PREVENTING FINANCIAL CRIME AND SANCTIONS VIOLATIONS AT GLOBALRE OVERSEAS LTD (GRO)

 

GLOBAL RE OVERSEAS Ltd (GRO) is a reinsurance company authorised by the Financial Services Regulation and Supervision Department - Office of the Registrar of International Insurance, having the Commercial Registration No: I 57722. According with the Licence granted by the supervisory authority, the GRO is authorised to carries out reinsurance activity in accordance with the Nevis International Insurance Ordinance Cap 7.07.

The GRO Company, a leading provider of reinsurance products and specialized risk transfer solutions, is firmly committed to ethical business practices. To this end, we maintain rigorous compliance risk frameworks designed to prevent all forms of financial crime and unethical behaviour. These frameworks are integral to our operations and reflect our dedication to integrity and legal compliance across all aspects of our business.

Throughout this document, the terms "company" or "GRO" refer to GLOBAL RE OVERSEAS LTD NEVIS (GRO).

Each employee at GRO company bears personal responsibility for adhering to the standards and guidelines set forth in our Code of Conduct and Ethics. This comprehensive framework is designed not only to ensure legal compliance but also to foster a culture of ethical integrity and responsible behaviour across all levels of the organization.

Code of Conduct and Ethics

The Code of Conduct and Ethics at GRO serves as a foundational document that outlines the ethical principles and professional standards expected of every employee. It covers a broad range of behaviours and decisions, emphasizing respect, fairness, and honesty in all interactions-both internal and external. Employees are expected to uphold these standards diligently and consistently in their daily activities and professional dealings.

Self-Commitments for Responsible Behaviour

In addition to adhering to the Code of Conduct and Ethics, all employees are encouraged to make personal commitments to responsible behaviour. This involves proactively identifying potential ethical dilemmas and taking thoughtful actions to address them. By fostering a proactive approach to ethics, employees contribute to a positive and principled work environment, enhancing the company's reputation and operational success.

Obligation to Act Ethically

Under these guidelines, the GRO employees are obliged to conduct themselves in a manner that is not only compliant with legal standards but also aligns with the highest ethical principles. This includes being transparent in dealings, responsible in the use of company resources, and respectful of the diverse perspectives and backgrounds of colleagues and clients. Employees must be reliable in their responsibilities and duties, ensuring their actions consistently reflect the company’s commitment to ethical excellence.

 

Enforcement and Guidance

To support employees in meeting these obligations, GRO provides continuous education on ethical standards and access to resources for ethical decision-making. Management and specialized compliance teams are also available to offer guidance and address any ethical queries or concerns employees might have. In situations where ethical violations are suspected, employees are required to report these immediately according to established company protocols, reinforcing our collective commitment to integrity.

 

In line with this policy, all GRO employees are expected to refrain from any activities that could potentially harm the Company. They must ensure that all business decisions are made in accordance with applicable legal requirements, supervisory regulations, and internal policies.

Our managers have a special responsibility to integrate compliance as a fundamental component into the business processes. They have a role model function for their staff and the obligation to ensure that all actions within their area of responsibility comply with the law, statutes and internal rules.

Every employee is provided with a copy of the Code of Conduct along with additional guidelines on responsible behaviour. These documents are not only distributed but also thoroughly explained to ensure all employees fully understand their obligations and commitments under these standards.

 

What is our position on preventing Financial Crime and Sanctions Violations?

The Company associates four key compliance risks relating to Financial Crime and Sanctions Violations:

  1. Anti-Bribery and Corruption;
  2. Anti-Money Laundering;
  3. International Trade Controls and Sanctions Violations (ITC);
  4. Fraud.

The GRO Company routinely evaluates and improves the effectiveness of its strategies to mitigate significant compliance risks.

The Company is committed to full compliance with all relevant laws, regulations, and internal policies concerning Financial Crime and Sanctions Violations, which apply to all our legal entities and employees.

 

How do we implement this approach to preventing Financial Crime and Sanctions Violations?

Key compliance risks are addressed through their individual Compliance Risk Frameworks structured around the following four pillars:

  1.  policies, standards and processes;
  2.  training and awareness,
  3.  tools and technology; and
  4.  reinsurance product analyses, investigations and reporting. 

 

Anti-Bribery and Corruption

The Company Boards of Directors of (“the Board”), for each of them, has determined that it is the policy of reinsurance company to:   

  • prohibit and prevent the making or offering of payments to government officials or any other persons in order to obtain or keep business or to obtain some other benefit for the Company or an employee of the Company,
  • prohibit other corrupt practices.

This Anti-Bribery & Corruption Policy (“AB&C Policy”) makes Anti-bribery & Corruption the responsibility of every employee of the Company and requires any of them that detects suspicious activity to report immediately that activity to the Compliance Officer.  

