Inclusion of contents on sanctions and embargoes. All amendments are highlighted with yellow. Contents

Transcription

1 Group Code: GR0006 Version 2 Effective as from Title: Policy for Risk Management in terms of Anti-Money Laundering and Counter Terrorism Financing Applicable to: Banco Comercial Português, S.A. Document owner: COFF - Compliance Office Summary This document sets forth the Compliance Policy for Risk Management in terms of Anti-Money Laundering and Counter Terrorism Financing (AML/CTF Policy). Alterations to the previous version Inclusion of contents on sanctions and embargoes. All amendments are highlighted with yellow. Contents 1. CONTEXT POLICY PURPOSE AND SCOPE ANTI-MONEY LAUNDERING AND COUNTER TERRORISM FINANCING - METHODS AND PROCEDURES Internal Rulings Due Diligence/Know Your Costumer (KYC) Risk Based Approach Classification of risk Methods used in the monitoring and control procedures Monitoring and Control Reporting Suspicious Transactions Main Risk Situations Training Agents Correspondent Banks... 8 APPENDIX 1 - LIST EXEMPLIFYING POTENTIAL HIGH RISK FACTORS... 9 A. Risk Factors inherent to Customers... 9 B. Risk factors inherent to products, services, transactions or distribution channels... 9 C. Risk Factors inherent to geographic location APPENDIX 2 - LIST EXEMPLIFYING POTENTIAL HIGH RISK FACTORS A. Generic Indicators B. Indicators related with banking deposit accounts C. Indicators related with credit operations D. Indicators related with transfer of funds E. Indicators related with manual FX operations F. Indicators related with the employees of the financial institutions G. Other indicators Once printed, this document constitutes a non-controlled copy. Page 1/17

2 1. CONTEXT The globalization of the financial activity and the fast development of information technologies are factors that provide new opportunities for the economy to grow and at the same time, the risk associated with money laundering. The reinvestment of criminal income in legal activities and the existence of operators and organisations that enable such schemes greatly disturb the market and its efficiency, weakening the economy. Group Banco Comercial Português accepted the challenge of fighting Money Laundering seriously and responsibly, putting an effort on actions and instruments that fight this crime, being convinced that this attitude will always be associated with the defense of the integrity and reputation of the Companies consolidated within Group Banco Comercial Português (hereinafter referred to as Companies), as well as with keeping high standards of professional ethics. Banco Comercial Português is a bank headquartered in Portugal and, as such, must comply with the Portuguese and European legal and regulatory requirements concerning the prevention and fight against money laundering and terrorism financing. Group Banco Comercial Português incorporates and observes best international practices, namely the FAFT Recommendations which rule, in the recommendatory aspect, the regulatory system in force for the prevention of money laundering and terrorism financing. Group Banco Comercial Português gives maximum priority to policies meant to prevent its involvement or use for eventual money laundering or terrorism financing actions that may damage its reputation and stability. Thus, the Companies adopt internal measures, procedures and training and control programs to ensure that all its employees and auditors (internal and external) are aligned with the legal framework on this matter, of which we highlight: Law 4/83, of 2 April (Public Control on the Wealth of Holders of Political Positions); Law 36/1994, de 29 September (Measures to fight money laundering and terrorism financing) Law 5/2002, of 11 January (Measures to fight Organized Crime); Law 11/2002 of 16 February (Establishes the sanctions applicable to situations of non-compliance with the sanctions set forth by EU regulations and establishes cautionary procedures for the extension of its material scope); DL 304/2002, de 13 December (creates the Financial Information Unit and defines competences on prevention and criminal investigation issues); Law 52/2003, of 2 August (Counter Terrorism Law); Law 25/2008, of 5 June (establishing preventive and repressive measures to fight money laundering of illicit assets and terrorism financing) DL 317/2009, de 30 October (Legal Regime of Payment Services and E-Money); Notice nr. 5/2013 of Banco de Portugal (Regulates the conditions, mechanisms and procedures necessary for the effective compliance with the duties for the prevention of money laundering and terrorism financing foreseen in Law nr.25/2008 of 5 June within the scope of the provision of financial services subject to the supervision of Banco de Portugal); Once printed, this document constitutes a non-controlled copy Page 2/17

