within the scope of and through this Policy.

This Policy covers and binds ArtBid, its owners and members of its corporate bodies, management and senior staff who perform functions essential to its business, all other employees who work for ArtBid, or service providers, whether individuals or legal entities, who provide services to ArtBid, regardless of the existing contractual relationship, and third parties who, by virtue of the contractual relationship established and maintained with ArtBid, have expressly adhered to this Policy or are legally obligated to comply with it, including buyers, sellers, bidders, or others participating in the respective advertised auctions.

DEFINITIONS

For the purposes of this Policy, the following definitions apply:

(a) Beneficial owners: the individual or individuals who ultimately hold ownership or control of the client or the individual or individuals on whose behalf a transaction or activity is carried out;

(b) Money laundering: the process by which perpetrators of criminal activities conceal the origin of illicitly obtained assets and income, transforming the liquidity derived from these activities into legally reusable capital by concealing the origin or true owner of the funds. Illicitly obtained income is typically related to crimes such as drug trafficking, corruption, embezzlement, fraud, smuggling, tax fraud, human trafficking, among others.
There are three phases in the money laundering process:

(i) Placement: assets and income are placed in financial and non-financial circuits, for example, through deposits in financial institutions or investments in profitable activities and high-value assets;

(ii) Circulation: assets and income are subject to multiple and repeated transactions (e.g., transfer of funds) with the purpose of distancing them from their criminal origin, eliminating any trace of their provenance and ownership;

(iii) Integration: laundered assets and income are reintroduced into legitimate economic circuits, through use, for example, in the acquisition of goods (e.g., art, real estate) and services.

Money laundering is a crime punishable by imprisonment of 2 to 12 years.

(c) Client: Any individual or legal entity that establishes any commercial relationship with ArtBid and participates in any auction promoted, executed, or concluded on the ArtBid platform, whether a seller, buyer, or any intermediary.

(d) Collaborator: Any individual or legal entity that, regardless of the contractual relationship, participates in the execution of any operations, acts, or procedures inherent to ArtBid's business.

(e) Freezing of funds: Action intended to prevent the movement, transfer, alteration, use, or operation of funds, or access to them, that is likely to alter their value, volume, location, ownership, possession, nature, destination, or any other change that could allow their use.

(f) Duty of identification and due diligence: legal duty that defines the rules that any entity covered by this regime must comply with when admitting, retaining, and terminating clients, determining the mandatory information to be collected, the appropriate means of proof to verify the information, the timing of the information collection, any additional procedures to confirm the information, and the requirements for applying these procedures based on the degree of risk identified.

(g) Terrorist financing: provision, collection, or holding of funds intended for use, or knowing that they may be used, in the planning, preparation, or commission of a terrorist act. Unlike money laundering, where the launderer's primary objective is to conceal the origin of the funds, in terrorist financing, one of the financiers' objectives is to conceal the intended purpose of the funds. Therefore, funds used to finance terrorism may have licit or illicit origins. For this reason, combined with the fact that the amounts involved are typically small, detecting terrorism financing transactions is particularly complex.

(h) High-risk third countries: Some countries may be classified as "high risk" due to political unrest, armed conflicts, high levels of organized crime, known involvement in drug production or trafficking, etc. Maintaining commercial relations with citizens of one of these countries, with individuals domiciled in these countries, or who regularly conduct commercial activities with such countries, may expose ArtBid to greater risk.

(i) Business relationship: a relationship of a business, professional or commercial nature between the obligated entities, their customers, or suppliers, which, when established, is or is expected to be long-lasting, tending to be stable and continuous over time, regardless of the number of individual transactions that are or will be part of the established relationship framework.

(j) Regulatory compliance officer: management member appointed to ensure compliance with the regulatory framework for the prevention of ML/CFT.

(k) Occasional transaction: transaction carried out outside the scope of business, characterized by its expected punctuality.

