Anti-Money Laundering and Combating The Financing of Terrorism Policy

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Review History

 

Version: Date of Review: History: 
1 04/19/2018 Preparation of the Document.
2 05/09/2019 In compliance with the Company’s Normative Instruments standard, the policy was revised according to the rules set out in that standard, and no need to modify any content was identified. In this sense, the Executive Board became aware of the review and, considering that this policy has not undergone any change, there is no need to submit it to the Board of Directors.
3 04/29/2020 Annual review making relevant changes to process adjustments, in line with market changes and current regulations.
4 04/26/2021 General changes in the content of the sub-items of the Guidelines; Inclusion of items 1.2, 1.5, 1.8, 1.9 and 1.27. Redaction changes in the items Objective; Scope; Responsibilities and Concepts and Acronyms. Inclusion of responsibilities for the Operations Superintendence.
5 04/20/2022 Update of items: I. Purpose, II. Scope, III. Sub-items guidelines 1.5, 1.9, 1.10, 1.11, 1.15, 1.17, V. Responsibilities, VI. Supplementary Documentation and VII. Concepts and Acronyms.
6 03/29/2023 UAnnual review including text on combating the financing of the proliferation of weapons of mass destruction. Update of items: I. Purpose, II. Scope, III. Guideline sub-items: 1.1, 1.4, 1.5, 1.13, 1.14, 1.15, 1.16, 1.19, 1.20, 1.23, 1.24, IV. Consequence Management, V. Responsibilities, VI. Supplementary Documentation and VII. Concepts and Acronyms..
7 02/28/2024 Update of items I. Purpose, II. Scope, III. Guidelines sub-item 1.4, IV. Consequence Management, V. Responsibilities, VI. Concepts
and Acronyms.

 

I. Purpose

This Policy for the Prevention of Money Laundering and Terrorist Financing (“Policy”) aims to establish guidelines related to preventing and combating the crimes of money laundering, terrorist financing, and the financing of the proliferation of weapons of mass destruction, in addition to other crimes involving simulation or concealment of financial resources, adopted by Cielo S.A. – Instituição de Pagamento (“Cielo”), in compliance with the regulations of the Central Bank of Brazil (“BCB”), in the rules of the Payment Arrangement Settlors (“IAPs” or “brands”), in Law No. 9.613/1998, and as set forth in Cielo’s Code of Ethics./

II. Scope

All members of the Board of Directors and the Executive Board (“Directors“); members of the Advisory Committees and the Fiscal Council; employees, including outsourced workers, interns and young apprentices (“Employees“) of the companies Cielo, Servinet Serviços Ltda (“Servinet“), Aliança Pagamentos e Participações Ltda. (“Aliança“) and Stelo S.A. (“Stelo“), hereinafter jointly referred to as the “Company”.

All the Company’s Subsidiaries must define their directions based on the guidelines set forth in this Policy, considering the specific needs and the legal and regulatory aspects to which they are subject.

With respect to the Affiliated Companies, the Company’s representatives who act in managing its Affiliated Companies must make every effort to define their directions based on the guidelines set forth in this Policy, considering the specific needs and the legal and regulatory aspects to which they are subject.

III. Guidelines

1. The Company:

1.1. Disapproves of practices related to money laundering, terrorist financing, financing of the proliferation of weapons of mass destruction, corruption and any other illegal acts.

1.2. Employs senior management committed to the effectiveness and continuous improvement of the Policy, procedures and internal controls related to the prevention of money laundering and terrorist financing, as well as periodically submits to its Executive Board and Board of Directors the reports related to this process.

1.3. Adopts a governance structure aimed at complying with this Policy and the obligations to prevent money laundering and terrorist financing set out in Law No. 9.613/1998 and BCB regulations, through the establishment of the Executive Working Group for the Prevention of Money Laundering (“PML WG”), under the management of the Vice-President responsible for fulfilling the obligations on the subject before the regulatory body.

1.4. Adopts procedures for internal risk assessment, aiming to identify and measure the risk of using its products and services and conducting business in the practice of money laundering and terrorist financing, pursuant to national legislation and rules of payment arrangements to which it is a part, according to attributions defined in internal regulations. This assessment considers the risk profiles of the clients; of the institution, including the business model and geographic operating area; of the operations, transactions, products and services, including all distribution channels and the use of new technologies; and of the activities performed by the employees, partner institutions and suppliers.

