AML Policy

INTERNAL CONTROL SYSTEM / POLICY FOR PREVENTING AND FIGHTING MONEY LAUNDERING AND FINANCING OF TERRORISM

The Policy for Preventing and Fighting Money Laundering and Financing of Terrorism, from Banrisul, henceforth named Policy for PML/FT, aims to establish a set of rules, mechanisms and procedures that must guide the acting of employees during the conduction of business, aiming to prevent the occurrence of operations related to these illicit acts in the institution.

Money Laundering (ML) is the process through which the offender converts funds earned from illegal activities into assets that apparently have a legal origin. Usually, this practice involves several transactions, used to hide the origin of the financial assets and allow them to be used without compromising the offenders. Dissimulation is, therefore, the basis for all laundering operation dealing with money derived from illegal acts.

Financing of Terrorism (FT) is defined as the gathering of money or capital to perform terrorist activities. These funds may have legal origin - such as donations, gains from licit economic activities - or illegal - proceedings from criminal activities (organized crime, fraud, smuggling, extortion, kidnapping, among others).

Regulatory Environment

Law 9613 of 03.03.1998 altered by the Law 12683 of 07.09.2012 - disposes about the crimes of money laundering or concealment of assets, rights and valuables; the prevention from the utilization of the financial system for the illicit acts predicted in this Laws; creates the Board of Control of Financial Activities (COAF).

Legislation and rules edited by the National Monetary Council (CMN), the Central Bank of Brazil (BACEN) and the Brazilian Security Exchange Commission (CVM) related to the item Regulation Associated of this Policy, which aim to restrain the utilization of the financial system for the practice of theses illicit acts, as well as ensure the observation of these laws and regulations by the institution in the execution of their activities.

Objective

This document aims to:

a) Consolidate the structure, the guidelines and the procedures adopted by Banrisul that aim to avoid its products and services to be used for illicit activity, through the adoption of policies and detection mechanisms and prevention and continuous capacitation of its employees.

b) Watch over and protect the name and image of Banrisul at its employees, clients, strategic partners, suppliers, service providers, regulators and society, by means of a governance structure oriented for the transparency and in consistency with the best practices in the market.

Scope of Application

This Policy applies for all the Banrisul Group.

Structure

In Banrisul, the Controller - Management of Money Laundering Prevention is the responsible area for the implementation of policies and procedures for the prevention and fighting the money laundering and the financing of terrorism, in conformity to the Law 9613 of 1998 and rules issued by the regulatory agencies.

For the effective execution of activities, the area must have:

  • the resources needed to the development of their responsibilities and suited to the risk appetite defined by the High Administration;
  • free access to the information needed for the exercise of their attributions.

The Controller, area responsible for the task of Money Laundering Prevention, reports to the Management of Risk and Control in the organizational area of the institution.

Roles and Responsibilities

All the employees, from strategic to operational level, are responsible by the establishment of a permanent environment of control, in which is possible to monitor all clients and non-clients operations, individuals or corporates, with the goal to identify illicit actions related to the money laundering or the concealment of assets, rights and valuables and financing of terrorism.

The roles and responsibilities must ensure the segregation between business activities and the procedures of prevention and fighting the money laundering e the financing of terrorism, aiming to avoid possible interest conflicts and ensuring the legislation and current rules fulfillment, established in this Policy.

All administrators and employees must receive a copy of Policy for PML/FT and sign the Adhesion and Aware Term.

Board of Directors

  • To approve the guidelines of the Institution’s Policy for PML/FT and their respective alterations;
  • To ensure the effectiveness and the continuity of the Policy for PML/FT’s application.
  • To ensure that corrective measures are adopted when identified noncompliance to the Policy for PML/FT; and
  • To provide the needed means for the activities related to the task of preventing and fighting the money laundering and the financing of terrorism to be exercised properly, in the terms of the current legislation.

Audit Committee

  • To supervise the Prevention Program for the PML/FT, from the information compiled and presented by the responsible area for the execution of the policy, as well as by the means of another mechanisms it possess.

Risk and Control Officer

  • To ensure the application of the guidelines of the Policy for PML/FT;

Compliance and Internal Control Management Committee

  • To evaluate and deliberate about the Policy for PML/FT and its alterations;
  • To submit the Policy for PML/FT and its alterations to the appreciation and approval of the applicable management committees, the Banking Management Committee, the Management and the Board of Directors;
  • To deliberate about the adoption of another measures in cases previously analyzed by the Controller, which presented indicative of high risk of money laundering or financing the terrorism.

