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SAGRILAFT

System of self-control and comprehensive risk management for money laundering, terrorist financing, and the financing of the proliferation of weapons of mass destruction

Introduction

LABORATORIOS FUNAT S.A.S., as part of the Colombian economy, adheres to international and national standards that seek to mitigate the risk associated with money laundering, terrorist financing, and the proliferation of weapons of mass destruction, relying for this purpose on the regulations established by the Superintendency of Corporations and other oversight and control entities for the implementation of the LA/FT/FPADM COMPREHENSIVE SELF-CONTROL AND RISK MANAGEMENT SYSTEM.

 

General objective of the manual

The objective of the manual is directed toward the implementation of controls to prevent the risk of money laundering, terrorist financing, and the financing of the proliferation of weapons of mass destruction, hereinafter SAGRILAFT.

Our Manual for the management of the LA/FT/FPADM Comprehensive Self-Control and Risk Management System is mandatory and applies to all our employees, collaborators, and contractors, without exception. It additionally involves in its application the shareholders and, in general, all persons who interact with our company.

 

Scope

The SAGRILAFT involves all activities carried out by LABORATORIOS FUNAT S.A.S. in the development of its main corporate purpose; therefore, the SAGRILAFT Manual is aimed at all our business associates and is mandatory for all our shareholders, directors, economic affiliates, employees, suppliers, customers, contractors, and other third parties.

Our mission as a critical associate of the SAGRILAFT is centered on supporting the Legal Representative and the Compliance Officer in the implementation of all measures that are necessary to prevent and reject involvement with third parties related to corruption, bribery, and LA/FT/FPADM crimes.

 

General SAGRILAFT Policy

At LABORATORIOS FUNAT S.A.S., we promote social and economic development under conditions of respect for the laws of our country and those that govern our operation, a commitment that compels us, from the Board of Directors, to support the implementation of the System of Self-Control and Comprehensive Management of the Risk of Money Laundering, Terrorist Financing, and the Financing of the Proliferation of Weapons of Mass Destruction, and likewise, we reject any commercial or contractual link with third parties related to corruption, bribery, money laundering, terrorist financing, and the financing of the proliferation of weapons of mass destruction.

 

Information privacy policy

All information related to the implementation of the SAGRILAFT and the Reporting of Operations is considered Confidential Information; therefore, no employee or third party related to the businesses of LABORATORIOS FUNAT S.A.S. may disclose to third parties not related to the operation—except for control entities that regulate the company’s actions—that a report of an operation has been made to the Financial Information and Analysis Unit (UIAF) or that any of the counterparts with whom the company interacts has been involved in any of the behaviors that define the crime of corruption, bribery, and LA/FT/FPADM.

 

Cash management policy

At LABORATORIOS FUNAT S.A.S., there is an obligation to avoid as much as possible cash payments for amounts exceeding $10,000,000 (ten million pesos), whether in a single payment or accumulated per month; payments made by check must be issued with stamps and crossed for payment to the beneficiary, the foregoing with the objective of facilitating the tracking of these documents.

A prohibition is issued against receiving or making payments in cash or by check, even if they have restrictive stamps, for third parties related to the precious metals and stones trading sector, legal services sector, accounting services sector, and currency exchange sector, due to the high risk of LA/FT/FPADM registered for these sectors.

In all cases, the Compliance Officer must apply, monitor, and strive for the application of the onboarding procedures described for each counterpart.

Renewal of onboarding data: the information provided at the time of onboarding must be updated for all customers and suppliers every two years, both for customers and suppliers and for direct and indirect employees. For this purpose, the update may be carried out physically, electronically, or by any verifiable means.

Rejection of operations with third parties: once operations have begun, in the event that the Compliance Officer determines that the Company is being or will be used through some operation or service to give an appearance of legality to resources linked to LA/FT/FPADM, or that some of its inputs or resources might possibly be used to commit these crimes, they must inform the Legal Representative so that they may proceed with the review of transactions and make decisions regarding the cancellation of operations with the third party.

