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BNP Paribas strengthens its control mechanisms

In order to enable the Group to ensure optimal security for all groups of clients and all businesses in all its geographies going forward, BNP Paribas is now undertaking a major reorganisation to strength its internal control mechanisms.

A major overhaul of the BNP Paribas internal control system, based on three main initiatives

1/ Vertical integration* of the Group Compliance and Group Legal functions, in order to ensure their independence and resource autonomy, along the same lines as the Risk Management and Inspection Générale (Internal Audit) functions. The organisation of these four Group supervisory and control functions will thus be mutually aligned, with direct reporting by all their teams worldwide, independently of individual businesses and geographies.
2/ Creation of a Group Supervisory and Control Committee, meeting twice monthly under the chairmanship of the CEO, to coordinate and ensure consistency in the actions undertaken. Membership of this Committee will comprise the heads of the four relevant departments – Compliance, Legal, Risk Management and Inspection Générale – who will report directly to the CEO.
3/ Creation of a Group Conduct Committee, including qualified persons from outside the Group, to shape and monitor the implementation of the Group’s Code of Ethics and Business Conduct and the special policies relating to sensitive business sectors and countries.

In parallel, the Group has now launched an overhaul of its organisation and procedures, with the assistance of an international consultancy firm.

Increasing resources and strengthening procedures for compliance and control

As part of these adjustments to our control mechanisms, the resources allocated to Compliance are to be further increased. Over 1,600 employees are currently working in this field, a 40% increase since 2009, and this headcount will be further increased. Moreover, the number of training programmes designed for our Compliance teams will be increased and the content further extended. In parallel, our internal control tools, including transaction filtering software and procedures for the obligatory periodic review of our client portfolio and of ‘Know Your Customer’ are also to be strengthened. In addition, a team is being set up with the task of implementing a Remediation Plan designed to ensure the compliance of all Group businesses. Meanwhile the Inspection Générale function will be stepping up the frequency of its audits at our main entities which deal actively in US dollars, with a new team specialising in Compliance and financial security issues.

Also part of this overall improvement in the Group’s control mechanisms are two specific measures now being implemented under the Remediation Plan drawn up to take account of the US embargoes in force (a Group Financial Security department is being established in the United States under the aegis of Group Compliance; the Group’s entire US dollar flows will henceforth be processed and controlled internally via our New York office). These measures are part of the overall changes to the Group’s control mechanisms.

Announcing these decisions, BNP Paribas Group CEO Jean-Laurent Bonnafé stated: “As a leader in the European banking industry, we must aim to be exemplary in our conduct. In a banking environment undergoing profound change and becoming ever more demanding and complex, these adjustments had become vital to the interests of our businesses and our clients. Our goal is to make our internal control mechanisms as robust and reliable as our Risk control system, with the renewed ambition of helping our clients to carry out their plans and projects within a strengthened security environment, for them and for our Bank.”

In order to implement the new arrangements, the following appointments have been made:

- Michel Konczaty has been appointed Deputy Chief Operating Officer. Currently Head of Group Risk Management (GRM), he was previously in charge of a number of CIB businesses, including Structured Finance and Capital Markets Origination, and held various posts in the branch network in France. He is a graduate of the Paris-based European business school HEC and the Paris Institute of Political Studies (Sciences Po).
- Frank Roncey has been appointed Head of Group Risk Management (GRM), and will also join the BNP Paribas Executive Committee. Currently Head of Retail and Corporate Risk Management at GRM, he previously worked in various management posts including Chief Market and Liquidity Risk Officer and in the United States as Chief Risk Officer Americas. He is a graduate of the Ecole des Mines and holds an MBA from HEC.

- Eric Martin has been appointed Head of Group Compliance, and will become a member of the BNP Paribas Executive Committee. He is currently Head of the Inspection Générale (Group Internal Audit) function, previously serving as Country Head for Japan, Germany and Luxembourg, among other. He is a graduate of the Paris Ecole Supérieure de Commerce.

- Nathalie Hartmann has been appointed to head up the Remediation Plan, reporting to Eric Martin. She is currently Head of Portfolio Management and transversal business functions at CIB, and has previously served in various roles within the Structured Finance business. She is a graduate of HEC.

- Gilbert Coulombel has been appointed Head of the Inspection Générale function. Currently Head of the Paris Basin branch network, he previously headed up the West France network and has served in various other posts across the branch network in France. He graduated in Financial Management from the Université de Paris Dauphine and holds an Executive MBA from HEC.

All these appointments are effective from 30 September 2014.

Jean Clamon, who has served as Head of Group Compliance since 2008, is to take retirement as planned, before the end of the year. After joining the Group in 1976, he occupied various management posts, including Head of Finance and Head of IT, before becoming Head of Specialised Financial Services in 2000, subsequently appointed in 2003 as COO in charge of Retail Banking.

Commenting on Jean Clamon’s departure and the new appointments, CEO Jean-Laurent Bonnafé underlined: “I would like to convey my sincere thanks to Jean Clamon for the decisive contribution he has made in a number of areas, both at the time when the BNP Paribas Group was being formed and throughout its growth and international expansion.  I have every confidence in the ability of Nathalie Hartmann, Michel Konczaty, Frank Roncey, Eric Martin, Gilbert Coulombel and also Georges Dirani, the Head of the Group Legal department, to implement the new arrangements and mechanisms and thus help to drive forward the Bank’s Business Development Plan.”

*The new organisational structure will be subject to the required consultations with the official staff representatives

About BNP Paribas
BNP Paribas has a presence in 75 countries with more than 180,000 employees, including nearly 140,000 in Europe. It ranks highly in its three core activities: Retail Banking, Investment Solutions and Corporate & Investment Banking. In Europe, the Group has four domestic markets (Belgium, France, Italy and Luxembourg) and BNP Paribas Personal Finance is the leader in consumer lending. BNP Paribas is rolling out its integrated retail banking model across Mediterranean basin countries, in Turkey, in Eastern Europe and a large network in the western part of the United States. In its Corporate & Investment Banking and Investment Solutions activities, BNP Paribas also enjoys top positions in Europe, a strong presence in the Americas and solid and fast-growing businesses in Asia-Pacific.