INNOSPEC INC. ( INNOSPEC ) FOREIGN CORRUPT PRACTICES ACT POLICY INTRODUCTION

Transcription

1 INNOSPEC INC. ( INNOSPEC ) FOREIGN CORRUPT PRACTICES ACT POLICY INTRODUCTION The vast majority of countries have adopted anti-bribery laws. Innospec s securities are registered on the NASDAQ in the United States and, accordingly, Innospec is subject to the US Foreign Corrupt Practices Act (FCPA), not only in respect of its own activities but also those of its non-u.s. affiliates worldwide, as well as any third parties acting on Innospec s behalf. FCPA violations can result in severe civil and criminal penalties and reputational damage for the Company and individuals involved. Innospec is committed to achieving the highest standards of ethical conduct and complying with all applicable laws in the countries where it conducts business, including the FCPA. Innospec also has adopted a Code of Ethics, which provides a guide to the legal and ethical standards observed by the Company. This Policy is to ensure that Innospec complies with the FCPA and Innospec s Code of Ethics. FCPA POLICY It is Innospec s policy to comply fully with all applicable provisions of the FCPA. Innospec s FCPA Policy prohibits the paying, offering, giving, authorizing, or promising, either directly or indirectly, of anything of value to any government official in order to secure an improper advantage, obtain or retain business, or direct business to any other person or entity. In addition, this Policy requires companies to keep and maintain accurate books and records in reasonable detail and to devise and maintain a reasonable system of internal controls. SCOPE This FCPA Policy applies to all Innospec officers, directors, and employees worldwide and all of its subsidiaries and affiliated companies (collectively, Employees ). Its general principles and prohibitions also apply to agents, distributors, consultants, joint venture partners, and any other thirdparties acting on Innospec s behalf (collectively, Representatives ), whether or not US citizens or residents, and regardless of whether they are located inside or outside the United States. This Policy covers dealings with government officials and not with commercial business partners, as long as such dealings with commercial business partners involve no payments intended to be transferred to government officials. Note, however, that commercial business payments could violate Innospec s Code of Ethics and subject Employees to disciplinary action. Innospec also recognizes that its Employees and Representatives are citizens of many countries and that its operations are subject to many different laws, customs, and cultures. In some countries, Innospec may issue specific anti-bribery guidelines to conform to local laws, but those guidelines must always be in line with the minimum standards outlined in this Policy. This Policy is not designed to make Employees and Representatives experts in the FCPA, but rather is designed to help you recognise situations and payments that might raise FCPA concerns. Importantly, Employees and Representatives must comply with the procedures described below and work closely with the Legal & Compliance Department to ensure compliance with the FCPA. ADMINISTRATION Innospec shall administer this FCPA Policy in accordance with Annex A. February

2 GENERAL RULE Innospec Employees and Representatives are prohibited from paying, offering, giving, authorizing, or promising, either directly or indirectly, money or anything of value to any government official in order to secure an improper advantage, obtain or retain business, or direct business to any other person or entity. Anything of Value: Anything of value includes not only cash, but also gifts, gift cards, logo and other tangible items, electronic equipment, clothing, meals, entertainment (for example, concert, theater, sport, or other similar event invitations without a prevailing business character), travel, lodging, transportation, loans, use of property or equipment, charitable contributions, and job offers. Government Official: Officials or employees of federal, state, provincial, county, municipal, and similar officials of any government or any department or agency thereof; any officers or employees of a company or business owned in whole or in part by a government ( state-owned enterprise ); any officers or employees of a public international organization (for example, the World Bank, United Nations, or the European Union); any foreign political party or official thereof; or any candidate for political office. Government officials include officials at every level of government, regardless of rank or position. PERMITTED ACTIONS The FCPA describes three narrow categories of payments that are permissible. Local Written Law Affirmative Defense: Payments that are lawful under the written laws and regulations of the relevant country. However, bribery of a government official is illegal in every country in the world so assertion of this defense will rarely if ever apply. Only the Innospec Legal & Compliance Department may authorize a payment if the legitimacy of such payment is based on a local law defense. Bona Fide Expenses: Under certain controlled circumstances, payments of reasonable and bona fide expenses incurred by or on behalf of a government official are not prohibited by the FCPA when they are directly related to the promotion, demonstration or explanation of products or services or the execution or performance of a contract. Facilitation Payments: Small payments made to low level government officials to secure a routine governmental action are not covered by the FCPA. Routine governmental action does not include any decision by a foreign official to award new business or to continue business with a particular person or entity. It is extremely difficult to distinguish between payments that are legal under the FCPA and illegal bribes. Consequently, no payment or promise of payment to any government official may be made on the basis that it is permitted as provided above unless such offer, promise or payment has been approved in accordance with the procedures specified below. In addition, under the FCPA s accounting standards, all payments that are legal under the FCPA must be properly recorded in Innospec s accounts and records. Recording of such payments in any way which would conceal their true nature constitutes an independent violation of FCPA accounting standards. February

