FOREIGN CORRUPT PRACTICES ACT

Transcription

1 ENERGY ENVIRONMENT INFRASTRUCTURE INDUSTRIAL FOREIGN CORRUPT PRACTICES ACT compliance policy Done once. Done right.

2 ETHICS AND SAFETY HELPLINE: US/Canada Toll Free Israel Other Countries: (Call Collect) PAGE ONE

3 FCPA compliance policy MESSAGE FROM KURT CONTI Dear Fellow Employee and Business Partner, The foundation of Conti s success for over one hundred years and four generations is based on the honesty, integrity, and ethics with which we conduct ourselves. As Conti s presence in the field of international business continues to grow, we are determined to remain committed to maintaining these founding principles by diligently abiding by the Foreign Corrupt Practices Act. Congress enacted the Foreign Corrupt Practices Act (FCPA) to ensure that American companies maintain ethical business practices while working internationally, prohibiting actions such as bribery, favoritism, and unauthorized payments to foreign officials in order to gain unfair economic advancement. Conti is committed to taking every step necessary to ensure that our employees are properly educated on the rules and requirements mandated by the FCPA and all other relevant anti-corruption laws. To achieve this mandate, our employees will engage in compliance assessments, routine training courses, and conduct regular internal audits of our process and procedures. Conti is dedicated to working exclusively with companies who abide by the FCPA or its local equivalent when engaging in business affairs, and who hold themselves to the same ethical standards that we do. Our awareness of and commitment to creating and maintaining a work environment in which corruption has no place ensures that Conti will continue to maintain its position in the industry as a company whose employees and business partners work to the highest level of ethical behavior when engaging in both foreign and domestic business practices. As CEO of The Conti Group I pledge to comply with the FCPA, noting that our executive team and all other employees are equally committed to Conti s Code of Ethics, Conduct Guidelines and this FCPA Compliance Program. Sincerely, Kurt Conti Chief Executive Officer The Conti Group PAGE TWO

4 CONTENTS Policy Statement Applicable Parties Overview Training Conti FCPA Guide Conti FCPA Guide - Prohibited Acts Conti FCPA Guide - Law Details Conti FCPA Guide - Permitted Payments Conti FCPA Guide - Gifts Conti FCPA Guide - Charitable Contributions Conti FCPA Guide - Accounting Controls Conti FCPA Guide - Compliance Program Monitoring Consequences of FCPA Violations Conclusion Regarding the FCPA FOUR FIVE SIX EIGHT EIGHT NINE THIRTEEN FIFTEEN SIXTEEN SEVENTEEN EIGHTEEN NINETEEN TWENTY PAGE THREE

5 FCPA compliance policy POLICY STATEMENT It is Conti s policy that each and every Conti Representative complies fully with all applicable provisions of the FCPA as well as the corrupt practices acts of foreign nations applicable to the Conti Representative s place of work. Compliance with the FCPA and other corrupt practices laws and regulations is mandatory. Conti representatives are not authorized to guide, or authorize, either directly or indirectly any other person to violate Corruption Laws; nor are they permitted to act contrary to these laws or ignore suspected corrupt activities. It is Conti s policy that violation of Corruption Laws may lead to disciplinary actions up to and including termination. There may also be legal repercussions if such a violation occurs. If convicted of a violation jail time and large fines are possible punishments and fines imposed on individuals may not be paid by their employer. The Foreign Corrupt Practices Act of 1977, as amended, states that it is illegal to make payments to foreign government officials to assist in obtaining or retaining business. While transacting Conti business, all Conti employees and its agents are expected and required to act within the legal and ethical guidelines posted by the FCPA. To provide context for this guide, in the 2011 Bribery Index, which ranked the industries where bribery is least likely to occur, Construction/Public Works received 5.3 out of 10 where the average industry score was 6.6. This means we are in an industry that is prone to bribery and therefore need to develop the appropriate compliance programs based on the risk. Compliance with FCPA regulations is an important component of Conti s Code of Business Ethics and Conduct policy requirements. That policy and the Ethics and Safety Helpline are additional resources available to assist anyone in complying with the FCPA regulations. PAGE FOUR