3 Regulation (EU) 2015/847 of the European Parliament and of the Council of 20 May 2015 relating to information conveyed together with funds transfers;; Regulation EC 1781/06/EC of the European Parliament and of the Council, of 15 November 2006 as well as the recommendations (40+9) issued by the FATF/GAFI (Financial Action Task Force) and by the Basel Committee on these matters. 2. POLICY PURPOSE AND SCOPE To prevent the use of the financial system to launder money and finance terrorism is one of the most effective means of fighting organized crime and an important tool in identifying and fighting criminal activities. Taking into account the serious consequences of money laundering and terrorism financing in the community and in the financial system, Group Banco Comercial Português considers that all its Employees have the duty to, in their daily activities and within the scope of the exercise of their functions, take into account and act in accordance with the domestic and international legislation on money laundering and also with the guidelines and internal rules of the Companies on this issue in order to be able to prevent the use of the products and services made available by the Group for purposes of money laundering and terrorism financing. This policy and procedures shall apply to: i. all units, branches and subsidiary companies of Group Banco Comercial Português in Portugal, and; ii. all the branches and subsidiary companies operating abroad with the necessary adjustments in view of the specifications of each jurisdiction, without damaging the mandatory compliance of the guidelines applicable to group relations ANTI-MONEY LAUNDERING AND COUNTER TERRORISM FINANCING - METHODS AND PROCEDURES 3.1. Internal Rulings Group Banco Comercial Português incorporates and observes best practices and international guidelines underlying the regulation framework in force to prevent the use of the system for money laundering and terrorism financing. These guidelines are strictly observed Due Diligence/Know Your Costumer (KYC) Group Banco Comercial Português adopts all the procedures necessary in order to be able to determine the true identity of its customers, representatives and/or ultimate beneficial owners (Customer Due Diligence Policy), and also to obtain all the pertinent and relevant information that the establishment of a business relationship involves. Within the ambit of due diligence and know your customer process, the Companies must, necessarily, evaluate (without damaging the evaluation of other aspects that may be deemed relevant) the following: i. the purpose of the account to be opened;; ii. the expected transaction profile; 1 Article 45 of Notice of Banco de Portugal nr. 5/2013; Once printed, this document constitutes a non-controlled copy Page 3/17

4 iii. iv. the customer s income sources; the coherence and consistency of the existing information.. The Due Diligence principles are applied not only to the customer s identification procedures but also to the detection, monitoring and follow-up of the transactions that do not conform to their characteristics. The Companies can resort to several sources of information on their Customers, both internal and external and regularly update that information, maintaining records of recent transactions, parties involved and their relation with the customer. All the registrations and document evidences are kept in several supports during a legally defined period of time Risk Based Approach The Companies developed a ML risk classification system applicable to all customers and beneficial owners which, acting in real time for the attribution of risk levels, is based upon the characteristics of the customer known during the KYC (professional activity, country of residence, expected transaction profile, condition of Politically Exposed Person, among others). This system enables, through an automated scoring attributed to each Customer an appropriate and differentiated risk level. The Customer Acceptance Policy, establishes the guidelines on the type of Customers with which the Companies are willing to initiate or maintain business relations, namely for money laundering risk (ML) purposes. Although the guidelines on money laundering and terrorism financing are applied to all new customers, they must also be applied to the existing ones based on weighted materiality and risk criteria. Since the process for classifying the ML risk of the customers is an ongoing process, the adequate procedures must be applied to all existing customers and accounts as per the risk attributed to them or to all who had their risk aggravated in accordance with the guidelines defined by the Companies and with the legislation and regulations on this subject, in force at any moment. 3 The Companies need to be sure that all the operations carried out in active accounts are continuously monitored and that any unusual or inappropriate functioning pattern shall trigger a process for the reevaluation of the risk classification of the customer, based on the updating of the respective due diligence. Accordingly, it is necessary to be sure that all the accounts held by companies, political parties, religious and charitable organizations, foundations, trusts, offshore vehicles and, among other, customers that exclusively resort to new technologies with online platforms (Internet and Mobile Banking) or that maintain with the Bank a non-presential relations, are subject to the appropriate KYC practices enabling 2 Article 14 of Law 25/2008: 1. All copies or references of the documentation gathered by, within the scope of compliance with the obligation to identify and of due diligence must be kept for seven years counting from the moment of the identification or, in business relationships, after they end. 2. The originals, copies, references or any long-lasting record, with similar validity as evidence, of the documentary evidence and of the records of the operations must always be kept, in order to enable the restoration of the operation, for seven years counting from the moment they are executed, even after the end of the business relationship. 3 Without damaging the immediate update of the information, whenever one of the circumstances foreseen in article 33, nr. 3 of Notice nr. 5/2013 of Banco de Portugal, the prioritization of the update varies, as per the provisos of nr. 2 of that article, in the reverse order in terms of the identified risk degree and must never exceed 5 years for low risk customers. Once printed, this document constitutes a non-controlled copy Page 4/17