3 DUE DILIGENCE PROCEDURES Agents, Distributors, Consultants and Other Third Parties The FCPA prohibits corrupt offers, promises and payments through intermediaries. It is unlawful to make an offer, promise, or payment of anything of value through an agent, distributor, consultant, joint venture partner or other third party to secure an improper benefit with the knowledge that the ultimate beneficiary is a government official. Knowledge includes conscious disregard and deliberate ignorance of facts which indicate a high probability that the relevant payment will occur. Pre-Hiring Due Diligence Whenever Innospec intends to engage or retain an agent, distributor, marketing consultant or other third party in connection with any business being sought, Innospec will conduct a due diligence inquiry of the prospective third party in order to determine the reputation, beneficial ownership, professional capability and experience, financial standing and credibility of the prospective third party and the history of such prospective third party's compliance with applicable provisions of the FCPA or similar applicable laws in other countries. The specific information to be obtained in connection with such due diligence shall be specified by, and the results of such investigation shall be reviewed and approved by, the Innospec Legal & Compliance Department. Key information concerning prospective third parties shall be recorded in Innospec s Third Party Due Diligence Questionnaire that must be certified as correct by the relevant prospective third party, the Innospec Business Manager, and the Innospec Regional Manager. Additional due diligence may be required depending on the third party s risk profile results. Files supporting Innospec s third party due diligence shall be maintained by the Legal & Compliance Department and updated from time to time as necessary to manage Innospec s compliance. Innospec s Third Party Due Diligence Questionnaire and pre-hiring due diligence procedures are described in the Third Party Enhanced Compliance Approval User Guide available on the Intranet at Post-Hiring Monitoring Once Innospec retains a third party, employees have a responsibility to continue monitoring on-going activities for any FCPA red flags or concerns. If any employee knows or reasonably believes that a payment or promise of payment prohibited by the FCPA has been, is being or may be made by an agent, distributor, consultant or other third party intermediary for or on Innospec s behalf, the employee shall immediately advise the Legal & Compliance Department and shall use all reasonable efforts to prevent the payment or promise of payment from occurring. Acquisitions Whenever the Company pursues the acquisition of any business entity, the due diligence process associated with the proposed acquisition shall include an inquiry of the acquisition target's compliance with the FCPA. The specific information to be obtained in connection with such investigation shall be specified by, and the written results of such investigation shall be reviewed and approved by, the Legal & Compliance Department. Joint Ventures Whenever the Company elects to pursue work outside the United States through a joint venture, Innospec will conduct a review of the prospective joint venture partner or partners in order to determine the reputation, beneficial ownership, professional capability and experience, financial February

