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Finansbank's Anti-Money
Laundering Procedure

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 International Division

Finansbank Anti-Money Laundering / Know Your Customer Policy And Procedure

Finansbank Anti-Money Laundering (AML) and Know Your Customer (KYC) Policy and Procedure underlines the general principles followed by Finansbank A.Ş. (Finansbank, or the Bank) for establishing adequate procedures of customer identification, reporting, record keeping and internal control in order to prevent operations related to laundering the proceeds of crime or financing of terrorism. Finansbank's branches located out of Turkey are also required to comply with the applicable money laundering and anti-terrorism legislation of the country they operate in. Finansbank is regulated mainly by the Turkish supervisory authority, BDDK (BRSA-Banking Regulation and Supervision Agency)[1], which ensures that banks in Turkey comply with the Banking Law and the related legislation and that they have adequate business procedures, control measures and auditing systems. Money laundering and anti-terrorism issues are specifically regulated in Turkish Financial System by the MASAK (FCIB-Financial Crimes Investigation Board of TURKEY)[2]. MASAK ensures that banks comply with the anti-money laundering and anti-terrorism legislation, including the Know Your Customer (KYC) rules. Finansbank is a member of National Bank of Greece Group of Companies ("the Group"). In this regard, the Bank ensures that the current Policy is aligned with the Group's Policy and complies with the Group's regulatory authorities requirements as long as these demands do not diverge from the requirements imposed by the Bank's local statutory and supervisory authorities. Finansbank's AML Unit is a part of the Compliance Department reporting to the Audit Committee of the Board of Directors and it is in charge of the Bank's internal procedures to prevent money laundering and financing of terrorism. It also handles the reporting of suspicious transactions to the MASAK. Bank's internal procedures are accessible to all employees via the IT system.

Aml / Kyc Policy Statements

Finansbank conducts its business in conformity with high ethical standards and adheres to all related laws and regulations. The Bank will conduct its business in compliance with the following general principles:

KYC / Customer Identification and Establishment of Ultimate Economic Beneficiary

Prior to transact any type of business, Bank will determine and document the true identity of customers, and it will obtain information about the purpose and the intended nature of the business. Bank will obtain and document any additional information, commensurate with the assessment of the money laundering risk with a risk-sensitive approach.

Finansbank will clarify whether the customer is acting on behalf of another natural person or legal entity as trustee, nominee or professional intermediary. In such cases, Bank will obtain satisfactory evidence about the identity of any intermediaries and of the persons upon whose behalf they are acting, as well as the nature of the trust arrangements in place.

KYC procedures will always be complied with, when customers open accounts and establishes a new business relationship. The Bank's AML and KYC procedures will be conducted on a risk-based approach, and anonymous accounts will not be established.

Finansbank has electronic systems in place whereby the Bank, on an ongoing basis, controls all persons, firms and organizations mentioned in international alert lists like EU terrorism lists and US OFAC list.

Additional Due Diligence Measures for Financial Institutions

Bank will obtain sufficient information about correspondent bank to avoid any kind of relationship with "shell-banks."

By use of publicly available sources of information, Bank will determine the reputation of correspondent institutions, including whether they have been subject to money laundering or terrorist financing investigations or other regulatory actions.

Bank will periodically assess the respondent institutions' anti-money laundering and terrorist financing controls.

Monitoring and Reporting of Suspicious or Unusual Transactions / Activities

Finansbank will implement and maintain measures for handling suspicious or unusual transactions. Bank will not ignore indications that a customer's money originated from unlawful activities or other money laundering activities, and it will report all identified instances of suspicious activities to the relevant authorities.

Bank will avoid providing support or assistance to parties seeking to deceive law enforcement authorities through the provision of false, altered, incomplete or missing information.

The reporting of suspicious or unusual transactions/activities will comply with the laws and regulations of the respective jurisdiction. Accordingly, all personnel will be diligent in monitoring for any unusual or suspicious transactions/activities basing on the relevant criteria applicable in the jurisdiction where the Bank operates.