1.5. Submits, for acknowledgment, the annual report on the internal risk assessment set out in item 1.4 of this Policy, approved by the Vice President responsible for the process of preventing money laundering and terrorist financing, to the Executive Board, Risk Committee, Audit Committee and Board of Directors, as well as revises its methodology every 2 (two) years or whenever any updates are made to the process.

1.6. Adopts procedures in the development of new products and services, as well as the use of new technologies, in order to assess the risk and prevent money laundering and terrorist financing, in accordance with the guidelines of the Policy on Corporate Risk Management and Internal Controls and attributions defined in internal regulations.

1.7. Evaluates, on an annual basis, compliance and effectiveness of this Policy, procedures and internal controls, with regard to the prevention of money laundering and terrorist financing, in order to identify possible deficiencies, following the guidelines of the Policy on Corporate Risk Management and Internal Controls and attributions defined in internal regulations.

1.8. Issues an annual report containing the results of the evaluation of effectiveness of controls set out in item 1.7 of this Policy, and submits it to the Executive Board, Risk Committee, Audit Committee and to the Board of Directors.

1.9. Adopts action plans to mitigate risks and correct deficiencies pointed out in inspections carried out by regulatory bodies, brands and controlling shareholders, as well as in evaluations of the areas of Internal Controls and Internal Audit, with the purpose of investigating procedures aimed at preventing money laundering and terrorist financing.

1.10. Adopts practices for the promotion of the organizational culture of prevention of money laundering and terrorist financing, through continuous training and specific communications on the subject.

1.11. Maintains up-to-date training of Employees on preventing and combating money laundering and terrorist financing on the Company’s Regulatory Training Track.

1.12. Adopts due diligence procedures such as Know Your Customer, Know Your Supplier, Know Your Partner and Know Your Employee, in order to mitigate the risks of money laundering and terrorist financing, in accordance with the activity, jurisdiction and parties involved. Such procedures include the collection, verification, validation and updating of registration information, as defined in internal regulations.

1.13. Adopts restrictive measures regarding the conduct of business and the maintenance of relationships with clients, vendors, partners and Employees, when circumstances indicate evidence of involvement in crimes of money laundering, terrorist financing, financing of the proliferation of weapons of mass destruction, and corruption or any other illegal acts, observed in current legislation.

1.14. Adopts procedures for the identification of clients, partners and third-party service providers who may be present on restrictive lists, such as OFAC (“U.S. Foreign Assets Control Agency”) and UNSC (“United Nations Security Council”), among other lists of national and international administrative and socio-environmental sanctions.

1.15. Immediately communicates to the competent authorities the identification of clients included on the restrictive list, in accordance with the applicable regulation of the BCB, and conducts due diligence in the identification of individuals included on lists of national and international administrative and socio-environmental sanctions, as established in internal regulations.

1.16. Adopts procedures for the identification and approval of the maintenance of relationships with clients, partners, service providers, and Employees that may be classified as Politically Exposed Persons (“PEPs”) or related to them, respecting proper governance, as established in internal regulations.

1.17. Pays special attention to operations or proposals for operations involving PEP, whether directly or related (representative, family member or close associate thereof).

1.18. Adopts controls to ensure that transaction settlements and financial transactions are carried out for current accounts, savings accounts, prepaid cards and payment accounts held by clients affiliated to the Company, whose identity and validity were previously confirmed.

1.19. Makes use of internal systems for logging and monitoring transactions, which, through parameterizable rules, identifies cases with indications of money laundering, terrorist financing, financing the proliferation of weapons of mass destruction, among other illegal activities.

1.20. Assesses, in the analysis of transactions, the capture solution used, the payment method, the frequency, the parties and amounts involved, the pattern of transactions, the economic activity and any additional indication of irregularity or illegality, involving the client or its operations, in order to identify evidence of money laundering, terrorist financing, financing of the proliferation of weapons of mass destruction, and corruption, among other illicit activities.

1.21. Maintains specific channels for receiving complaints, including those made anonymously, and repudiates any acts of reprisal or retaliation brought against good faith whistleblowers who choose to identify themselves.

1.22. Investigates evidence and complaints of practices related to suspected money laundering and terrorist financing by direct agents or third parties against the Company’s assets, in accordance with the current legislation.