4 standing and credibility of the prospective joint venture partner or partners and the history of such prospective joint venture partner's or partners' compliance with applicable provisions of the FCPA or similar applicable legislation in other countries. The specific information to be obtained in connection with such investigation shall be specified by, and the written results of such investigation shall be reviewed and approved by, the Legal & Compliance Department. Red Flags One of the key aspects of FCPA-related due diligence investigations is the identification of red flags that may indicate the potential existence of an FCPA problem. The FCPA red flags identified by the US Department of Justice are described in Annex B. All due diligence investigations conducted by Innospec must include an analysis of potential red flag issues. CONTRACT PROCEDURES Standard Forms and Provisions Innospec s Legal & Compliance Department maintains standard forms for most types of contracts and transactions that are available on the Intranet at m. The Company must use these forms at least as a beginning point in all applicable transactions. Unless otherwise approved in writing by the Legal & Compliance Department, all contracts with agents, distributors, consultants, and other third parties, all joint venture, partnership and shareholder contracts and all contracts for the acquisition of entities or business assets, to the extent such contracts or agreements pertain to business carried out or to be carried out in whole or in part outside the United States, shall contain standard anti-bribery provisions substantially similar to those specified in Annex C, and shall include this Policy and Innospec s Giving and Receiving Gifts & Hospitalities Procedures, as an Appendices. Approval Requirements In addition to any other approvals required by other Company policies, any contract to which this FCPA Policy applies shall require the specific approval of the Innospec Legal & Compliance Department and the Innospec Chief Financial Officer ( CFO ), where necessary. No payment may be disbursed by Innospec under any such contract unless an original written copy of the contract is in the files maintained by the Legal & Compliance Department and such copy reflects the approvals required above. GIFTS, HOSPITALITIES AND CHARITABLE CONTRIBUTIONS Importantly, corrupt payments are not limited to cash, but cover anything of value, including gifts, hospitalities, entertainment and tangible items. While in many countries gifts play an important role in building business relationships, problems arise when such customary courtesies create new opportunities for undue influence and misuse. Under very specific circumstances, the FCPA permits the payment of reasonable and bona fide expenditures, such as travel and lodging expenses, incurred by or on behalf of government officials directly related to: the promotion, demonstration or explanation of products or services; or the execution or performance of a contract with a foreign government. February

5 In addition, Innospec is committed to the communities in which it does business and permits reasonable donations to local and foreign charities. Donations only may be given to bona fide charities and used for proper charitable purposes and may not be misapplied in violation of this Policy. For guidelines on circumstances when gifts, hospitalities and charitable contributions to government officials may be extended, please refer to Innospec s Giving and Receiving Gifts & Hospitalities Procedures found on the Intranet at m. FACILITATING PAYMENTS FCPA Requirements The FCPA bribery prohibitions do not extend to payments made for the purpose of expediting or securing routine governmental action by a foreign official, political party or party official. Routine governmental actions include: obtaining permits, licenses or other official documents to qualify a person to do business in a country other than the United States; processing governmental papers, such as visas and work orders; providing police protection, mail pick-up and delivery, or scheduling inspections associated with contract performance, or inspections related to transit of goods across country; providing phone service, power and water supply, loading and unloading cargo, or protecting perishable products or commodities from deterioration; or actions of a similar nature. Such payments, which are generally referred to as facilitating payments do not include payments which relate to a decision by a foreign official relative to the award of new business or the continuation of existing business. Such payments must also be relatively small in amount in order to qualify for the exception, although there is no monetary amount at which such a facilitating payment will clearly qualify for this exception. The FCPA requires that any payments made pursuant to this exception must be accurately recorded in a company s books and records. Innospec Policy Regarding Facilitating Payments No facilitating payment may be made by any employees without the express approval of the Legal & Compliance Department. In a circumstance involving threats to the imminent health or safety of an Innospec Employee or Representative, prior approval is not necessary, but a report must be made to the Legal & Compliance Department within five (5) business days. All questions concerning the eligibility of proposed payments for classification as exempt facilitating payments must be directed to the Legal & Compliance Department All facilitating payments must be recorded in the general ledger as a Facilitating Payment and should show the amount, purpose, name, title and function of the person to whom the payment was made. Innospec s accounting system must code such payments under a single facilitating payments accounting code. Innospec will periodically conduct an audit to ensure that facilitating payments are lawful and in accordance with this Policy. February

