As part of keeping criminal capitals outside the Russian economy and preventing potential terrorist attacks, Vnesheconombank operates a system of anti-money laundering and counter terrorist financing (AML/CTF) measures. The Bank’s AML/CTF system provides for mandatory procedures that identify customers, customer representatives, beneficiaries and beneficiary owners and a set of measures to timely identify in customers’ operations transactions and deals that are subject to mandatory control and unusual transactions. The system also provides for AML/CTF training of the Bank’s employees.

Vnesheconombank’s AML/CTF system operates in line with the requirements of Federal Law No. 115-FZ “On Anti-Money Laundering and Counter Terrorist Financing” dated 7 August 2001 and those set by relevant authorities and takes into account the recommendations of international financial institutions and practices of Western and leading Russian financial institutions. The system is based on the internal control rules for the purposes of AML/CTF, which include programmes containing procedures that are binding on all employees who implement (support) banking and other transactions and which enable Vnesheconombank to comply with the requirements.

In 2013, due to the changes made to Federal Law No. 115-FZ and relevant regulatory acts, Vnesheconombank entered changes into its internal control rules for the purposes of AML/CTF that provide for identification of customers’ beneficiary owners, blocking of money or other property of customers included in the list of organisations and individuals known to be involved in extremist activities or terrorism, or in the event of a decision to block money or other property, monitoring of foreign trade transactions (deals) or other measures aimed to improve the AML/CTF system in Vnesheconombank.

In 2013, Vnesheconombank placed a special emphasis on strengthening its efforts aimed to prevent corruption and other unlawful activities. To this end, Vnesheconombank created a special dsubdivision within its structure that coordinates the Bank’s anti-corruption efforts and established a Committee on the Compliance with Requirements to Business Conduct by Employees of Vnesheconombank and Settlement of Conflicts of Interests.

In 2013, as part of its anti-corruption efforts, Vnesheconombank introduced a system of measures to collect and process information on income, expenses, property and financial obligations of persons applying for specific positions in Vnesheconombank, Vnesheconombank’s employees that occupy these positions, their spouses and underage children. This information is furnished by Vnesheconombank’s employees in hard copy and is then stored in fireproof metallic safe-boxes kept in special alarmed premises.

In 2013, Vnesheconombank approved the Procedure for Notification of the Employer on Attempts to Involve Vnesheconombank’s Employees in Corruption, and Registration and Verification of Such Notices. The Bank set up the Anti-Corruption section on its official web-site and launched communication channels for feedback on prevention of corruption, including e-mail (profkorr@veb.ru) and telephone. The Bank’s building displays posters reminding of the prohibition to accept gifts in relation with employees’ job duties and on the liability for bribe giving and taking. Special guidelines were developed for the Bank’s employees.

In 2013, 5 employees of the Bank underwent a special training course under supplementary vocational training programmes of the Russian Presidential Academy of National Economy and Public Administration (RANEPA) and the Institute of Legislation and Comparative Law under the Government of the Russian Federation. Additionally, the Bank held two specialised workshops entitled “Application of Criminal Liability Measures for Bribe Taking and Giving” and “Ensuring the Compliance by Employees with the Restrictions and Prohibitions, Requirements to the Prevention or Settlement of Conflicts of Interests, and with Their Job Duties”. These workshops were held as webinars for employees of Vnesheconombank’s representative offices in Russia and in other countries.

Vnesheconombank’s procurement system is governed by the Regulations on Procurement of Goods, Work, and Services for the Needs of State Corporation “Bank for Development and Foreign Economic Affairs (Vnesheconombank)” developed in line with Federal Law No. 223-FZ “On Procurement of Goods, Work and Services by Certain Types of Legal Entities” of 18 July 2011.

In its procurement operations, Vnesheconombank is guided by the following principles:

• procurement transparency;
• equality, transparency, no discrimination and no unjustified competitive restrictions with respect to procurement participants;
• targeted and economically efficient disbursement of funds to acquire goods, work and services;
• cutback of Vnesheconombank’s costs;
• no access restrictions on participation in procurement in the form of immeasurable requorements to procurement participants.

Each year Vnesheconombank publishes its procurement plan for the next calendar year and runs its procurement operations using procurement procedures via public sales (in the form of a bidding procedure or an auction), without public sales (in the form of competitive negotiations, request for quotations or competitive selection), or in the form of sole source procurement. Based on the results of procurement procedures, the supplier is selected by the procurement committee consisting of heads of Vnesheconombank’s structural units.

To protect its insider information, Vnesheconombank operates a System for Combating Unlawful Use of Insider Information and Market Manipulation based on the requirements of Federal Law No. 224-FZ “On Combating Unlawful Use of Insider Information and Market Manipulation and on Changes to Certain Legislative Acts of the Russian Federation” dated 27 June 2010.

In 2013, due to the changes in legislation, Vnesheconombank updated its corporate regulatory documents governing the procedure of access to Vnesheconombank’s insider information, the procedure for notification of persons about their inclusion in, or exclusion from, Vnesheconombank’s List of Insiders, and the procedure for transferring Vnesheconombank’s List of Insiders to exchanges and other regulatory documents. The Bank concluded non-disclosure agreements with those members of collective working bodies of Vnesheconombank that were not employed by Vnesheconombank. These persons were included in Vnesheconombank’s List of Insiders. Additionally, the Bank organised a training course for the Bank’s employees on practical application of the law on combating unlawful use of insider information and market manipulation.

