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BANCO DO BRASIL
INTEGRITY
PROGRAMME
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Presentation The Banco do Brasil Integrity Programme presents the actions taken by the Institution to prevent, detect and remedy harmful acts that can be classified as corruption, against national or foreign public administration practiced by an employee or third party in their interest or benefit; and to prevent, detect and punish harmful acts that may be caused by legal persons against the Bank.
For Banco do Brasil's Senior Management, conducting business in an ethical, integral and transparent manner is the entire Institution's commitment to its clients, shareholders, partners, suppliers and society.
Management plays a fundamental role in the dissemination of ethical values and integrity, complying with and enforcing laws, regulatory standards and policies, in abidance with the Institution's Code of Ethics, Standards of Conduct and Integrity Programme.
Each employee can and must help to prevent corruption. Abstaining from practicing any illegal acts and denouncing situations that may constitute corruption demonstrates citizenship and commitment to the Institution.
BB's integrity measures are applicable to Senior Management and all employees, comply with the requirements of laws on the prevention and fight against corruption. They also serve as a reference for all areas of the institution to maintain their processes, products and services in accordance with those laws.
The Bank's units located abroad are also guided by the Parent Company's Integrity Programme and may incorporate complementary integrity procedures, when required by local laws.
Banco do Brasil repudiates and does not tolerate acts of corruption, bribery, extortion, kickbacks, fraud, money laundering, terrorist financing or any other unlawful acts. Neither does Banco do Brasil authorise any type of facilitation payment.
The Board of Directors and Executive Office support this Integrity Programme for the purpose of effectively complying with all its items through the continuous commitment of Senior Management. All directors, employees of Banco do Brasil and its affiliates in Brazil and abroad must comply with the integrity policies and legal norms, when performing their work and business. This requirement also extends to all collaborators.
The aim of the Integrity Programme is in line with the Bank's vision and values, and makes a positive contribution to the dissemination and promotion of measures and good management practices, in order to maintain a sound, ethical and transparent corporate environment.
The main guidelines and rules on the topics that make up the Bank's Integrity Programme are included here to demonstrate the measures and controls adopted by the Bank to mitigate the risk of its employees or third parties, acting on their behalf, from incurring in or being victims of a possible act of corruption.
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Summary 1 Introduction .............................................................................................. 3
1.1 Ethics and integrity ............................................................................... 4
1.2 Fraud and corruption ............................................................................ 5
2 Integrity Policies and Guidelines .............................................................. 5
2.1 Standards of conduct, code of ethics, integrity policies and procedures applicable to all employees and managers ..................................................... 5
2.1.1 Code of ethics and standards of conduct of BB AG ...................... 5
2.1.2 The Bank's Fit and Proper Policy ................................................. 6
2.1.3 Articles of Association of Banco do Brasil AG ............................... 6
2.2 Standards of conduct, code of ethics and extended integrity policies - suppliers, service providers, intermediaries and associates ........................... 6
2.3 Complete and accurate accounting records ......................................... 7
2.4 Due care for contracting and, as the case may be, supervision of third parties, such as suppliers, service providers, intermediaries and associates . 7
2.5 Corporate Investments, Takeovers and Mergers ................................. 7
2.6 Decision-making process ..................................................................... 8
2.7 Conflict of interests ............................................................................... 8
2.8 Specific procedures .............................................................................. 9
2.8.1 Procedures to prevent fraud and unlawful acts in bid procedures, performance of administrative contracts or any interaction with the public sector ..................................................................................................... 9
2.8.2 Donations to candidates and political parties .............................. 10
2.8.3 Philanthropic donations ............................................................... 10
2.8.3.1 Gifts, presents and favours ..................................................... 10
3 Governance and integrity management environment ............................ 10
3.1 Governance and integrity management structure .............................. 10
3.1.1 Senior Management's Commitment to the Integrity Programme . 11
3.2 Integrity system of Banco do Brasil .................................................... 12
3.2.1 Roles and responsibilities ........................................................... 12
3.2.2 Pacts and partnerships ............................................................... 13
4 Integrity risk management ..................................................................... 14
4.1 Introduction ........................................................................................ 14
4.1.1 Lines of defence .......................................................................... 14
4.1.1.1 1st line of defence ................................................................... 14
4.1.1.2 2nd line of defence .................................................................. 15
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4.1.1.3 3rd line of defence ................................................................... 15
5 Transparency and communication ......................................................... 16
6 Training and qualification ....................................................................... 16
6.1 Training plan ...................................................................................... 16
6.1.1 Senior management training ....................................................... 17
6.1.2 Supplier and third-party training .................................................. 18
7 Monitoring .............................................................................................. 19
7.1 Monitoring procedures ....................................................................... 19
8 Incident management ............................................................................ 19
8.1 Complaint and follow-up channels ..................................................... 19
8.1.1 Whistleblowing channel .............................................................. 19
8.1.2 Other sources of complaints ....................................................... 20
8.1.3 Protection mechanisms for Complainers acting in good faith ..... 21
8.2 Response to incidents ........................................................................ 21
8.2.1 Corrective and punitive measures ............................................... 21
8.2.1.1 Disciplinary control (corrective measure) ................................ 21
8.2.1.2 Disciplinary measures (corrective measures) in case of breach of the integrity programme ..................................................................... 21
9 Questions and Answers ......................................................................... 22
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1 INTRODUCTION
Integrity management involves the coordination of participants and the use of instruments that cover different areas of an entity, such as the Internal Auditing, Risk Management, Human Resources, Compliance, Legal, Accounting, Internal Controls, Governance, etc.
