Anti-money laundering / Prevention of finance of terrorism at UBI><Banca. Organisational model, regulations and management policies

Transcription

1 Anti-money laundering / Prevention of finance of terrorism at UBI><Banca Organisational model, regulations and management policies Brescia, August 2017

2 Anti-money laundering / Prevention of finance of terrorism at UBI Banca - introduction The prevention of money laundering and finance of terrorism risks in the UBI Banca Group is managed in full compliance with the European and Italian regulations in force 1 and with the measures to implement them (the Provisions ) issued by the Bank of Italy (central bank of the Republic of Italy, part of the European System of Central Banks ESCB and of the Eurosystem). In compliance with Bank of Italy regulations, the Group has specific controls in place for the risks considered here and employs clearly identified staff, procedures and organisational functions with appropriate specialisation for these and employs a management model which: - involves the creation of a special function responsible for supervising the prevention effort and managing the risks in question. This includes the assignment of responsibility for assessing and reporting suspicious transactions to the Bank of Italy s national Financial Intelligence Unit; - clearly defines the different levels, roles, duties and responsibilities and also contains procedures designed to ensure compliance with the three fundamentals set at EU level and that is the following obligations: o customer due diligence; o reporting suspicious transactions to the FIU; o keeping records, information and data acquired when customer due diligence is carried out; - co-ordinates control functions involved in combating money-laundering and the finance of terrorism, which includes appropriate lines of reporting to facilitate the sharing of relevant information and to prevent inconsistencies between the different sources of information available to corporate management (at the same time the Group ensures that the architecture of these functions is consistent with the organisational structure, complexity and size of the company, the type of services and products offered and the magnitude of the risk that can be associated with the characteristics of the customers); - assigns responsibility to employees and external associate workers; - monitors compliance by staff and workers with internal procedures and all regulatory obligations with particular regard to active collaboration and continuous analysis of customer transactions; - provides adequate training on the subject. In relation to the last point it is underlined that the anti-money laundering function itself, in cooperation with UBI Academy, supervises staff training on combating money-laundering and the finance of terrorism by carrying out the following: - an analysis of training needs which much consider the provisions of the regulatory framework, the specific nature of corporate roles and previous action in which staff have 1 - Directive EU 2015/849 ( fourth anti-money laundering directive ), implemented in national law by Legislative Decree No. 109/2007 and subsequent amendments and by Legislative Decree No. 231/2007 and subsequent amendments. AML/Prevention of finance of terrorism at UBI><Banca August

3 been involved; - the design, development and update of the contents of training initiatives, with a standardised approach at Group level which ensures the following: o implementing the regulations in force; o clarity and effectiveness in the presentation of the contents; o correlation between the subjects illustrated and the operations involved in the procedures, with precise references to practical cases (illustration of expected behaviours and those to be avoided); - planning of training delivery, which considers the degree of risk present at each bank and company and in each organisational unit in them. A more in-depth examination is given in the following sections: 1. The organisational model 2. Regulations and management policies 1. The organisational model The organisational model adopted involves a specialist unit at the Parent named Anti-Money Laundering & Claims which is responsible for guidelines, co-ordination and control on the subject. The Anti-Money Laundering Liaison officers at subsidiary banks and companies that have outsourced the anti-money laundering function to the Parent (at the date of publishing this document: IWBank, UBI Leasing, UBI Factor and Prestitalia) and the Anti-Money Laundering Officers of other banks and companies, which have formed their own anti-money laundering functions (at the date of publishing this document: UBI Pramerica, Banca Adriatica, Banca Tirrenica, Banca Teatina, Banca Federico del Vecchio, Cassa di Risparmio di Loreto and the foreign concerns of the Group) report to that unit functionally. In the latter case, the local Anti- Money Laundering Officers, which operate in compliance with guidelines received from the Parent, are responsible for the identification and the implementation of appropriate procedures to manage the risk and to verify the proper functioning of procedures, organisational units and systems, and also for providing support and advice on decisions concerning the management of this risk. The Manager of the Anti-Money Laundering & Claims Area reports hierarchically to the Group Chief Risk Officer who in turn reports directly to the Management Board, and for all effects and purposes that manager is classified as one of those managers responsible for corporate control functions. This person s duty is to bring the overall management of money-laundering and finance of terrorism under one unit and he is appointed and removed by the body with the management function in agreement with the body responsible for strategic supervision after consultation with the body responsible for the control functions. As required by the regulations in force, this manager is in possession of adequate requirements of integrity, authority and professionalism and, in consideration of the importance of his duties, controls have been put in place to protect his stability and independence. Furthermore, he has no direct operating responsibilities, nor does he report hierarchically to staff working in operating areas. His role and AML/Prevention of finance of terrorism at UBI><Banca August