6 ACCOUNTING ISSUES Books, Records and Internal Controls As an entity whose securities are publicly traded in the United States, Innospec is required to make and keep books, records and accounts, which, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the Company's assets. In addition, the Company must devise and maintain a system of internal accounting controls sufficient to provide reasonable assurances as follows: that transactions are executed in accordance with management's general or specific authorization; that transactions are recorded in such a way as to allow preparation of a report that is in conformity with generally accepted accounting principles; that access to assets is permitted only in accordance with management's general or specific authorization; and that the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. Standard: Accuracy and Materiality The FCPA requires reasonable detail and reasonable assurances, which means the level of detail and degree of assurance as would satisfy prudent officials in the conduct of their own affairs. That standard has been interpreted to mean that the records and control requirements do not connote an unrealistic degree of exactitude or precision. Such standard is generally thought to be more stringent than the materiality standard which typically applies in accounting. Accordingly, even relatively small payments or gifts must be accurately recorded in order to satisfy the FCPA's requirements. Reporting Any perceived failure of Innospec s books and records to meet the FCPA's requirements, shall be reported to the Legal & Compliance Department, which shall, as circumstances warrant, consult with Innospec s CFO, the Company's internal and external auditors and/or the Nominating & Corporate Governance ( NCG ) Committee of Innospec s Board in order to determine whether a possible violation exists and, if so, the appropriate actions required. EDUCATION AND TRAINING Innospec implements and maintains a program to provide regular FCPA education and training to Innospec Employees and Representatives. Training sessions include on-line courses and in-person presentations regarding anti-bribery legal requirements, Innospec s Code of Ethics, and FCPA Policy. The Legal & Compliance Department will conduct or arrange for anti-bribery training sessions to be conducted at all major Innospec office and work locations throughout the world at least annually. Attendance at not less than one such training session each year shall be required for all Company management and accounting personnel, including the Board. From time to time, such training may be conducted via teleconference, video conference, webinar, or other means supplementary to in-person training. ANNUAL CERTIFICATIONS Innospec requires annual FCPA certifications containing the following language: February

7 The undersigned hereby certifies that he or she has read and understands the Company's Foreign Corrupt Practices Act Policy. The undersigned further certifies that, after due inquiry and investigation, he or she is not aware of any fact or circumstance that indicates that a violation of the Policy has occurred during the period covered by this Certificate. The undersigned further certifies that he or she fully understands that a false or incomplete statement in this Certificate will be grounds for immediate dismissal from employment. The foregoing certification will be required from all Innospec management and accounting personnel, as determined by the Legal & Compliance Department, including all persons who have access to Company funds or who have responsibility for recording transactions that impact the Company's books and records. This certification shall be completed at least annually and from time to time as determined by the Legal & Compliance Department, CFO, and/or NCG Committee. AUDITING Business Assurance Testing and analysis of Innospec transactions for possible violation of the FCPA Policy shall be a regular part of the Business Assurance routine audit process and all Employees shall cooperate fully with the Company's audit staff in that regard. The Business Assurance audit protocol shall contain a segment designed to conduct this testing and analysis. From time to time, the applicable Business Assurance protocol shall be reviewed to confirm that it is adequate. Compliance Auditing The Legal & Compliance Department, in consultation with the Innospec Business Assurance staff, shall select at least two Company operating locations outside the United States each year for a compliance audit focused on its FCPA compliance practices. The Legal & Compliance Department, in consultation with Business Assurance, shall develop a compliance audit protocol to be used during these compliance audits, and from time to time this protocol shall be reviewed to confirm that it is adequate. Compliance Audit Reporting to Nominating and Corporate Governance Committee The results of all FCPA auditing activities shall be communicated to the NCG and Audit Committees of the Board promptly after completion of the relevant audit. PENALTIES Violations of the FCPA are a serious matter and could result in significant criminal and/or civil penalties for Innospec and for those individuals responsible for a violation. Fines imposed on individuals may not be paid by Innospec. A violation can also result in disciplinary action by Innospec, up to and including termination of employment. Bribery Violations Innospec could be subject to criminal penalties of up to US$2,000,000 per violation or twice the benefit obtained by making the corrupt payment. Potential non-monetary penalties for an FCPA violation could include Innospec being barred from doing business with the US government or being ruled ineligible to receive export licenses, or being required to hire an independent monitor to oversee compliance with the FCPA. Individuals could be subject to fines of up to US$250,000 per violation or twice the benefit obtained and face up to five years in prison. Additional laws may also provide further penalties and prospective imprisonment. February

8 Accounting Violations Under the FCPA s accounting provisions, Innospec could be subject to fines of up to $25,000,000. Individuals could face fines of up to $5,000,000 and/or imprisonment for up to twenty years. Local Anti-Corruption Laws Conduct that violates the FCPA also may give rise to liability for both Innospec and the individual under the anti-corruption laws of the country in which the foreign official was bribed. Civil and criminal penalties under these laws may be much more severe than under the FCPA. Third Party Contracts Persons or entities who provide services to or on behalf of Innospec should similarly expect to have their contracts terminated for cause if they violate the FCPA. Innospec will actively seek to recoup any losses it might suffer as a result of a violation of the FCPA from the individual or entity who carried out the prohibited activity. DISCIPLINARY PROCEDURE Failure to comply with this Policy will be grounds for termination or other disciplinary action in line with the disciplinary process for the relevant Innospec site/country. In addition, Employees and Representatives violating the FCPA and/or local anti-bribery laws may also be fined and/or imprisoned as described above. REPORTING Employees suspecting a potential violation of this Policy should follow the procedures set out in the Reporting Corporate Governance Concerns procedures found on the Intranet at QUESTIONS Any questions concerning this Policy may be addressed to the Legal & Compliance Department. February

