256H LLC.
(Updated: 01/11/2022)

Compliance Manual

Policies & Procedures

Table of Contents

Compliance Program ....................................................................................................................... 3
Compliance Policy ..............................................................................................................................3
Compliance Standards .....................................................................................................................4
Four Pillars of Compliance .............................................................................................................. 4
Know Your Customer (KYC) .......................................................................................................... 7
KYC Procedures .................................................................................................................................... 7
Identification Requirements .......................................................................................................... 7
Identification Acceptable for Individuals: ................................................................................8
Identification Acceptable for Third-Party Transactions...................................................8
Unacceptable Identification ...........................................................................................................8
Employee Compliance Guide ........................................................................................................8
Obtain and Enter Accurate Information in the 256HSystem .......................................9
Identify Your Customer ...............................................................................................................9
Do Not Assist Structuring ..........................................................................................................!1
Prohibited Conduct ....................................................................................................................
11
Structuring .............................................................................................................................
11
Suspicious transactions ..........................................................................................................
13
Regulatory Filings ......................................................................................................................... 14
Currency Transaction Report (CTR) ......................................................................................... 14
Suspicious Activity Report (SAR-MSB) ...................................................................................
14
Reporting To The Office Of Foreign Asset Control (OFAC) ................................................... 16
Agent management and oversight ................................................................................................. 16
Agent recruitment ...................................................................................................................... 16
Agent supervision and training .................................................................................................. 17
Agent termination and relocation .............................................................................................. 18
Correspondent Paying Agents ....................................................................................................... 18
Branches And Agents Audit .......................................................................................................... 19
Risk Assessment ........................................................................................................................ 20
Risk Rating Model .....................................................................................................................
21
Assumptions for risk rating: .................................................................................................. 21
Agent location: ...................................................................................................................... 21
Destination: ............................................................................................................................
21
Number of Transactions ........................................................................................................ 21
Average transaction ............................................................................................................... 22
Training For Employees And Agents ............................................................................................ 22
Mystery Shopping ......................................................................................................................... 22
Recordkeeping ...............................................................................................................................
Responding To Law Enforcement Request ................................................................................... 23
Section 314(b) Registration ........................................................................................................... 26
Privacy Policy and Notice (Gramm-Leach-Bliley Act ) ................................................................ 27
Foreign Bank Account Report (FBAR) ........................................................................................ 27
Registration as an MSB and Independent Test ............................................................................. 27