5 to have a complete knowledge on the identity of the ultimate beneficial owners and on the transactional profile of those accounts. Within this context the Companies recognize and adopt as per the Appendix I and Appendix II of this document, the Lists Exemplifying High Risk Potential Factors and Suspicion Potential Indicators, in ML/FT matters, as mentioned in Notice nr. 5/2013 of Banco de Portugal Classification of risk The processes used to uphold the Companies' reputation and fight against money laundering and terrorism financing, within a rationale of differentiation and scoring of the ML risk, can only be truly efficient if the classification, analysis and monitoring policies are applied enabling them to understand, at all times, the risk level of the entity in question. Under those circumstances, all the Companies customers shall be classified as: i. low Risk, if the identities involved, sources of income or funds' origin are easily identified or, usually, present appropriate transactions, in accordance with the known profile of the customer, an individual or a legal person. In the risk classification defined by the Companies these are the customers classified with risks ML 1 and 2; ii. iii. medium Risk, whenever factors occur that are able to aggravate a risk considered by the Companies as one that cannot be neglected, such as in the occupation or activity of the customer, the business object of the entity, the inexistence of some identification data and of the transaction profile in the use of products and services. The Medium Risk classification comprises the ML risks 3 and 4; high Risk, for all those entities that, in compliance with criteria that the Bank defined for the acceptance of the customers, were accepted under conditions 4, due to the fact that the Companies recognized factors that they consider may considerably aggravate the risk involved, such as: geographic criterion, the condition of Politically Exposed Person (PEP), customers whose risk is attributed manually (due to specific high risk situations) and also those situations where the Companies verify that the financing sources, identities and operations are not clear, whenever the Customers refuse to give information or do not cooperate in the provision of the necessary information and also those that, due to their nature, may indirectly reveal an increased risk of unlawful practices. The High Risk classification comprises the risks ML 5 to Methods used in the monitoring and control procedures An approach based on risk as a method used by the Companies to identify, manage and mitigate the money laundering and terrorism financing risk must always include adequate control methods and systems to assess and prevent the effective occurrence of those risks. Thus: i. based on legal requirements 5 and on the factors that contribute to define the risk level, the Companies classify the customers through a ML Risk scoring. This process has to be continuously updated and enables the Companies to classify all entities in real time, a factor that is crucial and has a direct impact in all risk monitoring and control activities; ii. based on the ML risk profile, alerts are generated on daily transactions and on the behavioural variations that occur in a specific period of time, verifying if the transactions carried out by the customer comply with his/her/its profile, obtaining the evidence of their conformity through information or document evidences. In the cases where there is a high suspicion of an irregularity or unlawful act that may endanger the Companies' reputation, recommendations shall be issued and 4 As per 2.3. of the Customer Acceptance Policy. 5 Law nr.25/2008 Once printed, this document constitutes a non-controlled copy Page 5/17

6 their implementation shall be monitored. In more serious cases, the Companies may decide to terminate the business relation; iii. iv. based on the system used to filter entities and transactions, in direct interaction with other of the Companies' computer applications, the Companies are able to, in real time, monitor and assess the alerts relating to entities included in the internal and external lists (mandatory lists: e.g. United Nations Organizations / European Union / Office of Foreign Assets Control / Bank of England e FAFT/GAFI) with the purpose of verifying the matching or not, with the entities appearing in those lists. In case there is an exact match with some of the entities appearing in the international and mandatory lists, the Companies will not be able to carry out the transaction; in the remaining cases, when the match is not complete, the Companies must carry out enhanced control diligences. (1) the Companies keep an ongoing training of their employees and this training includes live training actions, on generic or specific issues, the supply of regular information, through the publication of relevant documents in the internal (that functions as a true depository of legal provisos, internal rulings and training manuals), on-the-job and e-learning training actions or yet through the disclosure of information in the internal network and by the Millennium BCP TV network. (1) It is mandatory for all the companies part of Group Banco Comercial Português, respective Employees and Service Providers to comply with the sanctions imposed by resolution adopted by the Security Council of the United Nations or regulation adopted by the European Union determining restrictions on the establishment or maintenance of financial or commercial relations with the States, other entities or individuals expressly identified in the respective subjective incidence scope. In Portugal, Law 11/2002, dated 16 de February, defines the regime sanctioning, under the Portuguese legal framework, the non compliance with the sanctions mentioned above. The existing procedures on sanctions and embargoes apply to effective and potential clients and are the minimum requirements for the filtering of the operations prior to their execution, against the embargoes lists Monitoring and Control The objective of the implemented control system is to protect the Companies from the several risks it faces and enable an ongoing monitoring of the execution of the transactions, assuring their compliance with all legal requirements, the pre-defined internal procedures, taking into consideration the profile of the customer in question. This control system will enable the Companies to detect transactions that show relevant signs or suspicious features in terms of Money Laundering and Terrorism Financing (ML/TF). Group Banco Comercial Português adopted and implemented several IT devices that enable it to, in an automatic manner, control and monitor customers and transactions. The monitoring and control activities include, but are not limited to, the following practices: i. monitoring and control of high ML risk customers and transactions; ii. iii. iv. monitoring and control of transactions involving high ML risk countries; monitoring and control of complex and/or extraordinary transactions; continuous monitoring of the consistency between the transactions and the information collected on the activities pursued by the customer, risk profile and his/her/its financial assets.. This activity does not only involve extraordinary transactions (daily alerts) but also the assessment of the Customer s profile in terms of time relating to the number of transactions made and the average of amounts involved (monthly alerts); Once printed, this document constitutes a non-controlled copy Page 6/17

