the_order/docs/governance/kyc-aml-sop.md

# KYC/AML Standard Operating Procedures (SOP)

**Version:** 1.0  
**Date:** November 10, 2025  
**Status:** Draft

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## Overview

This document defines the Standard Operating Procedures (SOPs) for Know Your Customer (KYC), Anti-Money Laundering (AML), and sanctions screening for eResidency and eCitizenship applications.

## Screening Lists

### Sanctions Lists

**Primary Sources:**
* UN Security Council Sanctions
* EU Sanctions
* OFAC (US Treasury)
* UK HM Treasury
* Other relevant jurisdictions

**Update Frequency:**
* Daily automated updates
* Manual review for high-priority updates
* Real-time screening for new applications

### PEP Lists

**Sources:**
* World-Check
* Dow Jones Risk & Compliance
* ComplyAdvantage
* Other commercial providers

**Categories:**
* Heads of State
* Senior government officials
* Senior political party officials
* Senior judicial officials
* Senior military officials
* State-owned enterprise executives
* Close associates and family members

## Risk Scoring

### Risk Factors

**Low Risk:**
* Clear identity verification
* No sanctions matches
* No PEP matches
* Low-risk geography
* Established history

**Medium Risk:**
* Partial identity verification
* Potential PEP match (distant)
* Medium-risk geography
* Limited history

**High Risk:**
* Failed identity verification
* Sanctions match
* Direct PEP match
* High-risk geography
* Suspicious patterns

### Risk Score Calculation

**Formula:**
```
Risk Score = (KYC Risk × 0.4) + (Sanctions Risk × 0.4) + (Geographic Risk × 0.2)
```

**Thresholds:**
* Auto-approve: < 0.3
* Manual review: 0.3 - 0.8
* Auto-reject: > 0.8

## Enhanced Due Diligence (EDD)

### Triggers

**Automatic EDD:**
* PEP match
* High-risk geography
* Risk score > 0.7
* Suspicious patterns
* Large transactions (if applicable)

### EDD Requirements

**Additional Checks:**
* Source of funds verification
* Additional identity documents
* References or attestations
* Background checks
* Enhanced monitoring

### EDD Process

1. Identify EDD trigger
2. Request additional information
3. Verify sources
4. Conduct enhanced screening
5. Risk assessment
6. Decision

## PEP Handling

### PEP Classification

**Direct PEP:**
* Current or former PEP
* Immediate family member
* Close associate

**Indirect PEP:**
* Distant relative
* Former associate
* Historical connection

### PEP Process

**Direct PEP:**
1. Automatic EDD
2. Enhanced screening
3. Manual review required
4. Risk assessment
5. Decision with justification

**Indirect PEP:**
1. Standard EDD
2. Risk assessment
3. Decision based on risk

## Source of Funds

### Requirements

**If Applicable:**
* Fee payments
* Donations
* Service contributions
* Other financial transactions

### Verification

**Methods:**
* Bank statements
* Payment receipts
* Transaction history
* Attestations
* Third-party verification

## Audit Trail

### Requirements

**Documentation:**
* All screening results
* Risk assessments
* Decisions and justifications
* EDD materials
* Audit logs

### Retention

**Periods:**
* KYC artifacts: 365 days (regulatory)
* Application metadata: 6 years
* Audit logs: 7 years
* Credential status: Indefinite

### Access

**Controls:**
* Role-based access
* Audit logging
* Data minimization
* Encryption at rest
* Secure transmission

## Compliance

### Regulatory Requirements

**Jurisdictions:**
* GDPR (EU)
* CCPA (California)
* Other applicable laws

### Reporting

**Obligations:**
* Suspicious activity reports (if applicable)
* Regulatory reporting
* Internal reporting
* Audit reporting

## Testing

### Mock Audit

**Scope:**
* End-to-end process testing
* Risk assessment validation
* EDD trigger testing
* Audit trail verification
* Compliance checks

### Success Criteria

**Requirements:**
* All processes documented
* All decisions justified
* All audit trails complete
* All compliance checks passed
* No critical findings

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## Revision History

| Version | Date | Author | Changes |
|---------|------|--------|---------|
| 1.0 | 2025-11-10 | CISO | Initial draft |

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## Approval

**CISO:** _________________ Date: _________

**Chancellor:** _________________ Date: _________

**External Counsel:** _________________ Date: _________