9 ANNEX A ADMINISTRATION OF INNOSPEC S FCPA POLICY Administration of the Policy The Policy will be administered by the Nominating and Corporate Governance ( NCG ) Committee of the Innospec Board of Directors, Innospec s Chief Financial Officer ( CFO ), the Innospec Legal & Compliance Department, and the Enhanced Compliance Steering Group. Board of Directors The Board has specifically directed issuance and implementation of Innospec s FCPA Policy and retains ultimate responsibility for ensuring that the Company meets its obligations under the FCPA. The Board has delegated certain responsibilities for administration of the Compliance Program to its NCG Committee and to certain officers of the Company. Nominating and Corporate Governance Committee The NCG Committee is charged with responsibility for: overseeing administration of Innospec s FCPA Policy; evaluating and recommending to the Board possible amendments to the FCPA Policy; reviewing the findings of the Legal & Compliance Department regarding possible violations of the FCPA Policy; where the circumstances warrant, undertaking an independent investigation of possible violations of the FCPA Policy; and reporting to the Board at least quarterly on the status of Innospec s compliance with the FCPA Policy. Chief Financial Officer The Innospec Chief Financial Officer has responsibility for: overall implementation and effective oversight of policies and procedures relating to the FCPA Policy; assisting the Legal & Compliance Department, as needed, in respect of the Policy; where the circumstances warrant, referring to the Legal & Compliance Department any questions, reports and/or complaints the CFO receives regarding adherence to the Policy; immediately reporting to the Legal & Compliance Department any material violations of the Policy that appear to have occurred; assisting the Legal & Compliance Department in investigating possible violations of the Policy unless the NCG Committee determines that an independent investigation is warranted; and reporting to the NGC Committee at least quarterly on the status of Innospec s compliance with the FCPA Policy. In carrying out the foregoing responsibilities, the Innospec CFO may utilize the assistance of qualified staff members, investigators, forensic accountants and outside legal counsel. Legal & Compliance Department The Innospec Legal & Compliance Department has responsibility for: day-to-day administration of the FCPA Policy; advising Company personnel (as Innospec s legal counsel) on any legal issues related to compliance with the Policy; coordination of FCPA education and training programs as required by the Policy; administration of the FCPA Policy hotlines; February

10 remaining current on best practices in FCPA and corporate compliance policies and procedures; administration of the Code of Conduct Annual FCPA Certification program; receiving and responding to questions, reports and/or complaints regarding adherence to the Policy, after consultation with the Innospec CFO and/or the NCG Committee where appropriate; immediately reporting to the Innospec CFO or, where appropriate, the NCG Committee any material violations of the Policy that appear to have occurred; reporting to the NCG Committee at least quarterly on the status of the Company's compliance with the Policy and any practical issues that have arisen in connection with administration of the Policy. The Innospec Legal & Compliance Department is authorized to communicate directly with the NCG Committee at any time. Enhanced Compliance Steering Group The Enhanced Compliance Steering Group comprises Innospec s CFO, Head of Business Assurance and Legal & Compliance Counsel. The Group meets bi-weekly to ensure effective implementation of the FCPA Policy. The Group approves any compliance related plans, such as the training plans, and monitors that such plans are being implemented. Performance Delivery Executive ( PDE ) The PDE manages Innospec s day-to-day operational activities. The PDE meets on a quarterly basis and by telephone every two weeks. The PDE considers and endorses, where appropriate, any compliance related actions plans recommended by the Enhanced Compliance Steering Group. Business Assurance The Innospec Business Assurance Department will assist with enforcement of the FCPA Policy by routinely and regularly including in the internal audit process questions and reviews designed to test and verify compliance with the Policy and by otherwise assisting the Legal & Compliance Department with administration of the FCPA Policy as needed from time to time. Each Innospec Business Assurance auditor will immediately notify the Innospec CFO, the Legal & Compliance Department, or the NCG Committee, as appropriate, when any credible indication of a failure to comply with the FCPA Policy comes to his or her attention. February