1.23. Informs the competent authorities of operations or proposed operations which, in accordance with the current legislation, characterize evidence of money laundering, terrorist financing, financing the proliferation of weapons of mass destruction, and corruption, among other illegal acts.

1.24. Collaborates with the public authorities in investigations related to money laundering, terrorist financing, financing the proliferation of weapons of mass destruction, and corruption, among other illegal acts, resulting from its activities, in compliance with the current legislation.

1.25. Conducts, in a confidential manner, the processes of recording, reviewing and reporting of operations with signs of money laundering and terrorist financing to the competent authorities.

1.26. Defines that any suspicious fact or indication of direct or indirect relationship with criminal offense, regardless of whether it was the subject of the situations described above, should be reported to the areas of Compliance and Prevention of Money Laundering.

1.27. Is committed to the continuous improvement of monitoring, selecting, assessing and reporting activities, promoting the review and updating of its processes, focusing on intelligence and technology.

1.28. Reviews the guidelines set out in this Policy on an annual basis or whenever process changes occur that impact or justify its revision.

IV. Consequence Management
Employees, suppliers or other stakeholders who observe any deviations from the guidelines of this Policy may report the fact to the Ethics Channel through the channels below, with the option of anonymity:

Internally, non-compliance with the guidelines of this Policy gives rise to the application of accountability measures to the agents that fail to comply with it, according to the respective severity of the non-compliance and as per internal regulations, and is applicable to all persons described in the item “Scope” of this Policy, including the leadership and members of the Executive Board.

V. Responsibilities

  • Officers and employees: Observe and ensure compliance with this Policy and, when necessary, call the Executive Vice Presidency of Risks, Compliance, Prevention and Security for consultation on situations involving conflict with this Policy, or upon the occurrence of situations described herein.
  • Executive Vice Presidency for People, Management and Performance: Responsible for enabling and supporting training programs, together with the Compliance and Prevention of Money Laundering Department, ensuring that all Employees are properly instructed and updated regarding their obligations and responsibilities. In addition, adopt development measures to promote organizational culture aimed at the prevention of money laundering and terrorist financing, and define criteria for the selection and hiring of employees, in internal procedures, aiming to mitigate the risks established in this Policy and in the applicable laws.
  • Executive Working Group for the Prevention of Money Laundering (“PML WG”): Ensure compliance with the guidelines of this Policy and the obligations of Law No. 9.613/1998 and BCB regulations, and deliberate on aspects related to the prevention of money laundering and terrorist financing.
  • Registration Management:: Support the application of stipulated criteria, as set out in internal regulations, for the registration and maintenance of clients, focusing on the prevention of money laundering and terrorist financing.
  • Executive Superintendency of Efficiency and Purchasing: Support the application of stipulated criteria, as set out in internal regulations, for the hiring and maintenance of business relationship with vendors, focusing on the prevention of money laundering and terrorist financing.
  • Executive Audit Superintendency: Carry out the independent and objective evaluation of the quality and effectiveness of the Policy, procedures and internal controls to prevent and combat crimes of money laundering and terrorist financing. Receive and investigate complaints logged in the Company’s Ethics Channel, including, but not limited to, complaints of suspected money laundering and terrorist financing.
  • Executive Vice Presidency of Legal and Government Relations: Inform the Vice Presidency of Risks, Compliance, Prevention and Security of any updates to legal provisions, and other duties, as established in the internal regulations.
  • Executive Vice-Presidency of Risks, Compliance, Prevention and Security: Ensure compliance, based on the guidelines of this policy, with the requirements determined by the regulations on the subject, and keep the content up to date and consistent, as well as evaluate its effectiveness and implementation.