Policies for the acceptance and cancellation of operations with third parties

Onboarding of customers, suppliers, and contractors: in cases where there is routine negotiation with a customer, supplier, or contractor for an amount exceeding $10,000,000 (ten million pesos), whether a single payment or accumulated, it is mandatory for these third parties to complete the applicable ONBOARDING FORM, with the objective of facilitating the application of SAGRILAFT onboarding procedures.

Onboarding of partners, associates, and employees: without exception, all partners, associates, and employees must complete the PARTNERS AND EMPLOYEES ONBOARDING FORM, which aims to facilitate the application of SAGRILAFT onboarding procedures.

 

Operation reporting policies

The Compliance Officer shall not disclose details of the reviews and investigations conducted and will only convene the Board of Directors in cases deemed appropriate because they consider that the continuity of operations with the third party endangers the continuity of the business; the foregoing is intended to facilitate the taking of actions regarding the disengagement of the third party, with the Compliance Officer bearing the responsibility of exercising their right to convene the Shareholders' Assembly in cases where they deem it necessary.

The decision made by the Board or the Assembly does not exempt the Compliance Officer from acting independently regarding reporting the ROS (Suspicious Operation Report) to the UIAF and, if applicable, filing the reports with the Prosecutor's Office that they deem necessary in compliance with articles 323 and 345 of the Colombian Penal Code.

 

Policies for handling exceptions

When negotiating with Customers, Suppliers, and other third parties, it is possible that they may state an exception to the delivery of information; in these cases:

  1. The Compliance Officer must review the reason for the exception and determine the action to be followed and, if applicable, refer the situation to the Head of Legal Affairs for their review and joint decision-making.
  2. BANKS AND COOPERATIVES supervised by the Financial Superintendency are exempt from filling out data and delivering documentation for onboarding, because they are at low risk of LA/FT/FPADM and are subject to the implementation of strictly mandatory LA/FT/FPADM risk prevention processes.
  3. Likewise, Health Promoting Entities and Pension Fund Administrators are exempt from filling out data and delivering documentation for onboarding, because these entities are freely chosen by employees, which obliges the Company to establish contractual relationships with them for social security payments regulated by law.
  4. Companies known to be publicly traded and those that are supervised and obligated to implement SARLAFT by regulation of a Superintendency or State Control or Oversight Entity are exempt from delivering the Onboarding Form and attached documents.

    In this case, the Compliance Officer must verify on the third party's website the SARLAFT, SAGRILAFT, or Anti-Money Laundering and Financing of Terrorism system implementation certificate, or its equivalent, and request it from the Compliance Officer, with it being within the Compliance Officer's authority to audit the system if they deem it appropriate.

Exceptions cannot become constant situations, and they are situations that arise in limited cases.

 

Policy on relationships with third parties classified as PEPs

If at any time LABORATORIOS FUNAT S.A.S. were to negotiate with a company where a majority shareholder or a person with decision-making power (due to owning the majority of shares), or the Legal Representative is a person classified as a PEP (Politically Exposed Person), the Compliance Officer must apply enhanced due diligence procedures, including:

  1. Requesting that the third party complete the PEP ONBOARDING FORM.
  2. Checking lists and databases for the third party and their associates.
  3. Conducting enhanced due diligence activities, requesting from the PEP a certificate stating the entity, position held, and if at any time they had management of public funds or assets, with the objective that the Compliance Officer verifies on the Comptroller's or Judicial Branch's website whether there are pending investigations.
  4. Submitting the third party for approval by the Board of Directors.

 

Policy regarding risks associated with LA/FT/FPADM

Illicit enrichment: a respective analysis of comparative financial statements and verification of the reasons for significant increases or changes will be carried out.