11 ANNEX B RED FLAGS 1. The third party has a history of improper payment practices. 2. The transaction or the third party is in a country where there is widespread corruption. 3. The transaction or the third party is in a country that has a history of bribes and kickbacks. 4. The transaction or the third party is involved in or with an industry that has a history of FCPA violations. 5. The third party refuses to agree to comply with the FCPA. 6. The third party has a family or business relationship with a government official. 7. The third party has a poor business reputation. 8. The third party insists that its identity remain confidential or refuses to divulge the identity of its owners. 9. A government customer recommends or insists on use of a particular intermediary or consultant. 10. The third party does not have offices or a staff. 11. The third party does not have significant experience. 12. The third party insists on unusual or suspicious contracting procedures. 13. The fee or commission to be paid to the third party is unusually high. 14. The payment mechanism to be utilized is secretive or unusual. 15. The third party submits inflated or inaccurate invoices. 16. The third party requests cash or bearer instrument payments. 17. The third party requests payment in a jurisdiction outside its home country that has no relationship to the transaction or the entities involved in the transaction. 18. The third party asks that a new customer be granted an excessive credit line. 19. The third party requests unusual bonus or special payments. 20. The third party requests an unusual advance payment. 21. The termination of a business relationship with a third party by another entity under suspicious or inadequately explained circumstances. 22. Heavy reliance on political/government contacts to promote Innospec s interests. February

12 ANNEX C STANDARD CONTRACT PROVISIONS: FCPA SCHEDULE 1. Compliance with Anti-Bribery Law. The {Third Party} represents and warrants that it will take no action, directly or indirectly, that would constitute a violation of the United States Foreign Corrupt Practices Act of 1977, as amended from time to time (the FCPA ), any other applicable anti-bribery laws or regulations, or Innospec s Code of Ethics and associated FCPA Policy. Specifically, the {Third Party} represents and warrants that neither it nor any of its officers, directors, employees, representatives, contractors, designees, ultimate beneficial owners or shareholders, nor any other party acting on its behalf, will directly or indirectly make, offer, authorize, or promise to make any Payment to obtain or retain any contract, business opportunity or other similar benefit: 1.1. to or for the use or benefit of any Government Official; 1.2. to any other person where the {Third Party} knows or has reason to know or suspect that any part of such Payment will be directly or indirectly given or paid by such other person, or will reimburse such other person, for any Payment previously made or given to any Government Official when such Payment could not be made directly in accordance with this Section 1; or 1.3. to any person where such Payment violates any laws, decrees, regulations or policies having the force of law in the country or countries of such person or applicable to such person or the laws of the United States of America Definitions. For the purposes of this Section 1, the following definitions shall apply: The Government is any national, federal, state, provincial, municipal, local, or any other government, including any department, agency, instrumentality, company, corporation, or other entity owned or controlled by any Government; A Government Official is any official, employee, or representative of any Government or state owned enterprise; political party, or any official, employee, or representative of any political party; candidate for political office; official, employee, or representative of any international organization An Affiliated Person is any officer, director, or employee of, or owner of any beneficial interest in or with respect to, the {Third Party} A Payment is any monetary payment, loan, donation, gift, in-kind service, or any other thing of value. 2. No Government Official Employees. The {Third Party} represents and warrants that unless disclosed to Innospec in a separate written statement, neither {Third Party} nor any of its Affiliated Persons are Government Officials nor have they been in the last five years. If at any time during the term of this Agreement the {Third Party} and/or any Affiliated Person is named, appointed, or otherwise becomes a Government Official, the {Third Party} will notify Company in writing within three (3) business days. 3. No Anti-bribery Offences. The {Third Party} represents and warrants that it has not been convicted of, pleaded guilty, or charged with any offence involving fraud, corruption or bribery in any jurisdiction or country. 4. Fully Qualified and Authorized. The {Third Party} represents and warrants that it is fully qualified to assist Innospec and is authorized to act in the capacity contemplated by the Agreement in accordance with all applicable laws. Further, the {Third Party} has complied with any applicable registration and licensing requirements. February