There are the following pillars for the development of an integrity management policy:
Inspired by the proposed models, Banco do Brasil's Integrity Programme is organised into seven dimensions:
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1.1 ETHICS AND INTEGRITY
The words ethics and integrity are often used together in articles and manuals.
According to the philosopher, Mário Sérgio Cortella, ethics is the set of values and principles we use to respond to three big questions in life: (1) do I want?; (2) should I?; (3) can I? Not everything I want, I can; not everything I can, I owe; and not everything I owe, I want. Ethics does no comfort us, it presents us with dilemmas; Ethical dilemmas.
Integrity is the ethical principle that helps you decide, judge and assess and leaves your conscience in peace. The clearer the principles, the easier it is to deal with their ethical dilemmas. You won't cease to have dilemmas but you must give priority to integrity that is the virtue of an ethical and honest person.
The philosopher also states:
"Integrity is taking care to remain whole, complete, transparent, true, without cynical masks or fissures. At the time, danger is in the offing: to assume, individually or collectively, a certain "ethical schizophrenia". It emerges when people do not put their whole but shared efforts into duties that would seem external to them. Examples? "If it were me, I wouldn't do that but as I'm in charge, I have to". 'm not me and a job, I'm a whole person. I'm not me and a teacher; I'm a researcher, me and a director, me and a Secretary, I'm a whole person. "If it were me, I wouldn't do it", so I don't!
To speak of ethics is to speak of values. Values that are the basics of relations between people, such as honour, equality, respect for others, responsibility, freedom, fraternity, justice and others. When values are transformed into social relationships between individuals, in everyday behaviours, we are speaking about integrity. And to the extent that people are reciprocally whole, they confirm the importance of values, validating and reinforcing their interiorization and importance.
Policies and guidelines
Governance and
management environment
Integrity risk management
Transparency and
communication
Training and qualification
Monitoring
Incident management
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Moral Ethics Integrity
It deals with
Right and wrong Right and wrong Right and wrong
Way to act Personnel (acquired and trained throughout their lives, by experience)
Social (implies consensus and involvement of the company)
Social (implies applying ethics in all social relationships)
Standards and rules
Personal (guided by conscience)
Social (guided by corporate culture)
Social (guided by corporate culture)
Construction
Individual Collective (based on the consensus of "different morals")
Social (based on the reciprocal application of ethics to all relationships)
1.2 FRAUD AND CORRUPTION
Please refer to Compliance Handbook. Insert a paragraph as mission statement against fraud and corruption.
2 INTEGRITY POLICIES AND GUIDELINES
2.1 STANDARDS OF CONDUCT, CODE OF ETHICS, INTEGRITY
POLICIES AND PROCEDURES APPLICABLE TO ALL
EMPLOYEES AND MANAGERS
2.1.1 CODE OF ETHICS AND STANDARDS OF CONDUCT OF BB AG
At Banco do Brasil AG, the document Code of Ethics and Conduct guides the ethical values and behavior that are expected from each and every employee of the institution. All subjects mentioned above are transposed into the Code of Ethics and Conduct of Banco do Brasil AG, except for the following amendments: At BB AG, institutionally, the management of ethics and conduct policies as well as the organisational programmes that operate them and dissemination of these policies and procedures are centralised in the Human Resources department, which reports directly to the COO which is in this institution the Director of Human Resources.
Disciplinary actions against violations of the Code of Ethics (both of BB SA and BB AG) are dealt at first at the subsidiary level. The outcome of such disciplinary actions may be communicated to the Disciplinary Control Division
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2.1.2 THE BANK'S FIT AND PROPER POLICY
In addition to the Code of Ethics and Standards of Conduct, Banco do Brasil AG has a Fit and Proper Policy, approved by the Supervisory Board, whose purpose is to bring together the standards of behaviour that guide the appointment of members of the Management Board and Supervisory Board (SB) and Key Function Holders.