6 APPLICABLE PARTIES OVERVIEW Conti s FCPA Policy is applicable to any and all Conti employees regardless of where they are conducting business. As stated previously, the FCPA and all other relevant Corruption Laws apply company wide. Their rules and regulations dictate how we all conduct business on a daily basis. Accordingly, every Conti employee is responsible for knowing and practicing the material contained within this Policy. This policy is intended to provide information regarding the Foreign Corrupt Practices Act ( FCPA ) and its application to Conti business activities and its divisions, subsidiaries, affiliate officers, directors, employees, agents, or representatives (collectively Conti Representative ) of all personnel within The Conti Group ( Conti ). The policy also extends to Conti s financial record keeping and accounting practices. While not directly subject to FCPA accounting requirements, Conti endeavors to pursue best business practices wherever it operates. Also included in this policy is the Conti FCPA Guide which details the procedures relating to the FCPA requirements and compliance program. While this guide focuses on the FCPA, it is important for all Conti employees to know that depending on where we are conducting business other local or foreign laws may apply in addition to the FCPA. If this is the case, Conti s administrators will advise all project and corporate personnel and provide them with all relevant information and resources. PAGE FIVE

7 FCPA compliance policy TRAINING Training for meeting FCPA compliance requirements and regulations is mandatory. All new employees receive FCPA training in New Hire Training. The training is delivered via video presentation and concludes with a certificate as proof of participation. FCPA training is also updated and certified on an annual basis for all employees. FCPA training and compliance is part of Conti s Code of Business Ethics and Conduct Guidelines and the Code is a starting point for any and all business conduct questions or concerns. The purpose of including the Conti FCPA Guide in this policy is to assist any and all Conti employees, agents, or representatives not only comply with the law but perpetuate Conti s commitment to ethical business practices. All individuals and entities should become familiar with the Conti FCPA Guide to ensure and facilitate compliance. There are specific departments within Conti that should understand and utilize the Conti FCPA Guide. These departments and a general summary of their responsibilities pertaining to the FCPA are listed below: 1. BUSINESS DEVELOPMENT Those individuals working in sales in foreign countries should understand the laws and customs pertaining to the countries they are soliciting business in. Those working in sales should also be well-versed in how to identify and evaluate risk factors in potential markets, making for more effective business opportunities. Business Developers should also be acutely aware of the risks posed by paying any fees or making gifts to foreign parties, whether they are government employees or not. Please consult the remainder of this Guide for more detailed information. 2. OPERATIONS PERSONNEL Operations personnel, both field and office, should be familiar with the specific procedures performed by field personnel in order to procure material and services at a project level. They must also know the appropriate procedures to follow when assessing potential risks in regards to procuring work. This is especially important when assessing our standard procurement procedures, as they must abide the guidelines posted by the FCPA. All purchasing activities, including those involving third-parties, require due diligence from Operations personnel to ensure Conti is complying with both the FCPA and all local Corruption Laws. PAGE SIX

8 3. CONTRACTS DEPARTMENT PERSONNEL These employees must be aware of the specific controls, requirements, checks, and logic that is required to ensure that risk assessment is done effectively. Contracts personnel must also execute appropriate levels of due diligence when drafting and editing the contracts used by Conti. The Contracts Department must actively communicate with Operations personnel so that all employees associated with a project are informed as to the risks and open issues with regards to Conti s Compliance Program. 4. ACCOUNTING The accounting staff and AP staff must have a sufficient understanding of what is and is not acceptable on an accounting level with the FCPA. They must also know how to review, evaluate, audit, and control transactions to ensure that Conti is FCPA compliant. PAGE SEVEN