Compliance Program
This Compliance Manual, Policies, and Procedures were reviewed and approved for
publication and distribution to its employees by 256H's Board of Directors at a meeting held
on Novenmer 22, 2022.
256H's Board of Directors appointed Alexander Voronovich as Compliance Officer at a
meeting held on January 11, 2021.
The Bank Secrecy Act ("BSA") as amended by the USA Patriot Act classifies 256H LLC and its
Agents as Money Services Business (MSB). MSBs are non-banking financial institutions that
provide financial products and services. The regulations classify "check cashers," "money order
issuers," "money transmitters," "currency exchanges," "traveler check issuers," and "stored value
card issuers" as Money Services Businesses. 256H's Agents are classified as MSBs. 256H and its
agents as MSBs have to develop a compliance program that must be risk based. 256H is required
to identify, assess, and mitigate the risks that its business will be abused by criminals for money
laundering and terrorist financing. Risks can be jurisdictional, product-related, service-related,
Agent-related, Paying-Agent-related, Employee-related, service-related or Customer-related.
Regardless of where these risks arise, 256H must take reasonable steps to mitigate them.
Compliance is risk-based, meaning that 256H must devote more compliance resources to the areas
of its business that pose the greater risks.
256H expects an effective implementation of its compliance program. The expectation is
predicated upon each 256H Employee's and each 256H Agent's knowledge of the business,
understanding of the applicable laws and regulations and a careful assessment of vulnerability to
money laundering and terrorist financing.
Compliance Policy
256H actively participates in domestic and international efforts to combat money laundering,
terrorist funding and other financial crimes. 256H complies with all applicable laws and regulations
relating to such activities, and seeks all available means to prevent being utilized as a conduit for
such illicit funds.
Compliance Standards
256H expects all of its Employees and Agents to observe the following Compliance standards:
• Always conduct business in accordance with the highest ethical standards.
• Follow 256H's "Know Your Customer" program included in this Manual.
• Always be alert to Customer transactions that may indicate money laundering or other criminal
activity; and take proper steps to report and/or refuse such transactions.
• Cooperate with law enforcement authorities within the confines of applicable law, and report
any suspicious activities to the 256H's Compliance Officer.
• Fully comply with the recordkeeping and reporting requirements of the BSA and its
regulations.
• Maintain all records required by the BSA, the USA Patriot Act and all applicable anti-money
laundering laws and regulations, for the required specified time period, at a minimum.
• Comply with all applicable Federal, State regulations and local laws.
• Refuse to conduct Money Transfer transactions if a Customer fails to provide sufficient
identification or other required information. Depending on the circumstances may file SAR as
a result.
• File suspicious activity reports on transactions that involve or aggregate up to $2,000 or more
and 256H knows, suspects or has reason to suspect that the transaction is being with the intent
to evade the record keeping or reporting requirements.
Review transactions daily for possible structuring to evade reporting requirements.
Four Pillars of Compliance
256H compliance program consists of the following four areas:
1. Board approved internal policies, procedures and controls for:
Detecting structured transactions or transactions conducted in a
way to prevent the record-keeping or documentation requirements
of the BSA or OFAC. 256H 's computerized compliance monitor
reviews each transaction to ensure the transaction is properly
documented and/or reported as required. All transactions,
regardless of amount, are filtered against a current data base based
on preprogrammed compliance rules, including OFAC. Any
transaction, regardless of the amount, that matches any of the
predefined rules is automatically placed on hold for further review
by a transaction analyst. Once a transaction is placed on hold it will
not be released until the transaction is properly documented as
defined in the Compliance Manual's Procedures Section.
-Detecting attempts to utilize 256H as a conduit for illicit funds;
-Preventing money laundering or terrorist financing;
-Know Your Customer, Employee, Agent, Paying Agent and
Customer Procedures. 256H's Compliance Program incorporates
Know Your Customer guidelines issued by FinCEN and other
applicable regulatory authorities, the program also provides
comprehensive training to its Employees and Agents on a regular
basis. In furtherance of the KYC obligations, 256H has established
due diligence procedures to ensure that the identity of its Customers
and Agents is known
-reviewing customer identification; -Creating and retaining
transaction records; -Responding to law enforcement
requests. -Reporting suspicious transactions; and
Reporting large currency transactions.
-Mystery Shopping. The purpose of the mystery shopping program is
to detect and mitigate risks by implementing targeted training to
employees and agents. (This program is being developed for
implementation during the first quarter 2009)
-In order to comply with its responsibilities under the Bank Secrecy
Act, the USA Patriot Act, OFAC and all other applicable federal and
state laws and regulations, 256H has created a Compliance
Department headed by its Compliance Officer. The Compliance
Department is organized in four basic functions: Regulatory,
Transaction Analysis and Reporting, Training, and Agent
Management.
2. 256H has designated Alexander Voronovich as its Compliance Officer. The
Compliance Officer is responsible for the Compliance Program. The Compliance
Officer reports functionally to the Board of Directors and administratively to the
President & CEO. The Compliance Officer's responsibilities include the
following::
-Ensuring that all compliance Policies and Procedures are followed;
-Proposing new compliance policies and procedures
-Procedures are updated as needed to meet all federal, state, local
laws and regulations.
-Provides training to all compliance personnel to ensure proper
application of all policies and procedures and identification of risks
and attempts to utilize 256H by unscrupulous criminals to launder
money or finance terrorism and compliance with all applicable laws
and regulations.
-Training and education are provided to all Employees, Agents and
Paying Agents
-Implementing a record retention program
-Develop policies and procedures for the protection of the customers'
information
-Develop and implement an agent management and oversight
program that includes agent visitation to audit agent's compliance
with applicable policies and procedures, laws and regulations.
-Work closely with 256H 's agents to help them develop their own
compliance program as required by the laws and regulations.
3. An ongoing Agent and Employee training program that: -Explains
policies and procedures;
-Explains the applicable laws and regulations;
-Provides updates to maintain Employees and Agents current with
their responsibilities and obligations under the applicable laws and
regulations;
-Provides guidance in identifying suspicious activity or transactions
that are conducted with the intention to prevent the record-keeping
or reporting requirements of the applicable laws and regulations;.
-Teaches the record-keeping and reporting obligations of the
Employees and Agents under the applicable laws and regulations.
4. An independent review of the Anti Money Laundering ("AML") program:
-256H will have external examinations of its compliance program by
256H's Internal Audit Department (when the function is formally
established) and an independent external AML expert;
-256H's Internal Audit Department will conduct frequent reviews of
the compliance program. The reviews will include, branches and
agents visitation to review Agent's and Employees' knowledge of
