Compliance and Integrity

We at NLB believe that responsible corporate governance is more than just respecting the laws, regulations, and standards. It is also a reliable compliance programme. NLB is committed to assuring compliance and integrity in the different countries where it operates.

At NLB, compliance is integrated into daily operations of the Bank, thus contributing to a strong internal control environment and ensuring the management of compliance risks.

NLB has laid down clear rules and guidelines for our employees in different areas of our operations. By ensuring compliance with the legislation and the other regulatory requirements we make sure that NLB, its shareholders, clients, business partners, and other stakeholders, as well as the employees, are appropriately protected against various risks related to the area of compliance.

We therefore expect that all employees of NLB and the other members of NLB will respect our compliance standards - by acting in a fair, responsible and ethical manner. Our NLB Group Code of Conduct, which is a standardised document for all members of NLB Group, describes the values and lays down the standards of ethical business conduct and serves as the guideline for all our relationships regardless of whether it involves clients, competitors, business partners, state authorities, regulators, shareholders or internal relationships between the employees. At the same time, it is the basis of our values and basic principles of conduct which provide specific conduct guidelines to our employees. The aim of this approach is to ensure compliance with all applicable laws, regulations, and standards.

To promote responsible conduct by the employees, we regularly carry out mandatory training in all areas within NLB Compliance and Integrity.

Compliance and Integrity is dedicated to the Bank’s future growth and development. Therefore, we constantly strengthen the compliance function and ensure that it is based on internationally recognised compliance management standards.

Compliance and Integrity programme

In NLB, Compliance and Integrity functions independently and separately from the Bank’s operations. The basis of our Compliance Programme is provided in the Integrity and Compliance Policy of NLB d.d. and NLB Group. NLB raises the awareness of the front office and the other organisational units of the Bank regarding the assurance of compliance and integrity with different legislative and regulatory requirements as well as good practices. Compliance and Integrity is thus in charge of:

•    providing consultancy services to individual units about the applicable laws, directives, standards and regulations and guidance and support in assuring compliance, which includes assistance in the provision of appropriate internal control mechanisms for the prevention of the conflict of interest (e.g. “Chinese walls”), protection of information, protection of personal data, prevention of abuse of the market in financial instruments,

•    monitoring operations, transactions and business processes to establish potential compliance risks,

•    development of the principles, standards, and guidelines for compliance, useful in NLB Group (AML/CFT, prevention of fraud, personal data protection, protection of information, code of conduct, applicable regulations, rules, and internal standards),

•    maintenance of internal controls and limited lists of the Bank’s projects that require special attention,

•    assistance in achieving compliance with the Bank’s internal regulations on confidentiality,

•    carrying out all measures arising from the programme for anti-money laundering and combating the financing of terrorism,

•    making sure that the events which justify the suspicion of money laundering or terrorist financing and other types of criminal offences are identified and reported to the law enforcement authorities and other competent supervisory bodies (e.g. Office for Money Laundering Prevention of the Republic of Slovenia),

•    provision of regular training and education of the personnel in the area of compliance issues (AML/CFT, prevention of fraud, personal data protection, protection of information, general ethics and other rules of the code of conduct, applicable regulations, rules and internal standards, prevention of fraud and other types of harmful conduct),

•    monitoring of the management of compliance and integrity risks and identification and assessment of risks at the level of NLB and NLB Group,

•    taking care of the relations with the competent supervisory bodies (ECB, Bank of Slovenia) on a daily basis.

NLB constantly builds, strengthens and supports the compliance and due diligence culture in NLB and NLB Group. The operations of the companies in the banking and the other financial sectors are strictly regulated, which makes it more and more complicated. To face these challenges, NLB uses a systematic approach to reducing the compliance risk.  It is important to ensure that the employees and those who make decisions know and understand the purpose and objective of the regulations. Systematic monitoring of the legal and regulatory environment and valuation of its impact on the Bank are thus an important part of its daily operations.

NLB has zero tolerance for all forms of financial crime. Our AML/CFT Programme for fighting money laundering and terrorist financing provides strong support for various international efforts in fighting money laundering, terrorist financing, and other criminal offences.

How we can fight against corruption, bribery and other forms of fraud

In the framework of our compliance programme, NLB undertook to fully comply with all local and international laws regulating the fight against corruption and bribery. Our employees and managers are strictly prohibited from accepting, offering, paying or approving bribes or any other form of corruption. Therefore, NLB d.d. and the other members of NLB Group very actively implement the policies and procedures in the area of zero tolerance to any such form of corruption, either in the public or the private sector. We have determined the rules and procedures, guidelines and rules of conduct which are binding for all employees as well as the members of the management of NLB d.d. and the other members of NLB Group. We expect our agents, brokers, consultants, business partners and suppliers related to NLB d.d. and the other members of NLB Group to also uphold these standards. NLB expects transparency, professionalism, and fairness in all business relationships and thus tries to avoid irregular advantages or occurrence of questionable conduct by employees or third parties we do business with.