9 FCPA compliance policy CONTI FCPA GUIDE The FCPA enacted in 1977 and subsequently amended, is the primary federal statute designed to deter the improper inducement or bribery of foreign officials and persons affiliated with foreign political parties for the purpose of obtaining or retaining business. The FCPA provides two methods of discouragement for such behavior. They are listed below: First, the FCPA includes a general prohibition against payments to foreign officials, foreign political parties or party officials and candidates for foreign political office. Second, it requires stringent record-keeping and accounting control for all publicly traded companies. While Conti is not publicly traded, it has its own internal accounting procedures and strives to maintain best practices and exceed minimum requirements. Accordingly, it is required by Conti that all employees maintain our strict accounting standards and document any payments to persons or entities in foreign countries. All Conti employees and agents are required to comply with Conti s FCPA policy and utilize the Conti FCPA Guide and adhere to the following procedures. CONTI FCPA GUIDE PROHIBITED ACTS The FCPA prohibits bribery of foreign government officials or persons affiliated with foreign political parties to obtain, retain or direct business. Specifically, it is unlawful for: i. any person or entity covered by the FCPA, including Conti and its officers, directors, employees, representatives and agents ii. to corruptly offer, pay, promise to pay or authorize the payment of anything of value, iii. directly or indirectly, iv. to any foreign official, foreign political party or party official, or candidate for foreign political office, (collectively Foreign Official ) v. for the purpose of influencing any act or decision of the Foreign Party, inducing such Foreign Official to do or omit to do some action or inducing such Foreign Official to influence any act or decision of such government, vi. in order to assist in obtaining or retaining business or directing business to any person. PAGE EIGHT

10 CONTI FCPA GUIDE LAW DETAILS LIST OF IMPORTANT POINTS: a. Payment, Offer or Promise The FCPA does not require that a payment actually be made or accepted for liability to attach. An offer or promise to pay is sufficient. b. Corrupt Intent The focus is on intent, as determined by the circumstances. The offer, promise, or payment must be made corruptly. A corrupt payment or offer is considered to be an offer that is intended to induce the Foreign Official to misuse his or her official position. It can also encourage an official to make a decision that may not have otherwise been made. Any payment, offer or promise of payment, despite its efficacy, that is intended to improperly influence an official act of the Foreign Official will violate the act, even if unsuccessful. c. Third-Party Payments We are liable for the acts of Third-Parties we contract with. This means our consultants, partners, team members, agents, subcontractors, vendors, etc The FCPA prohibits any individual or company from making, offering, or promising to make corrupt payments through an intermediary or a third party participant. PAGE NINE

11 FCPA compliance policy TO AVOID THIS RISK WE MUST: Thoroughly conduct due diligence on any and all potential third parties that will be involved in the project. Including but not limited to: Background checks, inclusive of their principals and the individuals who be involved in the project * What ties do they have to foreign officials? Personal visits References Understanding & clearly defining the role the third-party will play What value are they adding? How are they providing that value? * What are the potential contact points with foreign officials? What are their qualifications? Are they qualified to perform the work we are asking them to do? How will they be compensated for that value? * Is their compensation commensurate with the value added? Drafting written agreements defining their role and compensation? * Containing self-disclosure protocols that reveal if they or any other company member are a foreign official and what ties, if any, they have with the government Monitoring payments to the third-party and any payments they are making on our behalf. Ensuring we have audit rights Training them on our FCPA program and having them adopt its strictures. Knowing the Red Flags (listed below) & responding proactively when they are observed. PAGE TEN

