Anti Corruption An Inside View – Practical Risks faced by GFIs & Tips for Risk Control By Benedicte Nolens September 2011

Produced by: APAC GC Slide 2 Back Drop – Global Global - Since September 11, 2001, more than 100 countries have changed their laws related to financial services regulation, with the fight against political corruption playing a fundamental role. The Wolfsberg Group - Has issued an updated version of its global anti-corruption guidance, which is designed to help firms mitigate bribery risks. August Financial Action Task Force - FATF’s review of its recommendations could mean that corruption, tax evasion and issues on tax havens become more closely related to AML. September United States FCPA – Reporting acts of Foreign Bribery may entitle you to receive financial compensation, potentially millions of dollars…. [and] collect up to 30% of the fines that the government collects. In 2010 the US government collected over $1.5 Billion dollars in FCPA fines. Egypt - Ex-President Hosni Mubarak has denied charges of corruption on the pending day of his trial in Cairo. August Libya - Libya’s rebels are examining possible corruption at the country’s $65bn sovereign wealth fund and its links to the family of Colonel Muammar Gaddafi. August UK Anti-bribery Act – Has global reach; game-changing. July 2011.

Produced by: APAC GC Slide 3 Back Drop – Closer to Home China - Extensive public attention to matters of fraud and corruption. In 2010 Premier Wen Jiabao stated that steps would be taken to investigate "those who trade power for money"… [and that] FIs are one of the key focal areas of the government's anti-corruption fight. In July 2011, China executed two former vice- mayors for bribery. India - Anna Hazare's call for "India Against Corruption“. August Thailand - Amendments to Thailand's National Anti-Corruption Commission Act (NACC Act) have paved the way for the Office of the National Anti-Corruption Commission of Thailand (NACC) to pursue high-profile corruption cases. September Vietnam - Under pressure from international anti-corruption laws to act. September 2011.

Produced by: APAC GC Slide 4 Practical Risks & Tips for Risk Control  Gifts & Entertainment – Define government officials – Set thresholds – Focus on lavishness – May differ between Private Bank and Investment Bank – Discourage paying out of pocket – Emphasize importance of adequacy of books and records  Gifts – Prohibit cash – Prohibit facilitation payments  Entertainment – Focus on repetition – Focus on family attendance

Produced by: APAC GC Slide 5 Practical Risks & Tips for Risk Control  PEP Clients – DD, and – Continuous risk assessment needed  Finders, Third Parties & Senior Advisors – DD – Clear contractual terms, and – Continuous risk assessment needed  JVs & Strategic Partnerships – Clear contractual agreement, and – Cooperation on compliance policies needed  Internships & Training Programs – Fair evaluation process needed – Per diems discouraged  Charitable & Political contributions – Threshold based fair evaluation process needed

Produced by: APAC GC Slide 6 Conclusion  Globally, a fast evolving field  Regulatory incentives to pursue/ not to pursue bribery vary  Whistle blowing incentives vary  Enforcement margin is moving from cash bribes to the less obvious  s can bite  Inaccurate books and records bite  Look at the components of the GFIs compliance and control program  Build a culture of zero tolerance Top Down