BPCE - 2019 Universal Registration Document

RESPONSIBLE INTERNAL AND EXTERNAL PRACTICES NON-FINANCIAL PERFORMANCE REPORT

ensuring that employees observe the code of conduct and • professional rules of compliance and ethics by applying policies governing conflicts of interest, exchanges of gifts, benefits and invitations, confidentiality and professional secrecy. Disciplinary sanctions have been defined for any failure to respect professional rules governing the activities conducted by Group companies; exercising due diligence when making contributions to political • campaigns or to government agents, donations, patronage and sponsorship, or lobbying; supervising relations with intermediaries and business • introducers via groupwide standardized contracts describing the reciprocal services and obligations, and committees for approving and contractually establishing compensation terms; producing and regularly updating a map of exposure to • corruption risks arising from the Group’s activities. This was supplemented in 2019 by a map of exposure to procurement categories that are exposed to corruption risks; organizing regulatory training sessions on ethical rules • applicable in the industry and on fighting corruption, in the form of a mandatory e-learning course for all new hires and members of the business lines that are most at risk. A whistleblowing system is available to employees and included in the internal rules. Employees and external service providers have a procedure in place for implementing the whistleblowing system. The Group also has a comprehensive corpus of standards and procedures setting out the rules governing the strict separation of operating and control functions, including: a tiered system of delegation of authority for granting loans; • standards and procedures governing KYC and due diligence • procedures used for customer classification and supervision purposes. In the interest of organizing the internal control system, whistleblowing/detection tools and permanent control plans serve to bolster the security of this system.

BPCE also has accounting policies and procedures in place in line with professional standards. The Group’s internal control system for accounting information is based on a structured audit process to check the conditions in which such information is assessed, recorded, stored and made available, in particular by verifying the existence of the audit trail. This control system is part of the fraud, corruption and influence-peddling prevention and detection plan. From a more general standpoint, these systems are formalized and detailed in the Umbrella Charter governing the organization of Group internal control and the Risk, Compliance and Permanent Control Charter. These charters apply to parent company affiliates and all BPCE subsidiaries. BPCE Procurement and Natixis are working to establish common rules for assessing the Group’s suppliers in terms of anti-corruption requirements. A KYS system will be introduced in 2020 with rules for assessing the Group’s suppliers in terms of their exposure to the risk of corruption, in particular in certain procurement categories. Pursuant to the requirements of Article 17 of the French act of December 9, 2016 on transparency, prevention of corruption and economic modernization (Sapin 2 Act), Natixis has also reviewed its anti-corruption policy, which is available on its website https://www.natixis.com/natixis/jcms/rpaz5_65439/en/code-of- conduite COMBATING TAX AVOIDANCE AND THE GROUP’S TAX POLICY Groupe BPCE conducts most of its activities in France, under a regional cooperative business model. Through its subsidiary Natixis, the Group serves multinational enterprises and has thus established commercial operations all around the world. Its presence in different jurisdictions is justified for such business reasons and not for the purpose of enjoying any specific tax advantages.

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SIGNATURE OF A TAX PARTNERSHIP WITH THE MINISTER OF PUBLIC ACTION AND ACCOUNTS BPCE SA, acting on behalf of itself and its wholly-owned subsidiaries, signed the Tax Partnership with the Minister of Public Action and Accounts on its official launch on March 14, 2019. The Tax Partnership involves regular, transparent dialog with the tax authorities on a voluntary basis and is aimed at large corporations and intermediate sized enterprises, which are subject to frequent tax audits. It allows the companies concerned to obtain a clear response from the authorities on complex tax matters that can cause financial or legal risk, in exchange for more transparency. Groupe BPCE is the only bank admitted to this new scheme. To date, 190 Group entities have adhered to the Tax Partnership.

Groupe BPCE transfer pricing policy Groupe BPCE’s transfer pricing policy observes OECD recommendations and does not give rise to indirect profit shifting. The general underlying goal is for profits to be taxed where the value is created, in line with OECD transfer pricing guidelines and with local tax rules. Groupe BPCE applies the “arm’s length principle” to ensure that the parties to intragroup transactions are paid the amount they would normally receive on the open market, that transfer pricing methods are applied consistently and that transactions are performed responsibly and transparently.

As a reminder, BPCE was a pioneer in this area in 2013 when it joined the experimental ‘trusted relationship’ scheme set up by the tax authority. Plans to set up a fiscal code of conduct Groupe BPCE has decided to draft a fiscal code of conduct setting out the principles and general framework to be used as a guide to the Group’s own taxation, as well as the taxation applicable to its customers within their relations with the Group. The Code will be issued to all members of staff and will be applicable to all.

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UNIVERSAL REGISTRATION DOCUMENT 2019 | GROUPE BPCE