12 Conti Representatives must be vigilant in examining any instance that provides even an inference of corrupt activity. Conti and Conti s Representatives may not turn a blind eye in hopes that they do not learn of prohibited activity in the conduct of its foreign agents, representatives or joint venture partners. Ignorance is not a defense Red Flags to Watch For: Unusual payment patterns/arrangements History of corruption in the country Refusal of partner to provide a certification of compliance w. FCPA or other anticorruption law Unusually high commissions Partners lack of transparency in expenses & accounting records Partners lack of qualifications or resources Partner recommended by government official Consulting agreements w. only vaguely described services Consultant is a different line of business than that for which it has been engaged Large discounts to Third party distributors Third party related or closely associated w. foreign officials Third party a shell company incorporated in off-shore jurisdiction Third party requests payment to offshore bank account d. Prohibited Recipients A Foreign Official is any official, a foreign political party or party official, or any candidate for foreign political office. The term Foreign Official is defined broadly to include any officer or employee of a foreign government or government-related entity. The term also includes officers and employees of state-owned or controlled enterprises; officers and employees of international organizations; and, depending on the circumstances, may even extend to members of a royal family. The fact that the individual is unpaid or does not hold an official title or position with the government is not determinative. The FCPA prohibits payments to any Foreign Official, foreign party official, or candidate for foreign political office, regardless of rank or position. The focus of the prohibitions is on the purpose of the payment, offer or promise rather than the particular duties of the official or candidate receiving the payment, offer or promise. PAGE ELEVEN

13 FCPA compliance policy e. Anything of Value The phrase anything of value is interpreted broadly to include anything that could directly or indirectly benefit the Foreign Official. Any benefit offered to influence an official act, no matter how small, may violate the FCPA. Some examples of benefits that were found to violate the FCPA include, but are not limited to cash payments, scholarships or jobs for family members, airfare upgrades, and trips/vacations. Even charitable donations to organizations that are of interest to the Foreign Official can qualify as a violation of the FCPA guidelines. f. Influencing an Official Act Influencing an official act is broadly defined to include any effort to secure an improper advantage or influence the conduct of a Foreign Official. This prohibition is not limited only to efforts to influence acts of a foreign government. Any effort made by a representative of Conti aiming to influence a Foreign Official s conduct may violate the FCPA. g. Obtain or Retain Business The phrase obtain or retain business involves any benefit, whether direct or indirect, which could assist a company in its business activities. This prohibition is not only limited to obtaining or retaining government contracts, but has been interpreted broadly to cover any inducement to provide a company with more favorable treatment. For example, inducements to waiving of licensing requirements, the lowering of taxes, and the granting of special concessions have all been held to violate the FCPA. PAGE TWELVE

14 CONTI FCPA GUIDE - PERMITTED PAYMENTS In accordance with the provisions of the FCPA, there are three narrow categories of payments that, depending on the circumstances, may be permissible. The three categories include: Local Law, Bona Fide Business Expense, and Facilitating Payments. The determination of whether a payment falls within one of these narrow categories is often difficult to assess. Therefore, every Conti representative shall first seek prior approval from the Executive Sponsor or Program Manager before making or authorizing any payment (or offer or promise to pay) to any Foreign Official relating to any of these exceptions. Any payment made relating to any of these three exceptions must be properly documented in accordance with Conti s internal accounting procedures. a. Permissible Under Local Law Not all payments to Foreign Officials are prohibited by the FCPA. For example, the FCPA cannot prohibit a payment that is made in a foreign country if the payment abides by the written local laws of that country. This does not include unwritten laws or traditional practices. Because it is highly unusual for a local law to permit corrupt payments, Conti employees should continue to take extreme caution when transacting business in foreign countries. Furthermore, bribery is prohibited in every country that Conti does business with currently, meaning that it is unlikely that any payment covered by the FCPA will fit within this exception. b. Bona Fide Business Expenditure The FCPA does not prohibit payments by Conti Representatives to a Foreign Official if such payment is for bona fide business expenditures. The criteria to be bona fide business expenditures are very limiting. To be considered a permitted bona fide business expenditure, such expenditure (i) must directly relate to the promotion, demonstration, or explanation of products or services or to the execution or performance of a contract with a foreign government or agency, (ii) must be reasonable and necessary, (iii) must be allowed under the local law of that country and (iv) must not be provided with any corrupt intent to influence an official act of the official or party. It is often difficult to abide by these criteria. For example, training expenses may fit within the guidelines of bona fide business expenditure, but they need to be limited to training itself and training related expenses. PAGE THIRTEEN