2.1.3 ARTICLES OF ASSOCIATION OF BANCO DO BRASIL AG
Banco do Brasil AG has Articles of Association approved by the General Shareholders' Meeting, which set forth rules for investiture, impediments and prohibitions for members of the Board of Directors.
The Bank's Articles of Association are available for consultation by all employees through the Intranet.
2.2 STANDARDS OF CONDUCT, CODE OF ETHICS AND
EXTENDED INTEGRITY POLICIES - SUPPLIERS, SERVICE
PROVIDERS, INTERMEDIARIES AND ASSOCIATES
The Code of Ethics and Standards of Conduct are also applied to employees - trainees, apprentices, managers and employees of contracted companies - so that there is no reason for doubt, to those who act for the benefit or in the interest of BB, regarding the standard of behaviour expected by the Bank.
The Code presents a specific chapter containing guidelines on relationships with the Bank's suppliers where the latter are required, subject to legal limitations:
compliance with labour, social security and tax laws;
compliance with laws and regulations relating to the prevention and combat of corruption;
non-use of child or slave labour;
adoption of good environmental conservation practices;
non-adoption of acts of corruption against governments, public administration, Brazilian or foreign, in any of its spheres.
Banco do Brasil does not authorise any business to be conducted on behalf of the Institution to improperly establish criminal or illegal acts, such as corruption, money laundering, terrorist financing and fraud.
The AML/CFT Handbook, also states that, in order to maintain a business relationship with partners and suppliers, it is necessary to prevent and fight against Money Laundering and Terrorist Financing.
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2.3 COMPLETE AND ACCURATE ACCOUNTING RECORDS
The Bank's accounting and tax process is structured in accordance with the internal normative instructions, and the Accounting Department is responsible for:
exploration and development of accounting strategies and policies for disclosure of information to the market;
development of the accounting system;
accounting processes, standards, routines and procedures;
Tax planning and equity management;
management of the books and accounting control;
financial statements;
accounting information for the market; and
results of availability, integrity, reliability and compliance of accounting information.
2.4 DUE CARE FOR CONTRACTING AND, AS THE CASE MAY BE, SUPERVISION OF THIRD PARTIES, SUCH AS SUPPLIERS, SERVICE PROVIDERS, INTERMEDIARIES AND ASSOCIATES
In BB AG the principles for contracts with suppliers, service providers and outsourcing partners are laid down in the Admin Policy and in the Outsourcing Policy.
2.5 CORPORATE INVESTMENTS, TAKEOVERS AND MERGERS
Corporate transactions at the Bank are preceded by due diligence procedures such as:
investigation and auditing of administrative, financial, accounting, tax, intellectual, technological, legal and other information, allowing greater security in negotiations for shareholders;
assessment of the legal/formal aspects of the target company, including verification of compliance with laws, prevention and combating of money laundering and corruption;
prior assessment of the risk of corruption and the Integrity Programme.
The aim of due diligence is to know the company's environments, its operating methods and internal controls, identifying problems and mapping possible solutions.
Action in all stages of the process has the support of the legal team responsible, obtaining legal opinions, analyses and opinions on the work performed for the operation (e.g. corporate documents, obtaining authorisation from regulatory bodies, etc.).
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The Bank does not make investments or establish partnerships with third parties, in cases of conviction or suspicion of money laundering or concealment of assets, rights and values, terrorist financing, acts considered harmful to public administration nor does it engage in any other illegal activity, or that which directly or indirectly offers guarantees from unlawful activities, among others.
2.6 DECISION-MAKING PROCESS
Decisions, at any level of the company, are taken together, except in cases where individual competence/authority is expressly established. In order to involve executives in defining strategies and approving proposals for BB's various businesses, management uses strategic committees, activated within the Board of Executive Officers, that guarantee a rapid and secure decision-making process.
The competencies and decision-making powers of Banco do Brasil are established by the Board of Directors for members of the Executive Board, management employees and Strategic Committees established within the Bank - as provided for in the Articles of Incorporation.
As to the main concepts:
Competence is the faculty of being able to decide on a certain subject - attributed exclusively by the Board of Directors;
Limit is the maximum value for the exercise of competence; and
Decision-making authority is the level to which competence and authority have been assigned for making decisions.
The Bank also adopts the role segregation model, in the performance of its activities, whereby segregation between the negotiator and the authoriser of each business/transaction is mandatory.
2.7 CONFLICT OF INTERESTS
A conflict of interest arises when a person is involved in a decision-making process in which it has the power to influence the outcome, ensuring a gain for itself, a family member or third party with whom it is involved or which may interfere with its ability to exercise judgment. That means that here is a conflict of interest when someone is not independent in relation to the subject being discussed and can influence or make decisions based on interests different than those of the organisation.
The Bank's Compliance Handbook is available for consultation by all employees through the Intranet.
