STATEMENT ON AML/KYC APPROACH WITHIN AFREXIMBANK
THE BANK’S LEGAL FORM
The African Export-Import Bank (the “Bank” or “Afreximbank”) is a multilateral financial institution established by treaty (the “Establishment Agreement”). 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, PTA Bank, among others; Class “B” shareholders comprise of African private investors and financial institutions; and Class “C” shareholders are non-African investors. The authorized share capital of the Bank is in an amount of US$750 million.
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 Agreement establishing the Bank was registered with the United Nations on April 1, 1997 as an “international agreement”. The Bank is therefore recognized as a multilateral financial institution under Article 12 of the UN Charter. The UN registration certificate can be viewed at the Bank’s website www.afreximbank.com.
PHYSICAL LOCATION
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 three branch offices located respectively in Harare, Zimbabwe; and Abuja, Nigeria;
PURPOSE OF THE BANK
The Bank was established with a mandate to finance 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 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.
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AFREXIMBANK ANTI-MONEY LAUNDERING & TERRORIST FINANCING (AML/KYC) LEGISLATIONS
Afreximbank is not directly regulated by any monetary authority. Accordingly, its operating philosophy is to operate in accordance with best practices in the banking industry. With regards to AML/KYC issues, the following are the critical elements of the Bank’s policies and guidelines:
POLICIES & PROCEDURES
The Bank’s KYC policies and procedures were considered and approved by the Executive Committee (EXCO) of the Board of Directors. The KYC Policies & Procedures may be amended from time taking into consideration the growing trends in money laundering and terrorist financing including the sophisticated nature of these crimes.
The Bank strives to ensure that its AML/KYC policies conform to standard policies and procedures of key regulators and industry leaders in AML/KYC matters. Afreximbank’s KYC policies and procedures are based on the Financial Action Task Force (FATF) Recommendations, the Wolfsberg Principles and the Basle II Initiative.
THE COMPLIANCE UNIT (CU)
The Compliance Unit of the Bank is charged with the responsibility of handling all AML/KYC requirements by the Bank, creating awareness on AML/KYC matters amongst the Bank’s employees, clients and partner institutions. The CU serves as the Bank’s watchdog on global money laundering developments, trends and patterns in financial crimes. The CU reviews the Bank’s existing AML/KYC policy documents with a view to ensuring that they are in line with defined standards, and when necessary improve on them with respect to prevention, detection, monitoring and reporting of suspicious transactions.
The Bank’s CU reports suspicious transactions to the Management who would direct necessary investigations to be conducted before further reports to the Executive Committee (EXCO) and the Board of Directors for decision and appropriate measures to be taken on the matter. The CU ensures that all transactions are retained in the Bank’s archive for at least five years after the expiration of the transaction.
KNOW-YOUR-CUSTOMER
Afreximbank has developed its own KYC policy and other necessary instruments to adequately address the various requirements of KYC due diligence search on all its potential customers including full name, full physical and principal operating addresses of prospective customers; full identity of shareholders in the company e.g. date of birth, nationality, occupation, valid international passports and/or utility bills; ownership structure; memorandum & articles of association; and certificate of incorporation;
As part of continuous due diligence, the Bank KYC exercise is an ongoing process, with periodic review and update of customers’ information.
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DUE DILIGENCE
All KYC due diligence measures as stipulated in the Bank’s KYC policy must be sufficiently complied with, and must satisfy the Bank’s AML/KYC due diligence regulations as a condition precedent before any transaction is deemed qualified.
KNOW-YOUR-CUSTOMERS’-CUSTOMER (KYCC)
The Bank does not conduct KYCC on sub-borrowers, however, the Bank ensures that correspondent banking clients do conduct KYC on their borrowers and provide to the Bank all required information about such borrower prior to accessing funds under the Bank’s Line of Credit facility.
Under the Bank’s KYC policy, the Bank declines transactions that involve sub-borrowers for which adequate information on Know-Your-Customer (KYC) due diligence are not available.
AFREXIMBANK’S SERVICE PROVIDERS
Consistent with the Bank’s KYC policy, the Bank conducts due diligence on all its service providers to whom any amount exceeding US$20,000 may be paid to ensure they are KYC compliant. These may include 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 corporates customers and projects. The Bank also conducts KYC due diligence exercise on other suppliers of services to the Bank.
AUDITORS
The AML/KYC activities are routinely audited by the Bank’s external auditors - Ernst & Young, Kenya and PriceWaterhouseCoopers; and internal auditors – BDO, Egypt.
TRAINING
The Bank provides regular training to its employees, particularly to key personnel on AML/KYC issues to ensure their proper grasps of, and alertness on, all AML/KYC issues.
AGENT/PARTNER RELATIONSHIPS
The Bank uses first class institutions as agents in its transactions. Such agents are quite often used for club or syndicated deals.
SHELL INSTITUTIONS
The Bank conducts extensive due diligence search on all its correspondent banking partners to ensure their non affiliation and/or involvement with shell institutions.
POLITICALLY EXPOSED PERSONS (PEPS)
All transactions involving politically Exposed Persons (PEPs) must comply with the Bank’s due diligence process.
CORRESPONDENT BANKS
As a multilateral financial institution, its activities and operations go beyond the African continent and also involve a wide range of products. For this reason, the Bank monitors its correspondent banking relations with regard to proper AML policy. To further strengthen and confirm authenticity of information obtained on these institutions, the Bank took further steps to subscribe to Bankers Almanac/Wolfsberg Group International Due Diligence Repository (IDDR) – a global registry that provide key information about the banking industry and other financial institutions.
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