Regulations Governing Anti-Money Laundering and Countering Terrorism Financing of Financial Technology Innovative Experimentation Article 2

Terms used in these Regulations are defined as follows:1.Beneficial owner” shall mean the natural person(s) who ultimately owns or controls an innovative experimentation participant (referred to as the “participant” hereunder) and/or the natural person on whose behalf a transaction is being conducted, including those persons who exercise ultimate effective control over a legal person or arrangement.2.Risk-based approach” (RBA) shall mean the applicants should identify, assess and understand the money laundering and terrorist financing (ML/TF) risks to which they are exposed and take appropriate AML/CFT measures commensurate with those risks in order to effectively mitigate them. Based on the RBA, the applicants should take enhanced measures for higher risk situations, and take relatively simplified measures for lower risk situations to allocate resources efficiently, and use the most appropriate and effective approach to mitigate the identified ML/TF risks.When conducting an innovative experimentation, an applicant shall take due diligence measures on participant in accordance with Articles 3 ~ 5 and monitor transactions and keep relevant records in accordance with Articles 8 ~ 10. An applicant shall file suspicious ML/TF transaction reports to the Investigation Bureau, Ministry of Justice (referred to as “Investigation Bureau” hereunder) in accordance with Article 14.