ING Direct 2008 Annual Report Download - page 26

ING Group Annual Report 2008
1.2 Report of the Executive Board
24
The Executive Board and Senior Management share a clear vision
of reputation management that goes well beyond the compliance
and operational risk functions. They expect the highest levels of
personal conduct and integrity from all employees and managers
to safeguard the Group’s reputation. In 2008, Compliance Risk
Management helped develop and roll out the Non-Financial Risk
Dashboard, which gives management an overview of all key risks
in their jurisdiction.
ING’s Financial Economic Crime Policy (FEC Policy) was enhanced in
2008 to provide a clearer statement on combating criminal activity
and on ING’s participation in international efforts to counter money
laundering and the funding of terrorist and criminal activities.
Extraterritorial regulations
ING continuously reviews US laws and regulations which have
an extraterritorial effect on ING’s businesses. As an NYSE-listed
company and because of ING’s regulated activities in the US, ING
must comply with some key pieces of US legislation. To ensure
compliance, the Executive Board approved a plan of action
requiring ING’s legal and compliance officers at all levels to inform
the managers of the businesses of these laws, to help business
management assess if there are any gaps in business practices
(gap analysis), and to incorporate the relevant laws in the business
compliance charts.
Financial institutions continue to experience close scrutiny by
regulatory authorities, governmental bodies, shareholders, rating
agencies, customers and others to ensure they comply with the
relevant laws, regulations, standards and expectations. Bank and
insurance regulators and other supervisory authorities in Europe,
the US and elsewhere continue to oversee the activities of financial
institutions to ensure that they operate with integrity and conduct
business in an efficient, orderly and transparent manner. ING seeks
to meet the standards and expectations of regulatory authorities
and other interested parties through a number of initiatives and
activities, including scrutinizing account holder information,
payment processing and other transactions to support compliance
with regulations governing money-laundering, economic and trade
sanctions, bribery and other corrupt practices. The failure or
perceived failure by ING to meet applicable standards in these
areas could result in, among other things, suspension or revocation
of ING’s licences, cease and desist orders, fines, civil or criminal
penalties and other disciplinary action which could materially
damage ING’s reputation and financial condition, and accordingly
ING’s primary focus is to support good business practice through
its Business Principles and group policies. ING Bank N.V. has
continued discussions with its Dutch bank regulator De
Nederlandsche Bank (DNB) related to transactions involving
persons in countries subject to sanctions by the EU, the US and
other authorities and its earlier review of transactions involving
sanctioned parties. In connection with that review and related
discussions ING Bank has undertaken to complete the global
implementation of enhanced compliance and risk management
procedures, and to monitor the implementation of such
procedures on an ongoing basis, as instructed by DNB. ING Bank
also remains in discussions with authorities in the US and in other
jurisdictions concerning these matters, including with respect to
ongoing information requests, and it is not possible to predict at
this time the outcome thereof.
As a result of our frequent evaluation of all businesses from
economic, strategic and risk perspectives ING continues to believe
that for business reasons doing business involving certain specified
countries should be discontinued, which includes that ING has a
policy not to enter into new relationships with clients from these
countries and processes remain in place to discontinue existing
relationships involving these countries. At present these countries
include Myanmar, North Korea, Sudan, Syria, Iran and Cuba. ING
Bank N.V. is now in the final stages of liquidating the Netherlands
Caribbean Bank, which is since 2007 a 100% owned subsidiary.
Training and education
ING started several global training programmes in 2008, including
a global compliance training programme for 11,000 managers
around the world. A training course was launched for Money
Laundering Reporting Officers that aims to support the
implementation of the updated FEC Policy. ING also started a
course for all 750 compliance officers worldwide to increase
personal effectiveness. Finally, a new e-learning course has been
developed for all employees in the Netherlands updating them on
financial laws and regulations, based on a course created in 2006.
A PARTNER TO THE BUSINESS
The turmoil in the financial markets has underscored the need
for sound risk management, especially in times of difficulty. Risk
Management will continue to work closely with the business lines
to support their strategic decisions, to help them identify and
execute commercial opportunities, and to monitor asset, capital,
liquidity and funding requirements. ING will manage its assets and
risk profile in line with its risk appetite. Risk management has
evolved significantly at ING and now serves as a true partner to the
various businesses, helping them generate value and reduce risk.
Risk management (continued)