STATEMENT OF APPROACH ON ANTI-MONEY LAUNDERING AND COUNTER-TERRORIST FINANCING
1.1 THE BANK’S LEGAL FORM
The African Export-Import Bank (the “Bank” or “Afreximbank”) is a Pan-African Multilateral Financial Institution established by a Treaty:
a) The Agreement establishing the Bank; and
b) The Bank’s Charter, both of which make up the main constitutive legal instruments of the Bank.
The Agreement establishing the Bank was registered with the United Nations on April 10, 1997 as an “International Agreement”. The Bank is therefore recognized as a “Multilateral” financial institution under Article 102 of the UN Charter. The UN Registration Certificate can be viewed at the Bank’s website www.afreximbank.com. The Bank has full juridical personality under the laws of the States party to the Establishment Agreement and is accorded immunities, privileges and concessions pursuant to it.
The Bank’s Shareholders include African States, African and Non-African private and institutional investors. The Shareholders are categorized into Class “A” made up of African governments being represented by their central banks and/or ministries of finance. This category also includes African regional institutions, namely the African Development Bank Group (AfDB), the African Reinsurance Corporation (AfricaRe), PTA Bank, and others; Class “B” Shareholders comprise of African private investors and financial institutions; while Class “C” Shareholders are non-African investors; and discussions are currently on-going with a number of potential shareholders for the Class “D”. The current authorized share capital of the Bank is in an amount of US$5 billion. Afreximbank is rated by Fitch Ratings and Moody’s Investors Service.
1.2 PURPOSE OF THE BANK
The Bank was established with a mandate to finance, expand and promote intra- and extra-African trade. The specific objects of the Bank as contained in its Charter are to: extend direct credit to eligible African exporters in any appropriate form, by means of providing pre- and post-shipment finance; extend indirect short-term credit, and where appropriate, medium-term credit, to African exporters and importers of African goods, through the intermediary of banks and other African financial institutions; promote, expand and finance intra-African trade; promote and finance the export of non-traditional African goods and services; provide finance to export-generative African imports, preference being given to imports of African origin, including imports of equipment spare-parts and raw materials, as deemed appropriate by the Bank; promote and finance South-South trade between Africa and other countries; act as intermediary between African exporters and African and non-African importers through the issuance of letters of credit, guarantee, and other trade documents in support of export-import transactions; promote the development, within Africa, of a market for bankers’ acceptances and other trade documents; provide support to payment arrangements aimed at expanding the international trade of African States; carry out market research and provide any auxiliary services aimed at expanding the international trade of African countries, and boosting African exports; carry on banking operations and borrow funds; undertake any other activities, and provide other services which it may deem to be incidental or conducive to the attainment of its purpose, as determined by the General Meeting of Shareholders of the Bank.
Afreximbank is not regulated by any monetary authority or government agencies. Accordingly, the Bank’s operating philosophy is to operate in accordance with best practices in the banking industry that conforms to international standards.
1.4 BOARD OF DIRECTORS
Afreximbank has a 12-man Board of Directors comprising of 10(ten) non-Executive Directors and 2(two) Independent Directors. One (1) Director is elected, and may be removed, by the African Development Bank (AfDB). The other eleven (11) Directors are elected by the General Meeting, being three(3) Directors from Class “A”; four(4) Directors from Class “B”; two(2) Directors from Class “C”; and two(2) Independent Directors to represent the interests of the Shareholders as a whole. In the election of Boards of Directors, the Shareholders have due regard to high competence in controls, economic, financial and trade matters required for the office. No member of the Board of Directors may be an officer of the Bank nor stand for nomination, appointment or election for any such office and no Director may be of the same nationality as any other existing Director.
The Bank Board of Directors have sub-Committees including; the Executive Committee (EXCO); Audit Committee; Branch Management Committee; Remuneration Committee; Regular Award and Founders Award Committees. These Committees report periodically to the full Board during its quarterly meetings.
1.5 AFREXIMBANK ANNUAL GENERAL MEETINGS OF SHAREHOLDERS
The Shareholders hold an Annual General Meeting (the “AGM”), and other such meetings as may be provided for by the General Meeting or called by the Board of Directors. The General Meeting approves, after reviewing the report of the External Auditors, the Bank’s Annual Financial Statements and adopts its Annual Report for the year under review, approve the appointment of External Auditors, and determine their mandate and remuneration for the preceding year in accordance with the provisions of the Bank’s Charter. The Meeting also considers other proposals made by the Bank’s Management through its Board of Directors.
