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 Document Elaboration.
2 05/09/2019 In compliance with the Company’s Standard of Normative Instruments, the policy was reviewed, according to the rules set forth in said standard, and no changes were identified in the content. In this regard, the Board of Executive Officers acknowledged the review and since this policy was not amended, there is no need to submit it to the Board of Directors.
3 04/23/2020 Annual review with the due changes to adjust the processes, in line with market changes and current regulations.
4 04/26/2021 General amendments to the content of sub-items of the Guidelines; Inclusion of items 1.2, 1.5, 1.8, 1.9 and 1.27. Changes to the working of the following items: Purpose, Scope, Responsibilities and Concepts and Acronyms. Inclusion of responsibilities for the Operations Superintendence.

 

I. Purpose

To set forth the guidelines to prevent and combat the crimes of money laundering and financing of terrorism, besides other crimes involving the simulation or concealment of funds, as provided for in the regulations of the Central Bank of Brazil (“BACEN”), the rules of the payment arrangement institutions (“Brands”), Law 9,613/1998 and guidelines in Cielo’s Code of Ethical Conduct.

II. Scope

All management members (executive officers, members of the Board of Directors and members of the Advisory Committees), members of the Fiscal Council and employees of Cielo S.A., Servinet Serviços Ltda., Aliança Pagamentos e Participações Ltda. and Stelo S.A. (“Cielo” or “Company”), as well as their partners and outsourced service providers.

All Company subsidiaries must define their guidelines based on the guidance provided for in this Policy, considering the specific needs and legal and regulatory aspects to which they are subject.

Regarding its Affiliates, the Company’s representatives acting as management members of the Affiliates must spare no effort for said companies to define their guidance based on the guidelines provided for in this Policy, considering the specific needs and legal and regulatory aspects to which they are subject.

III. Guidelines

1. Cielo:

1.1. Repudiates any act of money laundering, financing of terrorism or any criminal activity involving the simulation or concealment of financial resources.

1.2. Adopts procedures to carry out an internal assessment to identify and measure the risk of (i) using its products and services and (ii) conducting business in Brazil’s territory in the practice of money laundering and terrorist financing, under Brazilian laws.

1.3. Adopts a governance structure focused on complying with the obligations to prevent money laundering and terrorism financing, as set out in Law 9613/1998 and Bacen’s rules, through the institution of the Executive Working Group to Prevent Money Laundering (“PLD WG”), managed by the officer responsible for fulfilling the obligations on the subject before Bacen.

1.4. Uses, employing automated internal systems of transaction monitoring, which through rules and parameters, identifies the cases considered as money laundering or financing of terrorism.

1.5. Assesses, when analyzing the transactions, the solution of capture applied, the payment conditions, the frequency, the parties and the amounts involved, the standard of transactions, the economic activity and any other indication of irregularity or illegality involving customer or his operations, aiming at detecting any indication of money laundering and financing of terrorism.

1.6. Adopts procedures to identify and approve the maintenance of the business relationship with clients that eventually may be included in lists of Politically Exposed Persons (“PEP”) and OFAC, among other restrictive lists, according to risk assessment and rating, established in the internal rule.

1.7. Adopts procedures to identify partners and outsourced service providers who eventually may be included in the PEP and OFAC lists, among other restrictive lists, according to risk assessment and rating, established in the internal rule.

1.8. Immediately informs the identification of customers connected with the OFAC list to the appropriate authority.

1.9. Adopts procedures in the development of new products and services, as well as the use of new technologies, to inhibit and assess the risk of their use in practices related to money laundering and terrorism financing, according to the guidelines of the Policy of Corporate Risk Management and Internal Controls and attributions defined in internal rules.

1.10. Adopts controls to certify that the movements of financial amounts are carried out to checking accounts, savings accounts, prepaid cards and payment accounts (“digital wallet”) of customers affiliated with Cielo, whose identity and veracity have been previously confirmed, either by the home institution, by the partner responsible for the digital wallet or by Cielo itself.