the Policies and Procedures, the BSA and all other applicable laws
and regulations, record-keeping and mystery shopping The
independent examination external examination;
-The external examination by the AML expert will focus on the
compliance program and its application. The external expert will
visit Agents and branches as well.
-The frequency and scope of the review should be based on the risks
specific to the business
Know Your Customer ("KYC")
256H will comply with KYC guidelines issued by FinCEN and other applicable regulatory
authorities, and will provide comprehensive training to its Employees and Agents on a regular
basis. In furtherance of the KYC obligations, 256H has established due diligence procedures to
ensure that the identity of its Customers and Agents is known.
KYC Procedures
• 256H's Employees must make every reasonable effort to determine the identity of each
Customer as outlined in the Identification Requirements.
• 256H will not process any transaction that lacks required information.
• 256H's Employees must stay alert to unusual transactions or activities that are disproportionate
to the Customer's known business or financial ability.
• Our Employees are critical to our Compliance program. 256H has established procedures to
ensure that we know the identity of our Employees. 256H's Human Resources Department
may also inquire when an Employee appears to be living beyond his/her known financial
means, refuses to take vacation or habitually works during off-hours without apparent reasons.
• Employees may not have exclusive relationships with Customers or Agents. This is not
intended to prevent typical Customer Service/Agent relationships.
• 256H has established due diligence procedures to ensure that it knows the identity of the
Customers, Agents and Paymasters.
• All Agents and Paying Agents must be approved, prior to conducting business with 256H , by
the Compliance Officer, and Credit Manager.
• Employees may not conduct transactions directly or on behalf of relatives without obtaining
the prior approval of the Compliance Officer.
Identification Requirements
In furtherance of its KYC obligations, 256H requires its Employees to obtain information about
the identity of each Customer by inspecting valid and acceptable identification, and to provide a
copy to 256H's Compliance Officer when required (see "256H Transaction Processing"). .
Identification Acceptable for Individuals:
For individuals, "acceptable identification" means a form of unexpired, Government-issued
identification with photograph, such as:
• A valid driver's license.
• A valid State issued non-driver identification card.
• A State-issued ID.
• A US issued work permit.
• A US issued alien registration card.
• A valid US or foreign passport.
• A Resident Alien card.
No 3rd Party Transaction :
.
Unacceptable Identification
The following forms of identification are NOT acceptable:
• Food stamp card.
• Temporary or expired driver's license.
• Club and association cards.
• Check cashing cards.
• Marriage license.
• Library card.
• Business card.
• Fishing and hunting licenses.
Employee Compliance Guide
256H must comply with legal requirements designed to detect and prevent money laundering and
terrorist financing activities. This guide states what you must do to comply with 256H compliance
policy. Failure to follow this guide violates 256H policy and may violate the law. Violation of this
guide may result in termination of your employment. Violation of the law may result in criminal
prosecution.
As a 256H employee, you have four compliance obligations:
1. Obtain and enter accurate information in the 256H system.
2. Identify your customer.
3. Do not assist structuring.
4. Report suspicious activities.
These obligations are not complicated, but it is essential that you understand what they are and
comply with them fully. Each of your compliance obligations is explained below.
Obtain and Enter Accurate Information in the 256H System
At 256H, a number of the compliance activities are automated. For example, U.S. law requires that
transfers of currency greater than $10,000 be reported to the government. These reports are
generated automatically based on information entered in the 256H system and are filed by the
256H Compliance Department. In addition, the 256H system will prompt you to obtain and enter
information that is required for compliance purposes.
REMEMBER: You must assure that accurate and complete information is entered in the 256H
system.
Identify Your Customer
You must confirm that customers are who they say they are. A customer shall not transfer money
on behalf of someone else. Identification information is required by the 256H system. Make sure
that all required fields are accurately completed and that any additional information requested by
the 256H system is provided.
In addition,
• For payment orders of $2,500 to $2,999: you must review and input the
valid and acceptable identification information in the 256H system:
identification type, identification number, Issuing authority, expiration
date.
o
For payment orders of $3,000 and $4,999: you must input the
identification information in the 256H system and send to 256H
Compliance Department a copy of one valid and acceptable
government issued identification, the compliance form completed
and signed by the customer. The Payment Order must contain the
Sender's Taxpayer Identification Number (such as Social Security
Number or Employer Identification Number) or if none, must clearly
state "None." Foreign issued passport should be obtained if the
customer is neither a resident nor a citizen.
• For payment orders in amounts between $5,000 and $9,999 must obtain
or prepare (as applicable) the same information as required for transactions
of $3,000 and up, plus o
One valid and acceptable form of identification.
o
A completed 256H BSA Compliance Form which must include,
among other things, the Customer's occupation and the name and
address of the Customer's employer.
o
The Payment Order must contain the Sender's Taxpayer
Identification Number (such as Social Security Number or Employer
Identification Number) or if none, must clearly state "None."
• For payment orders of $10,000 and more: must obtain or prepare (as
applicable) the same information as required or transactions of $5,000 to
$9,999, one valid and acceptable forms of identification, plus
• If the Customer intends to fund the transaction in a form other than cash
(i.e., check or wire) a copy of the form of payment.
(Note: The BSA requires the Agent to keep copies of any such form of non-
cash payment in addition to other forms of payment for at least 5 years from
the date of the transaction), plus:
• One or more of the following documents evidencing the Customer's source
of funds:
• Copy of bank statement showing funds plus a copy of the withdrawal slip.
• Copy of pay checks demonstrating sufficient income.
• Copy of a settlement check.
• Evidence of a real estate sale.
• Copy of W2 forms or signed and dated tax returns.
• Any other document that can adequately demonstrate the Customer's
financial ability to conduct the transaction.
The foregoing documents and information must be submitted to the 256H Compliance
Officer before the order will be released for payment to the Beneficiary.
Note: The BSA requires 256H to file a Currency Transaction Report (FinCEN Form 104) for any
transaction or a series of transactions by a single Customer totaling more than US$10,000 in one
day.
Identification is valid if it has not expired and has not been canceled or revoked. Review the
identification to verify that the expiration date has not passed. An identification that has been
canceled will usually have holes punched in it or be stamped to show that it is no longer valid.
REMEMBER: Provide all information required about the customer and the recipient by the
256H system, make sure that any identification required is both valid and acceptable and provide
a copy of any required identification to 256H Compliance Department and place a copy
together with the copy of the transaction receipt in your files for future reference.

