VKF_FRAE_2017

PART III: FINANCIAL HIGHLIGHTS AND RISK MANAGEMENT 124 VakıfBank Annual Report 2017 obligations of the “Prevention of Laundering of Criminal Proceeds and Terrorism Financing”, in order to ensure that the Bank’s obligations are fulfilled; necessary policies and procedures are structured on the issues of identifying the customers, classifying them into risk categories and monitoring them, informing about the suspicious customer transactions and controls are made to see if these policies and procedures are implemented or not, opinion/approval is given for risky sector and country transactions. The Financial Crimes Investigation Board (MASAK) is informed about the transactions that are considered suspicious in consequence of the necessary investigations and evaluations made within the framework of a risk-based approach about the potentially suspicious transactions (for the Bank) detected within the scope of monitoring and controlling activities or forwarded via channels like branches to the Compliance Department. In order to properly follow the international sanctions, the Bank uses the ban list - composed of the sanction decisions of the international organizations such as the United Nations, European Union, OFAC et al. - in the investigations and controls. With the compliance activities carried out in the domestic and international branches of the Bank regarding “Prevention of Laundering of Criminal Proceeds and Terrorism Financing”, coordination of relevant tasks and activities is achieved. Compliance risks – that may arise from the regulations in foreign countries – of the international branches that are subject to the compliance program structured by the Bank in line with the legislation of the country where activities are carried out, are monitored by a staff who will control the compliance with these regulations. While carrying out its activities, the Compliance Department works in coordination with the business department. Within the framework of training activities, the Bank employee is given in-class and online trainings to provide awareness on the issue of “Prevention of Laundering of Proceeds of Crime and Financing of Terrorism”.  »» LEGISLATION MONITORING AND EVALUATION ACTIVITIES Carrying out activities in order to monitor relevant legislative on the banking activities and run the compliance process in an effective and efficient manner. Regularly monitoring the recent developments in legislation and banking practices related to banking activities, interpreting the impacts of the legislation changes on the banking activities, within this scope, the measures to be taken by the Bank and changes to be made in the Bank’s internal legislation and practices are detected and thereafter written information about the issue is given to the relevant departments of the Bank and necessary measures to be taken are requested from them and monitored. Furthermore, relevant departments are informed about draft regulations related to banking and thus necessary procedures are initiated before the regulations enter into force. Tasks for legislation compliance controls are carried out within the scope of the “Regulation On Banks’ Internal Systems and Internal Capital Adequacy Evaluation Process”. Within this scope; (i) legislation change compliance activities are coordinated; (ii) measures taken, practices changed and internal procedures formulated in order to reflect the legislation changes to the Bank’s internal procedures and practices, are monitored and controlled in terms of legislation compliance; (iii) necessary corrections and changes are made; (iv) necessary measures are taken to ensure prompt and full compliance to legislation; (v) controls are performed for new products’ and services’ compliance to legislation; (vi) the process of updating the internal procedures and guidelines are coordinated within the Bank. Furthermore, an employee is assigned to monitor the compliance risks – that may arise from the regulations in foreign countries – in order to achieve the compliance of the international branches with the legislation of the countries where they carry out activities. ASSESSMENT OF THE INTERNAL SYSTEMS AND CURRENT TERM OPERATIONS