Similarly, Bank employees are prevented, individually or as members of Committees, from discussing matters regarding which they have conflicting interests with the Bank, or decisions, control or settlement of business with the
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following persons, as well as with companies of which they are directors or partners:
the employee itself;
the employee's spouse;
the employee's relatives up to third degree lineage.
The Bank's Code of Conduct contain a specific section on the conflict of interests, with the following guidelines:
To exercise its duties in an exempt manner, abdicating from making use of the condition of an employee in order to obtain an advantage for itself or a third party;
Immediately report any conflict of interests, or presumed existence of same to the supervisor;
Refrain from discussing matters regarding which they have conflicting interests with the Bank, or decisions, control or settlement of business with the following persons, as well as with companies of which they are directors or partners:
o the employee itself; o the employee's spouse or companion: o the employee's relatives up to third degree lineage.
To declare itself incapable of conducting matters or business with a public agent with decision-making powers within government bodies and entities with which it has a family relationship, direct or collateral, by blood or marriage, up to the 3rd degree;
Ensure that internal activities are restricted to the business and interests of the Company;
Abstain from carrying out external activities that could constitute damage or competition to the Company;
Ensure that in the exercise of its political rights there is no involvement of the Company's name;
Perform its job at the Bank without resorting to third-party intermediation;
Only make a decision, on behalf of the customer, with the latter's formal authorisation;
Abstain from maintaining a business relationship with people and organisations involved in unlawful activities.
2.8 SPECIFIC PROCEDURES
2.8.1 PROCEDURES TO PREVENT FRAUD AND UNLAWFUL ACTS IN BID
PROCEDURES, PERFORMANCE OF ADMINISTRATIVE CONTRACTS OR
ANY INTERACTION WITH THE PUBLIC SECTOR
In order to prevent the occurrence of harmful acts against public administration, the Bank positions itself assertively on the subject and issues guidelines on the proper conduct to be adopted by those who act for the benefit and interest of the Institution.
These guidelines are available in the Code of Ethics and Standards of Conduct, and there are internal policy instructions to better detail and elucidate focal
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points, providing roadmaps, guidance and mechanisms so that employees, third parties, and brokers do not incur in situations classified as corruption, under the pretext of benefiting the Bank, such as offering any type of advantage to a public agent, with the aim of obtaining licenses, authorisations and permissions, for example.
In addition to its clear stance, the Institution also invests in training and communication for ethics and for the prevention and fight against corruption; it makes available an appropriate channel for receiving complaints; it adopts mechanisms and controls to meet its business partners and those who apply to receive sponsorship and donations; it adopts adequate due diligence in corporate investment operations; and carries out actions to control, mitigate and monitor the risk of corruption in its processes.
2.8.2 DONATIONS TO CANDIDATES AND POLITICAL PARTIES
Banco do Brasil does not make donations to candidates or political parties, as indicated in the Code of Ethics: We do not finance political parties or candidates for public office in Brazil or in the countries where we operate.
2.8.3 PHILANTHROPIC DONATIONS
2.8.3.1 Gifts, presents and favours
In Austria, BB AG fulfils the requirements according the Austrian Penal Code to classify its employees as public officials, and therefore Gifts and Invitations rules apply as defined in the Compliance Handbook.
3 GOVERNANCE AND INTEGRITY MANAGEMENT
ENVIRONMENT
3.1 GOVERNANCE AND INTEGRITY MANAGEMENT STRUCTURE
One of the most important characteristics of good governance is the emphasis on prevention not repression of deviations. Hence the emphasis on integrity procedures and mechanisms such as risk management, transparency, accountability, auditing and others. These mechanisms and procedures have an instrumental role in management, not being ends in themselves, and cannot be implemented in isolation, at the risk of having little or no effectiveness.
a) EBA Guidelines on Internal Governance
Governance at Banco do Brasil defines a broad vision of principles and practices that contribute to strengthening the transparency of its management and increasing its institutional value. These guidelines are constantly updated as a result of legal or statutory changes.
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The risk governance model adopted by BB involves a committee structure, with the participation of several departments of the Institution, and includes the following aspects:
a. Segregation of duties: business x risk;
b. Specific risk evaluation/management structure;
c. Management process defined;
d. Decisions on different hierarchical levels;
e. Clear competence standards and structure;
f. Reference to the best management practices;
All decisions relating to risk management are taken jointly and in accordance with BB guidelines and standards.
