HYPO ALPE-ADRIA-BANK S.P.A.



HYPO Alpe-Adria-Bank S.p.A. pays particular attention to policies aimed at preventing any involvement of the Bank in money-laundering and international terrorism financing transactions.
HYPO Alpe-Adria-Bank S.p.A. has therefore developed specific regulations, procedures, internal training programs, monitoring activities and controls, also aimed at ensuring that HBI’s personnel respects current national and international legislation.


LEGISLATIVE PRINCIPLES

Italian national legislation has recently undergone substantial changes, following the implementation of Directive 2005/60/EC into the Italian legal framework. This implementation process has taken place by means of following decrees:
- Legislative Decree No. 231 of 21st November 2007: the purpose of this Decrees is to prevent the financial system from being used for laundering the proceeds of criminal acts or for financing terrorism. This decree came into force on 29th December 2007;
- Legislative Decree No. 109 of 22nd June 2007, concerning measures for freezing funds and financial resources in order to combat the financing of terrorism and of Countries that threaten Peace and International Security.

The aim of the system is to "trace" the transfer of financial flows among various parties, particularly by:
- prohibiting the execution of cash transactions amounting to or higher than € 5,000.00;
- prohibiting the issue of bank or postal cheques amounting to or higher than € 5,000.00 without specifying the beneficiary and without non-transferable clause;
- prohibiting the issue of banker's drafts, postal orders or bills of exchange, without specifying the beneficiary and without non-transferable clause;
- identifying and recording the personal data of individuals who execute transactions for amounts above € 15,000.00 or who open up continuous business relations (”rapporti continuativi”) with the Bank.

In particular, this legislation has introduced a series of obligations for all banks, including:
- identifying customers before starting a continuous business relation, or before executing the operation;
- setting up a Centralised Computer Archive (Archivio Unico Informatico - A.U.I.), the functioning of which is disciplined by the same legislation; in this archive all opened/changed/closed continuous business relations are entered, as well as all transactions amounting to € 15,000.00 or more executed with customers;
- adhering to the so called "obligations concerning an adequate verification of customers" with regard to accounts and transactions related to the performance of the institutional activity: these obligations are foreseen in the legal framework;
- notifying the authorities any transaction which is suspected of being involved in money-laundering or terrorism financing;
- notifying any violation of the prohibition against the transfer of cash, and with regard to bank cheques and money orders;
- setting up adequate staff training programmes;
- adopting adequate internal control measures.

The national authorities which supervise the adherence to the legislation are the Ministry for the Economy and Financial Affairs, the “Ufficio di Informazione Finanziaria” (Financial Information Office), the supervisory authorities of each sector to which the parties subject to this legislation belong, the “Direzione Investigativa Antimafia” (Anti-Mafia Investigation Directorate) and the Guardia di Finanza (Financial Police).


PROCEDURES

HYPO Alpe-Adria-Bank S.p.A. internal regulations:
specify the general provisions to which all employees must adhere;
provide operating instructions on how to set up all operations having anti-money-laundering relevance;
discipline the utilisation of the procedure that helps to identify operations suspected of being related to money-laundering and terrorism financing.
The regulations are revised periodically in order to check that they adhere to the legislative requirements.

The aim of the procedures is to "trace" the transfer of financial flows among various parties.


CUSTOMER IDENTIFICATION AND TRANSACTION RECORDING

By identification we mean acquiring the personal data of the customer and of the actual holder of the account, if they are not the same person. Should the party state that he/she is operating on behalf of third parties, or of a legal entity, signature authorisation and powers are checked as well.
The identification data and all operations executed by customers for amounts exceeding € 15,000.00 (or € 5,000.00 if the transactions are split up) are recorded in a special Centralised Computer Archive (Archivio Unico Informatico - A.U.I.) and kept for 10 years, at the disposal of the competent authorities.


TRANSACTION MONITORING

In accordance with the procedures, employees constantly monitor both current and potential transactions and customers.

In order to identify suspicious money-laundering transactions, HYPO Alpe-Adria-Bank S.p.A. uses a special IT procedure, which is integrated into the procedures used in the Bank, and which is a useful tool for checking the transactions.
In addition to this, and with regard to terrorism financing, a special procedure allows HYPO Alpe-Adria-Bank S.p.A. to intercept, and therefore to "freeze", any suspicious flow before it reaches its destination.
Particular focus is placed on transactions involving considerable cash amounts, or transactions involving "non-cooperative" or "low taxation burden" Countries.
Transactions suspected of being related to money-laundering or terrorism financing are notified to the competent authorities.


KNOWLEDGE OF CUSTOMERS

Following the adoption of Directive 2005/60/EC, HYPO Alpe-Adria-Bank S.p.A. has set up procedures aimed at classifying customers according to their "money-laundering risk", at "strongly" evaluating the operations involving parties belonging to higher "money-laundering risk". Intensified checks are also conducted on the transactions of specific customers, such as “politically exposed persons” and related organisations situated in non-EU Countries.





TRAINING and INTERNAL CONTROLS

The Bank organises classroom training courses for all employees and collaborators.
Particular focus is placed on employees and collaborators who have direct contact with customers, and on newly-employed staff members.
Internal controls are continuously conducted in order to check:
if the internal regulations adhere to national legislation;
if the employees respect regulations, national legislation and internal procedures;
the functioning of the procedures adopted by the bank;
the participation of the employees to training courses.
The training and control activities conducted annually are notified to the General Management, the Board of Directors and the Board of Statutory Auditors.