All General Meetings other than the Annual General Meeting are called Extra-Ordinary General Meetings.
The Bank is headquartered in Cairo, Egypt, pursuant to a Headquarters Agreement between the Bank and the Government of the Arab Republic of Egypt, signed on August 31, 1994. The Bank presently has two branch offices located in Harare, Zimbabwe; and Abuja, Nigeria, respectively. Two additional branch offices in Abidjan, Cote d’Ivoire, and Nairobi, Kenya will be operational in 2015.
2.1 PHYSICAL ADDRESSES OF THE BANK
2.1.1 PERMANENT HEADQUARTERS:
No. 72(B) El Maahad El-Eshteraky Street, (Opposite Merryland Park)
Heliopolis, Cairo 11341
P.O. Box 613 Heliopolis,
Cairo 11575, Egypt
Tel: (202) 24564100/1/2/3
Fax: (202) 24564110, 24515008
No. 2 Gnassingbe Eyadema Street
Asokoro, Abuja, Nigeria
Postal Address: PMB 601 Garki
2.1.3 HARARE BRANCH OFFICE:
Eastgate Building, 3rd Floor, North Wing
P.O. Box CY 1600, Causeway
Harare – Zimbabwe
Tel: +263-4-700 904; Tel/Fax: +263-4-701-006
2.1.4 ABIDJAN BRANCH OFFICE
3ème Etage, Immeuble CRRAE-UMOA
Angle Boulevard Botreau
Tel. +225 2 0307300
Fax +225 2 0307348/49
3. THE COMPLIANCE UNIT (CU)
Afreximbank has a dedicated Compliance Unit which is charged with the responsibility of:
i. Designing the appropriate and applicable policies and procedures;
ii. Monitoring to ensure that all employees comply with the relevant policies and procedures;
iii. Ensuring all relationships established by the Bank are compliant in terms of the Bank’s Customer Due Diligence requirements (KYC);
iv. Training and creating awareness among Employees, Senior Management, and the Board of Directors; and
v. Ensuring that a strong compliance culture is fostered within the Organization.
These policies and procedures include Anti-money Laundering and Counter Terrorist Financing (AML). The CU serves as the Bank’s watchdog on global money laundering developments, trends and patterns and other cross-border financial crimes. The CU reviews the Bank’s relevant policy and procedure documents with a view of ensuring that they are in line with defined international standards, and when necessary, improve on them with respect to prevention, detection, investigation, monitoring and reporting of suspicious transactions.
3.1 ANTI-MONEY LAUNDERING AND COUNTER-TERRORIST FINANCING (AML)
As the Pan-African Multilateral financial institution, as well as a good corporate citizen, Afreximbank has developed a documented AML policy with related procedures to adequately address potential money laundering and terrorist financing risks. The Bank’s policy and procedures were considered and approved by the Executive Committee (EXCO) of the Board of Directors, and the documents are being amended from time to time taking into consideration the growing trends in money laundering and terrorist financing, as well as, the sophisticated nature of these crimes. The Bank strives to ensure that its policies conform to standard policies and procedures of international key regulators and industry leaders on AML regime. Afreximbank AML policy and procedures are primarily based on Financial Action Task Force (FATF) Recommendations, the Wolfsberg Trade Finance Principles on and the Basel Initiatives.
It is compulsory for all Banks’ employees to comply with the requirements of Afreximbank’s AML policy and the related procedures at any given time during execution of their duties.
3.2 CUSTOMER DUE DILIGENCE (CDD)
3.2.1 CUSTOMER IDENTIFICATION
Afreximbank AML policy makes it mandatory to fully identify and verify all potential customers. These include credit customers, services providers, suppliers, employees, investors and any other third parties that the Bank discretionary engages. The process includes but not limited to identifying and verifying the legal establishment status, address, shareholding structure, corporate governance, sources of funds, among others The Bank will not establish any relationship until the CDD minimum requirements are met.
