Economic crime policy statement

We have no appetite to conduct or facilitate economic crime in any form, including money laundering, terrorist financing, contravention of sanctions, bribery and corruption, internal and external fraud or tax evasion facilitation. We recognise the damaging impact that economic crime has on our customers, communities and wider society, and we understand that tackling economic crime is the right thing to do. We're committed to fulfilling our legal and regulatory obligations through the application of a risk-based approach to deter, detect, prevent and report economic crime.

We expect compliance with economic crime laws and regulations that apply to our business and the transactions we undertake, whether by our employees, customers, supply chain, relevant third parties or associated persons. We are committed to conducting our activities with integrity, and honouring our regulatory, ethical and social responsibilities. This commitment is defined by our senior management and supported by the Board, which holds ultimate accountability for ensuring that we are compliant and operating within our risk appetite.

Our economic crime framework includes policies and standards that apply to all business areas, employees, our supply chain and associated persons. The policies and standards are informed by applicable laws, regulations, guidance and industry best practices. Minimum control requirements that facilitate risk-based, effective and efficient risk management are set in the key areas of anti-money laundering and counter-terrorist financing (AML/CTF), sanctions, fraud, and anti-bribery and corruption (ABC) (including anti-facilitation of tax evasion). 

The requirements include, but are not limited to:

• Definitions of the responsibilities and accountabilities of our employees, including senior managers, and the escalation routes available under governance
• Business-wide risk assessments that establish our overall economic crime risks, and assess the effectiveness of the systems and controls applied to mitigate them
• Initial and ongoing due diligence, risk assessment and screening applied to our business relationships, including employees, customers, third parties and associated parties
• Enhanced due diligence controls where a relationship is deemed of a higher risk such as, but not limited to, higher risk countries or Politically Exposed Persons (PEPs)
• Processes (including transaction monitoring) to internally detect, investigate and report suspicious activity
• Processes to ensure that mandatory funds transfer information is included in electronic payment messages
• Screening of payments and parties to identify and escalate potential matches to a relevant sanctions regime
• Record keeping, management information and governance (including escalation) requirements
• External engagement with competent authorities
• Training requirements (including specialised training for certain business areas), in relation to money laundering, countering terrorist financing, bribery and corruption (including tax evasion), financial sanctions, fraud (internal and external), market abuse and insider dealing, conduct risk and whistleblowing
• Second and third line of defence testing of the economic crime controls, to ensure appropriate assurance of an effective compliance programme
• External engagement with Public-Private Partnerships including the Joint Money Laundering Intelligence Taskforce (JMLIT) and the Joint Fraud Taskforce (JFT), and with industry trade bodies such as UK Finance and the Building Societies Association (BSA)
• Regular review of our Policies and supporting Minimum Control Standards to capture any changes in risk

We evaluate and monitor economic crime threats and risks and modify our controls in response to them, including investment in our economic crime management capabilities.

In line with our UK regulatory and legal obligations, our Director of Economic Crime Risk and Compliance also fulfils the role of the Money Laundering Reporting Officer (MLRO). The Director is the owner of the suite of Economic Crime policies and their supporting Minimum Control Standards, and they support the business with appropriate guidance and strategic leadership. As MLRO, the Director is responsible for the oversight of our compliance with relevant legislation, regulations, rules and industry guidance.

The MLRO reports to the Group Risk Officer (a member of the Executive Committee) and they hold delegated responsibilities within the FCA’s Senior Management Arrangements for countering the risk that the firm is used to further financial crime. The MLRO delivers an annual compliance report to the Board.

We monitor payments and transactions, and where necessary we will stop payments, close accounts and relationships where activity is suspicious or cannot be appropriately explained. Potential relationships will be declined, and existing relationships terminated (where lawful to do so), where the level of economic crime risk is outside of our risk appetite.

We’ll comply with all applicable sanctions, laws and regulations. We have no appetite for the contravention of sanction regimes applicable to the jurisdictions in which we operate or the business we undertake. These regimes currently include those of the United Nations (UN), the United Kingdom (UK), the European Union (EU) and the United States of America (US).

Our policy and supporting minimum control standards prohibit relationships, business activity and the remittance or acceptance of unlicensed payments, directly or indirectly involving sanctioned individuals, entities or sanctioned countries, territories and their governments. In compliance with our regulatory requirements and our policy, we may be required from time to time to reject payments, freeze assets or refuse to provide services.

We may process payments under licence, but these may incur delays or subsequently be rejected. We may refuse to process certain payments, even where permissions or licences exist within applicable law or regulation or where these payments fall outside of our risk appetite or the risk appetite of our clearing partner. We accept no liability for losses incurred on such occasions.

We are committed to protecting our customers from fraud. We want to ensure our customers can transact safely and without fear. We have a significant management focus on fraud prevention and victim support and are continually investing in ways to improve both. We have invested in technology, with a range of systems to support the screening and monitoring of our customers and their behaviour to prevent and detect fraud.

We do not tolerate internal fraud in any form. All such cases are considered gross misconduct and may lead to dismissal, criminal prosecution and/or being recorded on the relevant industry databases.

We aim to minimise the level of fraud and scams suffered by our customers, maintain a performance in fraud prevention that is better than peer average (without undue friction) and provide our customers with easy access to fraud reporting and victim support. This includes delivering fair and compliant outcomes in line with all applicable legislation, regulation and codes of practice.

We are fully committed to the principles of the Contingent Reimbursement Model (CRM), a voluntary code governed by the Lending Standards Board. This reinforces our approach to protect customers and society at large, by focusing on improving detection capabilities, in-payment warnings and (where appropriate) intervention. The code also supports the sympathetic and consistent manner with which we deal with those affected by fraud.

We recognise the societal and reputational damage caused by bribery and corruption, and the consequences to individuals and organisations that fail to prevent bribery. The UK Bribery Act 2010 governs both domestic and international conduct and is applicable to Nationwide. Tax evasion is damaging to the government, businesses and societies where it occurs, and is a predicate offence to money laundering. The Criminal Finances Act 2017 criminalises the corporate facilitation of domestic and foreign tax evasion and is applicable to Nationwide.

We have zero tolerance for breaches of law and regulation relating to bribery, corruption or facilitation of tax evasion, or for giving or receiving improper financial or other benefits. We are committed to acting professionally, fairly and with integrity in all our business dealings and relationships, and to promoting an anti-corruption and anti-tax evasion culture. A whistleblowing process (also known as “Speak Up”) is available to employees and associated persons, to report known or suspected misconduct, and to be able to do so anonymously. Potential acts of bribery, corruption or the facilitation of tax evasion are subject to investigation and we’ll co-operate fully with regulators and law enforcement.

We have an anti-corruption policy and framework which prohibits actions that can amount to bribery and corruption. This includes soliciting, accepting or receiving any benefit as an incentive, favour or inducement for inappropriately performing a function or activity. We also prohibit offering, promising or giving any benefit (such as money, gifts and hospitality) or an advantage to another entity as an incentive, favour or inducement for improper performance of a function or activity. Or, in the case of a public official, to use their public office-related influence to obtain or retain a business advantage.

Supply chain relationships are managed to ensure that they have the equivalent of, or adhere to, our anti-bribery and corruption standards. This includes the use of contractual clauses to compel compliance. We prohibit our employees and our associated persons (where they act for or on behalf of Nationwide) from facilitating tax evasion. We subject third party relationships to anti-tax evasion controls, including risk assessment, due diligence, screening, contract clauses, ongoing monitoring and periodic or event-based reviews. We also assess the risk of tax evasion in any joint venture, mergers and acquisitions.

Last updated: September 2023