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  3. Policy on financing of controversial activities

Report BFA - Bankia 2015 / Risk managementPolicy on financing of controversial activities

One of Bankia’s commitments is to set criteria that will promote good banking practices. For that purpose the bank defines specific policies for potentially sensitive sectors and activities on account of their social implications, such as investments or financing in certain weapons companies, organisations involved in the violation of human rights or any activity that may entail a violation of the fundamental rights of the individual

In relation to the arms industry, the policy requires that transactions relating to controversial weapons (antipersonnel mines, scatter ammunition and biological or chemical weapons) be rejected. The financing of projects for countries at war or subject to a UN embargo is also prohibited.

In 2015 Bankia detected no transactions that conflict with these policies, which suggests that any potentially compromised project is rejected before it can enter the formal credit decision process.

Bankia’s commitment also obliges it to refuse to finance transactions with companies that have been proven to infringe human rights in areas such as employment conditions, freedom of association, safety at work or equality. Isolated events are not sufficient proof of failure to respect fundamental rights.

Similar restrictions will be adopted in the case of illegal activities such as money laundering, terrorist financing, tax evasion, fraud or corruption.

The Internal Risk Control Directorate is responsible for carrying out quarterly checks to ensure that no transactions are entered into with customers who engage in such activities. In 2015 Bankia detected no transactions that conflict with these policies, which suggests that any potentially compromised project is rejected before it can enter the formal credit decision process.

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