The Compliance Department in the Bank is responsible for the Bank business' extent of compliance and conformity with laws, controls, and the best professional practices for protecting the Bank from the risks of non-compliance. Those risks are defined as the risks that expose the Bank to legislative and regulatory penalties, material and monetary losses, or defamation as a result of failure to comply with the laws, rules, and standards applicable to its Banking activities.

Housing and Development Bank complies with the application of regulatory controls of anti-money laundering and terrorism financing, which are issued from the Central Bank of Egypt and recommendations of the Financial Action Task Force (FATF).

The Board of Directors has approved an Anti-Money Laundering and Terrorism Financing Scheme, including but not limited to the following:

• Prohibition against taking part or continuing in a correspondence relationship with shell banks or banks that provide correspondence services to shell banks.
• Prohibition against opening unanimous or digital banking accounts.
• Compliance with the application of the "Know Your Customer" rule.
• Identification and assessment of money laundering risks for all the services and products.
• Compliance with the national and international laws and controls of anti-money laundering and terrorism financing.
• Compliance with the rules of identity identification and procedures of due diligence, as well as the identification of the real beneficiary of the account.
• Identification and assessment of the risks of high-risk customers due to their public positions (PEP).
• Maintenance of records and documents of opening customers' accounts and the banking transactions, in accordance with the specified legal terms.
• Development of training plans, periodically, in the field of anti-money laundering and terrorism financing, for the Bank's personnel, in coordination with the Human Resources Department.
• Reporting suspected anti-money laundering activities, in accordance with the regulatory laws in this regard.
• Setting internal regulatory controls that are continuously developed.
• Ongoing desk and field evaluation of the activities of compliance at the Bank's branches and units.

The U.S. Account Tax Compliance Act, enacted in 2010 as part of the HIRE Act, is a key step in U.S. efforts to counter tax evasion by U.S. persons holding investments in bank accounts outside the United States and was issued definitively on January 17, 2013 and published on January 28, 2013.

Under the provisions of the FATCA Act, all Financial Institutions, whether operating in the United States or abroad, are required to classify their customers into two classes:

• US customers.
• Non-US customers.

FATCA law will require Foreign Financial Institutions to report directly or indirectly to the U.S. Income Tax Authority (IRS) provided that these reports contain specific information on the Financial Accounts held by:

• Certain Foreign Financial Accounts and External Assets.
• Foreign Financial Institutions for Financial Accounts held by U.S. taxpayers or Foreign Entities in which the U.S. taxpayer has a substantial ownership share of more than 10% of capital or voting rights.

Foreign Financial Institutions that will not agree to abide by FATCA will:

• Be Listed as Non-Compliant Foreign Financial Institutions.
• Subject to heavy penalty under FATCA law of deducting/withholding tax of 30% of any payments/amounts received from a U.S. revenue source (profits- returns on deposits-balances).
• Lose established relationships with U.S. correspondent banks.
• Subject to Reputational risks that may prompt some compliant U.S. Financial Institutions or Foreign Financial Institutions to stop dealing with non-compliant Foreign Financial Institutions.

To comply with the new reporting requirements appropriately, Foreign Financial Institutions were required to enter into a special agreement with the U.S. Income Tax Authority (IRS). The Central Bank of Egypt decided on 2014/2/22 that Egyptian Banks to follow the individual approach while complying with the said law. Accordingly, the Central Bank of Egypt sent a letter to all banks operating in Egypt asking them to register directly with the U.S. Income Tax Authority (IRS) and to comply with FATCA law under individual agreement model. Accordingly, Egyptian Banks signed the intergovernmental agreement Form2 (IGA-2).

Housing and Development Bank registered with the U.S. Income Tax Authority (IRS), became committed to the application of FATCA law and has been included in the lists of participating Foreign Financial Institutions issued by the U.S. Income Tax Authority, which can be found on the website:

 https://apps.irs.gov/app/fatcaFfiList/flu.jsf 

Note that the GIIN number of Housing and Development Bank is 96BS9U.99999.SL.818