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Group Risk Appetite Statement related to Financial Crime

TBC Bank Group PLC is incorporated in England and Wales and included in premium listing segment of the Official List of the UK's Financial Conduct Authority and admitted to trading on London Stock Exchange Plc's Main Market for listed securities (the "Premium Listing"). TBC Bank Group PLC's main subsidiary JSC TBC Bank is incorporated and conducts its operations in Georgia. JSC TBC Bank is the largest commercial bank in the country which is licensed and regulated by the National Bank of Georgia. The Financial Crime program for TBC Bank Group PLC is therefore based on respective laws of the European Union, United Kingdom and Georgia.


The Group's Financial Crime Program 

The Group assumes responsibility to protect its customers, shareholders and society from financial crime and any resulting threat. The Group complies with applicable EU, UK, Georgian and jurisdictional financial crime laws and regulation. It is fully committed to comply with respective applicable regulations and industry best standards. The Group has implemented internal policies, procedures and detailed instructions to prevent itself from being used to facilitate money laundering, financing of terrorism or engage in other unlawful activities such as bribery, corruption or tax evasion.

The Group has zero tolerance for financial crime, regulatory breaches and any attempt to circumvent Group's financial crime policies and controls. The Group adheres to the following core principles:

  • To show zero tolerance for facilitation of financial crime and fraud;
  • To avoid knowingly conducting business with individuals or entities believed to be engaged in an inappropriate and unlawful behavior;
  • To avoid risks that could jeopardize the Group's strategic plans, including activities that could make the Group vulnerable to any type of public or private litigation or enforcement that could be damaging to the Group's reputation and cause deterioration of relationship with regulators;
  • To avoid or seize operating any customer segment line, for which the management believes that Group's control mechanisms cannot protect the Group from risks that exceed the tolerance threshold;

The Group's risk management framework is aimed at ensuring effective processes for Group wide risk management. Risk management is integral to all aspects of the Group's activities and is the responsibility of all staff. Managers at all levels have a particular responsibility to evaluate their risk environment, to put in place appropriate controls and to monitor the effectiveness of those controls. The risk management culture emphasizes careful analysis and management of risk of all business processes.

 

Risk Governance 

Under the Group's risk management framework, the Board of Directors, through the Risk Committee, sets risk appetite, oversees the establishment of robust enterprise-wide risk management policies and processes, and defines risk limits to guide risk-taking within the Group.

The Group has established rules and procedures to treat the escalation of problems with due respect to confidentiality. The process is aimed at revealing potential wrongdoings in a timely manner. Such escalation reports are followed by analysis and respective disciplinary sanctions. Identified breaches of noncompliance are addressed as soon as practicable.

 

Prohibitions 

The Group has no appetite for clients and contractors who engage in any of the following: 

  • Intentional or willfully negligent breaches of law, regulation or policy concerning financial crime and/or fraud;
  • Repeated unintentional or repeated accidental breaches of law, regulation or policy concerning financial crime and fraud;
  • Misusing accounts for money laundering, financing of terrorism or fraud;
  • Facilitating business activities which could be interpreted as a tax crime;
  • Refusing to provide sufficient information or documentation requested by the Group.

The Group is set to conduct business only with reputable counterparties, and/or counterparties whose identities can be reliably determined and verified.

The Group does not service the clients engaged in the following business areas:

  • Illegal manufacturers of weapons ,arms and munitions traders
  • Anonymous accounts
  • Pornography
  • Human trafficking
  • Shell Banks
  • Payable through accounts
  • Nested accounts
  • On-line gambling without local on-land presentation

The Group reserves the right to terminate relationship with any client, refuse payment, or business that is not consistent with the Group's risk appetite.


Sanctions (financial sanctions, trade embargos or similar measures) Policy 

The Group has no appetite for establishing or maintaining a client or counterparty relationship with an entity or individual listed, but not limited to, or who act on behalf of, or for the benefit of a government of a comprehensively sanctioned country or where otherwise prohibited by applicable law or regulation, including:

  • The list of Persons Supporting Terrorism provided by Financial Monitoring Service of Georgia
  • The United Nations Security Council Sanctions List (UN)
  • The Consolidated List of European Union Financial Sanctions (EU)
  • HM Treasury Financial Sanctions targets list (UK)
  • Sanctions lists administered by the United States Office of Foreign Assets Control (OFAC), including the List of Specially Designated Nationals and Blocked Persons

In relation to compliance with applicable sanctions regimes customer and payment screening is undertaken to identify sanctioned customers or transactions prohibited under applicable sanctions regimes.

