商业银行合规风险管理指引-英文版

8/8商业银行合规风险管理指引-英文版GuidelinesfortheComplianceRiskManagementof

CommercialBanks

October25,2006

ChapterIGeneralProvisions

Article1Forthepurposeofstrengtheningthecomplianceriskmanagementofcommercialbanksandmaintainingcommercialbanksoperatingsafelyandstably,theseGuidelinesareinstitutedinaccordancewiththeMeasuresofthePeople'sRepublicofChinaontheSupervisionandAdministrationoftheBankingSectorandtheLawofthePeople'sRepublicofChinaonCommercialBanks.

Article2AChinese-fundedcommercialbank,foreignsole-capitalbank,jointventurebankorbranchofaforeignbankestablishedwithintheterritoryofthePeople'sRepublicofChinashallbegovernedbytheseGuidelines.

Apolicybank,financialassetmanagementcompany,urbancreditcooperative,ruralcreditcooperative,trustinvestmentcompany,enterprisegroupfinancialcompany,financialleasecompany,automobilefinancialcompany,currencybrokeragecompany,postalsavingsinstitutionoranyotherfinancialinstitutionestablishedwithintheterritoryofthePeople'sRepublicofChinaandapprovedbytheChinaBankingRegulatoryCommissionshallbegovernedbytheseGuidelines.

Article3Theterm"laws,rulesandstandards"asmentionedintheseGuidelinesreferstothelaws,administrativeregulations,departmentalrulesaswellasotherregulatorydocuments,businessrulesandindustrialstandardsofself-disciplinaryorganizations,behavioralcodeandoccupationethnics.

Theterm"compliance"asmentionedintheseGuidelinesreferstotheconsistencebetweenthebusinessoperationsofcommercialbanksandtherelatedlaws,rulesandstandards.

Theterm"compliancerisks"asmentionedintheseGuidelinesreferstotherisksofacommercialbanksufferingfromlegalsanction,supervisionpunishment,greatfinanciallossesorreputationlosseswhenitviolatesanylaw,ruleorstandard.

Theterm"compliancemanagementdepartment"asmentionedintheseGuidelinesreferstoanydepartment,teamorpositionthatespeciallyestablishedwithinacommercialbanktotakechargeofcompliancemanagement.

Article4Compliancemanagementisacoreriskmanagementofcommercialbanks.Acommercialbankshalltakeoverallconsiderationoftherelevancebetweencompliancerisksandcreditrisks,marketrisks,operationrisksandotherriskssoastoensuretheconsistencebetweenallthepoliciesandformalitiesforriskmanagement.

Article5Theobjectiveofcomplianceriskmanagementofacommercialbankistoestablishandimproveaframeworkofcomplianceriskmanagementsoastorealizetheeffectiverecognitionandmanagementofcompliancerisks,promotetheestablishmentofanoverallsystemofriskmanagementandensureanoperationbasedoncomplianceoflawsandregulations.

Article6Acommercialbankshallenhancetheestablishmentofcompliancecultureandincorporatetheestablishmentofcompliancecultureintothewholeprocessofestablishingitsenterpriseculture.

Thecomplianceisthejointresponsibilityofallstaffmembersofacommercialbankanditsseniormanagementshalltakealeadintheexecutionthereof.

Theboardofdirectorsandseniormanagementofacommercialbankshalldeterminethekeynoteofcompliance,setupsuchcompliancephilosophiesasvoluntarycompliancebyallitsstaffmembersandvaluecreationsubjecttocompliance,promotetheoccupationalethnicsandvalueconceptofbeingcreditworthyanduprightwithinthebank,elevatethecomplianceconsciousnessofallitsstaffmembersandpromoteaneffectiveinteractionbetweenself-complianceofthecommercialbankandexternalsupervision.

Article7ChinaBankingRegulatoryCommissionshallimplementsupervisionoverthecomplianceriskmanagementofcommercialbanks,examineandevaluatetheeffectivenessofcomplianceriskmanagementofcommercialbanks.

ChapterIIComplianceManagementFunctionsandDutiesofthe

BoardofDirectors,

BoardofSupervisorsandSeniorManagement

Article8Acommercialbankshallestablishasystemofcompliancemanagementinlinewithitsbusinessscope,organizationalstructureandbusinessscalethereof.

Thefollowingbasicelementsshallbeincludedinthecompliancemanagementsystem:

(1)Compliancepolicies;

(2)Organizationalstructureandresourcesofthecompliancemanagementdepartment;

(3)Plansofcomplianceriskmanagement;

(4)Recognitionofandmanagementformalitiesforcompliancerisks;and

(5)Trainingandeducationsystemofcompliance.