7 v. control, by computerized means, of transactions that exceed a pre-determined amount (as per the customer s risk level) and assessment to verify if the same are consistent with the customer s profile; vi. monitoring and control of related extraordinary transactions that, together, exceed the required legal limit for the identification of the customer; vii. monitoring and control of transactions involving entities subject to the different sanctions and embargos that appear in the lists of suspicious entities issued by the United Nations, European Union and the Office of Foreign Assets Control (to control the compliance with those restrictions issued internationally) and also in Internal Lists, preventing/restricting transactions or forcing the making of an Enhanced Due Diligence. Within this scope, the Companies define performance priorities in real time, in accordance with the motive that determined the filtering of the operation; viii. control on the conclusion and updating of the information and documents of the customer that must be kept in paper or in the computer system, plus all additional information that will have to be included in electronic transfers of funds; ix. control of transactions presented by non-reliable means and without the physical presence of the customer Regardless of the above-mentioned criteria, of the ML risk level of the customer, the country involved in the transaction or the transaction s complexity or dangerous nature, the Companies must pay a special attention to all conducts and/or activities whose features may aggravate the risk or possibility of being related with the crimes of money laundering and terrorism financing 6 and must collect information and document evidence on the conformity and economic rationale of the transactions analyzed. Group Banco Comercial Português defined internally an Assessing and Monitoring High Risk Entities and Accounts Policy, which establishes practices and procedures enabling the Group to handle with these customers Reporting Suspicious Transactions The appropriate control and monitoring of customers and transactions is a fundamental activity of the Companies to detect, identify and follow-up transactions or untypical and/or potentially suspicious activities. If there is a grounded suspicion that a customer or a potential customer is using or intends to use the Companies products and services to launder funds coming from an unlawful activity or to finance terrorism, Group Banco Comercial Português must take all the steps necessary to assure the full observance of all the relevant legal requirements in force. The OS0105 defines the competences of the several departments of the Compliance Office in case of the detection of transactions or activities considered suspicious. The employees or their respective areas shall always have to report those transactions or activities to the Compliance Office, the organic unit responsible for assessing the same in a more detailed manner and carry out the appropriate internal diligences. Group Banco Comercial Português maintains a relation of total cooperation with the competent authorities of each jurisdiction, assuring to all the access to the information they deem relevant and, whenever necessary and complying with the applicable legal requirements, shall present to the competent authorities a report on transactions or activities showing abnormal (suspicious) features. 6 As per article 15 of Law 25/2008 Examination duty Once printed, this document constitutes a non-controlled copy Page 7/17

