Trade & Investment Compliance

Below is information about Serica Technology Group PTE LTD and its subsidiaries (“Serica”; “we”) Trade & Investment Compliance Policy. This policy outlines our framework for ensuring regulatory compliance, high ethical standards, and risk reduction measures to safeguard the interests of our clients and stakeholders. This policy has been effective as of January 01, 2018, and was last updated on December 15, 2023.

Our mission is to empower innovators to leverage the size and agility of the Chinese market to solve the world’s most pressing challenges. We believe that solving global existential challenges such as climate change, food security, healthcare access, and poverty alleviation requires a global solution, and there can only be an effective international solution with China. However, doing business in (or with) China presents a range of complex geopolitical, regulatory, and security challenges that many in our industry overlook or underestimate the importance of.

Serica does things differently. Since our founding, we have strived to balance the opportunities and risks of doing business in China by implementing robust and transparent compliance standards. This pioneering approach is designed to keep our mission on track, ensure we can operate without constraints in the best interest of our clients, and significantly reduce the risk of inadvertently undermining or causing harm to any of the markets we operate in.

This policy outlines our framework for ensuring regulatory compliance, high ethical standards, and risk reduction measures to safeguard the interests of our clients and stakeholders.

Independence
Market Neutrality
Sector Focus
Dual-Use Items
Anti-Money Laundering
Anti-Corruption
Questions & Recommendations

1. INDEPENDENCE

Maintaining full independence and operational control over our company is essential to ensure we can maintain our high compliance standards and reduce pressure from external forces.

How do you define independence?

Privately Owned: Be a privately owned company limited by shares.
Headquarter Jurisdiction: Be headquartered in a highly respected jurisdiction with a reputation for strong rule of law, progressive commercial practices, and a general policy of political neutrality.
Operation Control: Owning at least 51% of the shares and at least 75% of the voting rights of any subsidiary.
Not Contractually Bound To Governments: Not be contractually bound by any government anywhere in the world. We define “Government” to include but be limited to: government departments and agencies, economic zones, state-owned enterprises, state-owned universities, and state-owned research institutes.

What makes you independent?

We are Privately Owned: Our headquarters and all of our subsidiaries are privately owned companies limited by shares;
Headquartered in Singapore: Our headquarters is in the Republic of Singapore. Globally ranked 2nd in Ease of Business, 17th in Rule of Law (WJP), and a strong track record of political neutrality between the United States of America and the People’s Republic of China;
Maintain Operation Control: We own at least 51% of the shares and at least 75% of the voting rights of all our current subsidiaries. This strict policy will also apply to any future subsidiaries that we establish; and are
Not Contractually Bound To Governments: We have a strict policy of not signing any commercial contracts (including MoUs) with any Government anywhere in the world.

Where can I view your company structure and associated details?

You may request details of our company structure and associated details at any time by emailing compliance@serica-group.com

2. MARKET NEUTRALITY

No market should gain a disproportionate benefit over another’s expense. We maintain a strict market neutrality policy to help ensure equitable distribution of resources and value creation across all the markets we operate in.

How do you define market neutrality?

A tangible commitment to equitable access, opportunity, and benefit across all participating markets through the responsible deployment of resources and expertise with the goal of trying to ensure that no single market gains disproportionate benefits at an unacceptable cost to another.

What actions do you take to maintain your market neutrality?

Independence: See Section 1 for details.
Commercial Practices: We do not work on projects that involve knowledge hoarding, forced tech transfers, disproportionate resource allocation, predatory pricing, market manipulation, or other similar unethical practices, regardless of their legality.
Avoiding Politically Charged Sectors: We do not work in sectors that are overtly politicized (where there are clear and considerable political tensions, controversy, or disagreements), regardless of whether or not there are any trade and investment regulations or controls associated with them.
Examples of sectors politically charged sectors include but are not limited to semiconductors, telecommunications, and social media.
Avoiding Politically Charged Sectors: We do not work with technologies that are overtly politicized (where there are clear and considerable political tensions, controversy, or disagreements), regardless of whether or not there are any trade and investment regulations or controls associated with them.
Examples of politically charged technologies include but are not limited to vaccines, solar panels, and big data processing.
Bi-Annual Reviews: Review this policy at least every 6 months.

