Ethics

The Code of Ethics was adopted by resolution of the Bank’s Management Board in 2014. The Code is a set of the most important values, principles, standards of conduct and ethical attitudes determining mutual relations in business and in the Bank’s relations with the outside world. In practical terms, the Code is a tool supporting the popularization and implementation of ethical values at the Bank. Its provisions are binding on the employees and all persons who perform business activities for or on behalf of the Bank or act as intermediaries in the Bank’s operations. According to the Bank’s Working Regulations, every employee of the Bank is obliged to observe the Code of Ethics. Initiatives are organized to promote the Code of Ethics and the Bank’s values.

In addition, training in ethics and the Bank’s values was prepared for all employees.

• defining and promoting standards concerning business decisions and employee attitudes;
• increasing awareness of the significance of business ethics among employees by organizing training, workshops and dedicated information campaigns;
• defining and promoting key values which are necessary for the implementation of the Bank’s mission, such as reliability, Customer satisfaction, continuous improvement and entrepreneurship – these values constitute the basis for the employee competence model;
• ensuring that the whole of the Bank’s Group follows uniform standards of ethics;

• promoting firms which follow the principles of ethics in their relations with Customers, business partners and employees;
• social involvement in the initiatives addressed to local communities and global projects;
• taking steps to ensure a high standard of solutions in the area of ethics (confirmed by certificates);
• ensuring that employees have the right to associate and freedom of speech.

The Bank has analysed the ethical risks for each group of stakeholders and takes measures to mitigate such risks:

In addition to the promotion of the Bank’s values and ethical conduct, the Bank finds it equally important to counteract all forms of violation of ethics in all aspects of the operations referred to above (including counteracting bullying and discrimination). Therefore, the following procedures have been defined in a clear and transparent manner:

• reporting any violations – this path is available to every employee in any form (also anonymously);
• proceedings to investigate the reported (potential) violations;
• monitoring and reporting (also to a competent member of the Bank’s Management Board) the violations identified.

These procedures and principles of conduct have been adopted by the Management Board of the Bank.

The Bank’s Code of Ethics and the Bank’s Working Regulations contain provisions concerning, among other things, counteracting discrimination due to gender, age, disability, religion and denomination, race, ethnic origin, nationality, political views, trade union membership, sexual orientation, employment for a limited or unlimited period and on a full-time or part-time basis.

Each employee is obliged to comply with the Bank’s Code of Ethics and participate in the development and promotion of the organizational culture and the related values.

In order to counteract breaches of the principles of ethics, the Bank applies other internal regulations: “The principles for counteracting mobbing and discrimination and the procedure for handling complaints concerning the violation of employee rights”. The employees report such cases to dedicated email addresses.

The Bank analyses the cases reported through dedicated internal channels also in terms of non-compliance and violations related to conflicts of interests.

In order to popularize ethics outside the Bank, among other things, training in ethics and the Bank’s values was implemented for agents cooperating with the Bank.

In addition to promoting values among the employees, the Bank also monitors employee complaints for potential violations of the standards of ethics. The competent Members of the Management Board of the Bank are informed quarterly about employee complaints in the areas they supervise and the way in which the case has been resolved. The Members of the Management Board are also entitled to review the documentation concerning the examination of the complaint. Moreover, the President of the Management Board of the Bank is informed quarterly about all complaints filed by employees.

Additionally, in 2021 legislative solutions were drafted (and approved by the Management Board and the Supervisory Board in January 2022). The aim of the prepared amendments to the Bank’s Code of Ethics is primarily to tailor the currently applicable regulations to Recommendation Z concerning the principles of internal governance in banks. Therefore, the drafted regulation, among other things, points to behaviour inconsistent with the ethical attitudes indicated in the Bank’s Code of Ethics as unacceptable. In addition, the drafted regulation defines the process of verification and assessment of compliance with the principles of ethics by the Bank’s Management Board and the process of informing the Bank’s Supervisory Board of the results of the assessment. The reporting system under construction will enable the Bank to identify areas requiring more extensive measures in this regard in a systemic manner. The draft regulation also specifies the assumptions concerning the process of popularizing ethics on the basis of, among other things, the Management Board’s conclusions from the assessment of compliance with the principles of ethics at the Bank.

