Compliance and Integrity

We at NLB believe that responsible corporate governance is more than just respecting the laws, regulations, and standards. It is also a reliable compliance programme. NLB is committed to assuring compliance and integrity in the different countries where it operates.

At NLB, compliance is integrated into daily operations of the Bank, thus contributing to a strong internal control environment and ensuring the management of compliance risks.

NLB has laid down clear rules and guidelines for our employees in different areas of our operations. By ensuring compliance with the legislation and the other regulatory requirements we make sure that NLB, its shareholders, clients, business partners, and other stakeholders, as well as the employees, are appropriately protected against various risks related to the area of compliance.

We therefore expect that all employees of NLB and the other members of NLB will respect our compliance standards - by acting in a fair, responsible and ethical manner. Our NLB Group Code of Conduct, which is a standardised document for all members of NLB Group, describes the values and lays down the standards of ethical business conduct and serves as the guideline for all our relationships regardless of whether it involves clients, competitors, business partners, state authorities, regulators, shareholders or internal relationships between the employees. At the same time, it is the basis of our values and basic principles of conduct which provide specific conduct guidelines to our employees. The aim of this approach is to ensure compliance with all applicable laws, regulations, and standards.

To promote responsible conduct by the employees, we regularly carry out mandatory training in all areas within NLB Compliance and Integrity.

In NLB, Compliance and Integrity functions independently and separately from the Bank’s operations. The basis of our Compliance Programme is provided in the Integrity and Compliance Policy of NLB d.d. and NLB Group. NLB raises the awareness of the front office and the other organisational units of the Bank regarding the assurance of compliance and integrity with different legislative and regulatory requirements as well as good practices. Compliance and Integrity is thus in charge of:

• providing consultancy services to individual units about the applicable laws, directives, standards and regulations and guidance and support in assuring compliance, which includes assistance in the provision of appropriate internal control mechanisms for the prevention of the conflict of interest (e.g. “Chinese walls”), protection of information, protection of personal data, prevention of abuse of the market in financial instruments,
• monitoring operations, transactions and business processes to establish potential compliance risks,
• development of the principles, standards, and guidelines for compliance, useful in NLB Group (AML/CFT, prevention of fraud, personal data protection, protection of information, code of conduct, applicable regulations, rules, and internal standards),
• maintenance of internal controls and limited lists of the Bank’s projects that require special attention,
• assistance in achieving compliance with the Bank’s internal regulations on confidentiality,
• carrying out all measures arising from the programme for anti-money laundering and combating the financing of terrorism,
• making sure that the events which justify the suspicion of money laundering or terrorist financing and other types of criminal offences are identified and reported to the law enforcement authorities and other competent supervisory bodies (e.g. Office for Money Laundering Prevention of the Republic of Slovenia),
• provision of regular training and education of the personnel in the area of compliance issues (AML/CFT, prevention of fraud, personal data protection, protection of information, general ethics and other rules of the code of conduct, applicable regulations, rules and internal standards, prevention of fraud and other types of harmful conduct),
• monitoring of the management of compliance and integrity risks and identification and assessment of risks at the level of NLB and NLB Group,
• taking care of the relations with the competent supervisory bodies (ECB, Bank of Slovenia) on a daily basis.

NLB constantly builds, strengthens and supports the compliance and due diligence culture in NLB and NLB Group. The operations of the companies in the banking and the other financial sectors are strictly regulated, which makes it more and more complicated. To face these challenges, NLB uses a systematic approach to reducing the compliance risk.  It is important to ensure that the employees and those who make decisions know and understand the purpose and objective of the regulations. Systematic monitoring of the legal and regulatory environment and valuation of its impact on the Bank are thus an important part of its daily operations.

NLB has zero tolerance for all forms of financial crime. Our AML/CFT Programme for fighting money laundering and terrorist financing provides strong support for various international efforts in fighting money laundering, terrorist financing, and other criminal offences.

In the framework of our compliance programme, NLB undertook to fully comply with all local and international laws regulating the fight against corruption and bribery. Our employees and managers are strictly prohibited from accepting, offering, paying or approving bribes or any other form of corruption. Therefore, NLB d.d. and the other members of NLB Group very actively implement the policies and procedures in the area of zero tolerance to any such form of corruption, either in the public or the private sector. We have determined the rules and procedures, guidelines and rules of conduct which are binding for all employees as well as the members of the management of NLB d.d. and the other members of NLB Group. We expect our agents, brokers, consultants, business partners and suppliers related to NLB d.d. and the other members of NLB Group to also uphold these standards. NLB expects transparency, professionalism, and fairness in all business relationships and thus tries to avoid irregular advantages or occurrence of questionable conduct by employees or third parties we do business with.

NLB d.d. and the other members of NLB Group thus use the anti-corruption policy to fight corruption and bribery with:

• appropriate measures aimed at training and raising awareness,
• monitoring compliance and integrity risks and monitoring the implementation of the measures for their mitigation,
• implementing the processes of investigating all types of suspected misconduct,
• recording and accepting gifts, invitations, hospitality, conflict of interest,
• special channels for reporting irregularities in reporting suspicious conduct, either anonymously or not (phone, mail, e-mail, application Whistler),
• risk-adjusted procedures for monitoring third-party operations and preventing all kinds of fraud, abuse, money laundering, and terrorist financing.

NLB is bound to only offer products and services that create value for our clients and the shareholders, and meet the client’s needs. The processes for approving new products comprise a preliminary review required for achieving these goals. We wish to make sure that the clients can have full confidence in our products.

The procedures of approving products and services apply to all new product offers, as well as various existing products. The key control functions must be involved in the process of product development and monitoring, including the compliance function, since it is important that every product is compliant with the requirements of the regulations, inter alia, in the area of consumer protection, personal data protection, and prevention of money laundering and terrorist financing. The Committee for Existing and New Products in NLB is in charge of approving and monitoring products while also focusing on risks related to the product and the method of managing those risks.

Policies, rules, standards, and procedures for personal data and information protection (e.g. business secrets) are used in our everyday operations in the area of data protection. Thus, we ensure compliance with the relevant regulatory provisions that can differ significantly from one country to another.

Preventive measures and thorough control within NLB and in relation to outsourced providers and suppliers help prevent the loss or abuse of data and the violation of data protection regulations, including the protection of personal data. Each complaint is thoroughly investigated and appropriate measures are taken to manage the risks or prevent potential violations. To this end, we organise regular education and training courses in order to raise awareness about the protection among the employees and to ensure compliance with the established standards of information protection and compliance with the regulations and standards implemented by the Bank. More details about NLB's approach to personal data protection.

All important suspected violations or misconduct (such as abuse, fraud, including suspected bribery or any form of corruption) must be reported and handled. NLB maintains such an environment that encourages the employees to set questions which can be discussed with their managers or other employees in the Bank, including the experts in compliance, money laundering prevention, fight against bribery and corruption, or with lawyers or HR managers. Employees also have access to different channels through which they can anonymously report potentially non-ethical or inappropriate business practices. We use a strict policy of whistleblower protection against retaliation measures and assurance of anonymity.