(l) Politically exposed person: individuals who hold, or have held in the last 12 months, in any country or jurisdiction, prominent public functions at a high level, such as Heads of State, Heads of Government and members of the Government, Members of Parliament, Members of the Constitutional Court, Supreme Court of Justice, Supreme Administrative Court, Court of Auditors, Ombudsman, State Councilors, members of the National Data Protection Commission, Presidents and Councilors with executive functions in Municipal Chambers, members of administrative and oversight bodies of public institutions, members of the executive management body of political parties at the national or regional level, among others defined by law.

(m) Terrorism: consists of the practice of certain crimes that, by their nature or the context in which they are committed, are likely to seriously affect the State or the population that they are intended to intimidate with the intention of undermining national integrity and independence, preventing, altering or subverting the functioning of State institutions or of a public international organization and forcing public authorities to perform an act or to refrain from performing it.

The crime of terrorism is defined in Law No. 52/2003 of August 22.

GENERAL PRINCIPLES

The activity carried out by ArtBid imposes the need to prevent and combat the practice of all the crimes listed above, bearing in mind the recurrent practice of small-value transactions, or the sale and exchange of illicitly obtained objects to reintroduce them into the market, which, in most cases, fuel the money laundering and terrorist financing markets.

For this reason, auction activities, which may involve all the elements and characteristics listed above, are subject to more careful analysis and require more rigorous control and prevention mechanisms to prevent or flag any behavior, acts, or omissions that may contribute to the development of illicit activities designed for the money laundering market.

Therefore, Artbid assumes the duty to combat MLFT and mitigate its potential effects by observing certain duties and best practices within its operations.

Therefore, to comply with this policy, ArtBid has implemented a MLFT prevention system comprised of procedures based on national and international best practices. This system requires all employees to comply with these procedures, fostering a culture and practice of assessing the risk inherent to each client and/or transaction, as well as reporting to the Regulatory Compliance Officer.

Therefore, ArtBid develops its Policy based on the principles and duties of:


i. Control

ArtBid has robust internal control procedures in place to manage risks, proportionate to the nature, scale, and complexity of the business, the Clients, and the specific circumstances of the business relationship, in strict compliance with ML/FT legislation.

Risk control procedures are dynamic and ongoing, as a risk review is conducted frequently, depending on the degree of risk associated with each Client, and when warranted by any circumstance.

As set forth in this ML/FT Prevention Policy, control procedures include:

(a) Establishing a code of conduct and anti-corruption policies and procedures

(b) Identifying clients and business partners and collecting documentation;

(c) Defining a risk profile based on the client/business partner's characteristics ((i) low; (ii) normal; (iii) high; (iv) unacceptable);

(d) Suspicious transaction reporting procedure;


ii. Identification and Due Diligence - Collection and Verification of Proof of Identification Elements

ArtBid fully identifies and collects documentation related to all its clients and business partners, as well as their representatives and beneficial owners, before entering into any contractual relationship with them.

Information is collected through the mandatory completion of a questionnaire (Know Your Client). Both sellers and buyers registered on the platform must complete this form prior to accessing any auction, providing the necessary and required information. Based on this information, ArtBid will define each Client's risk profile.

This questionnaire or request for information covers not only obtaining and identifying identification documents and other necessary information, but also the origin and destination of funds, the Clients' nationalities, and other elements relevant to the purposes established in this Policy. In legally established cases, enhanced due diligence measures are adopted, particularly when the involvement of third or high-risk countries, politically exposed persons, or holders of political or public office is verified. Identification data collected from a Client, representative, or Beneficial Owner (in the case of legal entities) is compared with the lists of restrictive measures published by the European Union. It is also assessed whether the Client qualifies as a Politically Exposed Person (PEP), close family members, recognized individuals, or holder of other political or public office. It is also assessed whether the Client is on lists of high-risk individuals/entities. Employees who monitor all auction activity are responsible for complying with the KYC procedures established at ArtBid and must confirm the identification and collected data.

ArtBid reserves the right to refuse to conduct business with entities or individuals who maintain anonymity or do not allow identification/verification of the identity of the client, representative, or beneficial owner, or whose origin and destination of funds or assets intended for auction activity raise suspicions of criminal activity.