All employees of Finansbank who come directly or indirectly into contact with customers will be trained to deal with and respond to transactions that raise a suspicion of money laundering or the financing of terrorism or they deem to be unusual in this regard.Monitoring of suspicious or unusual transactions about AML and KYC issues has been enhanced by the implementation of MANTAS AML system as of October 2009.

Confidentiality

The employees and the executives of the Bank shall not disclose to the customer in scope of investigation or to any third party that they have officially reported or requested information or that there is or will be investigation concerning AML/CFT related crimes. The Bank may not give the information to anybody including the parties of the transaction that it reports the suspicious or unusual transactions to the MASAK , other than the examiners assigned to conduct inspection of obligations and the courts during legal proceedings. Those who violate that obligation shall be sentenced to imprisonment from one year to three years and to judicial fine up to five thousand days. Security measures peculiar to legal persons shall be adjudicated because of this offence.

Record and Document Keeping

The Bank retains the documents, books and records, identification documents kept in every kind of environment regarding the transactions and obligations related to money laundering topics in accordance with the statutory duties imposed on credit institutions by the applicable AML laws and regulations at least for eight years starting from the drawn up date, the last record date, and the last transaction date respectively and submit them when requested.

The relevant controlling divisions are responsible to review the content of records and their maintenance and are obligated to report for any breach of data confidentiality.

Training

Finansbank's employees will be trained about the prevention of money laundering so that they can implement immediate and appropriate measures for identifying customers and handling suspicious or unusual transactions.

Training on anti-money laundering will be provided to all employees who work directly with customers and to those employees in essential auxiliary functions that may be exposed to money laundering and terrorist financing threats. These trainings will be conducted initially upon commencement of employment and later on regularly on a 12-months-basis. In addition, these staff will be informed on an ongoing basis about new methods and techniques of money laundering.

Compliance Checks and Continuous Improvement

Adequacy of the AML Policy and compliance with this Policy will be checked periodically, and internal controls and audits will be continuously improved based on the outcomes of these checks.

Bank will cooperate fully with law enforcement and regulatory authorities in executing their duties under all applicable laws.

Policy Review

The Compliance Department is responsible for the development of this Policy, which is approved by the Bank's Board of Directors.

The Policy is reviewed at least on an annual basis in order to ensure that it remains appropriate for the nature, size, and complexity of the Bank's activities, and that it is in accordance to the requirements of the supervisory and regulatory authorities.

The Policy can be reviewed on an ad hoc basis, under exceptional circumstances, on the following cases:

  • significant changes to the organizational structure of the Bank;
  • important amendments to the current regulatory framework of the AML/CFT;
  • publish of directives by international organizations (e.g. FATF); and
  • in any other case, the Bank's Management considers it is appropriate in order to ensure the effective operation of the Bank regarding AML/CFT.

Any modifications of this Policy are approved by the Audit Committee and sent to MASAK.

The modifications are recorded to the document's history and the latest issue, along with the marking of the respective modifications, is communicated to all Units of the Bank.

Roles and Responsibilities

General Principles

Combating Money Laundering and Terrorist Financing is an overall responsibility and concern of all Business Units and personnel of the Bank. To this effect, the Bank adopts the following organizational structure regarding AML/CFT:

Bank's AML/CFT Committee

The Bank's Management establishes the AML/CFT Committee that is responsible to decide whether or not a new customer should be accepted as well as whether a business relationship with a customer should be terminated.

The AML/CFT Committee reviews the AML/CFT Officer's recommendations regarding the abovementioned issues and makes the relevant decisions.

Bank's Compliance Division:

The AML Unit of the Bank's Compliance Division is responsible for the following:

  • Developing the AML & CFT policy and monitoring compliance with this policy;
  • Updating the policy when required;
  • Participating in the development and documentation of AML /CFT procedures;
  • Preparing training material and developing training courses regarding AML/CFT in cooperation with Human Resources Division;
  • Recommending the adoption of measures and monitoring of corrective actions with respect to the findings of the Internal Audit Division and regulatory and supervisory authorities regarding AML/CFT
  • Participating in managing and ensuring the proper operation of IT systems installed for AML/CFT;
  • Supporting the Business Units in issues related with the implementation of the AML/CFT Policy and the respective procedures

The AML/CFT Officer sets the respective responsibilities of each job position.