This AB&C Policy is divided into three sections:

  1. For all Employees, a description of bribery and corrupt practices that are prohibited, some “red flag” practices to avoid, and some training information;
  2. for Senior Manager, a description of additional responsibilities and Company obligations; and
  3. for the Compliance Officer(s), a description of his / her special

The GRO Company defines bribery and corruption (bribery) as receiving, accepting or offering a financial or non-financial advantage (for example, gifts or hospitality) by, or to, any person in order to influence them, or another, to perform a duty improperly, or to reward that person for having already done so.   

The Company commitment to preventing bribery and corruption is stated in each Company Code of Conduct: "We conduct business fairly without accepting or offering benefits intended to improperly influence decision-making".  

In short, we prohibit all forms of bribery or corruption.

No employee may directly or indirectly offer or grant bribes to anyone to influence any action.

Examples of practices that are prohibited in the " AB&C Policy " include:

  • facilitation payments (an unauthorised payment to a public official to facilitate a transaction eg to expedite a process or grant a license);
  • giving or receiving cash gifts or cash equivalent gifts (eg gift cards); or
  • giving or receiving any advantage which could improperly influence, or be perceived to improperly influence, a business decision (eg giving or receiving an unauthorized commission - kickback - to an individual).

 

The AB&C Policy Framework is structured around the following four pillars:
   1. Policies, standards and processes
  1. Policies and standards: our "Policy on Financial Crime and Sanctions" and "AB&C Policy" set out our overarching principles, requirements and processes for preventing bribery and corruption. These are complemented as needed with the development and roll-out of related documents. Our policies comply with applicable laws and regulations, including the requirements in the :
  • Anti-Corruption Act n. 5 of 20 April 2023[1] - this act provides the legal framework for the prevention and punishment of corruption activities, under which our policies are aligned;
  • the Whistle-blowers Protection Act, 2023 - we support transparency and accountability, and this act protects individuals who come forward to report unethical practices;
  • the Freedom of Information Act - ensuring our operations maintain a high level of transparency, this act facilitates access to information about our activities;
  • the Integrity in Public Life Act and the Unauthorized Disclosure of Official Information Act - these acts promote integrity in the handling of official information and safeguard against the unauthorized disclosure of sensitive information.

 

    2. Controls and Processes: we have defined controls and processes to address bribery and corruption risks. The receipt and provision of gifts and hospitality subject to the "Global Standard on Anti-Bribery and Corruption"[2], are documented in line with the requirements in our recordkeeping and records management processes. The performance of due diligence on business partners (including clients, customers, joint ventures, and other partners across the Company) assesses if any bribery and corruption risk factors are present and perform enhanced due diligence where one or more risk factors are present which is updated regularly. The four key risk factors are: unusual payments or requests for payment, unusual or unexpected behaviour, lack of transparency, and public official influence.  

 

   2. Training and awareness
  • Mandatory training: employees are required to provide an acknowledgement of global compliance policies including the Code of Conduct and the "Global Standard on Anti-Bribery and Corruption", on an annual basis. Specific Anti-Bribery and Corruption training is rolled out on a global basis at least every 2 years or when material changes have taken place. The Anti-bribery and Corruption training features real cases and business scenarios to demonstrate how controls protect against bribery and corruption risks in practice. There is a defined escalation process with disciplinary action as a consequence of non-completion.
  • Communication and awareness programmes: periodic, risk-based awareness and communication efforts supplements the training initiatives.

    [1] chrome-extension://efaidnbmnnnibpcajpcglclefindmkaj/https://faolex.fao.org/docs/pdf/stk219916.pdf

    [1] ISO 37001 - Anti-bribery management systems

   3. Tools and technology
  • We have deployed the following tool within the Anti-Bribery and Corruption Framework: a mandatory Gifts and Hospitality Register to track and require review of gifts, hospitality, sponsorships, charitable contributions and political contributions above specified thresholds.

 

   4. Investigations and monitoring
  • Investigations: investigations into reported alleged misconduct are a key component of the Compliance procedures. Disciplinary actions eg warnings, suspension or termination, and other consequences eg process enhancements or training, are identified and centrally logged.
  • Monitoring: a designated employee monitors activity including certain issues, incidents, management actions and investigations. The investigation process and overall framework are reviewed by the Company external independent auditors.

 

Anti-Money Laundering Procedures Description

At GRO Company, we recognize the critical importance of implementing effective Anti-Money Laundering (AML) procedures to safeguard our operations from the risks associated with financial crimes. Our comprehensive AML framework is designed to comply with both Nevisian legislation and international FATF - AML standards, ensuring that all aspects of our financial operations uphold the highest levels of integrity and security., adopted and implemented the Anti-Money Laundering (ALM) Policy and Procedures.