The data provided by Clients is maintained to ensure the continuity of the activity made available through the ArtBid platform. However, all Clients are advised that if any changes are made to the information previously shared or completed, they must inform ArtBid so that it can analyze the Client's new risk profile.

Business relationships and risk profiles are reviewed periodically to ensure the current, accurate, and complete information previously available.

For the purposes of analyzing risks and potential suspicious transactions, the following elements are considered that characterize the suspicious nature of the transaction in question:

(a) The values, origin, and destination of the objects and funds moved through the auction activity;

(b) The place of origin and destination of the auctioned objects;

(c) The payment methods used;

(d) The nature, activity, nationality, identification, behavioral pattern (if applicable), and profile of the Customers;

(e) The type of object or product auctioned, and the structure of the legal entity (when applicable) that favors anonymity in the auction operation.

Whenever ArtBid concludes, in its risk analysis, that it may be facing suspicious activity, it may adopt enhanced due diligence measures to obtain additional information from Clients, representatives, partners, and beneficial owners (in the case of legal entities), and may request additional information.

For any situation known or suspected to be associated with funds or other assets originating from, or related to, criminal activities or MLFT, ArtBid, through the intervention of the Regulatory Compliance Officer, conducts enhanced investigative due diligence in the form of a written report, which can also be reported or shared with the appropriate authorities.


iii. Low-Risk MLFT Activities

Considering the activities carried out by ArtBid, whenever it is determined that these activities involve low-risk activities, ArtBid reserves the right to apply and implement more simplified measures to streamline all transactions inherent to and formalized through the platform. It is important to remember that ArtBid is merely an intermediary in the purchase and sale of auctioned goods. It is its responsibility to collect and analyze all information provided by its Clients and assess whether there is a MLFT risk, or whether these are simple activities or transactions with low-risk participants.

In this context, it is ArtBid's responsibility, as a mere intermediary, to analyze and weigh existing risks and, based on its analysis, implement the necessary internal procedures to protect and safeguard the principles established in this policy.

ArtBid reserves the right to simplify certain procedures and may:

(a) Reduce the frequency of updates to the information collected in compliance with the identification and due diligence obligations;

(b) Reduce the intensity of continuous monitoring and the depth of analysis of transactions when the amounts involved are low;

(c) Fail to collect specific information and fail to implement specific measures that allow for an understanding of the purpose of the transaction, when it is reasonable to infer the type of transaction carried out;

(d) Simply collect information that are not included in the identification documents of individuals or legal entities.

Considering that ArtBid's activity consists of auctioning through the use and registration of the platform, the nature and purpose of the business, when executed between national Clients and/or do not involve the transaction of high-value objects, or that may in any way originate from an unsuspecting activity, there are no risk elements that could indicate the practice of ML/CFT crimes, and simpler or faster procedures, such as those indicated above, may be applied. This Policy and the inherent procedures aim to ensure compliance with the regulations and regulations on this matter and not to create obstacles or hinder ArtBid's activity, affecting or harming its Clients.


iv. Cooperation with Competent Authorities

ArtBid undertakes to cooperate, promptly and fully, with any request from competent authorities, such as the DCIAP (National Antitrust Authority), the Financial Intelligence Unit, judicial authorities, police, and ASAE (Authority Agency for the Protection of Financial Services).

In compliance with the Principle of Cooperation, ArtBid fulfills its duty to report to the competent authorities any justified suspicion that certain funds or assets intended for auction activities, regardless of the amount or value involved, are derived from criminal activities.

Justified suspicions exist when there is concrete and reasonable evidence suggesting the possibility of a ML/FT crime being committed or planned.

Reporting is made by the Regulatory Compliance Officer (RCN), a position held by the designated management member, whose role is to ensure compliance with ML/FT prevention legislation.