In accordance with the regulations concerning the assessment of suitability of candidates for Management Board members and the members of the Management Board of PKO Bank Polski S.A. adopted by PKO Bank Polski S.A., in assessing suitability in terms of the guarantee of the proper performance of duties, the Supervisory Board takes into account the criteria of reputation, integrity and ethical conduct of candidates for the members of the Bank’s Management Board (as part of the preliminary assessment) as well as the members of the Bank’s Management Board (as part of the periodic assessment). If a candidate for a Management Board member or a Management Board member is found unsuitable in terms of the guarantee, the candidate may not be appointed to the body or measures may be taken to dismiss a member of the body from his/her position. Similar principles apply in the policy on the assessment of suitability concerning the members of the Bank’s Supervisory Board.

On 1 October 2018 the Bank’s Management Board adopted a policy for preventing money laundering and financing of terrorism, which applies to all entities of the Bank’s Group. The purpose of this Policy is to prevent the use of the Group’s products in the activities related to money laundering or financing of terrorism. The Policy defines the standards that should be observed by the Bank, its subsidiaries and all persons working for them, including permanent and temporary associates, consultants, contractors, external agents and their employees (see here, here and here).

The Policy is one of the internal procedures defining the scope of the transfer of data, regulations, obligations, standards and measures used to prevent money laundering and financing of terrorism. The Bank and the Group companies develop, implement, update and enforce the internal AML regulations which comprise, in particular:

• Customer identification and verification;
• monitoring of transactions in order to assess whether Customers’ transactions are consistent with the known Customer profile and the intended nature of business relationships (identification of unusual and suspicious transactions and examination of the source of funds where appropriate);
• recording of above-threshold transactions;
• monitoring of sanctions to prevent establishing prohibited relationships by checking whether the Customer is present on sanction lists;
• method of exchange and protection of information;

• financial security measures, including identification of beneficial owners;
• manner of storage of documents and information;
• manner of fulfilment of obligations comprising the provision of information about transactions and notifications to the General Inspector;
• manner of popularizing the knowledge of the regulations on preventing money laundering and financing of terrorism among the Bank’s employees;
• reporting of actual or potential violations of the regulations on preventing money laundering and financing of terrorism by the employees;

• internal control or oversight of the compliance of the operations with the regulations on preventing money laundering and financing of terrorism and the principles of conduct set out in the internal regulations;
• principles of documentation of the difficulties identified in connection with the verification of the identity of a beneficial owner and measures taken in connection with the identification of a natural person holding a senior managerial position as a beneficial owner;
• verification of financial institutions as part of the process of establishing correspondent relationships (LORO, exchange of RMA keys).

The Group applies financial security measures before establishing a business relationship with a Customer and then reapplies them during the relationship at the intervals adequate to a given Customer’s risk.

If the Group cannot apply one of the basic financial security measures, it takes appropriate steps in accordance with Article 41 of the Act on preventing money laundering and financing of terrorism, i.e. it does not establish business relationships, does not carry out an occasional transaction, does not conduct transactions via a bank account, terminates business relationships.

The Group identifies and verifies Customers and beneficial owners, determines the risk of money laundering and financing of terrorism, monitors Customers’ transactions and, in the event of identifying circumstances which may indicate money laundering or financing of terrorism or a well-founded suspicion of money laundering, it takes appropriate measures, including putting transactions on hold, blocking the account or freezing the funds. The Bank applies special mitigating measures in the form of freezing funds and not providing assets to persons or entities entered in the following lists:

• the lists published by the General Inspector based on the resolution of the United Nations Security Council passed under Chapter VII of the United Nations Charter, concerning threats to international peace and security caused by terrorist attacks, in particular the lists referred to in section 3 of resolution 2253 (2015) of the United Nations Security Council or in section 1 of resolution 1988 (2011) of the United Nations Security Council;
• the list of persons and entities subject to special mitigating measures, published by the General Inspector of Financial Information (GIIF);
• the lists published on the basis of the regulations of the Council of the European Union;
• and the lists published by the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC).

The persons performing AML duties participate in training programmes concerning the execution of such duties.

Within their organizations, the Bank and its subsidiaries appoint AML officers responsible for the exchange of information among the Group entities. The Bank performs periodic reviews of the Group policy at least annually. It also prepares quarterly information on counteracting money laundering and financing of terrorism, which is presented by the Security Department Director to the President of the Management Board of the Bank.

The Group operates in accordance with the laws of each country in which it conducts its activities and cooperates with institutions which are tasked with preventing money laundering and financing of terrorism (the GIIF in Poland, Bafin in Germany).

In 2021, the Group’s policy was modified towards the implementation of changes in the IT systems as regards the identification of Customers in the Central Register of Beneficial Owners, the manner of processing transactions with Customers from high-risk third countries and the methods of identification of Customers related to high-risk industries.