It is prohibited to provide any product/contract or to process any transaction for the benefit of sanctioned individuals or entities.

The Group refrains from entering into relationship with an entity or individual having the nexus to the sanctioned countries.


Restrictions 

The Group has enhanced controls in relation to types of industries and jurisdictions as set out below (non-exclusive list) and reserves the right to restrict activities in relation to:

  • Businesses related to forex/binary option
  • Cash intense businesses
  • Payment service providers/money transmitters
  • Political organizations
  • Charities
  • Offshore companies
  • Shell companies
  • Other gambling entities
  • Antiques or precious metal dealers
  • Companies incorporated or with connections/major counterparties in a high risk jurisdictions – countries with high levels of corruption, crime, drug trafficking, people trafficking, money laundering, supporting terrorism and nuclear arms proliferation

At the very least, the Group may require the individuals and entities falling into above group to disclose additional documents and information for improved understanding of the nature of the business and type of transaction.

In case the provided information is not satisfactory for the Group the business relationships may be terminated. 

 

Fraud and Corruption

The Group has no appetite for any fraud or corruption committed by, or any appearance of fraud or corruption, shown by its staff or third parties acting on behalf of the Group. The Group takes all allegations of suspected fraud or corruption very seriously and responds fully and fairly.

Range of actions is implemented with help of skilled analysts and respective IT tools for identification and monitoring illegal or dubious activities.

The Group has Anti-Bribery and Anti-Corruption Policy approved by the Board of the Directors. The Policy prohibits bribery in any form, whether direct or indirect and emphasises that books and records must be fair and accurate. The Employees are required to ensure that appropriate due diligence and control measures are applied to any third party they engage with to ensure that the parties comply with applicable anti-bribery legislation and regulation;

The Group also maintains clear whistleblowing policy and process to ensure that individuals can confidentially and with no fear of retribution report concerns.
 

Tax evasion 

The Group has a zero tolerance for tax evasion or the facilitation of tax evasion. The Group will not tolerate any of our partners, employees, agents or business partners knowingly assisting or encouraging tax evasion anywhere in the world.

The Group will not engage in transactions which we know or suspect facilitates tax evasion.

 

Financial Crime Policies 

The Group's written Financial Crime policies and procedures are subject to annual review and represent controlling mechanism to combat money laundering, terrorist financing, facilitation of tax evasion, bribery and corruption and adhere to relevant Sanctions regimes. The Group's AML/CTF, Sanctions, and Anti-Bribery & Corruption policies include:

  • Identification and verification of customers and counterparties
  • Retention of satisfactory evidence from reliable and independent sources on customer/counterparty profile related issues
  • Client classification according to the financial crime risk level
  • Identification of potential financial crime risks relevant to each business area
  • Internal monitoring of customer behavior, as well as transaction monitoring
  • Risk based due diligence procedures at client on boarding, periodic basis and payment on third parties who perform services for or on behalf of the Group
  • Maintaining appropriate records for the period defined by the relevant law
  • Establishing and maintaining Standards for Management information on Financial Crime
  • Provision of a financial crime training and awareness programme


Risk Culture 

The Group recognizes that a strong risk culture, facilitated through regular risk awareness trainings, is an integral part of a good business-wide risk-management. The Group doesn't have an appetite to retain employees who do not possess the basic and sufficient knowledge and awareness of risk mitigation. The Group has a robust staff training program that applies to new and existing employees at all levels within the Group. Employing the risk based approach the trainings are delivered either through the e-learning system, or conducted face to face. The main part of the overall training program is to:

  • Complete post training assessments or attestations;
  • Keep detailed records of delivered trainings, post training assessments and attestations.


Review 

This Risk Appetite Statement is reviewed annually, or whenever there is a significant change to the Group's operating environment. This review is coordinated by the Compliance Department. Proposed changes to the Risk Appetite Statement are authorized by the Group's Risk, Ethics and Compliance Committee.