2021 ESG Report

13 2021 ESG Report CRCBANK 14 Business Ethics and Compliance CSRC Bank attaches great importance to business ethics and compliance management. We strictly fulfills the legal obligations on anti-money laundering and continuously improves the compliance management system, aiming to create an atmosphere of integrity in its practice. Anti-Money Laundering In the year of reporting period, we complied with laws and regulations, formulated and improved a number of rules and regulations, including Management Measures for Self-Assessment of Money Laundering Risks and Terrorist Financing Risks, Operational Procedures for Anti-Money Laundering Business, Management Measures for Customer Money Laundering Risk Assessment and Classification, and Anti-Money Laundering Work Rules for Financial Market Business Lines, etc. We adopted processes and measures such as customer identification, customer risk level classification management and control of high-risk customers, and linked with public security authorities, regulatory authorities and Dow Jones List to fine-tune the Anti-Money Laundering management. At the same time, we held anti- money laundering publicity and training in multiple dimensions. Customer Identification Strictly implement the requirements of real-name system to open an account and refuse to open an account if suspicious cases are found, so as to prevent customers from borrowing or fraudulently using other people's identity to open an account and using the account for illegal purposes such as renting, lending or selling. In case of any abnormalities such as change of basic information, criminal investigation and freezing, in addition to retaining the relevant information, our bank is required to double check through identity network verification and other procedures, if applicable, to prevent risks. And for public customers, the information should be checked and verified. Compliance Management In 2021, CSRC Bank has built the "Three-Year Plan" in accordance with compliance, and will continue to promote the systematization of the bank compliance based on the development strategy. Establishment of the Compliance Culture System • We aim to build the distinctive "Xiao Yan" compliance brand by carrying out compliance culture development in multiple ways, strengthening positive propaganda and increasing the number of warning education events held. Establishment of the Compliance Organization System • We equip our compliance team with the best human resources. We have selected and hired 77 full-time and part-time compliance officers to cover all departments and branches of the bank. Establishment of the Institutional Process System ⚫ The total number of internal regulations in the bank is 2,696, of which 1,642 in the head office (425 added and 199 repealed) and 1,045 in the branches (483 added). 249 regulations are reviewed, with a year-on-year growth of 9.34%. The completion rate of the annual revision plan is 100%. Establishment of the Compliance Control System • We adhere to innovation and management compliance and continuously improve the problems and correction mechanism. We have built a compliance monitoring system to promote the normalization of case prevention and investigation. We focus on improving the branch compliance management mechanism, and evaluate the operation of the branch in terms of system management, contract management, and compliance inspection and correction mechanism. Customer Risk Level Classification Management Anti-money Laundering and Anti-Terrorist Financing Monitoring Multi- dimensional Anti-Money Laundering Financial Knowledge Promotion Events CSRC Bank's Anti-Money Laundering system has a dedicated customer risk registration management module with two types of templates: comprehensive scoring model and exception model. For blacklisted customers, we directly rate the highest risk level; for customers suspected of money laundering crimes and reported suspicious cases, we include them in the higher risk level range; for customers above the higher risk level, customer due diligence investigation, customer re-identification form are needed and transaction restriction measures are required. In addition to the terrorism-related lists issued by public security authorities and regulatory departments, our Anti-Money Laundering system has achieved T+1 linkage update with Dow Jones list, blacklist linkage warning, and linkage prompting between blacklist and core business system within the Anti-Money Laundering system. We held various types of events including hall publicity, outdoor publicity, live publicity, party building publicity, etc. In 2021, 17,109 people participated in CSRC Bank's offline promotional activities and 270,000 views for the online live broadcast. Integrity Building We attach importance to regulating staff behavior, identifying business compliance moral risks, and formulating CSRC Bank Reporting Incentives and CSRC Bank Rules for the Implementation of Petition Work to manage integrity practices. In 2021, we organized 87 newly promoted cadres to have integrity talks and signed the Ten Prohibitions of Employee Behavior Commitment, Compliance Commitment and Integrity Commitment, respectively. In addition, we have identified 20 major integrity risk points and 25 major employee abnormal behaviors, and conducted occasional dynamic behavioral checks, and sorted out 8 major risk points in 213 categories covering 227 positions according to 3 risk levels of "high, medium and low". 20 常熟农商银行 2021年度警示教育大会 CSRC Bank 2021 Warning Education Event □ HERO 20 zzz

View entire presentation