1. Purpose and legal basis
This Anti-Money Laundering and Counter-Terrorist Financing Policy (the "Policy") sets out the framework adopted by Basnet Law Pte. Ltd. (the "Firm") to prevent, detect and report money laundering, terrorist financing and sanctions non-compliance in connection with the legal services it provides in and from the Gelephu Mindfulness City Special Administrative Region ("GMC").
The Policy is adopted under the Financial Services Act 2025 of GMC, which designates the Regulator, the Gelephu Financial Services Office ("GFSO"), as the Supervisory Authority for GMC responsible for regulation in relation to money laundering. Under that Act, money laundering is taken to include terrorist financing, the financing of unlawful organisations and sanctions non-compliance. The detailed obligations are set out in the AML and Sanctions Rulebook issued by GFSO, and the organisational requirements in the General Rulebook. The Policy also reflects the FATF Recommendations.
The Policy applies to the Firm, its directors, its attorneys, its staff and any other person acting on its behalf.
2. Scope
The Firm is a Designated Non-Financial Business or Profession ("DNFBP") and therefore a Relevant Person under the Financial Services Act 2025. Law firms are among the businesses required to register as DNFBPs with GFSO, and the Firm maintains that registration. The Policy applies to all client engagements and to all legal services provided by the Firm, including corporate and commercial advisory, company formation and redomiciliation, licensing, contract drafting, regulatory and tax advisory, employment and immigration, and dispute resolution. It applies in addition to, and not in substitution for, any other law or professional obligation that binds the Firm.
3. Risk-based approach
The Firm adopts a risk-based approach. The level of due diligence, ongoing monitoring and internal controls applied to any client or matter is proportionate to the assessed risk of money laundering, terrorist financing and sanctions exposure. Higher-risk clients and matters attract enhanced measures; lower-risk clients and matters attract simplified measures where the AML and Sanctions Rulebook permits.
4. Governance and roles
4.1 Governing body. The directors of the Firm have ultimate responsibility for AML/CFT compliance, ensure that adequate resources are made available, approve this Policy and its periodic updates, and review the MLRO's annual report.
4.2 Money Laundering Reporting Officer. The Firm designates a Money Laundering Reporting Officer ("MLRO") with day-to-day oversight of the Firm's compliance with this Policy and the AML and Sanctions Rulebook. The MLRO receives and assesses internal reports of suspicious activity, files suspicious transaction reports with GFSO as Supervisory Authority in the form and manner the Rulebook prescribes, oversees sanctions screening, delivers staff training and is the point of contact for GFSO and other competent authorities. The MLRO is resident in GMC or Bhutan. At the date of adoption of this Policy the Principal Attorney performs the MLRO function; an independent MLRO will be designated as the Firm grows.
4.3 All staff. Every member of staff has a personal responsibility to comply with this Policy and to escalate any suspicion or concern of money laundering, terrorist financing or sanctions non-compliance to the MLRO without delay.
5. Business risk assessment
The Firm maintains a documented business risk assessment covering its client base, services, transactions, delivery channels and jurisdictions, with particular attention to clients in virtual asset activity, financial services licensing, cross-border structuring and redomiciliation. The assessment is reviewed at least annually and on any material change. It informs the Firm's customer due diligence, enhanced due diligence, ongoing monitoring and training arrangements.
6. Customer due diligence
Before engaging any client, the Firm identifies the client and verifies identity using reliable, independent source documents: a passport or national identity card for individuals; the certificate of incorporation, constitution, registers of directors and controllers and equivalent documents for entities. For entity clients the Firm identifies and verifies every natural person who owns or controls more than 25 percent of the entity or otherwise exercises effective control, using the entity's own register of registrable controllers kept under the Companies Act 2025, information available from the Gelephu Corporate Registration Office, and equivalent registers in other jurisdictions.
The Firm documents the purpose and intended nature of the relationship, captures source of funds and source of wealth where relevant, screens the client and its beneficial owners for politically exposed person status and against applicable sanctions lists, and risk-rates each client as low, medium or high. No service is provided until due diligence is satisfactorily completed. The relationship is monitored on a continuing basis and due diligence is refreshed periodically based on risk.
7. Enhanced due diligence
Enhanced due diligence is applied to high-risk clients, including politically exposed persons and their family members and close associates, clients from jurisdictions identified as higher-risk by the FATF or by GFSO, clients with complex or opaque ownership or control structures, clients carrying on or seeking to carry on virtual asset activity, clients in cash-intensive businesses, and any other client risk-rated as high. Enhanced measures include senior management approval before onboarding or continuing the relationship, enhanced verification of identity and beneficial ownership using additional independent sources, detailed source of funds and source of wealth documentation, more frequent ongoing monitoring with lower scrutiny thresholds, and independent corroboration of information.