8 3.8. Main Risk Situations A Customer Due Diligence Policy was made to comply with Notice nr. 5/2013 of Banco de Portugal, concerning the following risk special situations: a) the execution by third parties of the identification duty; b) beneficial owners; c) deposits in cash of equal or above ,00 or 5.000,00, according to the circumstances foreseen in the Notice; d) occasional transactions amounting to ,00, or more whether these are presential or made using remote channels, including (i) the cases when the transfer of funds whenever not connected with any account held, depending of the situation, by the remitter or by the beneficiary and (ii) the exchange and re-exchange operations when considered occasional since they are not carried out within the scope of a business relation; e) supplementary procedures in remote transactions; f) whenever the individual or aggregate amount of the transfers amounts to 1.000,00 or more or to less than ,00 and these transfers are not comprised within the exclusions foreseen in numbers 2, 4, 5 and 7 of article 3 of the Regulation (EC) nr. 1781/2006, of the European Parliament and of the Council, dated 15 November 2006, identify the transfers remitters or beneficiaries) Training The training policy in AML/CTF aims to ensure the conformity of the Companies with the applicable legal and regulatory framework, observing, in particular, the provisos of article 22 of Law 25/2008 and articles 46 and 47 of Notice nr. 5/2013 of Banco de Portugal, increasing the competences of all Employees on the prevention of money laundering and terrorism financing. Without damaging the general duty of training relating to functions specifically exercised by the Employees that are relevant in these issues, the Companies dedicate a special attention to the training of newly-admitted Employees whose functions are directly related with money laundering and terrorism prevention issues, within the scope of the "Integration Training" program ensuring that these do not begin to exercise functions without having, at least, some knowledge on: a) principles and basic concepts on anti-money laundering and Counter Terrorism Financing; b) the fundamental principles of the internal control system in force and the instrumental rules and procedures for its execution. The training program includes classroom, on-job and e-learning training actions. The training in classroom or on-job is mainly given by internal trainers, namely persons with a high experience on these matters, who are members of the Compliance Office Agents When, in accordance with the Legal Regime of Payment Services and E-Money, the exercise of the respective activity is admissible to be made through Agents, the Companies adopt the requisites specifically applicable to them in accordance with article 6 of Notice nr. 5/2013 of Banco de Portugal, depending on whether their respective activity is carried out in the national territory and the Agent is, or not, domiciled in the national territory Correspondent Banks 7 As per Article 27 of Notice nr. 5/2013 of Banco de Portugal. Once printed, this document constitutes a non-controlled copy Page 8/17

9 Group Banco Comercial Português takes the necessary steps in accordance with the existing rules and best practices in what concerns the establishment or maintenance of relations with correspondent banks, complying, in particular, with the provisos of articles 12, nr. 2 and 26 of Law 25/2008 and article 38 of Notice nr. 5/2013 of Banco de Portugal. APPENDIX 1 - LIST EXEMPLIFYING POTENTIAL HIGH RISK FACTORS A. Risk Factors inherent to Customers 1 - Business relations or occasional transactions that are carried out under unusual circumstances versus the expected profile of the Customer and the remaining elements that characterize the business relation or occasional transaction. 2 - Clients/ beneficial owners resident or developing activities in countries or jurisdictions mentioned in numbers 20 to Legal persons or collective interests centers without legal personality that are vehicles for the ownership of personal assets. 4 - Companies with nominee shareholders or those having their share capital represented by bearer shares. 5 - Clients pursuing activities that involve a significant number of transactions in cash. 6 - Ownership or control structure of the customer (specifically the respective chain of stakes, of control or domination) that seem unusual or excessively complex taking into account the nature of the activity pursued by the Client. 7 - Politically Exposed Persons. 8 - Bank correspondents in third countries. 9 - Clients/beneficial owners that have been object of sanctions or restrictive measures imposed by the Security Council of the United Nations or by the European Union. 10 -Charitable organizations whenever one of the following circumstances occurs: a) the organization has, domestically, a significant portion of the financial resources controlled by the charitable sector; b) the organization has a significant portion of the international activities developed by the charitable sector. For that purpose, must be considered as belonging to the same organization, the activity developed through: (i) branches or agencies outside the organization; (ii) associated charitable organizations, including the agencies and branches of those organizations; c) the ownership or control structure are unusual or excessive complex in view of the nature of the activity developed Business relations, occasional transactions or operations in general expressly indicated by Banco de Portugal, in view of the risks associated to Clients/beneficial owners. B. Risk factors inherent to products, services, transactions or distribution channels 12 - Private banking Trade finance Products or transactions able of favoring anonymity Business relations or occasional transactions established/executed by means of remote communication means Payments received from unknown third parties or not related with the Client or with the activity pursued by it Products made available and transactions made within the scope of bank correspondent relationships with credit institutions established in third countries. Once printed, this document constitutes a non-controlled copy Page 9/17

