Prevention of money laundering and other financial crimes

In view of the ProCredit group’s ethical business model, the prevention of money laundering and other financial crimes is of the utmost importance. We take our responsibility for the prevention of harmful financial transactions very seriously in all areas of our business activities.

A core element in the fulfilment of our due-diligence obligations is the Know-Your-Customer principle. We endeavour to establish long-term business relationships with our clients, a factor which greatly facilitates the detection and prevention of financial crime in our banks. All ProCredit banks also ensure that they identify the beneficial owners behind each of these business relationships. These are the natural persons who profit significantly from a business relationship but who themselves might not necessarily play an active role in the business relationship nor have any direct contact with the bank. This approach is even implemented in countries where banking supervision law does not yet provide for this level of prudence.

It is our policy not to enter into business relationships with persons or companies whose values are contrary to our own, and to immediately end any existing relationships as soon as we become aware of any great inconsistencies with our ethical business policies. Our ethical responsibility is set out in our Code of Conduct and Exclusion List, which contain the core rules and regulations that all employees of ProCredit banks are obliged to observe. The Group Anti-Money Laundering Policy specifies how these regulations are to be implemented in the context of preventing all forms of financial crime.

Regular training and other measures ensure that our staff are at all times able to identify the risks of financial crime as well as to understand and implement prevailing regulations on customer due diligence obligations and the prevention of money laundering. In addition, all ProCredit banks use computer-based monitoring systems in order to systematically and effectively assess all customers, accounts and payments with regard to potential financial crime.

All ProCredit banks employ dedicated AML staff who oversee the implementation of all group-wide anti-financial crime measures as well as ensuring compliance with national rules and regulations on the prevention of financial crime. The Group Anti-Money Laundering team at ProCredit Holding is responsible for coordinating these efforts at group level, providing training and advice in cases of doubt as well as maintaining a central reporting system.

We operate in accordance with international best banking practices and standards as well as with EU and German banking supervision requirements. In this way, ProCredit Holding actively supports all ProCredit banks in the implementation and advancement of all measures to prevent money laundering and financial crime and ensures that all regulatory obligations in this area are fulfilled.

The core measures and precautions which we have adopted in order to combat money laundering, terrorist financing and other acts punishable by law can be summarised as follows:

Transparent client relationships

Strict regulations are in place concerning the identification of clients (KYC –  the know-your-customer principle). This prevents individuals with dubious intentions from gaining anonymous access to the financial system. We apply this principle just as strictly to companies with complex structures, in order to ascertain exactly who the natural persons behind the corporation really are.

Training

To ensure that our staff are in a position to positively identify and “know” clients, we place great value on training. This includes mandatory courses for all new employees about the dangers of money laundering and what concrete measures can be taken to prevent it. In addition to this, staff are regularly trained with regard to new regulations and developments in the field of anti-money laundering.

Monitoring of client data, transactions and accounts

We have introduced special software group-wide, which enables us to detect and closely analyse any potentially suspicious activities. Another software module ensures compliance with national and international sanctions and embargoes. In this way, we are able to guarantee that we neither enter into business relationships with persons or companies on international watch lists or blacklists, nor do we permit transactions in their name or to their benefit.

Risk-based approach

All banks in the group apply the FATF-recommended risk-based approach. This means that besides applying the standard measures, each ProCredit bank analyses its own country-specific money-laundering risks and undertakes all appropriate additional measures.

Anti-money laundering officers

Every ProCredit bank appoints an anti-money laundering officer, who reports directly to the management board. Our anti-money laundering staff are responsible for applying the group-wide guidelines aimed at preventing money laundering, terrorist financing and other offences such as fraud and embezzlement. They co-operate with the local law enforcement authorities and report on economic crimes or suspicious clients and transactions, both to the management board and supervisory board of their own bank as well as to the ProCredit group-level anti-money laundering officer.

For more information, please contact: PCH.compliance@procredit-group.com