AML/CFT Officer

The AML/CFT Officer means the officer who is employed for the purpose of ensuring the compliance with obligations established through the Law 5549 on Prevention of Laundering Proceeds of Crime or the legislation issued on the basis of the Law and who is entrusted with the required authority,

Duties and responsibilities of the AML/CFT officer are as follows:

  1. To perform necessary works to ensure that the bank complies with the Law and the regulations issued pursuant to the Law and to provide the necessary communication and coordination with MASAK,
  2. To develop institutional policies and procedures and to submit the institutional policies for the approval of executive board,
  3. To develop risk management policy, to execute risk management activities,
  4. To develop monitoring and controlling policies and to execute activities related with it,
  5. To submit his/her works regarding training programme on laundering proceeds of crime and terrorist financing for the approval of executive board and to ensure the effective implementation of the approved training programme,
  6. To evaluate the information and findings obtained through researches that he/she has carried out to the extent of his/her power and the possibilities regarding possibly suspicious transactions which were forwarded or detected by his/her initiative and to report the transactions which he/she considered to be suspicious or unusual to MASAK.
  7. To take necessary measures for ensuring the confidentiality of reports and other relevant matters,
  8. To regularly keep information and statistics on internal control and training activities and to send them to MASAK within the periods specified in the Regulation.
  9. To establish appropriate procedures in order to identify and manage alerts generated by relevant IT systems for monitoring and detecting suspicious or unusual transactions or activities.
  10. To submit the Annual Compliance Report, in accordance to the requirements of the current regulatory framework, to the Board of Directors, through the Bank's Audit Committee.
  11. To respond to written enquiries made by the MASAK.
  12. To receive reports of suspicious or unusual transactions from the Bank's employees, as well as relevant information about any events they are aware, due to their provision of services that could indicate ML or FT. All reports shall be archived in a separate file.
  13. To recommend appropriate procedures in order to ensure the receipt and processing of alerts of unusual or suspicious transactions produced by the Bank's IT system. The processing and examination of the alerts may be undertaken either by Branches or by the AML/CFT Unit.
  14. To monitor and assess the proper and effective implementation of the Bank's AML/ CFT policy and its relevant measures. For this purpose, the AML/CFT Officer applies appropriate control mechanisms, for the Bank's Branches, in order to verify their compliance with the arrangements in force (regulatory framework, AML/CFT manual, customer acceptance policy etc.). In the event that the AML/CFT Officer identifies any failures, weaknesses or risks arising from existing customers, new customers, products and services, he documents in writing his recommendations to adopt appropriate corrective measures.
  15. To ensure the maintenance of lists of low- and high-risk classified customers, which include each customer's name, account number, branch in which the account is maintained as well as the date of establishment of the business relationship. In addition, (s)he shall ensure that the lists are updated regularly (at least on an annual basis) with additional information on existing customers or new customers.
  16. To submit to the Bank's Management an annual report assessing high-risk customers, analyzed by risk category. This report shall include aggregated data on these customers, drawn from the Bank's Business Units summary reports, as well as the recommendation for the termination of the business relationship with customers of this risk category that exceed the limits of acceptable risk.
  17. To provide guidance to the Bank's Subsidiaries employees on AML/CFT issues.
  18. To assess the adequacy of the AML/CFT policy, procedures, systems and controls applied by the Bank that request the establishment or already have established a correspondent banking relationship and submits a relevant recommendation to the relevant Unit
  19. In the event that the Bank relies on third parties for the identification and verification of customers, the AML/CFT Officer evaluates the procedures implemented by third parties and submits a relevant recommendation to the Bank's Management.
  20. To establish or recommend, under circumstances, corrective AML/CFT measures according to the findings of audits conducted by the MASAK.
  21. To evaluate Internal Audit findings in order to take corrective AML/CFT measures.
  22. To ensure that the Bank's Branches apply all required measures in order to fully comply with regulatory requirements.
Business Units and Branches

