The Bank actively promotes the safety and soundness of its operations through a compliance system that fully adheres to banking laws, rules and regulations and to maintain an environment that is governed by high standards and best practices of good corporate governance. This is achieved primarily through the formulation of policies and procedures, an organizational structure and an effective compliance program that will support the bank’s compliance system.

The Global Compliance Group which reports directly to the Board Audit and Compliance Committee is primarily responsible for promoting compliance with the laws and regulations of the different jurisdictions, corporate policies and procedures and international best practices.

The Chief Compliance Officer has direct responsibility for the effective implementation and management of the enterprise compliance system covering the Parent Bank, its subsidiaries and affiliates. To further strengthen good corporate governance, the Board of Directors appointed the Chief Compliance Officer as the Corporate Governance Executive tasked to assist the Board and the Corporate Governance/Nomination/Remuneration Committee in the discharge of their corporate governance oversight functions.

Global Compliance Group continues to evolve the bank’s Compliance System with the complement of five major divisions, namely: Global AML Compliance Division, Regulatory Compliance Division, Business Vehicle Management Compliance Division, Global Compliance Testing Review Division and the newly upgraded Corporate Governance Division. The new division provides support to the Corporate Governance/Nomination/Remuneration Committee and the Board Related Party Transaction Committee thru the Chief Compliance Officer as the designated Corporate Governance Executive.

The Bank’s existing Compliance Program defines the seven (7) key elements of an effective compliance framework. With a proactive Board and executive level oversight, effective compliance organizational structure, standardized policies and procedures across all businesses, periodic monitoring and assessment, robust MIS and compliance reporting, comprehensive compliance and AML awareness training and independent compliance testing reviews. The Compliance Program also incorporates the new policies, laws and regulations and enhancements to corporate standards of which Philippine National Bank, as the Parent Bank, its local and foreign subsidiaries and affiliates are required to be fully aware of the Compliance Program has been implemented consistently in the various bank units, branches and business vehicle entities.

The Bank’s AML/CFT Policy Guidelines and Money Laundering and Terrorist Financing Prevention Manuals are two major manuals approved by the Board in December 2013. The revised AML/CFT Manuals has incorporated FATCA compliance in preparation for the US regulatory reportorial requirements effective 2015. The bank is fully committed to adhere to existing and new AML laws, rules, regulations, and implementing guidelines issued by both Philippine and foreign regulators.

The bank has updated policies and procedures embracing the compliance framework, the corporate governance guidelines and the AML Risk Rating System issued by Bangko Sentral ng Pilipinas and foreign regulators on AML/CFT as well as FATCA laws and regulations. With a comprehensive compliance system effectively implemented enterprise-wide, there has been no material deviation noted by the Chief Compliance Officer.