Extortive kidnapping: checks will be performed in restrictive lists and databases, the judicial branch, and news; enhanced due diligence will be conducted for third parties related to the high-risk sector of corruption, bribery, and LA/FT/FPADM.

Arms trafficking: the respective verification of permits from the DCCA and Indumil will be carried out.

Terrorist financing and management of assets related to terrorist activities: a guideline for the acceptance and cancellation of operations with third parties will be established.

Crimes against the financial system: a cash management policy will be managed.

Crimes against public administration: a guideline for relationships with third parties classified as PEPs will be established; without exception, only the Company’s Legal Representative is authorized to conduct negotiations or procedures involving the participation of PEPs.

Extortion: a guideline for the acceptance and cancellation of operations with third parties will be established.

Responsibilities related to the SAGRILAFT

Board of Directors:

The main activities are related to decision-making aimed at fulfilling the company's strategic objectives and monitoring the defined decisions and action plans, which are in compliance with the premises of generating value for the company and its shareholders. The Board of Directors also promotes respect for and compliance with the norms and procedures established and documented in the PTEE and SAGRILAFT.

Legal Representative:

To present, with the Compliance Officer, for approval by the Board of Directors, the Transparency and Business Ethics Program proposal and the SAGRILAFT Manual and its updates, as well as the procedures that are applicable according to the Company's risk of corruption, bribery, and LA/FT/FPADM.

Compliance Officer:

The Compliance Officer actively participates in the procedures of design, direction, implementation, auditing, compliance verification, and monitoring of the Transparency and Business Ethics Program and the SAGRILAFT; given their position in the organizational structure, they are capable of making decisions regarding the management of the risk of corruption, bribery, and LA/FT/FPADM.

Statutory Auditor:

The functions of this body are expressly indicated in the law, in particular Article 207 of the Code of Commerce, which points out, especially, the one related to the obligation to report Suspicious Operations to the UIAF when they notice them within the ordinary course of their work, as indicated by numeral 10 of said article.

Accountant:

The accountant must inform, facilitate, and report to the compliance officer information of importance to manage correctly as the case may be.

Human Talent:

Define and implement the induction program for new employees and the re-induction program for current employees, taking into account the Business Ethics and Transparency Program and SAGRILAFT. Coordinate with the Compliance Officer to implement appropriate and effective disciplinary procedures.

Process leaders and all personnel in general: Study, analyze, and support the activities defined by the company to comply with all premises aimed at the proper management and operation of the Risk Management System, the Business Ethics and Transparency Program, and SAGRILAFT.

Incompatibilities and disqualifications of the various bodies

In establishing the bodies and instances responsible for evaluating the compliance and effectiveness of SAGRILAFT, the Regime of Disqualifications and Incompatibilities for the Compliance Officer has been taken into account, as they do not belong to corporate bodies, nor to internal or external audit or control bodies.

Sanctions for Non-compliance with the LA/FT/FPADM Comprehensive Risk Management and Self-Control System

Failure to comply with the provisions contained in this document and in the BUSINESS ETHICS AND TRANSPARENCY PROGRAM, as well as breaches related to other policies established by the company and any behavior considered to affect the reputational image of LABORATORIOS FUNAT S.A.S. or business continuity, shall be considered, as applicable, as follows:

  • As a labor offense in accordance with labor laws and the Company's Internal Work Regulations. As a commercial or corporate offense, in accordance with the company's bylaws and the respective regulations.
  • As a civil or criminal offense, in accordance with the current Civil and Penal Code.

Sanctions for persons who do not have an employment relationship with the company may include, among others: verbal or written reprimands, fines, or contract termination. Additionally, violations by employees as established in the BUSINESS ETHICS AND TRANSPARENCY PROGRAM and the SAGRILAFT MANUAL, as well as breaches related to other policies established by the company, imply the application of the procedures established in the Substantive Labor Code and the Internal Work Regulations and may even lead to the termination of the respective employment contract.