3.1.1 SENIOR MANAGEMENT'S COMMITMENT TO THE INTEGRITY
PROGRAMME
Senior Management supports the Anti-Corruption Prevention and Control Process and the Integrity Programme through several actions, which include:
a) Approval by the Board of Directors and by the Executive Office of all General and Specific Policies of the Institution as well as of other instruments related to the Process, such as:
AML/CFT Handbook and Compliance Handbook;
The Code of Ethics and the Code of Conduct of BB AG, which are the instruments used for implementing the principles, values, vision and purpose of the Bank, presenting the its commitments and guidelines regarding its relationship public and society; and they present expected duties and behaviours in relation to the working environment, facilitating the implementation of the commitments assumed in the Code of Ethics;
Integrity Programme, which presents the actions taken by the Institution to prevent, detect and remedy harmful acts that can be classified as corruption, against national or foreign public administration practiced by an employee or third party in their interest or benefit; and to prevent, detect and punish harmful acts that may be caused by legal persons against the Bank.
Fit and Proper Policy, aimed at bringing together the standards of behaviour that guide the appointment of members of the Management Board, Supervisory Board (SB) and Key Function Holders;
Annual Training Plan for Senior Management, which defines events and training to be carried out by the latter.
b) Approval by the General Shareholders Meeting of the Articles of Association of Banco do Brasil AG;
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c) Participation of senior management in annual training related to ethics
and integrity.
3.2 INTEGRITY SYSTEM OF BANCO DO BRASIL
3.2.1 ROLES AND RESPONSIBILITIES
Board of Directors - BD and Executive Office - EO
Within the scope of the Bank's senior management, the Board of Directors and the Executive Office approve the macro-guidelines for the Anti-Corruption Prevention and Control Process, as well as the standards of behaviour to be adopted by all members of the Bank, with the objective of repudiating acts of corruption, bribery, extortion, kickbacks, fraud, money laundering, terrorist financing and any other unlawful acts.
These guidelines and behavioural standards are contained in the AML Handbook, available to employees through the Intranet.
Regional Compliance, AML and Internal Controls Department
In order to ensure the independence of the Corruption Prevention Process, composed of the Integrity Programme and the Compliance Handbook its management is centralised in the Regional Compliance department, as defined in the Compliance Handbook.
The Regional Compliance department is directly linked to the Management Board and has the following functions:
proposing the Specific Policy for Prevention and Combating of Money
Laundering, Terrorist Financing and Corruption;
managing processes for the prevention and combating of money
laundering, terrorist financing and corruption.
formulating guidelines related to the prevention and fight against money
laundering, terrorist financing and corruption for Entities related to Banco
do Brasil (ELBB).
Processes that incorporate the Bank's Integrity Programme rely on the performance of several of its strategic units, such as the Human Resources Department, which is responsible for Corporate Ethics Management; the Governance Department managing outsourcing contracts and other suppliers and the internal governance structure; the Accounting Department, which manages the accounting process, among others, which promote actions to mitigate the risk of corruption in their respective areas of activity.
Regional Compliance is responsible for monitoring and supervising the Integrity Programme, acting as an intermediator and main promoter of the Programme in the Bank, systematically interconnecting the processes, accompanying the management of same according to the risk posed, providing advice on the subject and disseminating a culture of prevention and combating corruption.
Regional Compliance has the prerogative of access for consulting all files, documents, methodologies, databases, information systems and electronic
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transactions. It also has free access to environments, equipment and software owned or used by the Bank, in the exercise of its assignments.
The Compliance Officers of each branch of the Bank with headquarters abroad must observe Banco do Brasil's Integrity Programme and local laws in the elaboration of its respective integrity programmes.
Disin monitors the ELBB on the Anti-Corruption Prevention and Control Process on an annual basis. ELBBs are oriented to observe the Banco do Brasil Integrity Programme in the elaboration of their respective programmes.
3.2.2 PACTS AND PARTNERSHIPS
BB AG as a matter of internal decision does not engage is sponsorships or non-commercial partnerships with NGOs or entities of a similar nature.
Should BB AG change its internal decision in the future, the best practices of BB SA in dealing with such cases will be applied and policies and procedures will be amended accordingly.
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4 INTEGRITY RISK MANAGEMENT
4.1 INTRODUCTION
4.1.1 LINES OF DEFENCE
BB AG has adopted the internationally recognized structure of three lines of defence, in the same manner as its parent company, BB SA.
For the integrity risk, the three-line defence model is adopted as follows:
4.1.1.1 1st line of defence
The first line of defence comprises the performance of process managers and executors, who are responsible for business results, operational efficiency, etc., as well as for the risks to which the Bank is exposed and for their due treatment.
It is therefore the responsibility of all Bank units, in the first line of defence, to identify processes, threats, vulnerabilities and controls. It should also identify inherent and residual risks for all processes under its management.
In addition to guaranteeing the adherence of its processes and services to integrity standards, the 1st line of defence must comply with the recommendations of the 2nd and 3rd lines of defence, in a complete and timely manner, so that risk mitigation is effective.
