Economic crime policy statement

We have no tolerance for facilitating or appearing to facilitate any form of economic crime and must operate to avoid breaching economic crime laws and/or regulations prescribed by our policies. We recognise the damaging impact that economic crime has on our customers, communities and wider society, and we understand that tackling economic crime is the right thing to do. We're committed to fulfilling our legal and regulatory obligations through the application of a risk-based approach to deter, detect, prevent and report economic crime.

We expect compliance with economic crime laws and regulations that apply to our business and the transactions we undertake, whether by our employees, customers, supply chain, relevant third parties or associated persons. We are committed to conducting our activities with integrity, and honouring our regulatory, ethical and social responsibilities. This commitment is defined by our senior management and supported by the Board, which holds ultimate accountability for ensuring that we are compliant and operating within our risk appetite.

Our economic crime framework includes a policy and standards that apply to all business areas, employees, our supply chain and associated persons. The policies and standards are informed by applicable laws, regulations, guidance and industry best practices. Minimum control requirements that facilitate risk-based, effective and efficient risk management are set in the key areas of anti-money laundering and counter-terrorist financing (AML/CTF), proliferation financing, sanctions, internal theft and fraud, external fraud and anti-bribery and corruption (ABC) (including anti-facilitation of tax evasion). 

The requirements include, but are not limited to:

• Definitions of the responsibilities and accountabilities of our employees, including senior managers, and the escalation routes available under governance;
• Business-wide risk assessments that establish our overall economic crime risks, and assess the effectiveness of the systems and controls applied to mitigate them;
• Initial and ongoing due diligence, risk assessment and screening applied to our business relationships, including employees, customers, third parties and its associated persons;
• Enhanced due diligence controls where a relationship presents a higher risk such as, but not limited to, higher risk countries or Politically Exposed Persons (PEPs);
• Processes (including transaction monitoring) to internally detect, investigate and report suspicious activity;
• Processes to ensure that mandatory funds transfer information is included in electronic payment messages;
• Screening of payments and parties to identify and escalate potential matches to a relevant sanctions regime;
• Record keeping, management information and governance (including escalation) requirements;
• External engagement with competent authorities and law enforcement agencies;
• Training requirements (including specialised and role-based for certain business areas), in relation to money laundering, countering terrorist financing, bribery and corruption (including tax evasion), financial sanctions, fraud (internal and external), market abuse and insider dealing, conduct risk and whistleblowing;
• Second and third line of defence testing of the economic crime controls, to ensure appropriate assurance of an effective compliance programme;
• External engagement with Public-Private Partnerships including the Joint Money Laundering Intelligence Taskforce (JMLIT) and the Joint Fraud Taskforce (JFT), and with industry trade bodies such as UK Finance and the Building Societies Association (BSA);
• Regular review of our Economic Crime Policy and supporting Minimum Control Standards to capture any changes in risk.

We evaluate and monitor economic crime threats and risks and modify our controls in response to them, including investment in our economic crime management capabilities.

We have no tolerance for relationships, and/or activities which pose a high money laundering, terrorist financing or proliferation financing risk.

We monitor payments and transactions, and where necessary we will stop payments, close accounts and relationships where activity is suspicious or cannot be appropriately explained. Potential relationships will be declined, and existing relationships terminated (where lawful to do so), where the level of economic crime risk is outside of our risk appetite.

In line with our UK regulatory and legal obligations, our Director of Economic Crime Risk and Compliance also fulfils the role of the Money Laundering Reporting Officer (MLRO). The Director is the owner of the Economic Crime Policy and its supporting Minimum Control Standards, and they support the business with appropriate guidance and strategic leadership. As MLRO, the Director is responsible for the oversight of our compliance with relevant legislation, regulations, rules and industry guidance.

The MLRO reports to the Chief Risk Officer (a member of the Executive Committee) and they hold delegated responsibilities within the FCA’s Senior Management Arrangements for countering the risk that the firm is used to further economic crime. The MLRO delivers an annual compliance report to the Board.

We’ll comply with all applicable sanctions, laws and regulations. We have no appetite for relationships, and/or activities that violate UK HMT, UN, EU, OFAC sanctions obligations. These regimes currently include those of the United Nations (UN), the United Kingdom (UK), the European Union (EU) and the United States of America (US).

Our policy and supporting minimum control standards prohibit relationships, business activity and the remittance or acceptance of unlicensed payments, directly or indirectly involving sanctioned individuals, entities or sanctioned countries, territories and their governments. In compliance with our regulatory requirements and our policy, we may be required from time to time to reject payments, freeze assets or refuse to provide services.

We may process payments under licence, but these may incur delays or subsequently be rejected. We may refuse to process certain payments, even where permissions or licences exist within applicable law or regulation or where these payments fall outside of our risk appetite or the risk appetite of our clearing partner. We accept no liability for losses incurred on such occasions.

We are committed to protecting our customers from fraud. We want to ensure our customers can transact safely and without fear. We have a significant management focus on fraud prevention. Victims are given support through the duration of the fraud claim process, and this considers any vulnerability needs. We have invested in technology, with a range of systems to support the screening and monitoring of our customers and their behaviour to prevent and detect fraud.

We tolerate some financial loss from external fraud, however we aim to minimise fraud against customers and limit our exposure to fraud perpetrators, balancing these goals against delivering frictionless customer service.

We have a no tolerance approach for internal fraud or theft by associated persons (inc. employees and third parties).

We recognise the societal and reputational damage caused by bribery and corruption, and the consequences to individuals and organisations that fail to prevent bribery. Tax evasion is damaging to the government, businesses and societies where it occurs.

We have no tolerance for bribery and corruption by our customers, and associated persons (inc. employees and third parties), and no tolerance for our associated persons (inc. employees and third parties) facilitating or appearing to facilitate tax evasion. We are committed to acting professionally, fairly and with integrity in all our business dealings and relationships. A whistleblowing process (also known as “Speak Up”) is available to employees and associated persons, to report known or suspected misconduct, and to be able to do so anonymously. Potential acts of bribery, corruption or the facilitation of tax evasion are subject to investigation and we’ll co-operate fully with regulators and law enforcement.

We have a framework which prohibits actions that can amount to bribery and corruption. This includes requesting, accepting or receiving any benefit as an incentive, favour or inducement for inappropriately performing a function or activity. We also prohibit offering, promising or giving any benefit (such as money, gifts and hospitality) or an advantage to another person or entity as an incentive, favour or inducement for improper performance of a function or activity. Or, in the case of a public official, to use their public office-related influence to obtain or retain a business advantage.

Supply chain relationships are managed to ensure that they have the equivalent of, or adhere to, our anti-bribery and corruption and anti-tax evasion standards. We subject third party relationships to risk-based controls, including risk assessment, due diligence, screening, contract clauses, ongoing monitoring and periodic or event-based reviews. This includes the use of contractual clauses to compel compliance. We prohibit our employees and our associated persons (where they act for or on behalf of Nationwide) from facilitating tax evasion. We also assess the risks of bribery, corruption and tax evasion in any joint venture, mergers and/or acquisitions.

Last updated: August 2024