NLB d.d. and the other members of NLB Group thus use the anti-corruption policy to fight corruption and bribery with:

-    appropriate measures aimed at training and raising awareness,

-    monitoring compliance and integrity risks and monitoring the implementation of the measures for their mitigation,

-    implementing the processes of investigating all types of suspected misconduct,

-    recording and accepting gifts, invitations, hospitality, conflict of interest,

-    special channels for reporting irregularities in reporting suspicious conduct, either anonymously or not (phone, mail, e-mail, application Whistler),

-    risk-adjusted procedures for monitoring third-party operations and preventing all kinds of fraud, abuse, money laundering, and terrorist financing.

How we check and approve new products and services

NLB is bound to only offer products and services that create value for our clients and the shareholders, and meet the client’s needs. The processes for approving new products comprise a preliminary review required for achieving these goals. We wish to make sure that the clients can have full confidence in our products.

The procedures of approving products and services apply to all new product offers, as well as various existing products. The key control functions must be involved in the process of product development and monitoring, including the compliance function, since it is important that every product is compliant with the requirements of the regulations, inter alia, in the area of consumer protection, personal data protection, and prevention of money laundering and terrorist financing. The Committee for Existing and New Products in NLB is in charge of approving and monitoring products while also focusing on risks related to the product and the method of managing those risks.

Protection of personal data and information

Policies, rules, standards, and procedures for personal data and information protection (e.g. business secrets) are used in our everyday operations in the area of data protection. Thus, we ensure compliance with the relevant regulatory provisions that can differ significantly from one country to another.

Preventive measures and thorough control within NLB and in relation to outsourced providers and suppliers help prevent the loss or abuse of data and the violation of data protection regulations, including the protection of personal data. Each complaint is thoroughly investigated and appropriate measures are taken to manage the risks or prevent potential violations. To this end, we organise regular education and training courses in order to raise awareness about the protection among the employees and to ensure compliance with the established standards of information protection and compliance with the regulations and standards implemented by the Bank. More details about NLB's approach to personal data protection are available on NLB website.

Whistleblower protection

All important suspected violations or misconduct (such as abuse, fraud, including suspected bribery or any form of corruption) must be reported and handled. NLB maintains such an environment that encourages the employees to set questions which can be discussed with their managers or other employees in the Bank, including the experts in compliance, money laundering prevention, fight against bribery and corruption, or with lawyers or HR managers. Employees also have access to different channels through which they can anonymously report potentially non-ethical or inappropriate business practices. We use a strict policy of whistleblower protection against retaliation measures and assurance of anonymity.

AML/CFT programme

Our programme for anti-money laundering and countering the financing of terrorism

NLB has zero tolerance for all forms of financial crime. Our AML/CFT Programme for anti-money laundering and countering the financing of terrorism, therefore, pursues the international standards in the area of AML/CFT and enables the Bank to participate in various international efforts in fighting money laundering, terrorist financing, and other criminal offences.

Our money laundering and terrorist financing prevention standards are in compliance with the Slovenian and the EU legislation in the area of money laundering prevention, and the guidelines of the Bank of Slovenia. They are also in compliance with the recommendations of the intergovernmental organisation Financial Action Task Force on Money Laundering (hereinafter: FATF). Clients and their operations are reviewed using detailed procedures and an automated system for detecting potential abuse of the financial system for the purpose of money laundering.

Our requirements in the area of anti-money laundering and anti-terrorism financing prevention apply in all countries where NLB Group operates, regardless of their location. The members of NLB Group must namely operate in full compliance with the Slovenian AML/CFT legislation and NLB Group Standards. All our employees and senior managers must act in accordance with those standards in order to prevent abuse of our name or our products and services for the purposes of money laundering. To ensure that we always use the best possible harmonisation practices, we regularly inspect our goals, methodologies, procedures, and strategies for the prevention of money laundering and terrorist financing, and regularly train and raise the awareness of all employees in the front offices.

Strict measures for anti-money laundering and combating the financing of terrorism

Based on the AML/CFT Policy, NLB does not permit payments (transactions) to prohibited countries/jurisdictions. NLB does not cooperate with the clients from such countries. The harmonisation of the implementation of the AML/CFT system in the Group also includes the supervision and review of the AML/CFT system. With this approach and the upgrade of the AML/CFT system, NLB and NLB Group have been efficiently managing the AML/CFT risks in the recent years and thus meeting the obligations imposed by the international standards and other regulations.

