BPCE - 2018 Registration document

RISK REPORT Non-compliance, security and operational risks

Financial security 6.11.2

ORGANIZATION Financial security covers anti-money laundering and terrorist financing (AML-TF) measures as well as adherence to international sanctions aimed at individual persons, entities or countries. BPCE’s Involvement in the prevention of money laundering and terrorist financing Groupe BPCE works to prevent money laundering and terrorist financing through: Corporate culture Promoted across all levels of the company, corporate culture is built on: principles governing relationships with customers that avert risk and document KYC for each institution; ● a harmonized, biannual training program for Group employees, which has been expanded over the past few years to include specialized ● training for the Financial Security function; regular staff information and coordination on the risk of money laundering and terrorist financing. ● Organizational structure In accordance with Groupe BPCE’s charters, each institution has its own financial security division or unit. DRCCP has a specialized division that coordinates AML-CTF processes, defines the financial security policy for the entire Group, establishes the various standards and guidelines, and ensures consistency across all of the decisions made for each project. The division also performs a regulatory watch, oversees relevant transactions and ensures that the risk of money laundering and terrorist financing is taken into account when new commercial products and services are approved by BPCE. Specialized processes In accordance with regulations on the organization of internal control at credit institutions and investment companies, banks have methods for detecting unusual transactions that are specific to their risk classification. These can be used, if needed, to conduct closer analysis and to submit the required reports to Tracfin (French financial intelligence agency) as promptly as possible. The Group’s risk classification system takes into account “high-risk” countries (listed by the FATF, the OECD Global Forum on Transparency and Exchange of Information for tax purposes, Transparency International, the Directorate General of the French Treasury responsible for areas controlled by terrorist organizations, etc.). As regards compliance with restrictive measures related to international sanctions, Group institutions are kept informed by BPCE’s Group Financial Security division and equipped with screening tools that generate alerts on customers (asset freezes on certain individuals or entities) and international flows (asset freezes and countries subject to European and/or US embargoes). Supervision of operations Internal reports on the prevention of money laundering and terrorist financing are submitted to company directors and governing bodies, as well as to the central institution. The DRCCP Financial Security division also meets regularly to closely monitor each institution’s activities in this area.

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Registration document 2018