Do Not Assist in Structuring
It is illegal to break or fraction a transaction into two or more smaller transactions to avoid
regulatory requirements. This practice is called "structuring". For example, a customer who asks
you to transmit $10,000 in two transactions of $5,000 each is engaged in structuring. There may
reasons why this may not be structuring such as when a foreign paying bank is restricting how
much could be paid out in a day. In addition, customers can structure to avoid the $3,000 reporting
requirement. It is also illegal under structuring regulations to tell customers what regulatory
reporting and identification requirements are. For example, you may not tell a customer that
transfers greater than $10,000 are reported or that if he or she breaks the transfer into smaller parts
only one form of identification will be required. If you believe a customer is attempting to structure
a transaction you must report it as a suspicious transaction.
REMEMBER: Never discuss reporting, identification or other regulatory requirements with
customers and never suggest that a customer break a transaction into separate transactions.

Prohibited Conduct
Structuring
It is a felony for a Customer or a group of Customers to split a transaction into smaller
transactions of US$10,000 or less in order to evade or cause to evade the filing of the Currency
Transaction Report ("CTR") or other BSA recordkeeping requirements. This crime is called
'Structuring'. You become a participant, and guilty of a crime, if you knowingly assist someone
in structuring or advice or conspire with someone on how to evade the law.
Structuring is not limited to multiple transactions on the same day. It includes those conducted over
one or more days if done to evade the BSA reporting requirements. For example, if a Customer
regularly, on consecutive or near consecutive days, conducts cash transactions of less than
US$10,000 but which collectively add up to $10,000 or more, there is a strong likelihood they are
structuring. Please note that structuring can be done to avoid the $2,000 SAR filing requirement or
the $3,000 recordkeeping requirement.
Under no circumstances may any Employee, Agent or Agent's employee advice or instruct
Customers on grouping or structuring transactions to avoid a CTR, recordkeeping
requirement or SAR filing requirement.
256H employs a technique called "aggregation," which involves the analysis of all its transactions
over various periods of time across all of its Customers and locations in order to determine whether
structuring is occurring. 256H devotes considerable resources to this process.
It is also 256H's policy to aggregate transactions across all products in order to maximize detection
of suspicious transactions and to ensure that CTRs are appropriately filed for transactions in
amounts of more than US$10,000.