Article9Thecompliancepoliciesofacommercialbankshallspecifythebasicprinciplesthatallitsstaffmembersandoperationallinesshallcomplywithandthesignificantformalitiesforrecognizingandmanagingcompliancerisksaswellasstipulatetherelatedmattersinrespectofthefunctionsofcompliancemanagement,whichshallatleastinclude:

(1)Functionsanddutiesofthecompliancemanagementdepartment;

(2)Powerlimitofthecompliancemanagementdepartment,includingtherighttocommunicatewithanybankstaffmemberandobtainanyrecordorarchivalfileasrequiredinitsdutyperformance;

(3)Functionsanddutiesofcompliancemanagementofrelatedpersons-in-charge;

(4)Allthemeasuresthatguaranteetheindependencyofthepersons-in-chargeofcomplianceaswellasthecompliancemanagementdepartment,includingaguarantythatthereisnointerestconflictbetweenthefunctionsanddutiesofcompliancemanagementofthepersons-in-chargeandrelatedpersonsthatengageinthecompliancemanagementandtheotherfunctionsanddutiesthereof;

(5)Thecoordinationrelationshipbetweenthecompliancemanagementdepartmentandtheriskmanagementdepartment,theinternalauditingdepartmentaswellasotherdepartments;and

(6)Theestablishingofprinciplesofthecompliancemanagementdepartmentsforthebusinesslinesaswellasthebranchesandsub-branches.

Article10Theboardofdirectorsshallundertakefinalresponsibilitiesofcomplianceinthebusinessoperationofacommercialbankandperformthefollowingfunctionsanddutiesofcompliancemanagement:

(1)Examiningandapprovingofthecompliancepoliciesofthecommercialbankandsupervisingitsimplementationofthecompliancepolicies;

(2)Examiningandapprovingthereportsoncomplianceriskmanagementsubmittedbytheseniormanagementofthecommercialbankandappraisingtheeffectivenessofcomplianceriskmanagementofits

commercialbanksoastotimelyandeffectivelyresolvethecompliancedefects;

(3)Authorizingtheriskmanagementcommission,auditingcommissionorspeciallyestablishedcompliancemanagementcommissionundertheboardofdirectorstoconductdailysupervisionoverthecomplianceriskmanagementofcommercialbankthereof;and

(4)Supervisinganyotherfunctionsanddutiesofcompliancemanagementasstipulatedintheconstitutionofitscommercialbank.

Article11Thecommissionundertheboardofdirectorsofacommercialbankwhichisresponsibleforthedailysupervisionofcomplianceriskmanagementshall,bymeansofholdingindividualtalkswiththerelatedpersons-in-chargeofcomplianceorbyanyothereffectivemeans,knowabouttheimplementationofthecompliancepoliciesandexistingproblems,timelyputforwardcorrespondingopinionsandsuggestionstotheboardofdirectorsortheseniormanagement,superviseandguaranteetoimplementthecompliancepolicieseffectively.

Article12Theboardofsupervisorsshallsupervisetheperformanceoffunctionsanddutiesofcompliancemanagementbytheboardofdirectorsandseniormanagement.

Article13Theseniormanagementshallmanagethecompliancerisksofitscommercialbankeffectivelyandperformthefunctionsanddutiesofcompliancemanagementasfollows:

(1)Institutingthecompliancepoliciesinwrittenformandrevisingthecompliancepoliciesinaccordancewiththestatusofcomplianceriskmanagementaswellastherelatedlaws,rulesandstandardsatanappropriatetime,reportingthemtotheboardofdirectorsfordeliberationandthendistributingthemtoallitsstaffmembersafterhavingbeenapproved;

(2)Carryingoutthecompliancepolicies,guaranteeingthatpropermeasuresforcorrectionbetimelyadoptedwhenanyrule-breakingeventoccursandinvestigatingthecorrespondingresponsibilitiesofviolators;

(3)Designatingthepersons-in-chargeofcomplianceandguaranteeingtheirindependency;

(4)Specifyingthecompliancemanagementdepartmentandtheirorganizationalstructure,arrangingenoughandproperpersonnelofcompliancemanagementforitsperformanceoffunctionsandduties,andensuringtheindependencyofthecompliancemanagementdepartment;

(5)Recognizingthesignificantcompliancerisksthatthecommercialbankisfacedwith,examiningandapprovingtheplansofcomplianceriskmanagementandensuringtheworkcoordinationbetweenthecompliancemanagementdepartmentandtheriskmanagementdepartment,theinternalauditingdepartmentandotherrelevantdepartments;

(6)Submittingtotheboardofdirectorsareportofcomplianceriskmanagementonanannualbasis,whichshallpresentsufficientproofandassistthemembersoftheboardofdirectorstojudgetheeffectivenessofcomplianceriskmanagementbyseniormanagers;

(7)Reportingtotheboardofdirectorsorthecommissionsthereunderandtheboardofsupervisorsanysignificantrule-breakingeventtimely;and

(8)Performinganyotherfunctionsanddutiesasprescribedbythecompliancepolicies.