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4.1.1.2 2nd line of defence
The second line of defence is comprised of several units that help construct a broad view of the risks and controls of BB's business, and this assessment supports decisions made by senior management. Concerning the Anti-Corruption Prevention and Control process, the Institutional Security Department at BB SA acts in the second line of defence and coordinates the mapping and monitoring of processes that may expose the Bank to the risk of corruption, in order to verify the sufficiency of existing controls and promote the permanent updating of the Integrity Programme. At BB AG this task of monitoring the risk of corruption falls under the responsibility of the Compliance department.
Every two years or when necessary, Disin reviews the Institution's processes to identify risks related to corruption. For this identification, Disin triggers all Strategic Units to classify the processes under their management regarding the risk of corruption and to indicate the procedures they adopt to mitigate such risks.
Disin, manager of the Anti-Corruption Process, evaluates this process on an annual basis with the Entities Linked to the Bank of Brazil (ELBB) questionnaire, as well as the risk of corruption and the Integrity Programme. With the help of this report, BB AG is evaluated yearly on its processes regarding the prevention of corruption and illicit practices.
4.1.1.3 3rd line of defence
The perfect functioning of the whole cycle of risks management and controls in the organisation is verified by Internal Auditing, because it comprises the third line of defence.
Internal Auditing performs periodic and independent checks, focusing on the risks to which the Conglomerate is exposed, assessing risk management activities and the adequacy of internal controls based on the verification of their quality, sufficiency, compliance and effectiveness. Therefore, in the third line of defence, it issues independent conclusions on the management of risks related to the Anti-Corruption Process, practiced by the other lines of defence.
The audit conclusions, as well as the recommendations issued to mitigate the weaknesses identified, are reported to the managers of the processes evaluated at the end of the work. In addition, information on the work completed in the period, in executive format, as well as any eventual corporate recommendations that are due or falling due in the month are reported to Senior Management.
The results of these checks carried out in the three lines of defence, reports in the complaint channels and those arising from the relationship with third parties that have business with the Bank, are inputs for carrying out new risk assessments and updating the Risk Management Integrity Programme.
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BB AG has an independent Internal Audit function subordinated directly to the Management Board of BB AG and this unit has also direct ties to the Internal Auditing Function in BB SA.
5 TRANSPARENCY AND COMMUNICATION
In order to offer full access by the internal and external public to the Bank's guidelines and instruments regarding the Anti-Corruption Process, the main documents related to the Process are disclosed in intranet of BB AG, accessible to all employees, and on the BB AG’s external homepage , for the external public in general. They include:
Code of Ethics and Standards of Conduct - available in the internal
normative instructions, in Portuguese, English, Spanish, Japanese,
Mandarin and German, on the intranet and on the BB Portal, in the same
language as our instructions and in audio format.
Specific Policy to Prevent and Combat Money Laundering and Terrorist
Financing - available in the internal regulatory instructions and on the BB
Portal, in eight languages of countries in which the Bank operates;
Specific Supplier Relationship Policy - available in internal regulatory
instructions and on the BB Portal, in a specific site, to maintain dialogue
with such stakeholder - Supplier Relations;
Integrity Programme - available in the internal normative instructions, on
the intranet and BB Portal.
Clean Company Reporting Channel - available on the Corporate Intranet
and BB Portal.
Disin and Dipes prepare annual communication plans for the dissemination of relevant actions developed within the scope of the Anti-Corruption Prevention and Control Process as well as in the scope of Ethics Management so that all employees are aware of the improvements implemented or actions in which the Bank has participated or supported.
6 TRAINING AND QUALIFICATION
6.1 TRAINING PLAN
The Regional Compliance department in cooperation with the Human Resources department (responsible for employee training) promote and encourage training for employees and Senior Management on the prevention of Corruption and illicit practices.
For this purpose, the Compliance department organizes compliance training yearly for all employees of BB AG, which include the topics described in this document. BB SA also has trainings available on these topics at Banco do Brasil's Corporate University Portal - UniBB, available in Portuguese, English
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and Spanish. BB AG employees are informed and encouraged to conclude these trainings at their own pace and time, besides the mandatory yearly presence training at BB AG.
The UniBB Portal disseminates contents for personal and professional development of active employees, adolescents and young apprentices, retired educators, classified in the external selection of Banco do Brasil (in the qualification stage) and Senior Management.
The Trail of Ethics is available on the UniBB Portal, composed of three training axes, for qualification of employees in ethics and integrity:
Ethics and Society;
Corporate Ethics;
RSAE at BB.
The Trail of Ethics is not static and can be updated whenever necessary, since ethical dilemmas are constantly changing, or due to legal requirements. In addition to the solution provided through the UniBB Portal, the Institutional Security Board develops and promotes lectures and seminars on the subject.