10 18 - New products and new business practices, including new distribution mechanisms and payment methods, as well as the use of new technologies or developing technologies for new products or existing ones Business relations, occasional transactions or operations in general expressly mentioned by Banco de Portugal in view of the risks associated to products, services, transactions or distribution channels. C. Risk Factors inherent to geographic location 20 - Countries or jurisdictions with strategic deficiencies in what concerns the prevention of money laundering and terrorism financing identified by the Financial Action Task Force in a document published by this organism at the website Other countries or jurisdictions identified by credible sources (as, for example, publicly disclosed evaluation/monitoring reports) as not having efficient means to prevent money laundering or terrorism financing Countries or jurisdictions identified by credible sources as having a significant level of corruption or of other criminal activities Countries or jurisdictions that have been subject to additional countermeasures resolved by the Council of the European Union Countries or jurisdictions that have been object of sanctions or restrictive measures imposed, namely, by the Security Council of the United Nations or by the European Union Countries or jurisdictions that finance or support terrorist activities or where known terrorist organizations operate Offshore centers Business relations, occasional transactions or operations in general expressly indicated by Banco de Portugal in view of the risks associated to geographical factors. II. The list appearing in I may be updated by a circular letter of Banco de Portugal. APPENDIX 2 - LIST EXEMPLIFYING POTENTIAL HIGH RISK FACTORS A. Generic Indicators 1 - Clients that establish business relations make occasional transactions or make operations in general that - for their nature, frequency, amounts involved or any other factor - do not match their profile. 2 - Clients that, without a plausible explanation, make entries in cash: a) in unusual amounts; b) in amounts that do not match the Client's profile; c) that is packed or presented in a unusual way; d) presented in a poor condition or in a bad conservation state; or e) represented by small banknotes to be exchanged by large banknotes. 3 - Clients that, in any way, try to persuade the employees of the financial institution from observing any legal duty or internal procedure in what concerns the prevention of ML/TF. 4 - Clients that are reluctant or refuse to provide the identification data/means of proof/other information data or to promote the verification diligences deemed necessary by the financial institution to: a) identify the client, its attorney or beneficial owner; b) understand the Client's ownership and control structure; c) know the nature and purpose of the business relation; d) know the origin and destination of the funds; or e) characterize the Client's activity. 5 - Clients that are reluctant or refuse to provide original documents or similar. 6 - Clients that are reluctant or refuse to update their information data. 7 - Clients that are reluctant or refuse to establish face-to-face contacts with the financial institution. Once printed, this document constitutes a non-controlled copy Page 10/17

11 8 - Clients that provide identification data or other information data that show the following characteristics: a) their authenticity is not very credible; b) their contents are not very explicit; c) the documents are very difficult to verify by the financial institution. d) present unusual characteristics; 9 - Clients that present different identification documents every time the same are requested to them by the financial institution Clients that, in the exercise of their activity, use pseudonyms, nicknames or any other expressions other than their real name or denomination Clients that postpone or do not deliver at all the documents required to be presented to the financial institution after the establishment of the business relation Clients that try to suspend or alter the business relation or the occasional transaction after identification data, means of proof or other relevant information for the knowledge on the Client have been requested to them Clients that do not wish to have any mail remitted to the address provided Clients that, without having an apparent relation among themselves, present the same mail address or contact data (phone number, fax number, address or other) Clients whose address or contact data (phone number, fax number, address or others) are incorrect or permanently inoperative, especially when the contact attempt made by the financial institution is made shortly after the establishment of a business relation Clients whose address or contact data (phone number, fax number, address or others) are frequently altered Clients that, apparently, are acting on behalf of a third party and do not reveal that fact to the financial institution or, if they do so, they refuse to supply the necessary information on the third party on behalf of which they are acting Clients that seek to establish close relations with employees of the financial institution Clients that try to restrict any contacts they establish with the financial institution to only one employee or to specific employees of the latter, in particular when - if that employees or employees is/are absent - the Clients decides not to execute the operations or suspends the same Clients that reveal an extraordinary knowledge on the legislation ruling money laundering and terrorist financing Clients that evidence an unusual interest and curiosity on the financial institution's internal control policies, procedures and mechanisms for the prevention of ML/TF Clients that, in a short period of time, have established similar business relations with different financial institutions Clients that develop their activities in successive different locations in an apparent attempt to avoid being detected by third parties Clients that, repeatedly, make operations in an amount under the limits that would mandatorily imply the adoption of identification procedures Clients that acquire assets with a significant value and that sell the same in a short period of time and for no apparent reason Clients that, on the same day or in a very short period of time make operations in different agencies of the institution Clients that present unclear or inconsistent explanations on the operations or have little knowledge on their purpose Clients that give too much and non-requested explanations on the operations Clients that appear to be nervous or have an abnormal urgency in the execution of the operations Clients related with operations suspected of being connected to ML/TF that have been reported by the financial institution to the competent authorities. Once printed, this document constitutes a non-controlled copy Page 11/17

