Effective compliance risk management aims at stimulating, monitoring and controlling the observation of laws, regulations, internal rules - including the compliance principles outlined in Fransabank’s Code of Conduct - and establishing good business standards that are relevant to the integrity and, hence, to the reputation of Fransabank. Integrity is the focus in managing compliance risk and therefore the driving force behind everything Fransabank does. Controlling integrity risk is accordingly placed within the scope of the compliance function.
The compliance function of Fransabank supports the entity and its management in managing the compliance risks and embedding and improving the compliance arrangements in all levels and structures of the entity. The compliance function therefore has the following objectives:
- To identify, assess, control, monitor, test and report on the compliance risks faced by Fransabank
- To assist, support and advise the Board of Directors, top and senior management of Fransabank, in fulfilling their responsibilities to manage compliance risks
- Foster a compliance culture among staff and enhancing compliance awareness throughout the organization
- Implement the compliance program in a fashion that is in line with regulatory environments and expectations
- Enforce compliance policies and procedures which implement applicable laws and regulations and adopt industry standards and best practices
- Advise any staff member of Fransabank with respect to their personal responsibility to manage compliance risks.
The scope of compliance depends on the nature, the size and the location of business activities. It generally includes:
- Legal/Regulatory Compliance including: compliance with rules & regulations, FATCA law, and local and international sanctions and restrictive measures (UN, US, EU sanctions)
- Anti-Money Laundering and Combating the Financing of Terrorism including: customer acceptance – Know Your Customer / Customer Due Diligence, transaction monitoring, investigation and reporting.
- Capital Markets Compliance including: treatment of confidential information, management of conflicts of interest, prevention of insider trading and market manipulation, new product approval, and fair treatment of customers.
Fransabank Group’s AML/CFT (Anti-Money Laundering/Combatting the Financing of Terrorism) Policy primarily aims at setting, within the Group, the essential standards for fighting money laundering operations and terrorism financing. Should the applicable AML/CFT laws and regulations of any country or jurisdiction require higher standards, Fransabank Group’s overseas subsidiaries and associate banks must conform to those standards. However, in case the relevant subsidiary or associate bank comes across any applicable law that is inconsistent with the Group’s policy, it must first refer to the Group’s Compliance Department to resolve the conflict.
The AML/CFT Policy also encompasses the following objectives:
- Promoting a Know Your Customer (KYC) standard as a cornerstone principle for Fransabank Group business ethics and practices:
- Prior to any transaction of any type, Fransabank Group’s entities gather and document the relevant customer identification data, along with the background information, the purpose and the intended nature of the business
Fransabank Group’s entities retain and document any additional customer information relevant to the assessment of the money laundering risk, by adopting a risk-based approach which triggers the proper enhanced due diligence for the relevant customers
- Enforcing the following additional due diligence measures while establishing and maintaining correspondent relations:
- Gathering sufficient documentary evidence on a respondent institution, to avoid any relationships with “shell banks”
- Enquiring about the good reputation of a respondent institution from public sources of information, including whether it has been subject to a Money Laundering or Terrorist Financing investigation or other regulatory action
- Verifying, on a periodic basis, that the respondent institution is implementing sufficient and effective procedures to fight Money Laundering and Terrorist Financing
- Monitoring and reporting suspicious transactions/activity:
- Fransabank Group’s entities apply due diligence measures whenever they detect any unusual or suspicious transaction or activity, taking into account the legal framework of the concerned institution
- All suspicious transactions or activities complying with the laws and regulations of the corresponding jurisdiction are reported
- The Group’s Compliance Department is notified of all suspicious transactions or activities when doubts arise
- Developing an effective internal control structure where no activity with a customer is carried out without obtaining in advance all the required information relating to the customer
- Consolidating, within the Group, the AML/CFT efforts deployed by Fransabank entities
- Conducting self-evaluation processes on the compliance with the AML/CFT policy and measures
Consequently, the adoption of the AML/CFT Policy is crucial to ascertain that all Fransabank Group’s entities, whatever their geographic location, fully comply with the enacted AML legislation. Thus, the Group is committed to overseeing its AML/CFT strategies, objectives and guidelines on an ongoing basis, and supporting an effective AML/CFT Policy within the Group’s business.
Fransabank Group’s Compliance governing principles are as follows:
Integrity and reputation are vital assets to maintain the healthy growth of business
Management is the owner of compliance to foster the adequate enterprise-wide culture
The compliance function is independent from business lines, yet is a shared responsibility of all employees
A transparent and constructive relationship between the Fransabank’s Group and its’ regulators is maintained
Effective monitoring of compliance risks is implemented
Timely, accurate and systematic compliance reporting is provided
The compliance function will continue to improve itself by improving its governance, its measurement methods, its policies and procedures, and adopting the industry’s best practice in line with local and global developments
The Group compliance team is headed by the Group Chief Compliance Officer who coordinates “overall compliance” within Fransabank Group. He is the internal supervisor and responsible for ensuring that Fransabank Group operates within the defined compliance framework. The Group Chief Compliance Officer is supported by a number of designated officers and controlling bodies within Fransabank‘s Group organization structures.