8. Simplified due diligence
Simplified due diligence may be applied to clients risk-rated as low, where the AML and Sanctions Rulebook permits. Identification and verification of the client and its beneficial owners remain mandatory in all cases.
9. Ongoing monitoring
The Firm monitors each client relationship on a continuing basis. Transactions and instructions are reviewed for consistency with the client's profile and the stated purpose of the relationship. Due diligence information is updated periodically based on risk and on any material change in the client's circumstances. Any unusual activity is escalated to the MLRO.
10. Sanctions compliance
Sanctions non-compliance is money laundering for the purposes of the Financial Services Act 2025. The Firm screens all clients, beneficial owners and counterparties against the United Nations Security Council Consolidated List, any sanctions list adopted or implemented in GMC or Bhutan, and, for international clients and cross-border matters, the U.S. OFAC Specially Designated Nationals and Sectoral Sanctions lists, the EU Consolidated List and the UK Sanctions List. Screening is performed at onboarding, on each material transaction or change in client profile, and on a continuing basis. On a positive or potential match the Firm freezes any client assets in its possession, declines the transaction and reports the matter to GFSO and any other relevant authority without delay. The Firm does not provide services to any person designated under an applicable sanctions regime or in a sanctioned jurisdiction. All screening, decisions and related correspondence are documented and retained.
11. Politically exposed persons
Politically exposed persons, foreign and domestic, their family members and close associates are subject to enhanced due diligence. Establishing or continuing a relationship with a politically exposed person requires senior management approval. The Firm documents all such determinations and the supporting rationale.
12. Suspicious transaction reporting
Staff who identify any activity that gives rise to a suspicion of money laundering, terrorist financing or sanctions non-compliance must report it to the MLRO without delay. The MLRO assesses each internal report and, where required, files a suspicious transaction report with GFSO in the form and manner prescribed by the AML and Sanctions Rulebook. Staff must not tip off any client, beneficial owner or third party about an internal report, an external report or any related investigation. Tipping off is a serious breach of this Policy and may constitute an offence.
13. Record keeping
The Firm retains due diligence records, transaction records and copies of all internal and external reports for at least five years from the end of the business relationship or completion of the transaction, or for such longer period as the law requires. Records are kept in a form that allows individual transactions to be reconstructed on request by GFSO or any other competent authority.
14. Training
All staff, including the directors and the MLRO, receive AML/CFT and sanctions training on appointment and at least annually thereafter. Training covers the Financial Services Act 2025, the AML and Sanctions Rulebook and the General Rulebook, this Policy, due diligence procedures, sanctions screening, identification of suspicious activity, internal and external reporting, the tipping-off prohibition, record keeping, and emerging risks in the legal sector and in virtual asset activity. Records of training, including content, attendance and assessment, are retained for at least five years.
15. Internal controls and independent review
The Firm maintains systems and controls that ensure its affairs are managed effectively by senior management, with documented roles and reporting lines, segregation of key duties, and a compliance function with unrestricted access to records and to the governing body, as the General Rulebook requires. Breaches are identified, reported and recorded. The MLRO reviews the AML/CFT programme at least annually and reports to the directors on its effectiveness. An independent review by a qualified external party is conducted at least every two years, or more often if GFSO requires.
16. Confidentiality
All AML/CFT matters, including internal reports, suspicious transaction reports, sanctions investigations and related correspondence, are strictly confidential and accessible only to the MLRO, the directors and other personnel authorised by the MLRO on a need-to-know basis.
17. Non-compliance
Breach of this Policy by any member of staff may result in disciplinary action up to and including termination of employment or engagement, and may also constitute an offence under the Financial Services Act 2025 and other laws applicable in GMC.
18. Review of Policy
This Policy is reviewed at least annually by the MLRO and approved by the directors. It is updated to reflect changes in the Financial Services Act 2025, the AML and Sanctions Rulebook, the General Rulebook, GFSO guidance and the Firm's circumstances. The current version is available at the Firm's office in Gelephu and on basnetgmc.com.
Approved and adopted by the directors of Basnet Law Pte. Ltd. Revised 19 September 2026.
You may contact Basnet Law at basnet@basnetgmc.com or office@basnetgmc.com for any legal queries related to GMC.