15 FCPA compliance policy c. Facilitating Payments The FCPA provides for an exemption for nominal payments made by Conti Representatives to facilitate or expedite performance of what are considered routine governmental functions. These types of payments may be classified as facilitating payments. Routine governmental action involves a nondiscretionary act that the Foreign Official was already obligated to perform. Routine governmental action does not include any decision by a Foreign Official to award new business; continue business with a particular party or direct business, or issue a permit where one would not otherwise be issued. To be classified as a facilitating payment, the payment must be for routine governmental action, must be customary in the country where the payment is made and must be permissible under local law. The FCPA lists the following examples of payments that may be permitted: obtaining permits, licenses or other official documents; processing government papers, such as visas and work orders; providing police protection or mail service; providing phone service, power and water supply or loading and unloading cargo; and scheduling inspections associated with contract performance or transit of goods across country. Conti employees need to be careful as even a valid facilitation payment may violate local laws and subject the individual and Conti to local liability. Any potential payment believed to be a facilitating payment requires prior approval from the Executive Sponsor or Program Manager. PAGE FOURTEEN

16 CONTI FCPA GUIDE GIFTS Modest gifts provided by Conti Representatives to a Foreign Official as a token of appreciation or to showcase Conti s products/services may be allowed under the FCPA provided (i) the gift is of nominal value, (ii) the gift is permissible under the local law of that country, (iii) the gift is of an amount and of a kind that is customary to give in that country and (iv) the gift is not provided with any corrupt intent to influence a Foreign Official s actions or to obtain, retain or direct business, rather it is given only to reflect gratitude or esteem. Any gifts provided by a Conti Representative to a Foreign Official must be properly documented in accordance with Conti s internal accounting procedures. Determining whether a gift is permissible under the FCPA can be very difficult. Accordingly, prior approval from the Executive Sponsor or Program Manager must be obtained by all team members before providing any gift to a Foreign Official. For the purposes of this section a Modest Gift is determined to be less than $50.00 unless the limit is less by the laws of the foreign country. PAGE FIFTEEN

17 FCPA compliance policy CONTI FCPA GUIDE CHARITABLE CONTRIBUTIONS Charitable contributions are another area of FCPA exposure. While Conti aims to be an active participant in all of the communities where we work, we must be mindful even when donating to local charities. Charities can be used as vehicles to improperly conceal payments made to corruptly influence foreign officials. For example, a pharmaceutical company used charitable donations to a charity headed by a government official to induce the official to direct business to the company. However, with proper due diligence and appropriate controls, charitable donations are permissible. The process should include: Certification from the recipient of compliance with the FCPA Due diligence confirms that none of recipient s officers are affiliated with the government Require recipient to provide audited financials Written agreement with recipient restricting use of funds Steps to ensure funds transferred to valid bank account On-going monitoring of the efficacy of the program 5 Questions to ask when making charitable payments in foreign country What is the purpose of the payment? Is the payment consistent with the company s internal guidelines of charitable giving? Is the payment at the request of a foreign official? Is a foreign official associated with the charity, and, if so, can the foreign official make decisions regarding your business in that country? Is the payment conditioned upon receiving business or other benefits? Not only will these actions ensure FCPA compliance but will also create a closer and trusting relationship between Conti, the charity and the community, which is the ultimate goal. PAGE SIXTEEN

18 CONTI FCPA GUIDE ACCOUNTING CONTROLS As stated previously in this guide, because Conti is a privately held company, it is not subject to the FCPA s accounting controls. Nonetheless, Conti takes pride in our accounting system and making certain it enables the company to exceed the requirements of wherever we operate. Conti s established system of accounting control ensures that when all transactions are recorded in the companies books, records and accounts, they are recorded accurately and in sufficient detail. Our accounting practices and procedures are designed to meet DCAA standards and we have achieved satisfactory audit results for several years. In order to exhibit our commitment to best practices, Conti must maintain its existing controls, while also considering the following: Keep accurate detail of all payments and expenses All payments to foreign officials must be recorded as such No undisclosed or unrecorded accounts are to be established for any purpose False or artificial entries are not to be made in the books for any reason Adequate monitoring systems should be in place to detect violations of Conti Accounting policy and applicable laws All CASH payments are approved prior to being made and are thoroughly tracked and accounted for in our system. PAGE SEVENTEEN