4 responsibilities are adequately formalised and disclosed within the Group. The governance model adopted by the Group to prevent and combat money-laundering and finance of terrorism transactions, involves assignment to the Anti-Money Laundering & Claims Area of the duty to continuously verify that operating procedures and IT systems are able to ensure compliance with the provisions of laws and regulations on this matter. The Manager of the Anti-Money Laundering & Claims Area acts as the Anti-Money Laundering Officer for UBI Banca and for the banks and companies that have outsourced this function to it. Furthermore, responsibility is delegated to him by the Legal Representative of each of UBI s Italian subsidiaries for assessing and sending reports of suspicious transactions to the national FIU (he also duly receives information on reports of suspicious transactions transmitted by Anti- Money Laundering Officers of foreign companies in the Group to their local FIUs). 2. Regulations and management policies The current internal regulations in force on the prevention of money-laundering and finance of terrorism risks are organised on three hierarchically linked levels: 1. Strategic guidelines and Policies for the management of risks connected with moneylaundering and the finance of terrorism ; 2. Group Organisational Regulations on combating money-laundering and the finance of terrorism ; 3. Anti-Money Laundering Regulations Rulebook. The regulations are published and can be consulted online by all staff on the Regulatory Portal, accessible on the corporate intranet and its contents are used for training initiatives destined to all staff. The Strategic Guidelines adopted by the Group and approved by the competent governing bodies in April 2017, drawn up in compliance with Principles for the design of the internal control system and Compliance risk management policies, provide guidelines for risk management in this area at the Parent and at subsidiaries and they define the relative principles, management guidelines and characteristics of the organisational model to be adopted. The underlying basis of the regulations is that effective organisational structure and governance constitute essential conditions for the prevention and mitigation of corporate risk factors. The document lays down guidelines for risk management, for compliance with the three fundamentals cited in the introduction (customer due diligence, reporting suspicious transactions, record keeping and data storage) and also obligations connected with limits on the use of cash and bearer certificates, compliance controls (to assess the adequacy of systems and procedures) and staff training. It defines the necessary contents of possible outsourcing agreements (where authorised by external regulations) and the necessary controls with regard to the distribution network and intermediaries. The characteristics and details of the organisational model to be adopted for risk management are AML/Prevention of finance of terrorism at UBI><Banca August

5 also documented and it includes a definition of the roles and duties of the various staff involved, together with the details of the necessary lines of reporting and relationships. It is underlined that the various roles to which responsibilities are given include those of Managers of Operating Points who are responsible for the administration and concrete management of customer relationships. They are assigned the role of first-level assessor in the process of reporting suspicious transactions to the competent FIUs. On the basis of the evidence and corporate instruments available, they carry out overall assessments of transactions carried out by customers and of the risk profile attributed to them and they intercept suspicious transactions, which they report to a specialist unit for finalisation. The characteristics of the organisational model adopted are set out in the Organisational Regulations, approved by the competent governing bodies in July 2017, which describe the model adopted by the Group by setting out the main roles and responsibilities assigned to the staff involved in activities to combat money-laundering and the finance of terrorism. The document also describes the main processes involved in the prevention and management of money-laundering and finance of terrorism risks, also with regard to verification of compliance and it describes the main relationships and lines of reporting between the corporate units involved and defines the internal reporting model. As concerns reporting, the document gives details for each line of reporting of the contents of the reports, the unit responsible for compiling them, the recipients, the frequency and the relative external regulations that apply, where present. The Anti-Money Laundering Regulations Rulebook, destined to all staff, illustrates the provisions defined by the Group for the application of regulations on the matter. It summarises corporate regulations on the subject in a single document and gives instructions to follow during the course of business. The Anti-Money Laundering Regulations Rulebook is updated periodically on the basis of circulars (regulatory provisions) published when the regulatory changes occur or when updates are made to the related operating procedures. The document was last updated in August 2016 and is currently being further revised as a result of regulatory changes introduced in 2017 and as a result of the substantial changes made to the Group s organisational structure. The Rulebook is composed of five sections with regulatory and operating instructions to implement this matter as follows: 1. the legislative framework; 2. customer due diligence obligations; 3. restrictions on the use of cash and bearer certificates; 4. obligations to keep records of transactions and register them; 5. obligations to report suspicious transactions. One important factor here is the Group s development of its Anti-money laundering Portal, a monitoring tool to keep track of events on the matter which require more precise analysis as a function of the importance of the relative operations or due to the approach of a deadline by which actions required by internal regulations must be taken. The software guides and supports AML/Prevention of finance of terrorism at UBI><Banca August

6 the activities of staff in the distribution network and is a fundamental tool for carrying out second level controls on the work of line units. An Anti-money Laundering Portal Rulebook has been compiled which contains operating instructions on the use of this software tool. All staff are required to carefully comply with all the instructions laid down in the rulebooks and circulars which update their contents and they are aware that any failure to comply with these in the course of their work may result in criminal and administrative penalties applicable by law. The results of the ordinary and extraordinary management of operations and projects connected with this matter are compiled on a quarterly basis and submitted to the management, supervisory and strategic policy-making bodies of the Group in specific reports. AML/Prevention of finance of terrorism at UBI><Banca August