On the other hand, ArtBid refrains from executing any transaction, current or future, whenever it knows or suspects it is associated with funds related to criminal activities or MLFT.


v. Duty to Refuse

ArtBid refuses or shall refuse to initiate business relationships or conduct auction transactions through the platform in the following cases:

(a) When it does not obtain the indicative elements and respective means of proof required for identifying and verifying the identity of the client, representatives, and beneficial owners of legal entities;

(b) When the client is on lists of restrictive measures and sanctions lists;

(c) When there are serious suspicions of MLFT;

(d) In cases of failure to obtain information on the origin and destination of funds moved within the scope of a business relationship;

(e) When the client's risk profile or the characteristics of the transaction justify;


vi. Information Retention Period (Including Personal Data)

In compliance with legal provisions regarding document retention periods and conditions, ArtBid retains copies, records, or data entered into the platform obtained as part of identification and information collection procedures, including all business correspondence, any documents, records, and internal or external analyses, risk analyses, and other associated information, for a period of 7 (seven) years, respecting the minimum period established by law.

Originals, copies, references, or any durable documents, such as proof of payment, delivery of cash, delivery of auctioned items, images of auctioned items, among others, are always retained to allow for the reconstruction of transactions, for a period of 7 (seven) years from their execution, even if they are part of a business relationship that has already ended.

Within the scope of information archiving, it must be ensured that the information is stored on a durable medium and that the archive meets conditions that allow for the proper preservation and easy location of documents, as well as immediate access to them, whenever requested by the competent entities and authorities.


vii. Training

ArtBid's employees and members of its governing bodies regularly attend training sessions on ML/CFT matters, appropriate and proportionate to their respective roles.

COMPLIANCE MODEL

ArtBid's Management assumes compliance functions regarding ML/CFT prevention and the obligations set forth in current legislation and regulations regarding ML/CFT prevention, namely:

a) Approving the Money Laundering and Terrorism Financing Prevention Policy, ensuring its updating and legal adequacy;

b) Ensuring that ArtBid's organizational structure allows, at all times, the appropriate implementation of ML/CFT policies, procedures, and controls;

c) Promoting, To maintain, before its employees and business partners, practices based on high standards of ethics and integrity in matters of ML/CFT, namely through the implementation of Codes of Conduct;

d) Ensure compliance with the duty to report suspicious transactions and collaborate with the competent authorities and judicial and police entities, as well as other duties related to ML/CFT;

e) Receive reports of irregularities, complaints, and/or grievances filed by ArtBid partners, employees, Clients, and/or third parties related to possible violations of regulations on ML/CFT prevention;

f) Analyze high-risk clients, subject to enhanced due diligence measures, prior to the commencement of any commercial relationship;

FAILURE TO COMPLY WITH POLICY

Failure to comply Failure of ArtBid employees to comply with this Policy violates the provisions of the Law and the Code of Conduct, and the employee is subject to the disciplinary rules set forth in the Labor Code and to civil, administrative, and criminal liability. ArtBid reserves the right to exercise its disciplinary power over any employee in the event of a violation of this Policy.

MINOR AND CRIMINAL LIABILITY

Individuals and legal entities may be subject to criminal liability for the crime of money laundering as provided for in Articles 368-A and 11 of the Penal Code.

In addition to criminal liability, individuals and legal entities are also subject to offenses provided for in supplementary legislation, particularly Law No. 83/2017 of August 18, which establishes Measures to Combat Money Laundering and the Financing of Terrorism, and the Law on Combating Terrorism, approved by Law No. 52/2003 of August 22, which classifies the practice of financing terrorism as a separate crime.

CHANGES TO THIS ML/FT PREVENTION POLICY

ArtBid reserves the right to change this ML/FT Prevention Policy or any terms and conditions of sectoral security and privacy policies, always in accordance with applicable national and community legislation.

PUBLISHMENT

This Policy It is disclosed to all ArtBid employees and is also published on the ArtBid website in a clear, accessible, and transparent manner.


September 2025

For all legal purposes, in the event of any discrepancy between this translation and the original Portuguese version, the Portuguese version shall prevail.