3. SECTOR FOCUS

Our exclusive sector focus ensures we remain laser-focused on our mission and are able to maintain our legal and ethical compliance standards.

Why do you have such a narrow sector focus?

Our mission is to empower innovators to leverage the size and agility of the Chinese market to solve the world’s most pressing challenges. No small feat. To stand a fighting chance, we believe we must minimize any unnecessary distractions and constraints to stay focused on delivering a positive impact in the world.

What sectors do you exclusively focus on?

We only work on projects across the following sectors:

Healthcare: e.g. life sciences, pharmaceuticals, medical technology (MedTech), digital health solutions (digital health), and medical services.
Greentech: e.g. decarbonization, clean energy, energy storage, agricultural technology (agritech), circular economy.
Mobility: e.g. automotive, logistics, micro-mobility, shared mobility.
Financial Technology (Fintech) – e.g. cross-border payments, wealthtech, insurtech, regtech.
E-Commerce: e.g. B2C stores, B2B stores, C2C stores, procurement services, supplier management solutions.
Education Technology (Edtech): e.g. language learning, corporate training, higher education.
Professional Services (done on occasion): e.g. IT service providers, management consulting firms, industrial service providers, law firms, creative agencies, corporate service providers.

Note the examples listed above for each sector are not exhaustive and if you have any questions, please email compliance@serica-group.com

Do you have any other noteworthy sector or sub-sector restrictions?

Yes. We do not work in any industries or industry verticals that do not align with our core mission and values. Our current list (last updated in December 2022) includes:

Tobacco (including e-cigarettes and vapes);
Recreational drugs;
Gambling (including video games with gatcha/loot box mechanics);
Pornography (including glamour publications);
Weapons;
Whaling;
Ultra-processed food;
Fast fashion;
Surveillance (including facial recognition);
Data brokers;
Multi-level marketing;
Micro-lending and payday loan services;
Buy-now-pay-later services;
Cryptocurrency promotion and trading; and
Pseudoscience products and services (such as homeopathy).

Once a year, we conduct a review our list of Off-Mission Industries to determine if we need to make additions. Before doing so, we ask for recommendations from our key internal and external stakeholders. If you have any recommendations on industries that you believe don’t fit our mission or values, please email compliance@serica-group.com

4. DUAL-USE ITEMS

We have a strict policy of not working on projects that support the export, development, or promotion of any dual-use items.

How are Dual-Use Items defined?

Dual-use items are typically defined as goods, software, or technology that can be used for both civil and military applications. Dual-use items include materials, components, or complete systems used in the production or development of military goods and weapons of mass destruction.

4.1 DUAL-USE ITEM EXPORTS

What is considered an export of a dual-use item?

The transfer, release, or dissemination of a good, software, or technology that has both civilian and military applications from one country to another.

What are Dual-Use Export Controls?

Dual-use export controls cover a wide range of products and technologies and affect manufacturers, transport providers, academia, and research institutions. Their key contribution to international security has been helping to prevent the supply of goods and technologies that may contribute to illegal weapons of mass destruction programs. However, in recent years, there has been an increased focus on their role in other areas, including preventing acts of terrorism and human rights abuses and controlling the trade in cyber-surveillance systems.

What are the international standards of Dual-Use Export controls?

Serica follows the international standards of the Wassenaar Arrangement, including its definitions, categorizations, and guidelines. Where relevant, we also adhere to both the Dual-Use Item Export Controls of the USA (who have expanded the definitions of dual-use items to include various foundational and emerging technologies) and that of China (whom are not currently a member of the Wassenaar Agreement).

What are common examples of dual-use items?

