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Compliance Manual

Sand Lab L&M Group LLC

Effective Date: January 1, 2026

1. Purpose and Scope

This Compliance Manual establishes the policies, procedures, and internal controls governing all operations of Sand Lab L&M Group LLC (“Sand Lab” or “Company”).

The purpose of this Manual is to ensure:

  • Full compliance with applicable laws and regulations
  • Integrity in all commercial transactions
  • Transparency, accountability, and traceability
  • Risk mitigation across all operational activities

This Manual applies to:

  • Directors and executives
  • Employees and contractors
  • External partners and authorized representatives

2. Corporate Compliance Principles

Sand Lab operates under the following core principles:

2.1 Integrity

All business activities must be conducted honestly and ethically.

2.2 Transparency

Transactions must be documented, verifiable, and auditable.

2.3 Accountability

All actions must be attributable to authorized individuals.

2.4 Compliance

Strict adherence to all applicable legal and regulatory frameworks.

3. Regulatory Framework

Sand Lab operates in accordance with:

  • United States federal and state laws (including Texas jurisdiction)
  • International trade regulations
  • Anti-Money Laundering (AML) laws
  • Know Your Customer (KYC) standards
  • Sanctions and export control regulations (OFAC and equivalent bodies)

All operations must comply with applicable jurisdictions involved in each transaction.

4. Anti-Money Laundering (AML) Policy

Sand Lab enforces a strict AML policy to prevent the use of its platform for illicit financial activities.

4.1 Requirements

  • Identification of all counterparties
  • Verification of beneficial ownership
  • Assessment of transaction legitimacy
  • Monitoring for suspicious activity

4.2 Prohibited

  • Anonymous transactions
  • Unverified counterparties
  • Transactions involving high-risk or sanctioned entities

5. Know Your Customer (KYC)

All clients, partners, and counterparties must undergo KYC verification prior to any transaction. Required documentation includes:

  • Corporate registration documents
  • Identification of authorized representatives
  • Beneficial ownership structure
  • Proof of operational legitimacy

Sand Lab reserves the right to reject any entity failing KYC requirements.

6. Sanctions and Export Control

Sand Lab strictly complies with all sanctions regimes, including those administered by:

  • The United States (OFAC)
  • European Union
  • United Nations

No transactions shall involve sanctioned countries, restricted entities or individuals, or prohibited goods or services.

7. Anti-Bribery and Corruption

Sand Lab maintains a zero-tolerance policy toward bribery and corruption. Prohibited conduct includes:

  • Offering or accepting bribes
  • Facilitation payments
  • Undisclosed commissions
  • Improper financial incentives

All employees and partners must act in accordance with anti-corruption laws.

8. Transactional Procedures

All commercial transactions must follow standardized procedures:

  1. Receipt of LOI / ICPO
  2. Issuance of SCO
  3. Negotiation and execution of SPA
  4. Verification (tank, product, documentation)
  5. Execution (lifting / shipment)

No deviations from approved procedures are permitted without authorization.

9. Document Control

All documents must be:

  • Generated through approved templates
  • Reviewed and approved by authorized personnel
  • Stored securely within the Company system
  • Traceable through audit logs

Unauthorized document creation or modification is prohibited.

10. Approval Authority

Transactions require multi-level approval based on type and value. Approval roles may include:

  • Chief Executive Officer (CEO)
  • Chief Operating Officer (COO)
  • Chief Financial Officer (CFO)
  • Legal Department

No transaction may proceed without proper authorization.

11. Digital Signature and Authentication

All official documents must:

  • Be digitally signed by authorized personnel
  • Include verifiable authentication
  • Be protected against unauthorized use

Signatures may only be applied through secure systems.

12. Data Protection and Confidentiality

All information handled by Sand Lab is confidential. Requirements include:

  • Restricted access to sensitive data
  • Secure storage and encryption
  • Prohibition of unauthorized disclosure

All users are bound by confidentiality obligations.

13. Audit and Monitoring

Sand Lab maintains continuous monitoring and audit systems. The Company records:

  • Document creation and modification
  • Approval actions
  • User activity
  • Transaction history

These records ensure full traceability and accountability.

14. Risk Management

Sand Lab actively identifies and mitigates risks, including:

  • Counterparty risk
  • Financial risk
  • Operational risk
  • Regulatory risk

Risk assessments are conducted prior to transaction execution.

15. Training and Awareness

All personnel must:

  • Understand compliance obligations
  • Follow internal procedures
  • Participate in periodic compliance training

16. Violations and Enforcement

Any violation of this Manual may result in:

  • Immediate suspension of access
  • Termination of business relationship
  • Legal action

All violations must be reported and investigated.

17. Reporting and Whistleblowing

Sand Lab encourages reporting of suspicious activity, compliance violations, and ethical concerns. Reports may be made confidentially and without retaliation.

18. Record Retention

All records must be retained in accordance with legal requirements, audit obligations, and internal policies.

19. Continuous Improvement

Sand Lab regularly reviews and updates this Compliance Manual to reflect regulatory changes, operational improvements, and industry best practices.

20. Governing Law

This Compliance Manual is governed by the laws of the State of Texas, United States.

21. Contact

Sand Lab L&M Group LLC

1317 N FM 509, Harlingen, TX 78550, USA

Email: info@sandlablmgroup.com