Société Générale / Risk report 2021 - Pillar 3 2020

13 COMPLIANCE RISK, LITIGATION COMPLIANCE | SOCIETE GENERALE GROUP | PILLAR 3 - 2021 221 Moreover, Chief Compliance Officers dedicated to Business Units take part in the various bodies (new product Committees, ad hoc Committees, etc.) organised to approve new types of transactions, products, projects or customers, and formulate a written opinion as to their assessment of the level of risk of the planned initiative, and notably the reputational risk. The Compliance function transformation programme The Compliance function transformation programme aims to strengthen compliance risk management through the increased vigilance and awareness of all stakeholders, including businesses, support staff and other units, to increase the operational efficiency of the associated processes and to meet the demands of supervisory and regulatory authorities in the long term. This programme includes updating the governance and allocating greater resources to the Compliance function, whether in terms of recruitment, training, or modernisation of dedicated information systems and digitalisation. It also relies on a stronger risk-assessment framework and a robust control system. The programme includes a specific component on remediation linked to the agreements signed in 2018 with the US and French authorities. This updated program’s action plan was implemented in 2019 and will continue to be implemented in 2021. COMPLIANCE REMEDIATION PLAN IN THE WAKE OF AGREEMENTS ENTERED INTOWITH FRENCH AND US AUTHORITIES In June 2018, Societe Generale entered into agreements with the US Department of Justice (DOJ) and the US Commodity Futures Trading Commission (CFTC) to resolve their investigations into IBOR submissions, and with the DOJ and the French Parquet National Financier (PNF) to resolve their investigations into certain transactions involving Libyan counterparties. In November 2018, Societe Generale entered into agreements with the US authorities to resolve their investigations into certain US dollar transactions involving countries, persons or entities subject to US economic sanctions. prosecuted if it abides by the terms of the agreements, to which Societe Generale is fully committed. As part of these agreements, the Bank has committed to enhance its compliance system in order to prevent and detect any violation of anti-corruption and bribery, market manipulation and US economic sanction regulations, and any violation of New York state laws. The Bank has also committed to enhance corporate oversight of its economic sanctions compliance program. The Bank will not be The Bank has also agreed with the US Federal Reserve to hire an independent consultant to assess the Bank’s progress on the implementation of measures to strengthen its compliance program. To meet the commitments made by Societe Generale as part of these agreements, the Bank has developed a programme to implement these commitments and strengthen its compliance system in the relevant areas. This programme has been placed under the direct supervision of the Group Head of Compliance. In addition, the program’s Steering Committee is chaired by a member of the Bank’s General Management, and a programme progress report is presented to the Board of Directors on a monthly basis. In 2020, the Programme was rolled out according to the schedule presented to the internal Governance bodies and the various authorities receiving regular reports on the progress of remedial actions. Moreover, the external audits provided in the agreements have been conducted or are under way. On 14 December 2020, Societe Generale took note of the termination of proceedings notice issued by the Financial Prosecutor of the French Republic (the Procureur de la République Française , or PRF) in connection with certain transactions with Libyan counterparties. UNITED STATES COMPLIANCE REMEDIATION PLAN On 19 November 2018, Societe Generale Group and its New York branch (SGNY) entered into an agreement (enforcement action) with the NY State Department of Financial Services regarding the SGNY antimoney laundering compliance program. This agreement requires (i) submitting an enhanced antimoney laundering program, (ii) an antimoney laundering governance plan, and (iii) the performance of an external audit in May 2020. As a reminder, on 14 December 2017, Societe Generale and SGNY on the one hand, and the Board of Governors of the Federal Reserve on the other hand, agreed to a Cease and Desist order (the “Order”) regarding the SGNY compliance programme to adhere to the Bank Secrecy Act (“BSA”) and its antimoney laundering (“AML”) obligations (the “Anti-Money Laundering Compliance Program”), and regarding some aspects of its Know Your Customer program. This Cease and Desist Order signed on 14 December 2017 with the FED supersedes the Written Agreement entered into in 2009 between Societe Generale Group and SGNY on the one hand, and the US Federal Reserve and the New York State Financial Services Department on the other hand.