13 5. Immediate Disclosure by {Third Party}. The {Third Party} agrees to immediately inform Innospec if a possible violation by the {Third Party} of the FCPA, other applicable anti-bribery law, and/or Innospec s Code of Ethics or associated FCPA Policy has taken place. Further, if any Government Official or any relative of such Government Official solicits, asks for, or attempts to extort, any money or thing of value from the {Third Party}, the {Third Party} shall refuse such solicitation, request or extortionate demand, and immediately report the event to Innospec. 6. Innospec s Right to Disclose. The {Third Party} agrees that full disclosure of information relating to a possible violation by the {Third Party} of applicable law, including a violation of the FCPA or any other applicable anti-bribery law, may be made by Innospec at any time and for any reason to the U.S. Government, its agencies, and/or any other Government or non-government party. 7. Compliance Training for the {Third Party} Personnel. The {Third Party} warrants that it fully understands these provisions relating to its business conduct and will ensure that it and all Affiliated Persons fully understand and comply with these provisions. The {Third Party} agrees to make itself available for compliance training as directed by Innospec prior to the Commencement Date and for periodic retraining and refresher training courses as directed by Innospec after the Commencement Date. 8. Certification of Non-Violation. The {Third Party} warrants that its senior personnel will furnish Innospec a signed non-violation certification on an annual basis certifying the following: In carrying out my responsibilities for Innospec under the {Agency/Distributor/Consultancy} Agreement, I have fully complied with all applicable anti-bribery laws, including, but not limited to, the US Foreign Corrupt Practices Act ( FCPA ) and local anti-bribery laws. I am not aware of any violations by {Third Party} of the FCPA and/or any other applicable anti-bribery laws. {NAME/SIGNATURE/DATE} 9. Records and Audit. The {Third Party} shall keep accurate accounts, books, and records showing all costs and charges incurred in accordance with generally accepted accounting principles and practices. Such accounts and records shall be made available in the {Third Party s} office during normal business hours for inspection by Innospec or its designee. The {Third Party} shall preserve such accounts and records for at least five (5) years after the end of the term of this Agreement. Innospec shall further have the right, upon reasonable written notice to the {Third Party}, to audit compliance by the {Third Party} with all provisions of this Agreement including, but not limited to, provisions of this Agreement related to compliance with the FCPA and any other applicable anti-bribery laws. The {Third Party} agrees to fully cooperate with respect to any such audit or other compliance review. 10. Accuracy of Representations at All Times. The {Third Party} undertakes that all of the listed Representations and Warranties will remain true, accurate, and complete at all relevant times. 11. Termination. At its sole discretion, upon notification to the {Third Party}, Innospec may terminate this Agreement effective immediately if: Innospec makes a good faith determination that the {Third Party}, and/or any Affiliated Person, has breached these Representations and Warranties and/or otherwise has committed a violation of the FCPA and/or any other applicable anti-bribery laws; OR the {Third Party} and/or any Affiliated Person has been named, appointed, or otherwise becomes a Government Official, Innospec may terminate this Agreement effective upon notification to the {Third Party}; OR {Third Party} fails or refuses to promptly furnish the anti-bribery non-violation certification referenced in Section 8 above. February