Article14Aperson-in-chargeofcomplianceshallcoordinatetherecognitionandmanagementofcompliancerisksofthecommercialbank,supervisethecompliancemanagementdepartmenttoperformitsfunctionsanddutiesinaccordancewiththerelatedplansofcomplianceriskmanagementandsubmittotheseniormanagementanappraisalreportaboutcompliancerisksperiodically.Aperson-in-chargeofcompliancemustnottakechargeofthemanagementofanybusinesslines.

Anappraisalreportoncompliancerisksshallincludebutbenotlimitedtothefollowingcontents:anychange

ofcomplianceriskwithinthereportingperiod,therecognitionofanyrule-breakingeventorcompliancedefectandthemeasuresforcorrectionthathavebeenadoptedorareadvisedtobeadopted.

Article15Acommercialbankshallsetupanexaminationsystemofcomplianceperformanceofmanagers.Theperformanceexaminationofacommercialbankshallembodythevalueconceptofpromotingcomplianceandpunishinganyrule-breakingbehavior.

Article16Acommercialbankshallestablishaneffectivecomplianceaccountabilitysystem,strictlycarryouttheconfirmationandinvestigationofresponsibilitiesincurredfromanyrule-breakingbehavior,adopteffectivemeasuresforcorrection,improvetheformalitiesformanagementintime,revisetherelatedpolicies,formalitiesandoperationalguidelinesatapropertime.

Article17Acommercialbankshallestablishacreditaccusationsystem,encourageitsstaffmemberstotipofftheillegalacts,theactinviolationofprofessionalintegrityorthesuspiciousacts,andfullyprotectanytip-offreporter.

ChapterIIIFunctionsandDutiesoftheComplianceManagement

Department

Article18Thecompliancemanagementdepartmentshall,undertheguidanceofitsperson-in-charge,assisttheseniormanagementtoeffectivelyrecognizeandmanagethecompliancerisks,ifitscommercialbankisfacedwith,andperformthefollowingfundamentalfunctionsandduties:

(1)Payingcontinuousattentiontothelatestdevelopmentoftherelatedlaws,rulesandstandards,correctlyunderstandingtheprovisionsandspiritoftherelatedlaws,rulesandstandards,accuratelyunderstandingtheimpactoftherelatedlaws,rulesandstandardsonthebusinessoperationofthecommercialbank,andputtingforwardcorrespondingsuggestionsoncompliancetoitsseniormanagement;

(2)Institutingandcarryingouttheplansofcompliancemanagementwhichfocusonrisks,includingtheimplementationandappraisalofspecialpoliciesandformalities,appraisaloncompliancerisks,compliancetesting,compliancetrainingandeducation,etc..

(3)Examiningandappraisingthecomplianceofallpolicies,formalitiesandoperationalguidelinesofthecommercialbank,organizing,coordinatingandsupervisingandurgingallbusinesslinesandtheinternalcontroldepartmenttosortofandrevisetherelatedpolicies,formalitiesandoperationalguidelines,andguaranteeingthatallpolicies,formalitiesandoperationalguidelinescomplywiththerequirementsoftherelatedlaws,rulesandstandards;

(4)Helpingtherelatedtrainingandeducationdepartmentstoimplementcompliancetrainings,includingthecompliancetrainingsofnewstaffmembersaswellastheperiodiccompliancetrainingsofallitsstaffmembers,andfunctioningastheinternalcommunicationdepartmentforstaffmemberstoconsulttherelatedmattersofcompliance;

(5)Organizingtheinstitutionoftheformalitiesforcompliancemanagementaswellassuchcomplianceguidelinesascompliancebookletsandbehavioralcodeofitsstaffmembers,appraisingtheformalitiesforcompliancemanagementandtheappropriatenessofcomplianceguidelines,offeringguidancetoitsstaffmembersonproperimplementationofrelatedlaws,rulesandstandards;

(6)Recognizingandappraisingthecompliancerisksinrelationtothebusinessoperationofthecommercialbankactively,includingconductingthenecessaryexaminationandtestingforthedevelopmentofnewproductsandservices,recognizingandappraisinganycomplianceriskarisingfromthedevelopmentofanynewbusinessmode,establishmentofnewcustomers'networksorchangeofnatureofthebank'srelationship

withitscustomers.