3.2.2 CDD ON THE BANK’S CUSTOMERS’ CUSTOMERS (KYCC)
In accordance with Afreximbank policy, the Bank conducts due diligence on sub-borrowers on a need basis; however, it is mandatory that correspondent banking clients conduct full CDD on their borrowers, and provide the Bank with all required information about such borrower, prior to accessing funds under the Bank’s Line of Credit facility. The Bank declines transactions that involve sub-borrowers for which there are inadequate or unavailable due diligence information.
3.2.3 CDD ON POTENTIAL EMPLOYEES (KYE)
The Bank’s AML policy makes it mandatory to conduct due diligence on all new hires, whether temporary or permanent to ensure that the Bank’s integrity is not compromised
3.2.4 SERVICE PROVIDERS, POTENTIAL INVESTORS AND OTHER RELATED PARTIES
Consistent with the Bank’s AML policy, the Bank conducts due diligence on all service providers whose services are in excess of US$20,000 in value. These may include, but not limited to, law firms providing legal documentations on transactions; insurance companies and technical support companies, engaged by the Bank to conduct due diligence on the Bank’s corporate and project customers. The Bank also conducts CDD on suppliers of services as well as potential investors.
3.2.5 AGENT/PARTNER RELATIONSHIPS
The Bank uses first class institutions as agents in its transactions. Such agents are quite often involved in club or syndicated deals.
3.3 ONGOING MONITORING
As part of continuous monitoring, the Bank assesses all relationships on an ongoing basis. This involves both periodic and trigger-based reviews and updating information to ensure that information on the Bank’s customers is current, relevant and up-to-date at any given time.
3.4 SHELL INSTITUTIONS
The Bank’s policy prohibits establishing any relationships with “shell” companies and institutions.
3.5 POLITICALLY EXPOSED PERSONS (PEPS)
Afreximbank has a defined policy and procedures for conducting Enhanced Due Diligence (EDD) on all relationships that involved Politically Exposed Persons. All transactions involving Politically Exposed Persons (PEPs) must comply with the Bank’s EDD requirements process. It is mandatory that the role of PEPs in a transaction is clarified including verification and corroborating source of wealth prior to establishing any relationships.
3.6 CORRESPONDENT BANKING RELATIONSHIPS
Afreximbank has a clear policy and procedures regarding establishing relationships with correspondent institutions. For this reason the Bank monitors its correspondent banking relations with regard to their implementation of anti-money laundering and counter-terrorist financing controls. The Bank subscribes to internationally recognized global registries that provide detailed information about the banking industry, and other financial institutions, and also, performs other independent checks and verification of all information provided by the Correspondent Banks. All correspondent relationships are subjected to EDD.
In line with the Bank’s policy and procedures, it is mandatory for all employees to receive regular training on AML, including; Induction training for all new hires, which is followed by annual refresher trainings and specific training for relevant staff. In addition, regular communication is done to update staff on any developments on compliance issues.
3.8 REPORTING OF SUSPICIOUS ACTIVITIES
All employees of the Bank are obliged to report any known or suspected activities and transactions. As part of its ethical culture, the Bank supports employees to immediately bring forward to the attention of Compliance, any suspected wrongdoing or malpractice happening in the workplace in confidence. Whistle-blowing as it is commonly called, or making a disclosure if done through the proper channel would lead to immediate investigations to determine the origin of the crime for adequate measures to be taken.
The Bank’s CU escalates reported suspicious transactions after investigation to the Management Compliance Committee (MANCOCO) – an internal committee established to work in tandem with the CU, in monitoring and ascertaining that all transactions involving the Bank satisfy its AML/CDD policies. Further, depending on the findings, the Committee may escalate to the Executive Committee (EXCO) and the Board of Directors for decision.
3.9 RECORDS RETENTION
All customer records and relevant transactions’ audit trails are retained in the Bank’s archive for at least five (5) years after terminating the relationship.
The AML activities are subject to routine audits by the Bank’s Internal and External Auditors – Deloitte & Touché, and KPMG; and Internal Auditors – BDO International, 1 Wadi El Nil Street, Mohandessin, Giza, Cairo, Egypt.
5. ANNUAL REPORTS
The Bank’s past five years Annual Reports can be viewed by the wider public at www.afreximbank.com.
Name: Maureen MBA
Title: Head of Compliance Unit
Tel: +202 2456 4166
Fax Number: +2202 2456 4110
Date: May 20, 2015