14 ANNEX D FREQUENTLY ASKED QUESTIONS Scope Innospec subsidiaries are incorporated in various countries. Why is the US FCPA nevertheless applicable to all Innospec employees and representatives worldwide? Innospec is listed on the NASDAQ and thus subject to the FCPA. The FCPA applies to all US listed securities issuers and their subsidiaries irrespective of where they are located or incorporated. Does the FCPA also apply to non-us citizens and to activities outside of the United States? The FCPA particularly targets illegal activities outside the United States. Individuals may be subject to US jurisdiction with regard to the FCPA because they are employees of Innospec, which is subject to the FCPA. Individuals also may be directly subject to US law as US permanent residents or US citizens or because the relevant business is a US listed securities issuer or incorporated in the United States. If there is a conflict between US law and the laws of a different jurisdiction in relation to application of the FCPA, which takes precedence? Innospec and all of Innospec s Employees and Representatives, wherever located, are covered by the US FCPA. If there is a difference between the application of the US FCPA and the laws of a different jurisdiction, Innospec s FCPA Policy still covers all employees and you should comply with the Innospec FCPA Policy. If you have a question about a specific scenario, contact Legal & Compliance. Commercial Bribery If the FCPA relates to bribing foreign officials, does this mean bribing someone who works for a private company is OK? No. Improper payments between private company employees sometimes called commercial bribery is improper under the Innospec Code of Ethics, which states at Section 7: An employee must not offer or receive bribes or other payments which are intended to influence a business decision or compromise independent judgment; must not give money, services or gifts in order to obtain business for the Company, and must not receive money, services or gifts for having given Company business to an individual or organisation. For guidance on hospitality and gift-giving among private company employees, refer to the Innospec Giving and Receiving Gifts & Hospitalities Procedures available on the company s Intranet. Government Officials What about payments to employees at a state-owned company? Do these violate the FCPA? Yes, payments to employees of state-owned companies may violate the FCPA and Innospec policy. The FCPA views employees of many state-owned businesses as being employees of the governments that own them. Importantly, the FCPA may view a company as state-owned, and its employees as government officials, even if local law does not view that entity as state-owned. If you have questions about a specific company, please call Legal & Compliance. Due Diligence Why do I need to provide certain information in the Due Diligence Questionnaire such as banking details when other Innospec departments already have it? It is very important for Innospec that there is a complete, written file containing the due diligence done by the business manager responsible for the relationship. Information provided over the telephone or maintained in a different department (such as banking details) is not consistent with the process developed to protect Innospec. Innospec also cross-references the information in the Questionnaire with information maintained by other Innospec departments to ensure consistency. Where did the Corruption Perception Index come from and how often is it updated? Innospec refers to the Corruption Perceptions Index ( CPI ), developed by the non-governmental organization called Transparency International. This is a widely cited source for corruption risk evaluation (see The CPI is updated annually. February

15 What is the FCPA risk with distributors? Why are distributors included in the procedures if they are not acting on our behalf like agents or consultants? Innospec may be liable under the FCPA if a distributor makes an improper payment, Innospec knew of or was aware of a high probability of the payment, and Innospec did not make appropriate efforts to prevent it from happening. In a 2004 enforcement action, the U.S. government charged a company with FCPA violations when it knew of or was aware of a high probability that its distributors were making improper payments to sell the company s products When evaluating whether to retain a sales agent in a certain country, the candidate claimed proudly to be the brother of the Minister of Industry. Is this a red flag? Yes, for two reasons. First, the candidate may be a close relative of a government official in a position to assist in obtaining or retaining business, a key element under the FCPA. Innospec must ensure that the agent, if retained, does not seek to corruptly influence his relative on Innospec s behalf. Second, the candidate s proud claim about his relation may suggest that he views this relationship as an asset for assisting Innospec in obtaining or retaining business. In both cases, the risks of an FCPA concern are heightened because of this candidate s proximity to a government official, and you should consult with Legal & Compliance about the best way to proceed. Business with Government Entities May Innospec Transact Business with Government Entities? Yes, the FCPA does not prevent Innospec from engaging in legitimate business transactions with government entities, such as contracting for the delivery of various goods and services. The FCPA is focused on corrupt payments to individual government officials that are made in order to unfairly gain business opportunities. Innospec, however, must be very vigilant in supervising these relationships and gaining assurances that the government officials will comply with the FCPA. Innospec may not enter into agreements with such entities or persons without completing the due diligence process and obtaining a review and written approval from the Legal & Compliance Department. Facilitation Payments Does any small payment qualify for the "facilitating payments" exception of the FCPA? No. Even a very small payment, if made for the wrong thing or in the wrong way, can violate the FCPA. The exception permitted under the FCPA for facilitating payments is very narrow. For this reason Innospec s FCPA policy is to prohibit all such facilitating payments except under circumstances implicating the health or safety of an employee, or with the express permission of Legal and Compliance. What if my personal safety is in danger? In circumstances involving threats to the health or safety of an Innospec employee, prior approval is not required before making a facilitating payment. However, a report must still be made to the Legal & Compliance Department within five days of the event, so that Innospec s books and records accurately reflect the transaction. Violations Is Innospec Liable for the Acts of its Third Party Intermediaries? Yes, Innospec may be liable for bribes made by both its U.S. and non-u.s. Representatives or other parties acting on its behalf, if Innospec had prior knowledge of or should reasonably have known about the bribes. If the circumstances indicate that Innospec turned a blind eye to conduct that violates the anti-bribery provisions of the FCPA, Innospec is deemed to have knowledge of the unlawful conduct. All Employees have a duty to inquire when circumstances raise red flags. February