12 31 - Clients related with operations suspected of being connected to ML/TF that have been reported by the supervision authorities under article 40 of the law and are known by the financial institution Clients that are or have been under scrutiny for the practice of criminal activities, in particular ML/TF or any of the criminal offences underlying these two types of crime (being that information known by the financial institution or conveyed by a public and credible source) Clients expressly referenced by the competent authorities as able of being related with ML/TF operations Clients that exercise any type of financial activity and for which exercise they are not duly authorized or licensed Operations that show a degree of complexity that is apparently not necessary for the accomplishment of the goal in view, namely in what concerns the number of financial entries made, of the financial institutions involved, accounts, intervenient parties and or countries or jurisdictions involved Operations the purpose or economic rationale of which is not evident Operations, whose frequency, atypical circumstances or uncommonness are not consistent with the profile of the Client Operations that are, apparently, not consistent with the current practice of the Client s line of business or activity Operations that involve shell companies Operations that are not at all related with the known activity pursued by the Client and involve individuals or entities related with countries or jurisdictions that are publicly known as: a) places where drugs are produced/ trafficked; b) showing high levels of corruption; c) being money laundering platforms; d) promoting or supporting terrorism; or e) promoting or supporting the proliferation of weapons of massive destruction Operations that do not present any relation at all with the activity known as being pursued by the Client and that involve individuals or entities related with countries, territories, or regions with privileged tax regimes included in the list published by the Ordinance nr. 150/2004, of 13 de February, or other countries or jurisdictions with a strongly restrictive legislation in bank secrecy issues Business relations or occasional transactions that seek to hide the identity of the beneficial owners, namely through complex corporate structures. B. Indicators related with banking deposit accounts 43 - Clients that hold a considerable number of bank deposit accounts opened, especially when some of them are inactive for a long period of time Clients that hold bank deposit accounts with several banking institutions located in the same country/geographical area Clients that make deposits and do not know exactly the amounts they are depositing Clients that open accounts with significant amounts in cash Clients that often use personal bank accounts for the accomplishment of operations related with their business activities Accounts that often register entries for which the respective holder does not present a credible justification Accounts opened in branches that are, geographically speaking, very distant from the Client s work place Accounts that show an activity that largely exceeds the activity expected on the date they were opened Accounts co-held or used by a high number of individuals that do not with each other any professional or business relation. Once printed, this document constitutes a non-controlled copy Page 12/17

13 52 - Accounts held by legal persons that pursue economic activities without any relation with each other, being all used by the same natural persons Accounts with a large number of small deposits and a small number of large debits Accounts with many credits or debits in cash and that are not consistent with the Client's profile or with his/her/its line of business or activity Accounts that often receive deposits made by individuals that apparently do not have any professional or personal relationship with the account holders Accounts used to concentrate funds coming from other accounts that are afterwards transferred in block, especially when such transfer is made to another country Accounts that, for no apparent reason, show a sudden increase in the number of entries made, of the amounts used and or the respective average balances Accounts that remain inactive for a very long period of time and suddenly register debits/credits involving large amounts or receive large deposits in cash Accounts that are almost exclusively used for the transfer of funds from and to abroad Accounts held by entities domiciled in offshore centers that have the same beneficial owner and frequently register complex fund entries Accounts that often receive large deposits made through ATMs or night deposit boxes, in particular when those deposits are made in cash Accounts that receive cash deposits immediately after their holders access a rental safe held by them in the financial institution. C. Indicators related with credit operations 63 - Early redemption of credits when the same: a) are made unexpectedly and without an apparent logical reason; b) represent a loss for the borrower; c) are made with funds coming from third parties; d) are made with funds whose origin is uncertain and not consistent with the Client s profile; e) are made by resorting to funds transferred from accounts opened in several financial institutions; or f) are made in cash (particularly in the context of consumer loans) Loan applications made with no apparent economic justification, taking into consideration, for example, the high value of the assets owned by the Client Loan applications made by Clients that do not evidence interest in discussing the terms and conditions of the operation, in particular the costs thereto related. 66- Loan applications based on collaterals or assets deposited at the financial institution, owned by the client or by third parties, whose origin is unknown and the value of which does not match the client s financial situation Loan applications made by Clients that already are borrowers in loans granted by institutions domiciled in offshore centers and show no relation with the known activity pursued by them Loan applications made by Clients that reported income to the financial institution the origin of which has not been totality explained by their holders Loan applications made by Clients that propose, as a compensation for the approval of the loan, the application of significant amounts in the subscription of other products or in deposits Loan application wherein the documents on the borrower that will become part of the respective process are delivered to the financial institution by a third party that has no apparent connection with the operation Lack of evidence that the sums borrowed have been used and the Client withdrawals in cash the amount credited in his/her/its bank deposit account that corresponds to the loan granted Repeated payments with credit cards made by different individuals that are not the holders of those cards. D. Indicators related with transfer of funds Once printed, this document constitutes a non-controlled copy Page 13/17