The Anti-Corruption Course, which addresses the issue of corruption, is available on the UniBB Portal that presents the Brazilian laws and regulations and the main international laws on the subject, in order to raise awareness of the importance of preventing and combatting corruption.
In addition to the solution provided through the UniBB Portal, the Institutional Security Board also develops and promotes lectures and seminars on the subject.
The "Knowing the Code of Ethics and the Standards of Conduct" course is available on the UniBB Portal, which is also a part of the Trail of Ethics, addressing the standards and principles that guide company behaviour and relationships in its business activities, as stated in the Code of Ethics and Rules of Conduct.
Completion of all training that comprises the Trail of Ethics is a prerequisite for employees to enrol in opportunities for growth and activity at the Bank.
In addition to this trail, there is the Ethics Management Workshop at BB, aimed at training members of Ethics Committees for at BB and analysts of Regional Human Resources Management (Gepes) to apply guidelines and institutional ethical drivers in their jurisdictions.
Associated with the training courses, Disin and Dipes also prepare annual communication plans for the dissemination of relevant actions developed within the scope of the Anti-Corruption Prevention and Control Process as well as in the scope of Ethics Management so that all employees are aware of the improvements implemented or actions in which the Bank has participated.
6.1.1 SENIOR MANAGEMENT TRAINING
A key to the success of integrity management is the adhesion of senior management, managers and others in charge of governance, namely, the
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Board of Directors, Executive Board, Supervisory Board, Risk and Capital Committee, and Audit Committee. Without such high-level support, risk management and its assessment may lose momentum, avoid or inadequately deal with certain problems or be affected by other managers who have chosen not to participate in it.
To reaffirm top management's commitment to ethics and integrity, the Board of Directors approved the Annual Training Plan for Senior Management, comprising the following actions:
a) An annual lecture to be given by professionals well-versed on the subject; and
b) Performing internal training through the UniBB Portal, specifically intended for training Senior Management, updated periodically in order to contemplate legal requirements and strategic directions.
For the first annual cycle of the Training Plan, the following courses were adopted in the UniBB Portal:
Focus on Senior Management;
Prevention and Combat of Corruption;
Knowing the Code of Ethics and Standards of Conduct;
Synapsis of the Ethics Management Programme at BB;
Banco do Brasil keeps values stable;
Synapsis of Preventing and combating money laundering and terrorist
financing.
The members of the following bodies were also defined as the target audience for the Senior Management Training Plan:
Board of Directors;
Executive Office;
Supervisory Board;
Risk and Capital Committee; and
Audit Committee.
At BB AG level, the members of the Management Board attend the annual AML
training and the Compliance Fundamentals training (which encompasses
material on prevention of corruption, fraud, whistleblowing and code of ethics
and conduct).
6.1.2 SUPPLIER AND THIRD-PARTY TRAINING
Banco do Brasil SA makes available, on the UniBB Portal, the "Anti-Corruption" course, under the heading "Courses open to the community", as a learning option for the external public, combining the knowledge produced by Banco do Brasil.
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At BB AG, suppliers are evaluated prior to the establishment of the business relationship according to the EBA guidelines and best practices of Banco do Brasil SA. The suppliers must acknowledge BB AG’s Code of Ethics and Conduct and expected to abide by these rules.
7 MONITORING
7.1 MONITORING PROCEDURES
The Regional Compliance department at BB AG performs continuous monitoring the Bank's Integrity Programme.
The focal points resulting from the monitoring can be the subject of action plans so that any identified weaknesses are corrected and the Integrity Programme is updated according to the needs identified. Any violations of the Integrity Programme are communicated to Senior Management at BB AG.
The Department of Internal Controls - Dicoi also has the prerogative to monitor the Integrity Programme, from control procedures in the second line of defence. Dicoi, as the second line of defence of the internal control system, conducts periodic evaluations of the Anti-Corruption Process, in processes conducted by Disin and the other Strategic Units, and may, from such monitoring, issue Technical Control Recommendations for the treatment of deficiencies, weaknesses or non-conformities identified in the work performed.
In addition to control, the Institutional Security Department also monitors and analyses inputs that may contribute to the improvement of the Integrity Programme, based on investigations related to practices of acts harmful to public administration, national or foreign; any indications arising from customer complaints; audit reports; information obtained from the reporting channel and reports from regulatory or supervisory government agencies.
The Internal Audit, acting in the third line of defence, also conducts evaluations on the process of Prevention of Criminal Financial Flows and Corruption.
8 INCIDENT MANAGEMENT
8.1 COMPLAINT AND FOLLOW-UP CHANNELS
8.1.1 WHISTLEBLOWING CHANNEL
For more details on our whistleblowing procedures, please refer to the Compliance Handbook.