Executive Officer

  • To deliberate about communication to the COAF;
  • To report to the Risk and Control Director, the reports and demands from the regulators organs for the purpose of compliance evaluation of Banrisul with the laws and regulations of PML/FT.
  • To adopt the necessary measures for eventual irregularity corrections founded during the audits performed by the inspector’s organs, reporting the progress of adjustments to the Director and to the Internal Control Management Committee.

Management of Money Laundering Prevention

  • To manage the Banrisul’s Policy and Policy Program for PML/FT;
  • To perform previous evaluation of money laundering and financing of terrorism risks in new products and services;
  • To define the criteria for the classifications of money laundering and financing the terrorism risks from the clients;
  • To elaborate and release to the branches orientations needed for the correct execution for the procedures of PML/FT;
  • To support the Units and Companies within the Group in the definition and implementation of process for PML/FT;
  • To monitor, identify and analyze the transactions and operations performed by clients with indications of money laundering or financing the terrorism and realize the respective communication, when suitable, to the competent organs;
  • To submit for the Internal Control Management Committee the analyzed situations and reported to the COAF classified as high risk of PML/FT and of image/reputation from the Bank, for the deliberation as for the maintenance of commercial relation with the clients evolved and/or as for the adoption of another suitable measures;
  • To elaborate and to implement training programs and continuous capacitation of managements and employees from Banrisul about Prevention and Fighting the Money Laundering and the Financing the Terrorism.

Banrisul Group Companies

  • To dismiss special attention to its client base, as well as its operations, watching the indications of money laundering divulgated in laws, norms from the regulators and internal regulations;
  • To forward for the Management of Money Laundering Prevention the cases identified as suspicious, together with the respective analysis and opinion about what has already been determined;
  • To elaborate and to keep updated the respective Policy for PML/FT for the Group Companies, requiring follow up of the Controller when needed.

Units in General Management

  • To define and to implement procedures and controls compatibles with the complexity and risks associated to products and services under its responsibilities, considering the evaluation of money laundering and financing the terrorism risks.
  • To monitor its activities, products and services, situations that represent any indicator of occurrence of money laundering or financing the terrorism and report to the Controller - Management of Money Laundering Prevention;
  • To ensure that the employees perform, periodically, the training for money laundering and financing terrorism prevention;
  • To designated the focal points of PML/FT and its respective business units and treat it together with the Controller - Management of Money Laundering Prevention.

Branches

  • To know and to follow the guidelines and the intern norms due to the Policy for PML/FT;
  • To communicate all and every situation, operation or proposal suspected of involvement with illicit act related to money laundering e to financing terrorism, for the Controller - Management of Money Laundering Prevention;
  • To answer in timely form and objective to the information request for the Management of Money Laundering Prevention;
  • To ensure that its employees perform, periodically, the trainings for Money Laundering and Financing the Terrorism Prevention, made available for the Controller - Management of Money Laundering Prevention.

Exchange Unit, Foreign Branches and Portfolios

  • To observe and fulfill the guidelines and procedures established in the manuals: BSA/Anti-Money Laundering and Anti-Terrorism Program, BSA/AML/OFAC Risk Assessment e no Anti-Money Laundering and Anti-Terrorism Program - Head Office/International Department, in addition to the policies and rules from the Institution.

Prevention Program for Money Laundering Fighting and Financing of Terrorism

Aiming to enable the fulfillment of the guidelines in this policy, Banrisul adopted the Prevention Program for Money Laundering Fighting and Financing of Terrorism, which establishes processes and control procedures, monitoring and reporting, which is consolidated in internal normative and disclosed to all employees.

Get To Know Your Clients and their activities Process

It is a set of actions that must be adopted for identification, acceptance and monitoring of clients, including the gathering, updating and storage of registration information, also including the specific procedures for the identification of Final Beneficiary and Exposed Politically Persons (PEP).

The main goal is to identify and to know the origin of the clients’ financial resources, their activities, as well as their business potential, protecting, in this way, the reputation and reducing the risk of the Institution’s products and services were used to legitimize funds arising out of illicit activities.

The orientations and procedures are defined in internal normative and must be object of continuous review and update.

In the context of this process, it is important to emphasize that it is forbidden to begin or to maintain commercial relationship with individuals or entity mentioned in the list of financial sanctions from the United Nations Security Council (UNSC) and from the US Office of Foreign AssetsControl (OFAC).

Get To Know Your Employee Process

It is a set of rules, procedures and controls that must be adopted for selection, hiring and monitoring the economic-financial situation, for the purposes of money laundering prevention, financing of terrorism and other illicit acts.