Dual-use technologies typically include but are not limited to:

Aerospace & aviation: aircraft, satellite technology, navigation systems, hypersonic technologies, spacecraft.
Artificial intelligence (AI): neural networks and deep learning, genetic computation, natural language processing, computer vision, audio and video manipulation technologies.
Chemical and biological technologies: synthetic biology, genetic engineering, virology, microbiology.
Communication technologies: satellite communications, encryption, steganography, radio frequency jamming.
Cybersecurity: encryption, authentication, firewalls, intrusion detection systems, vulnerability scanners.
Material science: advanced materials (such as metamaterials, carbon nanotubes, graphene), composite materials, alloys, polymers.
Nuclear technology: nuclear reactors, nuclear fuel enrichment, nuclear waste processing.
Robotics: unmanned aerial vehicles (UAVs), unmanned ground vehicles (UGVs), unmanned underwater vehicles (UUVs).
Space technology: satellite imagery, satellite navigation systems, launch vehicles, spacecraft technology, space-based surveillance systems.
Other dual-use technologies: quantum computing, additive manufacturing, advanced material processing technology, surveillance technologies, facial recognition technologies.

How do I know if my technology would be regarded as dual-use and subject to controls?

Different countries have different regulations and procedures. Fortunately, most have an online tool to help you determine this fact. Here are some useful government web pages you can refer to:

We also recommend speaking directly with your national department of trade/commerce for additional guidance and support.

4.2 DUAL-USE DEVELOPMENT & PROMOTION

In addition to not working on projects that export dual-use items, we are also take steps to ensure that we do not support the development or promotion of dual-use items.

What is considered dual-use item development?

Dual-use item development is any activity, including research and development, that results in the creation of a new dual-use item or the improvement of an existing dual-use item. This can cover a wide range of activities, including basic research on new technologies, applied research and development on new products and processes, and the improvement of existing dual-use items through the development of new features, components, or materials.

What is considered dual-use item promotion?

Dual-use item promotion is any activity that is intended to increase the awareness of or demand for dual-use items. This can cover a wide range of activities, including advertising and marketing, trade shows and exhibitions, technical documentation and training, and public relations.

4.3 PREVENTATIVE MEASURES

What actions do you take to help prevent the export, development, or promotion of dual-use items?

Screening: A range of Know Your Customer (KYC) and Customer Due Diligence (CDD) protocols (typically based on publicly available sources of information) to screen all prospective clients and strategic partners;
Contractual Safeguards: we include Dual Use Item-specific clauses in contracts, outlining expectations for both parties and consequences for suspicious activity.
Consult Regulators: we proactively consult with different government departments such as the US International Trade Administration, the UK Department for Business & Trade, and Chinese Ministry of Commerce (MOFCOM) in advance of any acquisition, joint venture, licensing deal, or sales agreement we are advising on;
Bi-Annual Reviews: We review our dual-use policy at least every 6 months to help us stay up-to-date with the latest regulations, definitions, and trends.

5. ANTI-MONEY LAUNDERING

We do not engage in any money laundering or terrorist financing activities or assist any other party in doing so. We escalate any red flags we identify for further investigation and report suspicious activity to the authorities where required.

What is money laundering and terrorist financing?

Money laundering has been defined as converting money or assets obtained through criminal activity into assets that appear legitimate. Terrorist financing has been defined as using money or assets, whether legitimate or obtained through criminal activity, to fund terrorist activities or groups. Money laundering and terrorist financing are often linked because terrorism is more often funded by money or assets that were obtained illegally but then laundered to appear as if they came from a legitimate business.

Generally, there is a higher risk of being exposed to money laundering and terrorist financing activities when conducting business in countries where there is little enforcement of laws prohibiting money laundering or where financial transparency standards (e.g. bank secrecy) make it easier to hide these activities, and therefore they are more widely prevalent.

What are the common types of red flags you may encounter that would require further investigation?