(7)Collectingandchoosingthedatathatmayindicatepotentialcomplianceproblems,suchasincreasingindexofcustomers'complaintsandabnormaltransactionsetc.,establishingasupervisoryindexofcompliancerisks,anddeterminingthepreferentialsequenceofcomplianceriskstobeconsideredinaccordancewiththepossibilityandimpactofcomplianceriskoccurrencemeasuredbytheriskmatrix;

(8)Carryingoutenoughandrepresentativeappraisalandtestingofcompliancerisks,includingtestingthroughon-the-spotexaminationonthecomplianceofallpoliciesandformalities,inquiringtheexistingdefectsinthepoliciesandformalities,andmakingcorrespondinginvestigation.Theresultofacompliancetestingshallbereportedinaccordancewiththeformalitiesforinternalriskmanagementofcommercialbanksthroughthereportinglineofcomplianceriskssoastoensurethatallpoliciesandformalitiescomplywiththerequirementsofrelatedlaws,rulesandstandards;and

(9)Keepingdailycontactwithitssupervisoryorgan,andtracingandappraisingtheimplementationofsupervisoryopinionsandsupervisoryrequirements.

Article19Acommercialbankshallallocatetheresourcesforeffectivelyperformingthecompliancemanagementforitscompliancemanagementdepartment.Apersonwhoengagesincompliancemanagementshallhavethequalification,experience,expertiseandindividualqualitycorrespondingtohis/herfunctionsandduties.

Acommercialbankshalloffersystematicandprofessionaltechnicaltrainingstoitspersonnelwhoengageincompliancemanagement,especiallytechnicaltrainingsinsuchaspectsascorrectmasterthelatestdevelopmentoftherelatedlaws,rulesandstandardsaswellastheirimpactsonthebusinessoperationofthecommercialbank.

Article20Thepersons-in-chargeofallbusinesslinesorbranchesorsub-branchesofacommercialbankshalltakeprimaryresponsibilityforthebusinessoperationoftheirlinesordepartments.

Acommercialbankshall,inaccordancewiththebusinessscopeofitslinesofbusinessandthebranchesandsub-branchesaswellastheoperationalscale,setupthecorrespondingcompliancemanagementdepartments.Thecompliancemanagementdepartmentsofallbusinesslinesandthebranchesandsub-branchesofacommercialbankshall,inaccordancewiththeformalitiesforcompliancemanagement,activelyrecognizeandmanagethecompliancerisksandreporttherelatedinformationintimethroughthereportinglinesinaccordancewiththereportingrequirementsofcompliancerisks.

Article21Acommercialbankshallestablishacoordinationmechanismbetweenthecompliancemanagementdepartmentandtheriskmanagementdepartmentinrespectofcompliancemanagement.

Article22Acommercialbankshallseparatethefunctionsanddutiesofcompliancemanagementfromthefunctionofinternalauditing,andtheperformanceofcompliancemanagementshallbesubjecttoindependentappraisalbytheinternalauditingdepartmentperiodically.

Theinternalauditingdepartmentshallberesponsiblefortheauditingoncomplianceamongallbusinessoperationsofthecommercialbank.Aninternalauditingplanshallincludeanauditingappraisalontheappropriatenessandeffectivenessofthefunctionsanddutiesofcompliancemanagement.Anappraisaloncompliancerisksshallbeincludedinthemeasuresforriskappraisalintheinternalauditing.

Acommercialbankshallspecifythefunctionsanddutiesofcomplianceriskappraisalandcompliancetestingbetweenthecompliancemanagementdepartmentandtheinternalauditingdepartment.Theinternalauditingdepartmentshallnotifytheresultofcomplianceauditingtotherelatedpersons-in-chargeofcompliance.Article23Acommercialbankshallspecifyitsreportinglinesofcompliancerisksaswellastheelements,

formatandfrequencyofareportoncompliancerisks.

Article24Theoverseasbranchesorsub-branchesoraffiliatedinstitutionsofacommercialbankshallstrengthenthefunctionsofcompliancemanagement.Theorganizationalstructureofthecompliancemanagementfunctionsshallaccordwiththelocallawsandrequirementsofsupervision.

Article25Theboardofdirectorsandseniormanagementofacommercialbankshallguaranteethattheoutsourcingoftheworkofthecompliancemanagementdepartmentshallcomplywithlocallaws,rulesandstandards.

Acommercialbankshallguaranteethatanyoutsourcingworkofthecompliancemanagementdepartmentbeunderapropersupervisionofitsperson-in-chargeofcomplianceandwillnothamperaneffectivesupervisionbyChinaBankingRegulatoryCommission.

ChapterIVSupervisionoverComplianceRisks

Article26Acommercialbankshallreportitsinternalregulationssuchascompliancepolicies,formalitiesforcompliancemanagementaswellascomplianceguidelinestoChinaBankingRegu