The Company, as a legal entity, will actively prevent and take measures to guard against being used as a medium for money laundering activities and terrorism financing activities and any other activity that facilitates money laundering or the funding of terrorist or criminal activities.  

Key Elements of Our AML Procedures
  1. Customer Due Diligence (CDD) and Know Your Customer (KYC)
  • Risk Assessment: Before establishing any new client relationship, we conduct a thorough risk assessment to determine the level of AML risk associated with the prospective client. This involves analysing the nature of the client's business activities, source of funds, geographical location, and any potential exposure to high-risk factors.
  • Identification and Verification: We require all new clients to provide valid identification documents as part of our KYC procedures. This includes verifying the client’s identity, legal status, and the identities of beneficial owners and controlling parties.
  • Ongoing Monitoring: Client profiles are continuously monitored for any unusual or suspicious transactions that deviate from their typical business patterns. This monitoring is crucial for early detection of potential money laundering activities.
  1. Employee Training and Awareness
  • Regular Training: All employees, especially those in client-facing roles or involved in transaction processing, receive regular training on AML regulations, emerging trends in financial crimes, and internal AML procedures. This training ensures that staff remain vigilant and informed about how to identify and handle potential money laundering threats.
  • Awareness Programs: The company maintains ongoing awareness campaigns to keep the importance of AML efforts top of mind throughout the organization.
  1. Compliance and Reporting Mechanisms
  • Suspicious Activity Reports (SARs): If money laundering is suspected, employees are required to file SARs with the relevant authorities. This process is confidential and protected by law to ensure that employees can report suspicious activities without fear of reprisal.
  • Record Keeping: All financial transactions are recorded in detail, maintaining comprehensive records for a minimum period as mandated by law. These records enable thorough audits and reviews, facilitating compliance with investigative and regulatory requests.
  1. Internal Controls and Audit
  • Independent Audits: Regular independent audits are conducted to assess the effectiveness of our AML strategies. These audits help identify any weaknesses or areas for improvement in our AML procedures.
  • Internal Controls: Robust internal controls are in place to prevent and detect any attempts at money laundering through our operations. This includes segregation of duties, transaction limits, and rigorous authorization processes.
  1. Regulatory Compliance
  • Adherence to Laws: We strictly adhere to the laws and regulations outlined in the Nevis Anti-Money Laundering Regulations and the relevant international standards set by bodies such as the Financial Action Task Force (FATF).
  • Collaboration with Regulators: We maintain an open and cooperative relationship with regulatory authorities to ensure that we are always aligned with the latest legal requirements and best practices in AML compliance.

 

Having in consideration this aspects, the GRO Chief Compliance Officer, in coordination with Group Executive Committee (Group EC) under the leadership of the company CEO and in consultation with the Board of directors, will act as the Money Laundering Reporting Officer (MLRO) in title to coordinate the money laundering policies and procedures of the business for the GRO.

All staff that meet or contact clients and potential clients of this company are required to acknowledge that the policy and procedures have been read and understood before meeting or contacting clients.

 

ANTI-MONEY LAUNDERING GRO COMPANY’S PROCEDURES

 

CUSTOMER DUE DILIGENCE

The Company has established a Know-Your-Client (KYC) policy to ensure that the identities of all new and existing clients are verified to a reasonable level of certainty. This will include all individual clients, all directors and shareholders with a stake holding of 25% or more of client companies, all partners of client partnerships, and every board member of client.    

Identities will be verified either online or face-to face or by a combination of both.

The following documentation may be presented by the prospective client, partner or third party:

  • Any government issued document that provides the date of birth, NI or Tax number or other such government data identifier.
  • Other forms of identity confirmation, such as evidence of a long-standing relationship with the client, or a letter of assurance from independent and reliable persons or organisations, who have dealt with the client for some time, may also provide a reasonable level of certainty.
  • Registration certificates of the juristic entity.
  • Passport or other acceptable identification documents of shareholders and the directors of the entity.
  • Proof of bank accounts of the juristic entity.

If the Company employee fails to verify the identity of a client with reasonable certainty it will not establish a business relationship or proceed with the transaction. If a potential or existing client either refuses to provide the information described above when requested, or appears to have intentionally provided misleading information, the Company employee shall refuse to commence a business relationship or proceed with the transaction requested.  

   1. RISK ASSESSMENT AND ONGOING MONITORING

The Company shall take a risk-based approach in monitoring the financial activities of its clients.

