FENC established the Control System on Preventing Economic Sanction from Financing of Terrorism in April 2018. The Company also established programs on anti-money laundering and countering the financing of terrorism through initial risk assessment. Currently, 22 nations and 1 region have been sanctioned, and 26 customers are under controlled transaction. To avoid penalty from international organizations, the Company reinforces system validity through the following 3 measures：

1. Conduct comprehensive review over trade compliance to ensure there is no risk of major violations.
   Customers under controlled transaction are randomly checked. Business units are asked to provide records of transaction process, and the records are checked against surveys from Know Your Customer (KYC) and data from the website of Office of Foreign Assets Control (OFAC). All records are in compliance in 2019
2. Strengthen risk awareness for compliance in management and trade units to avoid violations and penalty.
   New recruits underwent training on Credit and International Trade Risks in 2019 to help them enhance risk awareness, develop proper mindset regarding sales and promote company business under the premise of regulatory compliance.
3. Implement automatic KYC (Know Your Customer) review to accelerate the compliance decision process
   The Company introduced D&B Onboard, an online platform, to conduct due diligence on compliance in order to select and monitor business partners. The Company also utilizes D&B Onboard’s global data bank to ensure compliance with local and international regulations.