1.11. Adopts due diligence procedures Know Your Customer, Know Your Supplier, Know Your Partner and Know Your Employee to mitigate risks of money laundering and financing of terrorism, according to the activity, jurisdiction and the parties involved, including the collection, verification, validation, and updating of registration data, as defined in internal rules.

1.12. Adopts restrictive measures as to the conduction and businesses and the maintenance of the relationship with customers, suppliers, and partners when circumstances indicate evidence of involvement in acts connected with money laundering and financing of terrorism, according to prevailing laws.

1.13. Considers, when contracting and maintaining business relations with partners and suppliers if they have mechanics to combat money laundering and financing of terrorism.

1.14. Analyzes indications and complaints of practices connected with suspicious money laundering and financing of terrorism by direct agents or third parties against Cielo’s assets, according to prevailing laws.

1.15. Confidentially conducts the processes of registration, analysis, and communication of operations, indicating money laundering or financing of terrorism to the appropriate authorities.

1.16. Informs the appropriate authorities on the operations or operations proposed, which according to prevailing laws, may characterize money laundering and financing of terrorism.

1.17. Devotes special attention to operations or operations proposed involving a PEP, as well as family members, employees, or legal entities participating therein. The notification of cases indicating money laundering, deriving from customers classified as PEP, will be identified in related notices to the appropriate authority.

1.18. Cooperates with public authorities in investigations referring to harmful acts to the public administration resulting from its activities, according to prevailing laws.

1.19. Adopts practices to promote an organizational culture to prevent money laundering and terrorism financing and maintains an annual specific training program for employees on prevention and combat of money laundering and financing of terrorism.

1.20. Maintains specific channels to receive complaints, also anonymous, as well as repudiates any acts of retaliation against the good-faith denouncers who opted to identify themselves.

1.21. Defines any suspicious fact or indication of a direct or indirect connection with criminal infringement, regardless of the purpose of the situations mentioned above, shall be reported to the Compliance and Money Laundering Prevention areas.

1.22. Reviews the guidelines defined in this policy annually or whenever there are changes in the process that impact or justify its review.

1.23. Periodically assesses the compliance and effectiveness of this policy, procedures, and internal controls regarding the prevention of money laundering and the financing of terrorism.

1.24. Cooperates with public authorities in investigations related to money laundering, financing of terrorism and corruption, among other illicit acts resulting from its activities, according to prevailing laws.

1.25. Confidentially records, analyzes and communicates transactions with indication of money laundering or financing of terrorism to the appropriate authorities.

1.26. Established that any suspicious fact or indication of a direct or indirect connection with criminal acts, regardless of having been the purpose of the situations described above, shall be reported to the Compliance and Money Laundering Prevention areas.

1.27. Is committed to the continuous improvement of monitoring, selection, analysis and communication activities, reviewing and updating its processes, focusing on intelligence and technology.

1.28. Reviews the guidelines defined in this policy annually or whenever there are changes in the process that impact or justify its review.

IV. Outcome Management

Employees, suppliers, or other stakeholders who notice any deviations to this Policy’s guidelines may report the fact to the Ethics Channel, through the channels below, anonymously or not.
www.canalconfidencial.com.br/cielo
• Telephone, toll-free: 0800 775 0808
Internally, non-compliance with this Policy’s guidelines implies the application of measures for agents’ liability who fail to comply therewith, according to the respective seriousness of such non-compliance, and pursuant to internal rules.