The Company employee/ will actively not accept high-risk clients that are identified as follows:

  • Clients with businesses that handle large amount of cash (i.e. involving €15,000 euros or more per transaction, or the sterling equivalent) or complex unusually large transactions.
  • Clients with larger one-off transactions, or a number of transactions carried out by the same customer within a short space of time.
  • Clients with complex business ownership structures with the potential to conceal underlying beneficiaries.
  • Clients based in or conducting business in or through, a high-risk jurisdiction, or a jurisdiction with known higher levels of corruption, organised crime or drug production/distribution.
  • Situations where the source of funds cannot be easily verified.
  • Unusual patterns of transactions that have no apparent economic or visible lawful purpose.
  • Money sent to or received from areas known to have high levels of criminality or terrorist activity.
In this respect, the Company will not carry out contractual activities in the fallowing jurisdictions, or having or developing contractual activities with clients that came from these:

SAINT CHRISTOPHER and NEVIS

  
 1.   Islamic Republic of Afghanistan

2.   Cuba

3.   Democratic People’s Republic of Korea (North Korea -DPKR)

4.   Russian Federation

5.   Republic of Belarus

6.   Jurisdictions affected by the Balkans OFAC Sanctions

7.   Islamic Republic of Iran

8.   Somalia

9.   Venezuela

10.   Yemen

11.   Syria

12.   Ukraine

13.   Sudan

14.   Myanmar

The Company through their employee/collaborator/brokers/business partners will conduct ongoing monitoring of business relationships with customers, to ensure that the documents, date or information held evidencing the customer’s identity are kept up to date.

The following are examples of changes in a client’s situation that may be considered suspicious:

  • A sudden increase in business from an existing customer;
  • Uncharacteristic transactions which are not in keeping with the customer’s known activities;
  • Peaks of activity at particular locations or at particular times;
  • Unfamiliar or untypical types of customer or transaction.

Whenever there is cause for suspicion, the client will be asked to identify and verify the source or destination of the transactions, whether they be individuals or company beneficial owners.

No action need be taken if there is no cause for suspicion.

 

   2. INTERNAL CONTROLS AND COMMUNICATION

Internal controls and Communication are not applicable as the business only has one person involved in client compliance.

 

   3. MONITORING AND MANAGING COMPLIANCE

The Money Laundering Reporting Officer (MLRO), designated by the Group Executive Committee (Group EC) under the leadership of the Group CEO, will regularly monitor the following procedures to ensure they are being carried out in accordance with the AML policies and procedures of the business:

  • client identity verification;
  • reporting suspicious transactions;
  • record keeping.

The MLRO will also monitor any developments in the Money Laundering Regulations (MLR) and the requirements of the MLR supervisory body. Changes will be made to the AML policies and procedures of the business when appropriate to ensure compliance.

 

   4. SUSPICIOUS ACTIVITY REPORTING

A Suspicious Activity Report (SAR) will be made to the relevant authority as soon as the knowledge or suspicion that criminal proceeds exist arises.

The MLRO will be responsible for deciding whether or not the suspicion of illegal activity is great enough to justify the submission of a SAR.

 

   5. RECORD-KEEPING

Records of all identity checks will be maintained for up to 5 years after the termination of the business relationship or 5 years from the date when the transaction was completed GRO will ensure that all documents, data or information held in evidence of customer identity are kept up to date.

All records will be handled in confidence, stored securely, and will be capable of being retrieved without undue delay.

 

   6. TRAINING

The training of staff is not applicable as the Company has only one employee involved in ML compliance who is also the MLRO.  

All affected employees are provided with training that explains the concept of money laundering and any regulation which may affect such staff.

All affected employees should be trained on their responsibilities in relation to money laundering transactions.

 

International Trade Controls and Sanctions Violations (ITC)

The GRO Company adheres to the ITC laws and regulations that it considers to be applicable to the legal entity and its employees.

The Company also has policies and procedures that may be more stringent than applicable laws and regulations to ensure that certain business activities comply globally with sanctions laws, rules and regulations imposed by the United Nations, the United States, the European Union, United Kingdom, Switzerland and possibly other country-specific or international sanctions.

For this purpose, a designated person, for each company, follows the latest aspects in this respect and update the company's internal procedures.

 

Fraud

The GRO Company is committed to preventing, detecting and responding to fraud. We ensure the highest standards of honesty and integrity in order to avoid any form of fraud. Having the fallowing procedures implemented into the companies the "Policy on Financial Crime and Sanctions " and the "Standard on Anti-Fraud" we are able to detect and respond to fraudulent activities in order to protect the Company and its employees against losses, legal and reputational damage, substantial fines and/or other disciplinary actions as a result of fraudulent activities.  

We define fraud as an intentional deception to secure unfair or unlawful gain, or to deprive a victim of a legal right. Fraud can be internal (committed by employees) or external (committed by a party outside of the Company) or a combination of internal and external.

The Company has implemented a Fraud Compliance Framework and our approach is also defined in the Code of Conduct.