14 73 - Transfers segmented in several operations in order to avoid the compliance with the legal and regulatory duties foreseen for operations that reach a determined amount Transfers to abroad that are not consistent with the known activity pursued by the Client due, namely, to the amounts involved, frequency and beneficiaries Transfers that - at any point of the fund's circuit, including when they are made available to their final beneficiaries - show the intervention of, under any capacity, of individuals or entities that are not duly authorized to exercise such activity by the competent authorities of the countries or jurisdictions involved Operations that do not evidence an apparent relation between the known activity pursued by the Client and the beneficiaries/remitters of the operations or the originator/destination countries or jurisdictions Transfers whose purpose the Client refuses or is reluctant to explain Transfers in favor of a beneficiary or coming from a remitter about whom the customer has little information of or is reluctant to provide it; 79 - Transfers in amounts that exceed the amounts expected when the business relation was established with the Client Transfers to abroad made in favor of a large number of beneficiaries that, apparently, are not members of the Client's family Transfers made in favor of a large number of beneficiaries that were born in countries or jurisdictions recognizably related with terrorist activities Transfers regularly ordered by the same person or entity for the same or approximate amounts to different beneficiaries Transfers regularly ordered by the same person or entity wherein the beneficiary is the same but the amounts vary Transfers ordered by different individuals or entities to the same beneficiary on the same date or on very close dates Transfers ordered by different individuals or institutions that have in common one or more personal information data (last name. address, employer, phone number, etc.) made on the same date or on very close dates Transfers ordered by different individuals or institutions wherein the respective funds are made available by only one of them Transfers made using funds made available by a third party Large transfers instructing that the funds are to be delivered to the respective beneficiary in cash Transfers coming from abroad wherein the amounts transferred immediately leave the Client's account or, if no account exists, they are immediately transferred to other beneficiaries Transfers containing instructions stating that the amounts transferred are to be made available to third parties and not to the operation's beneficiaries Transfers to abroad made in a crossed way, that is, showing transfers from abroad with the same or approximate amount or amounts Transfers wherein the Clients evidence an unusual interest and curiosity on the funds transfer system, namely operational procedures, limits, etc Transfers to abroad made on dates that, apparently do not coincide with salary payment dates, in particular when ordered by emigrant citizens. E. Indicators related with manual FX operations 94 - Operations segmented in several purchases/sales in order to avoid the compliance with the legal and regulatory duties foreseen for operations reaching a determined amount Operations that are not consistent with the known activity pursued by the Client because, namely, of the amounts involved or frequency. Once printed, this document constitutes a non-controlled copy Page 14/17

15 96 - Operations that, pursuant to a proposal made by the Client, are executed using a foreign exchange rate more favorable for the financial institution than the one made public and/or the fees paid exceed the due amount Operations wherein the Client intends to exchange large sums in a determined currency for another foreign currency Operations with non-resident Clients that apparently travel to the national territory expressly to purchase/sell currency Frequent foreign exchange operations, with small banknotes or with currencies of low international circulation Operations wherein the Client instructs the financial company to afterwards deliver the counter value to a third party Operations wherein the Clients insist in receiving the counter value by cheque of the financial institution and this is not the practice usually adopted by the latter Operations wherein the Clients request to receive the counter value in a foreign currency in banknotes as large as possible Operations wherein the Clients request to receive the counter value in several post office cheques of small amounts to the order of several beneficiaries. F. Indicators related with the employees of the financial institutions Employees that, repeatedly, stop from observing any legal duty or internal procedure in what concerns the prevention of ML/TF Employees that establish family ties or close relationships that exceed the usual standards within the context of the functions committed to them and do not comply with the internal practices established by the financial institution Employees that evidence a social behavior or other external signs that do not match their financial standing, as known by the institution. G. Other indicators Operations related with the sale of real estate properties wherein: a) the sale amount largely exceeds the market values; b) the payment is made by bearer cheque or by cheque endorsed in favor of a third party that has no apparent relation with the transaction; b) the payment is made in cash, in particular when it comes from a bank deposit account held by a third party that has no apparent relation with the purchaser; or d) the real estate property involved in the transaction has been recently acquired by the seller Operations related with charitable organizations whenever: a) the nature, frequency, or the amounts involved in the operations are not consistent with the size of the organization, with its objectives or with its known activity; b) the frequency and the amount of the operations increase suddenly ; c) the organization keeps large amounts in its bank deposit account for very long periods of time; d) the organization only gets contributions from individuals or entities that do not reside in Portugal; e) the organization apparently has few or any human and logistic resources allocated to the exercise of their activity; f) the representatives of the organization do not reside in Portugal, especially when large transfers are made to the country where those representatives reside; or g) the organization has some kind of relation with countries or jurisdictions publicly recognized as countries where drugs are produced/trafficked, show high levels of corruption, are platforms for the laundering of money, promote or support terrorism or support or promote the proliferation of weapons of massive destruction Clients that, suddenly, increase the number of times they go to their safe rentals. Once printed, this document constitutes a non-controlled copy Page 15/17