The Bank's Business Units and Branches apply the principles of this Policy. Specifically, the Bank's Business Units and Branches are responsible for the following:

  • Application of customer identification and verification procedures;
  • Application of customer risk assessment and classification;
  • Detection of suspicious or unusual transactions and submission of relative reports to AML/CFT Officer;
  • Collection of necessary records and the provision of supplementary information to the AML Unit, regarding customers, transactions, business relationships as well as any other information required under the implementation of this Policy;
  • Compliance with the requirements of circular letters' regarding AML/CFT.
Internal Audit Division

The Internal Audit Division integrates this policy as well as any related internal procedures occurring by it, in the annual audit program.

Internal Audit Division conducts an assessment of the adequacy and effectiveness of the measures established by the Bank for identifying, assessing, monitoring and managing ML & FT risk.

New Customer Acceptance

The Bank does not open or maintain secret, anonymous or only identified-by-number accounts or accounts in fictitious names or accounts without the full name of their owner, according to the identification certification documents.

All Business Units of the Bank that establish business relationships with customers are responsible for:

  • Identifying and verifying the customer's identity based on documents, data or information obtained from credible and independent sources;
  • Certify the identity of the beneficial owners (s) of legal persons and entities;
  • Continuously updating the information and undertaking of reasonable, risk-based measures to verify beneficial owners' identity;
  • Following reasonable, risk-based measures to understand the ownership and control structure of legal persons, trusts and similar legal vehicles;
  • Obtaining information on the purpose and intended nature of the business relationship or of important transactions or activities of the customer or the beneficial owner;
  • Establishing the economic/transaction profile of their customers (both individual and legal), including at least:
    1. the purpose for which an account is opened or a business relationship is concluded;
    2. the anticipated movement of the account;
    3. the types of transactions that may be carried out;
    4. the anticipated source of funds credited to the account;
    5. the anticipated destination of outgoing remittances or payments;
    6. the size and sources of the customer's wealth assets and revenues; and
    7. the description of the customer's professional or business activity.
  • Conducting ongoing oversight of the business relationship, including scrutiny of transactions and activities undertaken by customers and beneficial owners throughout the course of the relationship, in order to ensure that such transactions or/and activities are consistent with the Bank's knowledge of these persons, their business activities and risk profile, including, where necessary, the source of funds.
  • Receipt all required approvals, in case of customers classified as high risk according to the customer risk classification procedures regarding AML and CFT

The Bank ensures that customers' data are continuously updated during the business relationship.

The Bank ensures that it maintain records, for all of the above, in accordance with the procedures defined in Record keeping chapter.

Re-evaluation of Clients Categorized Compulsorily As High Risk

The Bank reassesses at least on an annual basis, all customers classified as high-risk. The purpose of the reassessment is to decide whether or not the business relationship with the customer should be recommended for termination.

The Bank's Business Units submit a relevant report to the Bank's AML/CFT Officer. The report includes for each high risk customer the following:

  • customer information and data;
  • brief description of customer's risk profile;
  • recommendation upon the continuation or termination of the business relationship, along with relevant supporting documentation.

The reports are assessed by the AML/CFT Officer and then (if required) an overall consolidated report is submitted to the AML/CFT Committee of the Bank or any other equivalent committee of the Bank (depending on the specified organizational structure of the Board).

The AML/CFT Committee of the Bank decides on the termination or not of the business relationship and determines the procedure and the means to inform the customer accordingly.

The Bank during the termination process of the business relationship apply all necessary measures to ensure confidentiality, as presented in Confidentiality chapter.

For all the aforementioned, relevant records are maintained in accordance with the guidelines presented in Record Keeping chapter.

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