Explosives Precursors Policy

POLITICS OF "CHIMTEX" Ltd FOR THE SALE OF PRECURSORS OF EXPLOSIVES

I. GENERAL PROVISIONS AND DEFINITIONS

The purpose of this policy is to implement the restrictions and measures, and to establish rules for the work of employees at "CHIMTEX" Ltd with regulated precursors of explosive substances and their sale to third parties in connection with the implementation of Regulation (EU) 2019/1148 of the European Parliament and the Council from June 20, 2019. on the marketing and use of explosives precursors, amending Regulation (EC) No. 1907/2006 and repealing Regulation (EC) No. 98/2013, hereinafter referred to as the "Regulation" for brevity.

1. Definitions according to the Regulation:

- "suspicious transaction" means any transaction with regulated explosives precursors for which there are reasonable grounds to suspect that the substance or mixture is intended for the illegal manufacture of explosives.

- "mass user" means any natural or legal person for whom the purchase of regulated explosives precursors is for a purpose that is not related to his economic activity, occupation or profession.

- "professional user" means any natural or legal person or public legal entity, or group of such persons or entities, who can be proven to need a restricted explosives precursor for purposes related to their economic activity, occupation or profession, provided that those purposes do not include providing another person with the explosives precursor under restriction.

- "economic operator" means any natural or legal person or public legal entity, or a group of such persons or entities, that makes regulated explosives precursors available on the market, offline or online, including online trading venues.

- "regulated explosives precursor" means a substance specified in Schedule I or II below, including a mixture or other substance in which a substance specified in those schedules is present, except for homogeneous mixtures of more than five ingredients, in in which the concentration of any substance listed in Annex I or II is below 1% by mass.

- "restricted explosives precursor" means a substance specified in Annex I in a concentration higher than the relevant limit value specified in column 2 of the table in Annex I, including a mixture or other substance in which a substance is present, specified in this annex, in a concentration higher than the relevant limit value.

- "supply" means any supply, whether for payment or free of charge, of regulated explosives precursors.

- "importation" means the act of bringing regulated explosive precursors into the territory of an EU Member State, regardless of its destination in the Union, regardless of whether from another Member State or from a third country, under the conditions of any customs regime, including transit.

II. REGULATED EXPLOSIVES PRECURSORS UNDER THE REGULATIONS

1. In accordance with Regulation 2019/1148, explosives precursors are included in two applications in Annexes I and II as follows.

APPENDIX I RESTRICTED EXPLOSIVES PRECURSORS

List of substances that are not made available to the mass consumer and are not introduced, possessed or used by the mass consumer, alone or in mixtures or substances that contain such substances, unless the concentration is equal to or lower than the maximum permissible values ​​defined in column 2, and in respect of which suspicious transactions and significant absences and thefts must be reported within 24 hours:

ANNEX II REPORTABLE EXPLOSIVES PRECURSORS

List of substances, on their own or in mixtures or substances, in respect of which suspicious transactions and significant absences and thefts must be reported within 24 hours:

(1) Commission Implementing Regulation (EU) 2017/1925. Reference should be made to subsequent amendments to Annex I to Regulation (EEC) No 2658/87 regarding the updated CN codes.

(2) With a particle size of less than 200 μm.

(3) As a substance alone or in mixtures containing 70% by mass or more of aluminum or magnesium.

III. PROHIBITION OF SUPPLY, INTRODUCTION, POSSESSION AND USE

3. Precursors of explosive substances under the restriction of Annex I shall not be provided to the mass consumer, nor shall they be introduced, possessed or used by the mass consumer.

4. CHIMTEX Ltd. does not sell explosives precursors to individuals.

5. The restriction under Article 4 also applies to mixtures containing chlorates or perchlorates listed in Annex I, when the total concentration of these substances in the mixture exceeds the maximum permissible value of any of these substances, determined in column 2 of the table in the Annex I.