Other measures used for preventing money laundering and combating terrorism financing:

-    NLB has in place a prohibition of starting business cooperation with entities having headquarters in high-risk countries with inadequate standards regarding the terrorist financing,

-    the restriction and in-depth reviews of non-residents without economic or logical bases for the entry into the business relationship,

-    prohibited operations with the countries and regimes defined as high-risk by the international banking standards (including Iran, North Korea, Sudan, and South Sudan, Myanmar, Afghanistan, Cuba, Crimea and Siria),

NLB has set up a special committee for the prevention of money laundering which regularly investigates suspicious cases and adopts decisions on the termination of business cooperation where risks exist for money laundering and terrorist financing.

In terms of acceptability of operations with entities and segments where the actual risks exceed the acceptability level, the Bank adopts a sovereign decision not to enter into a business relationship with such client or group or to terminate any existing business relationships.

How we ensure the know your customer (KYC) principle

NLB upholds the laws and international standards in the AML/CFT area. NLB Group carries out the client due diligence review process (a) prior to establishing a business cooperation, (b) prior to implementing individual transactions in the amount of EUR 15,000 or more, (c) in the event of doubt regarding the accuracy of data or (d) in the event of suspected money laundering or terrorist financing regardless of the amount of transactions and (e) in the case of periodic transactions performed by a non-client of the Bank.

To support the fight against terrorist financing and money laundering activities, NLB obtains, verifies and records data which identify every person or entity that opens an account with NLB.

NLB strives to obtain and update the data and documents in relation to the process of knowing the client at least every two years for high-risk clients and every 5 years for usual-risk clients.

NLB’s client due diligence review comprises the following:

•    establishing and verifying the customer's identity on the basis of independent and objective sources,

•    identifying the actual owner of the client,

•    obtaining data on the activities, reasons, purpose and intended nature of the business relationship, and other data as required by law,

•    regular monitoring of the clients’ business activities based on the risk assessment.

What does the implementation of the KYC procedure mean for your customers? When you open the account, we will ask you for your name, address, date of birth and other data enabling us to identify you. We can also ask you to present your identification documents (passport, personal ID card or other identification documents) for verification. Should we need additional data and information (e.g. on the origin of money, actual owners and similar) we will ask for them, since we are required to do so by the regulations and international standards that bind us.

More detailed information on the implementation of the KYC procedures - how do we assess and monitor our clients

We have developed efficient Know Your Customer or KYC procedures and the procedure of deciding about accepting new clients in order to ensure the appropriate level of compliance with international standards for the sake of anti-money laundering and combating the financing of terrorism. These also help us reduce the risks in relation to money laundering, terrorist financing, and other economic crime. Our KYC procedures begin with client due diligence reviews carried out in accordance with the international standards and guidelines of our regulators (client reviews are carried out prior to the establishment of the business relationship with individual clients and later in the form of regular reviews). Our procedures do not only apply to individuals and business entities that are or could become our direct business partners, but also for the people and entities behind them (actual owners) or indirectly associated with them (business partners).

Based on the KYC principle, we assess and determine the level of risk for each client and business relationship. Based on the risk assessment, we carry out a simplified or an in-depth client review. In the event of high risk, an in-depth review is carried out (e.g. for politically exposed persons) which comprises additional measures, such as: obtain data on the origin of assets and property, additional data on the activity, purpose and interests of the client, obtain approval of the business relationship from the senior management and carry out more frequent and in-depth monitoring of the client’s business activities and operations performed by the client using our services.

Financial sanctions and EMBARGO (UN, EU, OFAC, HMT)

The unacceptability of entering into business relationships and carrying out transactions applies to all operators, entities, ownership associations, goods, countries and geographical areas listed among the international restrictive measures. In accordance with the regulatory requirements, NLB carries out the restrictive measures of the UN (United Nations) and the EU. Even though NLB as an entity with the registered office in Slovenia is not obliged to implement the US regulatory requirements, we have adopted a business decision in the framework of the policy of implementing the international restrictive measures (financial sanctions and embargo) and committed to implementing the OFAC financial sanctions and embargo, the HMT and the US Patriot Act in the part relating to foreign banks.

KYC/AML documentation

NLB AML/CFT and Sanctions Policy Statement and Important General Information

Articles of Association of NLB d.d.

Annual Reports of NLB d.d. 

Wolfsberg Anti-Money Laundering Questionnaire

US Patriot Act - Certification regarding correspondent accounts for foreign banks

Abovementioned signed documents are available in the following specialized databases:

SWIFT KYC Registry

Bankers Almanac Due Diligence Depository

For evidence on the licenses to perform the services of a credit institution in the EEA countries, you are recommended to contact the Register of credit institutions on the websites of the European Banking Authority (EBA: Credit institutions register) or the website of the Bank of Slovenia.