Red flags for technology consulting, management consulting, and financial advisory companies that would typically require further investigation include but not are not limited to:

A. Stakeholder Behavior

Secretive or evasive: Customers who provide vague or contradictory information about identity, source of funds, or purpose of transactions and are overly concerned about privacy or hesitant to answer questions.
Disinterest in risk mitigation: Customers who dismiss concerns about AML procedures, request shortcuts, or pressure unusually structured transactions.
Suspicious relationships: Customer associates with known high-risk individuals or businesses, particularly those sanctioned or involved in illicit activities.
Politically Exposed Persons (PEPs): Transactions involving PEPs without enhanced due diligence (EDD) measures in place.

B. Engagement Characteristics

High-risk industries: Industries known for money laundering risks, such as cash-intensive businesses, offshore entities, or trade finance.
Large cash payments: Accepting significant payments in cash, particularly for projects with intangible deliverables.
Structuring of fees: Breaking down large project fees into multiple smaller payments to avoid reporting thresholds.
Unexplained third-party payments: Fees paid by or to unfamiliar third parties, especially those located in high-risk jurisdictions.
Unusual payment methods: Payments made through virtual currencies or other non-traditional means.

C. Internal Controls

Inadequate KYC/CDD: Weak customer due diligence (CDD) or know-your-customer (KYC) procedures, missing key information, or inconsistencies.
Suspicious internal activity: Employees showing unusual interest in high-risk customers, ignoring procedures, or trying to expedite facilitating suspicious transactions.
Systemic weaknesses: Gaps in AML compliance program, outdated technology, or lack of staff training.

What actions do you take to help prevent money laundering and terrorist financing?

We train all of our staff to escalate red flags (circumstances, activities, or events that, due to their nature and the context in which they occur, could be a sign of money laundering or terrorist financing activity) for further investigation and report suspicious activity to the authorities where required.

Screenings: A range of Know Your Customer (KYC) and Customer Due Diligence (CDD) protocols (typically based on publicly available sources of information) to screen all prospective clients and strategic partners;
Contractual Safeguards: we include anti-money laundering (AML) compliance clauses in contracts, outlining expectations for both parties and consequences for suspicious activity;
Staff Training: conduct regular training for all staff on AML risks, red flags, reporting procedures, and internal policies.
Consult Regulators: we report all suspicious activities to the relevant authorities where required.
Bi-Annual Risk Assessments: conduct regular risk assessments to identify and update potential red flags, improve investigatory procedures, and enhance training standards.
Stakeholder Feedback: we welcome our stakeholders to raise red flags or provide us with suggestions by contacting us at compliance@serica-group.com

6. ANTI-CORRUPTION & BRIBERY

We have a zero-tolerance policy for all forms of corruption and bribery. This includes offering, promising, or giving anything of value, directly or indirectly, to a public official or any other third party with the intent of influencing their actions or obtaining an unfair advantage.

How do you define corruption and bribery?

Corruption is commonly defined as the misuse of entrusted power or authority for private gain. This includes, but is not limited to, bribery, extortion, fraud, embezzlement, cronyism, and nepotism. Bribery, a specific form of corruption, involves offering, promising, or giving anything of value (money, gifts, favors) to improperly influence the actions of another, typically an official or someone in a position of authority.

What actions do you take to help prevent corruption and bribery?

Internal Controls: We have implemented robust internal controls and reporting mechanisms to prevent and detect corruption and bribery.
Contractual Safeguards: we include specific clauses for all staff, suppliers, and clients, outlining expectations for both parties and consequences for suspicious activity;
Employee Training: We provide regular training to all employees on our anti-corruption and bribery policy, highlighting the risks and consequences of non-compliance.
Risk Assessments: We conduct regular risk assessments to identify and mitigate potential corruption risks associated with our operations.

7. QUESTIONS & RECOMMENDATIONS

We are constantly seeking ways to improve our legal and ethical compliance standards and welcome any questions, feedback, or recommendations on our policies you may have. Please email them to compliance@serica-group.com