In 2013, the relevant authorities had no claims against Vnesheconombank regarding the combating of unlawful use of insider information and market manipulation.

Vnesheconombank undertakes to keep its borrowers’ and partners’ information confidential. The Bank operates a certificated information security system and has in place mechanisms to identify and investigate any unlawful use of such information.

In 2013, Vnesheconombank took additional measures to monitor access to confidential information by the Bank’s employees and organisational and technical measures to protect the information in Vnesheconombank’s automated information system and ensure information security in secured automated systems and premises in line with existing Russian and international standards. The Bank also ran an audit and obtained a certificate of conformity to the requirements of the Payment Card Industry Data Security Standard (PCI DSS) from International Payment Systems VISA and MASTER CARD, version 2.0.

The procurement operations of Vnesheconombank Group’s entities, and their efforts on AML/CTF, prevention of unlawful use of insider information and market manipulation, and confidentiality of borrowers’ and partners’ information are implemented in strict compliance with the requirements of Russian laws. Bank BelVEB and Prominvestbank are guided by the relevant legislative requirements of their respective countries.

In 2013, to prevent corruption and other unlawful activities, Eximbank of Russia approved the Instruction “On Enactment of Anti-Corruption Procedures in Examining Requests to Provide Financial and/or Guarantee Support to Russian Exports Involving Sovereign Guarantees of the Russian Federation”. SME Bank approved the Policy for Prevention, Identification and Settlement of Conflicts of Interests.

Some entities of the Group also analysed the operations of structural units for corruption-related risks:

• Eximbank of Russia analysed 10 out of 13 units (76.9%);
• Sviaz-Bank analysed 12 out of 85 units (14.1%).

In 2013, Vnesheconombank Group’s entities were not involved in any litigations covered by the definition of Federal Law “On Anti-Corruption” and did not receive any human rights complaints.

GLOBEXBANK received complaints regarding the disclosure of customers’ personal data. The bank investigated each of the 5 cases. To prevent similar incidents, the Bank audited the perimeter of information systems for security, ran PEN-testing of the corporate network’s segments, and analysed the need to grant the Bank’s employees the rights of access to corporate file resources.

The total amount of pecuniary fines imposed on Vnesheconombank Group’s entities in 2013 for incompliance with legal and regulatory requirements was RUB 9.221 mn. The largest fines included:

• fines imposed on Prominvestbank for incompliance with the requirements of tax laws (RUB 3,220.5 thousand) and for earlier termination of a lease agreement (RUB 1,404.2 thousand);
• fines imposed on Sviaz-Bank as a restl of claims by individuals for a total of RUB 1,019 thousand;
• a fine of RUB 1,200 thousand imposed on VEB-Capital for incompliance with the capital adequacy ratio set for the company as a professional player in the securities market.

Key channels used to assess the satisfaction level of customers and partners and inquiries from customers of Vnesheconombank Group in 2013

Retail banking services are offered by the Group’s universal commercial banks, GLOBEXBANK and Sviaz-Bank, and the Group’s Byelorussian and Ukrainian subsidiary banks, Bank BelVEB and Prominvestbank, respectively. The subsidiary banks are seeking to integrate customer-oriented practices into their retail operations, including by promoting remote service channels, enhancing the accessibility of office premises for mobility impaired people, and by offering their customers socially important banking products.

The key remote customer service channels used by the Group’s subsidiary retail banks include the Call Centre, internet banking, mobile banking, and the online consultant service. Additionally, Bank BelVEB provides its customers the opportunity to obtain a loan online or via the Bank’s Call Centre, or by offering to send an employee to the customer to execute the loan documents.

Offices of the Group’s subsidiary banks equipped to facilitate access to the premises by mobility impaired persons

The Military Mortgage Loans programme implemented by Sviaz-Bank is the most important initiative in terms of providing customers with socially important banking products. In 2013, the Bank issued over 5 thousand loans for a total of RUB 10.636 bn as part of this programme. The share of these loans in the Bank’s retail portfolio totalled 43.16%. Sviaz-Bank also provides its customers that receive length-of-service and age pensions with an opportunity to open a special pension deposit, 13^th Pension, with an interest rate of up to 9.5% per annum.

GLOBEXBANK also implements the Military Mortgage Loans and Young Researchers loan programmes that are designed to provide affordable housing. In 2013, the Bank extended over 500 loans under the programmes for a total of RUB 866.9 mn. The share of these loans in the Bank’s retail portfolio totalled 15.86%.

Bank BelVEB developed a special banking product for its retirement age customers, the current settlement bank account Pensionniy (Pension), with an annual interest rate of 14% as compared to the interest rate of 0.5% p.a. for standard current settlement accounts. Additionally, the Bank offers its pre-retirement age customers the Golden Time pension savings account, with an increased interest rate (34% for Byelorussian roubles, 8.7% for Russian roubles, and 7.2% for US dollars and Euro). As of the end of 2013, Bank BelVEB opened 253 Pensionniy accounts and signed 31 agreements under the Golden Time programme.

Prominvestbank offers a special lending programme focused on young students. In 2013, the Bank issued 25 loans for education purposes totalling RUB 873.8 mn.