MasterCard 2015 Annual Report Download - page 19

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Government Regulation
General. Government regulation impacts key aspects of our business. We are subject to regulations that affect the payments
industry in the many countries in which our cards and payment devices are used. See “Risk Factors” in Part I, Item 1A for more
detail and examples.
Interchange Fees. Interchange fees associated with four-party payments systems like ours are being reviewed or challenged in
various jurisdictions around the world via legislation to regulate interchange fees, competition-related regulatory proceedings,
central bank regulation and litigation. For more detail, see our risk factors in “Risk Factors-Payments System Legal and Regulatory
Challenges” in Part I, Item 1A. Also see Note 18 (Legal and Regulatory Proceedings) to the consolidated financial statements
included in Part II, Item 8.
Payments System Regulation. Regulators in several countries around the world either have, or are seeking to establish, authority
to regulate certain aspects of the payments systems in their countries. Such authority could result in regulation of various aspects
of our business. Additionally, we are or may be subject to regulations related to our role in the financial industry and our
relationship with our financial institution customers. For example, certain of our operations are periodically reviewed by the
U.S. Federal Financial Institutions Examination Council under its authority to examine financial institutions’ technology service
providers.
Preferential or Protective Government Actions. Some governments have taken actions to provide resources, preferential
treatment or other protection to selected domestic payments and processing providers, as well as create their own national
providers.
No-Surcharge Rules. We have historically implemented policies in certain regions that prohibit merchants from charging higher
prices to consumers who pay using MasterCard products instead of other means. Authorities in several jurisdictions have acted
to end or limit the application of these no-surcharge rules (or indicated interest in doing so), including in Australia and Canada.
Additionally, pursuant to the terms of settlement of the U.S. merchant class litigation, we have modified our no-surcharge rules
to permit U.S. merchants to surcharge credit cards, subject to certain limitations.
Data Protection and Information Security. Aspects of our operations or business are subject to privacy and data protection laws
in the United States, the European Union and elsewhere. For example, in the United States, we and our customers are respectively
subject to Federal Trade Commission and federal banking agency information safeguarding requirements under the Gramm-
Leach-Bliley Act that require the maintenance of a written, comprehensive information security program. Due to constant changes
to the nature of data, regulatory authorities around the world are considering numerous legislative and regulatory proposals
concerning privacy and data protection. In addition, the interpretation and application of these privacy and data protection laws
in the United States, Europe and elsewhere are often uncertain and in a state of flux. This includes the recent ruling by the
European Court of Justice that invalidated the EU-U.S. Safe Harbor treaty and the newly announced EU-U.S. Privacy Shield.
Anti-Money Laundering. MasterCard is subject to anti-money laundering (“AML”) laws and regulations, including the USA
PATRIOT Act. We have implemented a comprehensive AML program designed to prevent our payment network from being used
to facilitate money laundering and other illicit activity. Our AML compliance program is comprised of policies, procedures and
internal controls, including the designation of a compliance officer, and is designed to address these legal and regulatory
requirements and assist in managing money laundering and terrorist financing risks.
Economic Sanctions. We are subject to regulations imposed by the U.S. Office of Foreign Assets Control (“OFAC”) restricting
financial transactions and other dealings with Crimea, Cuba, Iran, North Korea, Syria and Sudan and with persons and entities
included in OFAC’s list of Specially Designated Nationals and Blocked Persons (the “SDN List”). Iran, Syria and Sudan have been
identified by the U.S. State Department as terrorist-sponsoring states. We have no offices, subsidiaries or affiliated entities
located in these countries or in the Crimea region and do not license financial institutions domiciled there. We have established
a risk-based compliance program that includes policies, procedures and controls that are designed to prevent us from having
business dealings with prohibited countries, regions, individuals or entities. This includes obligating issuers and acquirers to
screen cardholders and merchants, respectively, against the SDN list.
Consumer Financial Protection Bureau. The Consumer Financial Protection Bureau has significant authority to regulate consumer
financial products in the United States, including consumer credit, deposit, payment and similar products.