AFD - Universal Registration Document 2020

RISK MANAGEMENT Risk management

4.3.1.4 Risk monitoring Risk monitoring is ensured by the Group Risk Management Department (DRG) of the Executive Risk Department (DXR): by the Counterparty Risks division (DRC) at the individual level of credit risks and the Risk Monitoring Division (DSR) at a consolidated level, both for credit risks and market transactions. This supervision is not exclusive to this department: among other procedures, a six-monthly review of non-sovereign counterparties is conducted by local departments, credit transactions are referred for a second opinion (DXR/SOP) and the Finance Department provides strategic and financial guidance (DEF/PFG). 4.3.1.5 Methods of informing executive officers The executive officers are informed through different channels which are essentially committees and executive officer memos. The Internal Control Committee (Cocint) comprises members of the AFD Executive Committee (including the Chief Executive Officer of Proparco), the head of the Group Risk Management Department (DRG), the head of the General Inspection Department, the head of the Compliance Department, and the head of the Operational Risk and Permanent Control Department. It makes sure that systems are in place to monitor the activities and risks, as required by the Decree of 3 Ǿ November 2014, to ensure the AFD Group’s internal control system operates effectively. It mobilises management to put these systems in place. It is through this body that the heads of Periodic Control (the General Inspection department – IGE) and of Permanent Control and Compliance of AFD Group report on the fulfilment of their roles. The committee is also regularly informed of incidents and risks updated in the operations risk mapping. The Risk Committee (Coris) is responsible for risks within the scope of the AFD Group, with a particular focus on macro- economic risks in the countries in which it operates (“country risk”) and credit risks (“counterparty risk”). It is chaired by AFD’s executive head of risk (DXR) and is attended by Senior Management. In its “Compliance” configuration, the New Products and New Activities Committee (Coconap) examines (i) Ǿ any changes to French or local laws or regulations which affect the AFD Group, (ii) Ǿ any significant compliance events in the respective areas of activity, (iii) Ǿ the list of operational non-compliance incidents, (iv) Ǿ the updated compliance, fraud and corruption risk mapping and (v) Ǿ the progress of corrective measures. It is chaired by the AFD’s executive head of risk (DXR). In its “New activities and new products” configuration, its role is to examine all projects for new activities and new products as well as any significant changes made to existing products and, as part of an annual review, to examine all of AFD’s activities and products to ensure their compliance and relevance to the Agency’s overall product offering.

The role of the Accounting, Finance and Management Control Committee (Cofico) is to examine and monitor AFD’s financial, accounting and management control activities. It is chaired by the Chief Operating Officer or the Chief Financial Officer. The Professional Ethics Council (CETH): chaired by the Chief Operating Officer, the mission of the CETH is to help identify the Group’s internal doctrine for the application of the Ethics Charter and to issue opinions at the request of the Chief Executive Officer or the Ethics Adviser. Its role, composition and functioning are set out in memoranda of instruction. The Security and IT Committee (COSI): in its “security” configuration, it is the steering body for the security of AFD’s assets, people and information system, including business continuity. In its “IT” configuration, it is notably in charge of examining the strategic orientations and priorities of the Group’s information system, the annual budget for IT expenses (projects & maintenance, equipment & operations), and organising and monitoring IT projects. It is chaired by the General Secretary. The Organisation and Procedures Committee (COMOP): its role is to examine significant changes to the documents of AFD’s organisation and procedures manual. It is chaired by AFD’s Chief Executive Officer or Chief Operating Officer. The Partnerships Committee (Copar) is responsible for discussing major strategic lines with the AFD Group’s partners, and deciding on the financing of partnerships. It is chaired by the Deputy Chief Executive Officer or the Executive Director for Strategy, Partnerships and Communication (SPC). The role of the Credit Committee (CCR) is notably: P to verify all the due diligence carried out at the time of project appraisal; P to examine the financing proposals prior to their submission to the AFD decision-making bodies; P to validate the terms of the resolution proposals or decision to grant funds; P to review the advisability of decentralisation of project management within the international network; P to log any reservations expressed by the Compliance Department (DOC), the Second Opinion Unit or any other member of the committee; P to record the sustainable development appraisal and the final opinion of the Second Opinion Unit and log any follow-up rights issued. The chair of the CCR will be appointed according to the value of the applications submitted, with provision for three levels of delegation (director of the regional department or Operational Steering Committee for cross-cutting projects that are not geographically assignable, director of the executive operations department (DOE) or Senior Management). Information is also passed on to executive officers via memos which formally record, for example, the verdicts of the Second Opinions Unit or compliance opinions, legal warnings or notification of thresholds being exceeded.

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2020 UNIVERSAL REGISTRATION DOCUMENT