It is the Institution’s responsibility to know its employees, by means of monitoring about behavioral aspects, living standards and respective operating results, attempting to unusual and meaningful changes in these variables, according to current regulations.

Transactions Monitoring

The transactions and financial operations performed by clients must be monitored for verification of a situation that may configure indications of money laundering or financing of terrorism.

The monitoring is realized by corporative system that considers in its rules and parameters the profile, recourses origin and destination, financial capacity, the way and path used for clients movement.

It is also monitored and treated the news circulated in the media that are related to money laundering crimes and financing of terrorism, with the goal to identify possible link to Banrisul clients.

Restrictive Lists Monitoring Process

Banrisul adopts procedures aiming to secure it does not maintain business relations neither operations with individuals, entities or countries that participate in any restrictive lists divulgated by international organizations, which maintain name of people, groups or designated entities, in special the Resolutions from the United Nations Security Council (UNSC) e the Office of Foreign Assets Control (OFAC).

Banrisul does a regular screening of every international transfer received and sent using the Bank, comparing it with the restrictive lists, in way to secure that none operation is made with a counterpart that appears on a restrictive list.

Communication of a Suspect Transaction to the Regulatory Agencies

The operations or proposals with money laundering indications or financing of terrorism must be communicated for the Board of Control of Financial Activities (COAF), when applicable, in fulfillment with the legal and regulatory determinations.

The communications made in good faith will not entail civil or administrative liability to Banrisul, neither to its managers and employees.

Banrisul must not provide to the respective clients or third parts, information regard eventual communication made as a result of money laundering indication or financing of terrorism.

Training

The training program for MLP/FT must be continuous and applicable to every employee, by presential courses, on-line courses (e-learning) or other modalities and ways, aiming to:

  • Improve knowledge for managers and employees about demands and liabilities, both legal and regulatory, as well as corporative guidelines for MLP/FT.
  • Capacitate managers and employees to identify, prevent, treat and communicate risk situations or money laundering indications or financing of terrorism in business performed.

Penalties Provided

The noncompliance of legal and regulatory disposals, which the managers and employees are subject to, goes from administrative penalties to even criminal charges.

The neglect and the noncompliance with the guidelines in this Policy and in the Program for MLP/FT are subject to disciplinary measures predicted in the Banrisul’s Employees Regulatory.

Relevant Legislation

Law 9613 of 03.03.1998, altered by Law 12683 of 07.09.2012 - Disposes about money laundering crimes or concealment of asses, rights and valuables; the prevention of the utilization of the financial system for the illicit predicted in this Law; creates the Board of Control of Financial Activities (COAF), and gives other measures.

BACEN Circulars 3461, of 07.24.2009, altered by Bacen Circulars 3517 of 12.07.2010, 3654 of 03.27.2013 and Bacen Circulars 3839 of 06.28.2017 - Consolidates the rules about procedures to be adopted in the preventing and fighting the activities related to crimes predicted in Law 9613 of 03.03.1998.

BACEN Circular Letter 3430, of 02.11.2010 - Clarifies about aspects related to preventing and fighting activities related to crimes predicted int Law 9613 of 03.03.1998, also treated in BACEN Circulars 3461 of 07.24.2009.

BACEN Circulars 3517, of 12.07.2010 - Alterates Circulars 3461 of 07.24.2009, which consolidates rules about procedures to be adopted in preventing and fighting activities related to crimes predicted in Law 9613 of 03.03.1998.

BACEN Circular Letter 3542, of 03.12.2012 - Releases a relation of operations and situations that may configure crime occurrence indications predicted in Law 9613 of 03.03.1998, which are susceptible to be communicated to the Board of Control of Financial Activities (COAF).

BACEN Circulars 3654, of 03.27.2013 - Alterates the Circulars 3461 of 07.24.2009, which consolidates rules about procedures to be adopted in preventing and fighting activities related to crimes predicted in Law 9613 of 03.03.1998.

BACEN Circulars 3839, of 06.28.2017 - Alterates the Circulars 3461 of 07.24.2009, which consolidates rules about procedures to be adopted in preventing and fighting activities related to crimes predicted in Law 9613 of 03.03.1998.

BACEN Circulars 3858, of 11.14.2017 - Regulates parameters for application of administrative penalties predicted in Law 9613 of 03.03.1998.

CVM Instruction 301, of 04.16.1999 - Disposes about identification, cadaster, registration, operations, communications, limits and the administrative responsibility in clause I and II of the 10th article, I and II of the 11th article and the 12th and 13th articles in Law 9613 of 1998, referring to money laundering crimes or concealment of assets, rights and valuables.

Responsible Manager

Controller