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8.1.2 OTHER SOURCES OF COMPLAINTS
Although there is a proper channel for receiving reports of corruption, stating that some employee or third party may have harmed public administration or that the Bank has been the victim of the unlawful act practiced by a legal entity, Banco do Brasil provides other channels that, if triggered, will inform the Institutional Security Board of this and thereby help to prevent and combat corruption.
BB's Internal Ombudsman is the direct communication channel for active
employees (in the country, abroad and expatriates), trainees, apprentices and
employees of companies hired by the Bank, to receive complaints related to
conflicts, deviations from ethical conduct and non-compliance with internal
standards and ethics consultation, through which the company seeks to:
solve conflicts in the working environment through dialogue and
mediation;
humanise relationships;
value ethics in working relationships;
contribute to the improvement of policies, processes, programmes and practices of People Management and Social/Environmental Responsibility.
Although the External Ombudsman's Office is not intended to receive complaints of irregularities, it makes it possible for any claimants of the external public to manifest themselves anonymously through demands brokered by the Central Bank of Brazil, which may be treated as anonymous reports.
Contact with the channel can be made anonymously or identified and the department preserves secrecy and confidentiality in the conduct of all demands.
The External Ombudsman provides last resort services to meet to the demands of customers and users of products and services that have not been resolved in the Institution's primary care channels.
Although the External Ombudsman's Office is not intended to receive complaints of irregularities, it enables any claimants of the external public to send anonymous complaints intermediated by the Central Bank of Brazil, which may be treated as anonymous reports.
The "Talk to the Audit Committee" channel is also available to the external public, in compliance with Resolution CMN 3.198/2004, which receives complaints of fraud; violation of laws, regulations and internal codes; and irregularities of an accounting nature, regarding controls and internal and independent auditing.
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8.1.3 PROTECTION MECHANISMS FOR COMPLAINERS ACTING IN GOOD
FAITH
Complainants are protected by Austrian and European Law from any retaliation, discrimination or adverse consequences by their employers that may derive from their declaration and for that purpose the employee may even make complaints anonymously. For anonymous complaints, please see section on whistleblowing above.
8.2 RESPONSE TO INCIDENTS
8.2.1 CORRECTIVE AND PUNITIVE MEASURES
8.2.1.1 Disciplinary control (corrective measure)
Disciplinary Control is the process that governs discipline in relation to employees and former employees participating in irregularity. Thus, when violations are identified, either through complaints or as a result of monitoring, the Bank identifies the circumstances and consequences of the irregularity committed, which may result in the application of an administrative measure or disciplinary sanction to the person involved.
The Bank of the Compliance department and Internal Audit department who conduct the investigation, and in conjunction with the Human Resources reports the outcome of the investigation to Senior Management with the recommendation of disciplinary procedures.
The disciplinary procedures, besides resulting in the application of an adequate solution to those involved, promoting their awareness and repositioning opportunity, when appropriate, produce inputs to the various managers for identification, evaluation and correction of any weaknesses in the process, product or service object of the irregularity, or gaps and regulatory inconsistencies, promoting their improvement.
In addition, information from disciplinary action can serve as input to improve the Integrity Programme.
8.2.1.2 Disciplinary measures (corrective measures) in case of breach of the integrity programme
Concurrently with the Bank's efforts to investigate unlawful acts committed by legal entities against the Institution, as well as the steps taken to identify, interrupt and remedy any violation by an employee, former employee or third party against public administration, for or on behalf of the Bank, that employee who is involved in such unlawful acts shall be held liable disciplinarily.
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Therefore, employees or former employees who commit irregularities, including harmful acts against public administration may have their conduct evaluated from a disciplinary perspective, through Disciplinary Control.
Disciplinary procedures may result in the application of administrative measures, with a purely educational character, or disciplinary sanctions, with an educational and restrictive rights character. Both imply recording the disciplinary occurrence in the history of those involved in a corporate system.
Administrative measures are the Notice (formal alert to those involved).
The following are disciplinary sanctions:
Warning - formal reprimand, during which involvement in any other
disciplinary infraction will be considered even more serious.
Discharge – depending on the severity of the transgression termination
of employment.
Resignation - termination of employment contract, with the
consequences resulting from dismissal.
The solution to be applied depends on the nature and extent of the participation of the party involved, any mitigating or aggravating factors identified, and the effects of the acts practiced in relation to the Company and its values.
In cases of proof of authorship and materiality of an unlawful act, judicial and extrajudicial measures are also taken, for criminal liability and for payment of damages caused.
9 QUESTIONS AND ANSWERS
Questions and answers regarding the implementation of the Integrity Programme must be sent to the following email address: [email protected]
If you have questions regarding the Integrity Program at Banco do Brasil SA, please direct your queries to the following address: [email protected].