V. Responsibilities

  • Management and Employees: comply and ensure compliance with this Policy and, when necessary, consult the Risk, Compliance and Prevention Office about situations that involve conflict with this Policy or if the situations described herein occur.
  • Audit Executive Superintendence: carry out independent and objective assessments of the quality and effectiveness of the policy, procedures and internal controls to prevent and combat money laundering and terrorism financing crimes.
  • People, Management and Performance: support training and cultural actions, as well as the application of the criteria stipulated for hiring and employee conduct, focusing on preventing and combating money laundering and the financing of terrorism.
  • Operations Superintendence: support the application of stipulated criteria, as set forth in internal regulations, for the registration and maintenance of customers, focusing on preventing money laundering and the financing of terrorism.
  • Efficiency and Procurement Superintendence: support the application of stipulated criteria, as set forth in internal regulations, for the establishment and maintenance of business relationships, focusing on preventing money laundering and the financing of terrorism.
    Risk, Compliance, Prevention and Security Office: ensure compliance, based on the guidelines of this policy, with the requirements imposed by the regulations on the subject, in addition to keeping the content up-to-date and adherent, as well as evaluating its effectiveness and compliance.
  • Legal and Governmental Relations Superintendence: inform the Risk, Compliance, Prevention and Security Office of updates on legal provisions and other duties, as set forth in internal regulations.
  • Anti-Money Laundering Executive Working Group (“AML WG”): enforce compliance with the guidelines of this policy and the obligations set out in Law 9,613/1998 and BACEN regulations, as well as resolve on aspects related to the prevention of money laundering and the financing of terrorism.

VI. Additional Documentation

VII. Concepts and Acronyms

  • COAF (Financial Activities Control Council): a council created within the Ministry of Finance with the purpose of disciplining, imposing administrative penalties, receiving, examining and identifying suspicion of illicit activities set forth in Law 9,613/1998, without prejudice to the competence of other agencies and entities.
  • AML WG: Anti-Money Laundering Executive Working Group, responsible for governing the prevention of money laundering and the financing of terrorism, composed of the Risk, Compliance, Prevention and Security Officer; Fraud Prevention Manager; Compliance and Anti-Money Laundering Manager; and Anti-Money Laundering Coordinator.
  • OFAC (Office of Foreign Assets Control) list: a list issued and regularly updated by the U.S. Treasury, containing names and associations of persons and companies restricted for connection with illicit acts such as drug trafficking, money laundering and terrorism, among others.
  • PEP (Politically Exposed Persons): PEP refers to people who in the past five (5) years met the following conditions: (I) elective office in the federal government’s executive and legislative branches; (II) a position at the Federal Executive Branch, serving as Minister (or a similar position) or holding a Special Nature position (or a similar position); (III) CEO, vice president and officer, or similar positions, at indirect government agencies; (IV) Senior Management and Advisory Group – DAS, level 6, or similar positions; (V) members of the National Council of Justice, Federal Supreme Court, Higher Courts and Federal Regional Courts, Labor and Electoral Courts, Superior Labor Justice Council and Federal Justice Council; (VI) members of the National Council of the Public Prosecution Office, Federal Attorney General, Vice Federal Attorney General, Labor Attorney General, Military Attorney General, Deputy Federal Attorney General and Deputy Attorney General of the States and Federal District; (VII) members of the Federal Accounting Court and the Attorney General and Deputy Attorneys General of the Public Prosecution Office in the Federal Accounting Court; (VIII) political party presidents or treasurers or similar positions; (VII) Federal District and state governors and secretaries, Federal District and state legislators, president (or a similar position) of entities of the state and district indirect government entities and presidents of Courts of Justice, Military Courts, Accounting Court or equivalent institutions in the States and the Federal District; (VIII) Mayors, City Counselors, Municipal Secretaries, presidents (or a similar position) of entities of the municipal indirect public administration and presidents of Municipal Accounting Courts or equivalent institutions. Politically exposed persons are also those who abroad are: (I) heads of state or government; (II) high-ranking politicians; (III) those holding high-ranking positions in the government; (IV) official generals and members of the judiciary, legislative branches or military high ranking; (V) top-level executives in state-owned companies; or (VI) leaders of political parties and leaders of state-owned companies (VII) leaders of high-ranking public or private international law entities.
  • Stakeholders: all relevant public with interests relevant to the Company or individuals or entities that take some type of risk, direct or indirect, before society, such as shareholders, investors, employees, society, customers, suppliers, creditors, governments, regulatory bodies, competitors, press, associations and class entities, users of electronic payment methods and non-profit organizations, among others.

VIII. Miscellaneous

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

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