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The EFG –Hermes Group (“EFG” or “Group”) is committed to complying with relevant sanctions restrictions or prohibitions imposed by laws and regulations which target economic, diplomatic, financial and trade activities with specific countries, governments, entities, organisations or individuals in all jurisdictions in which it operates through identifying, mitigating and managing the risk.
Governments and supranational organisations implement sanctions to achieve various foreign policy objectives, such as to promote and maintain international peace and stability, democracy and human rights and to prevent terrorism, proliferation of arms and weapons of mass destruction.
EFG recognises that failure to comply with relevant sanctions laws or to prevent or manage this risk would not only constitute a breach of legal and/or regulatory requirements, but would also represent a failure to abide by broader community expectations and could carry significant reputational damage, legal and regulatory action and financial loss for the Group.
All EFG employees have a role to play in safeguarding and building upon EFG’s reputation which is dependent on the ability to behave and act responsibility in accordance with EFG’s values and principles.
This Policy applies to all countries and/or jurisdictions in which EFG operates and extends to any additional countries and/or jurisdictions where EFG commences operations and/or has an active registration or license.
This Policy applies to all EFG employees acting in any capacity, directors, officers, secondees, people on work experience, contractors, corporate directors, authorised representatives and consultants in all EFG businesses. In this Policy, “EFG” means the EFG Group and its subsidiaries and affiliates.
This Policy establishes the minimum Group expectations of EFG’s risk management and compliance with its sanctions obligations and sets out EFG’s approach including:
EFG’s Board and Group Executive Committee are committed to EFG’s compliance with all relevant sanctions laws and sanctions risk management. They expect all employees to be accountable and responsible for their own actions and not to be involved in activities of non-compliance with sanctions requirements. This includes assisting customers not to circumvent or avoid sanctions laws. The Executive Committee has appointed and delegated responsibility of AML and Sanctions compliance to the Group AML and Sanctions Escalation committee.
EFG clearly documents roles and responsibilities of compliance officers/MLROs and governance structure to ensure the ongoing development, maintenance, monitoring and oversight of AML/ CTF and sanctions across the Group. The Framework follows the 3 Lines of Defence principle.
EFG must comply with sanctions laws of all jurisdictions in which it does, or seeks to do, business. EFG also has regard to international best practice standards and guidance.
6.1 Global sanctions obligations
All of the jurisdictions in which EFG operates are obliged to give effect to United Nations Security Council (UNSC) sanctions. In addition, some jurisdictions also impose autonomous sanctions (such as the United States and the European Union).
The sanctions laws of multiple jurisdictions may apply to a single transaction facilitated by EFG
6.2 Global Sanctions implemented by other jurisdictions
Other jurisdictions give effect to sanctions in different ways. For example:
EFG will ensure that on an ongoing basis it is properly informed as to make reasonable measures to comply with, any findings recommendations, guidance , directives and resolutions, notices or other conclusions issued by :-
Where EFG conducts or seek to do business.
Parties to be screened against sanction lists
Sanctions screening should be undertaken on those parties who are subject to identification requirements to meet KYC and customer due diligence standards. This could include but is not limited to employees, board members of EFG legal entities account holders, beneficial owners (including settlors, named and vested beneficiaries), corporate directors, third party contractors, vendors and individuals with control over the account.
Organisations owned or controlled by sanctioned entities also need to be in scope and additionally customers who are not on a sanctions list but have a relationship with a sanctioned entity could also present a risk and should be screened, identified in any screening.
EFG requires that during the onboarding process a customer risk assessment is conducted to determine the level of Financial crime risk posed by the customer. The customer risk assessment takes into account sanction risks in the jurisdiction of the customer and global sanctions requirements.
Once the customer has been onboarded EFG requires ongoing monitoring against sanction lists for all existing customers.
EFG compliance segments heads must report any positive matches to sanction lists to the Group Chief Risk and Compliance Officer
Human resources must report any positive matches to sanction lists of any employees to The Group Chief Risk and Compliance Officer
All Policy incidents and breaches must be reported to the Group AML and Sanctions Escalation Committee.
Sanction lists are a compilation of individual sanctions that can be applied to individuals, countries, groups or companies. Sanction lists are often collated by governments or international bodies such as the UN.
EFG requires that all legal entities must include the following sanctions list in the screening processes
All group companies subject to this policy should conduct an assessment to identify any additional international sanctions list(s) that applies to their activities and/or clientele.
EFG requires that IT protocols should be in place to test data quality and integrity of systems used to screen for sanctions, politically exposed persons ("PEPs") and adverse media. Testing should be done periodically on risk-based intervals.
This section sets out obligations of the EFG Group’s employees and contractors.
Violation of the Sanctions may impact EFG’s reputation and could result in severe criminal and civil penalties being imposed on the EFG subsidiary or affiliate concerned or on EFG as a whole, as well as directors and employees. It is important to keep in mind that Sanctions imposed by one country for example, the United States, may have an effect on individuals and companies both inside and outside its border. Financial institutions play a vital role in the enforcement of Sanctions. Any violation may severely damage EFG’s relationship and ability to transact.
Risk appetite is the maximum level of risk that EFG is prepared to accept in the normal course of business. EFG has zero tolerance to breaches to the sanctions policy.
At a minimum, all relevant records must be retained in accordance with the EFG record keeping requirements.
All employees will receive annual sanctions training and targeted training where applicable.