19 FCPA compliance policy CONTI FCPA GUIDE - COMPLIANCE PROGRAM MONITORING To ensure compliance with the FCPA, an outside Auditing Firm will be contracted to report to the Ethics Officer and perform the following audit functions: Evaluation of Conti s compliance strategy Assessment of the level of effort that is put forth when educating all pertinent employees and third party representatives Assessment of the implementation of monitoring mechanisms Review of all internal business agreements Evaluation of due diligence efforts taken prior to entering into third party arrangements Assessment of the level of Good Faith Effort taken to ensure that the foreign entities engaging in business with Conti comply with the FCPA Interviews with the key personnel responsible for administering, implementing and monitoring Conti s compliance program Review of Conti s FCPA Policy and Procedures Review of FCPA training material and certifications Audit of books and records, noting incurred costs relating to travel, gift and entertainment expenditures for foreign officials Audit of any charitable contributions to foreign parties Review of our international business partners FCPA compliance programs and obtainment and storage of certifications verifying that these businesses are complaint with the guidelines of the FCPA PAGE EIGHTEEN

20 CONSEQUENCES OF FCPA VIOLATIONS The Department of Justice enforces both criminal and civil violations of the FCPA. In recent years, investigations and enforcement of the FCPA guidelines has increased. Criminal Penalties: A company convicted of violating the FCPA can be fined up to $2 million per offense. An individual convicted of violating the FCPA can be fined up to $100,000 per offense. Alternative sentencing guidelines under federal law may result in even greater fines. In addition, an individual can be sentenced to as many as five (5) years in prison. Civil Penalties: The government can also bring a civil action against any company or individual believed to have violated the FCPA for fines up to $10,000 and/or injunctive relief. A court-imposed injunction could involve substantial restrictions on Conti s business operations, providing competitors not subject to such prohibitions with a significant advantage in the competitive marketplace. Violations of the FCPA are not covered by directors and officers insurance, and you are hereby notified and cautioned that Conti will not indemnify any individual employee for such violations. Any Conti employee who violates the FCPA or these guidelines may be subject to disciplinary action, up to and including termination. All other Conti Representatives who violate the FCPA or these guidelines may also be subject to adverse actions up to and including termination of the relationship (contract or otherwise). PAGE NINETEEN

21 FCPA compliance policy CONCLUSION REGARDING THE FCPA The U.S. Government enacted the FCPA in order to maintain proper business dealings and to insure that companies conduct business fairly in the international marketplace. Several other countries are implementing similar laws, if they have not been put in place already. Violation of the FCPA may carry significant penalties for both Conti and the specific individuals responsible for the violation. Therefore, it is imperative that every Conti employee understand these policies and FCPA guidelines. Conti stresses compliance not only in light of the potential penalties but because compliance ensures we continue to operate ethically and honestly, wherever we conduct business. As stated in Kurt s opening letter, the foundation of Conti s success for over one hundred years and four generations is based on the honesty, integrity, and ethics with which we conduct ourselves. Enacting and executing this FCPA program is only an extension of the values by which we already operate. If questions arise while performing an occupational responsibility, please refer to the FCPA policy and Conti FCPA Guide. In addition, please do not hesitate to contact your supervisors or the administrators listed on the front of this guide. NOTE: It is mandatory that the Contracts department be contacted before involving any outside council or party relating to any FCPA problem-solving or issue resolution. Conti employees should always feel free to contact the ETHICS AND SAFETY HELPLINE at any time regarding challenges relating to the FCPA compliance. Calls to the Ethics Office will be confidential and there will be no consequences for calling to ask questions or report suspicious activity. PAGE TWENTY

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