VI. Supplementary Documentation

VII. Concepts and Acronyms

  • COAF (Council for Financial Activities Control): Council created within the Ministry of Finance for the purpose of disciplining, applying administrative penalties, receiving, examining and identifying suspected occurrences of illegal activities set out in Law No. 9.613/1998, without prejudice to the authority of other bodies and entities.
  • Advisory Committees: advisory bodies to the Board of Directors, of a technical nature, which are instruments of support and which increase the quality and efficiency of the performance of the Company’s Board of Directors. The Advisory Committees have no deliberative power and their recommendations are not binding on the Board of Directors.
  • Board of Directors: A collegiate decision-making body that aims to satisfy the duties of guiding and supervising the management of the Executive Board and deciding on major business issues, including making strategic, investment, and financing decisions, among other matters provided for in article 142 of the Brazilian Corporation Law and/or the Company’s Bylaws.
  • Executive Board: the body responsible for managing the company’s business, executing the strategy and general guidelines approved by the Board of Directors. Through formalized processes and policies, the Executive Board enables and disseminates the organization’s purposes, principles, and values.
  • Affiliates: Companies in which the investor has significant influence, under the terms of article 243, paragraph 1 of the Brazilian Corporation Law.
  • Subsidiaries: companies in which the Company, directly or indirectly, holds partner or shareholder rights that assure it, on a permanent basis, preponderance in the corporate decisions and the power to elect the majority of the managers, under the terms of article 243, paragraph 2 of the Brazilian Corporation Law.
  • Money Laundering: According to COAF, it is characterized by a set of commercial or financial operations that seek to incorporate into the economy of each country, on a temporary or permanent basis, resources, goods and values of illicit origin and that develop through a dynamic process that theoretically involves three independent phases that often occur simultaneously.
  • Terrorist Financing: This crime consists of allocating funds to terrorist acts or any organizations that operate for this purpose.
  • Financing the Proliferation of Weapons of Mass Destruction: This crime consists of allocating resources to agents who intend to use, directly or indirectly, weapons that result in major impacts, damage and destruction on a large scale, such as nuclear, chemical and/or biological weapons.
  • PML WG: Executive Working Group for the Prevention of Money Laundering, responsible for governance of prevention of money laundering and terrorist financing, composed of the Director of Risks, Compliance, Prevention and Security, Fraud Prevention Manager, Compliance and Money Laundering Prevention Manager, and the Coordinator of Prevention of Money Laundering.
  • OFAC (Office of Foreign Assets Control) List:  List issued and updated regularly by the U.S. Treasury, containing names and associations of persons and companies that are restricted to due to the connection with illicit acts such as drug trafficking, money laundering, terrorism, among others.
  • PEP (Politically Exposed Persons): People who, in the last 5 (five) years, have met the following conditions: (I) holders of elective mandates of the Federal Executive and Legislative Branches; (II) holders of office in the Federal Executive Branch, Minister of State or equivalent, Special Nature or equivalent; (III) president, vice-president and director, or equivalent, of indirect public administration entities; (IV) Senior Management and Advisory (DAS) Group, level 6, or equivalent; (V) members of the National Council of Justice, the Supreme Federal Court, the Superior Courts and the Federal Regional Courts, labor and electoral courts, the Superior Council of Labor Justice and the Council of Federal Justice; (VI) members of the National Council of Public Prosecutors, the Federal Attorney General, the Federal Deputy Attorney General, the Attorney General of Labor, the Attorney General of Military Justice, the Federal Deputy Attorney General and the State and Federal District Attorney General of Justice; (VII) members of the Federal Court of Auditors and the Attorney General, and the Sub-Attorneys General of the Public Prosecutor’s Office before the Federal Court of Auditors; (VIII) national presidents and treasurers, or equivalent, of political parties; (IX) governors and secretaries of state and the Federal District, State and District Representatives, presidents, or equivalent, of entities of the indirect state and district public administration and the presidents of courts of justice, military, accounts or equivalent of state and Federal District; (X) Mayors, Aldermen, Municipal Secretaries, presidents, or equivalent, of entities of the municipal indirect public administration and presidents of Municipal Courts of Accounts, or equivalent. People who, abroad, are considered to be: (I) heads of state or government; (II) high-ranking politicians; (III) senior government officials; (IV) general officers and high-ranking members of the judiciary, legislature or military; (V) high-ranking executives of public companies; (VI) leaders of political parties; (VII) high-ranking leaders of international public or private entities.
  • Stakeholders: Stakeholders are all relevant audiences, whether internal or external, consisting of people, groups, organizations, associations and other actors who influence or are influenced by the company’s activities, products and services, and who may be impacted by its decisions, actions and performance. Examples of stakeholders include, but are not limited to: suppliers, investors, employees, local communities, the press and civil society organizations.

VIII. General Provisions

The Company’s Board of Directors is responsible for altering this Policy whenever necessary.

This Policy takes effect on the date of its approval by the Board of Directors and revokes any documents to the contrary.