IV. OBLIGATION TO REQUIRE DECLARATION FROM THE THIRD PARTY

To check whether the potential customer is a professional user or another economic operator, "CHIMTEX" LTD requires for each transaction, unless such due diligence has already been carried out within one year prior to the date of the transaction and the transaction does not materially deviate from previous transactions, following information:

a) identity document of the person authorized to represent the potential client;

b) trade, occupation or profession, together with the company's trading name, address and VAT identification number or any other relevant registration number, if any, of the potential customer;

c) the potential customer's intended use of explosives precursors under restriction.

6. For the purposes of collecting the above information, the third party - buyer is required to submit the following Declaration, which is in the form of Annex IV to the Regulation:

DECLARATION OF THE CUSTOMER

(valid for a period of 12 months from provision)

on the specific use or uses of a restricted explosives precursor referred to in Regulation (EU) 2019/1148 of the European Parliament and of the Council (1)

(Complete in capital letters) (*) The undersigned,

Name  (client):                                                                                                                                          

ID  (issuing authority number):                                                                       

Authorized representative of:

Company (Principal):                                                                                                                             

VAT identification number or other company identification number (**)/Address:

Business activity/occupation/profession:                                                                                                         

I declare that the commercial product and the substance or mixture it contains are used only for the indicated use, which is in any case lawful, and will be sold or supplied to another customer only if he makes a similar declaration of use, subject to the restrictions , established in Regulation (EU) 2019/1148 for their provision to the mass consumer.

Signature:                                                                           

Name:                                                                                 

Position:                                                                          

Date:  

(1) Regulation (EU) 2019/1148 of the European Parliament and of the Council of 20 June 2019 on the marketing and use of explosives precursors, amending Regulation (EC) No. 1907/2006 and repealing Regulation (EU) No. 98/2013 (OJ L 186, 11.7.2019, p. 1).

(*) You can add the necessary rows in the table of substances.

(**) You can check the validity of the VAT identification number of the economic operator through the VIES website of the Commission. Depending on national data protection rules, some Member States will also provide data on the name and address associated with the VAT identification number that is registered in national databases.

7. If there are reasonable grounds for doubting the legality of the intended use of the precursor of explosive substances under restriction, "CHIMTEX" Ltd. has an obligation to report suspicious transactions and attempts at such transactions. Suspicious transactions are reported regardless of whether the potential customer is a mass user, a professional user or an economic operator.

8. According to the Regulation, transactions in which the potential customer acts in one or more of the following ways are considered suspicious:

a) does not provide a clear answer to the intended use of the regulated explosive precursors;

(b) does not appear to be familiar with or cannot plausibly explain the intended use of the regulated explosives precursors;

c) intends to purchase regulated precursors in quantities, combinations or concentrations that are unusual for legal use;

d) does not wish to provide a document of identity, of place of residence or, where applicable, of the capacity of a professional user or economic operator;

9. “CHIMTEX Ltd” is obliged to report a suspicious transaction or an attempt at such a suspicious transaction to SRZI within 24 hours after it is considered suspicious. When such a transaction is reported, the identity of the customer and any circumstances leading to the judgment that the transaction is suspicious shall be communicated, where possible.

10. “CHIMTEX Ltd” is obliged to report significant shortages and thefts of regulated explosives precursors within 24 hours of their discovery to SRZI. To determine whether the loss or theft is significant, they consider whether the amount is unusual, taking into account all the circumstances of the particular case

11.  When selling precursors of explosive substances from Annex I to another economic operator, the employee of "CHIMTEX" Ltd is required to inform this operator of his obligation to report, in the cases above.

V. OBLIGATION TO STORAGE INFORMATION

12. In order to verify compliance with the Regulation, as well as to prevent and detect cases of illegal production of explosives, "CHIMTEX" Ltd. undertakes to store the information specified in Art. 7.(2) for a period of 18 months, from the date of the transaction. During this period, the information is made available for inspection at the request of national inspection authorities or law enforcement authorities.

VI. PROCESSING OF PERSONAL DATA

13. All personal data provided by the client through the Declaration above, namely: names of the client's representative and his ID card number, will be stored by "CHIMTEX" Ltd, in accordance with his duties as a personal data administrator specified in the REGULATION ( EU) 2016/679 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of April 27, 2016 (General Data Protection Regulation).