Park-Ohio Holdings Corp. Foreign Corrupt Practices Act Policy

Transcription

1 Park-Ohio Holdings Corp. Foreign Corrupt Practices Act Policy I. Policy Park-Ohio Holdings Corp. ( Park Holdings or the Company ) is committed to conducting all operations and activities, including those outside of the United States, in compliance with the U.S. Foreign Corrupt Practices Act ( FCPA ). This policy is an integral and mandatory part of our Code of Business Conduct and Ethics in requiring compliance with laws applicable to our international business dealings. II. Purpose and Scope The purpose of this policy is to inform Company employees of their responsibility to comply fully with the requirements of the FCPA. This policy applies to the Company and its subsidiaries, divisions and to all employees, officers, directors, consultants, agents, contractors and other persons acting for or on behalf of the Company. Key personnel will be required to complete a FCPA Compliance Certification. III. Foreign Corrupt Practices Act The FCPA has two primary components: the antibribery provisions, which prohibits bribery of foreign officials by U.S. persons, corporations or their wholly-owned or controlled affiliates for the purpose of obtaining or retaining business, directing business to another or securing an improper advantage in the foreign country. The second component is the accounting provisions (known as the books and records and internal controls provisions), which impose record-keeping and internal controls requirements that mandate the Company and its whollyowned or controlled foreign affiliates record and account for business transactions accurately and implement sufficient internal controls to ensure the books and records accurately reflect the Company s transactions. A. AntiBribery Provisions The antibribery provisions of the FCPA prohibit: Promising, offering or giving money or anything of value to a foreign official for the purposes of obtaining or retaining business. Promising, offering or giving money or anything of value to a foreign official for the purposes of obtaining or retaining favorable legislation or regulation or other preferential treatment.

2 Promising offering or giving money or anything of value to a third party while knowing that some or all of the payment will be given, directed or offered to a foreign official. Foreign official means any officer or employee of a foreign government or governmental department, agency, or instrumentality, and includes any person acting in an official capacity on behalf of a governmental entity. Foreign official also includes political party officials and candidates for public political office, employees of government-owned entities and officials and employees of public international organizations. The FCPA prohibits making payments to third persons, such as consultants representing sales agents, distributors, or contract partners, while knowing that some or all of such payments will be given, directed or offered to a foreign official in return for an exercise of influence to help a U.S. company to obtain or retain business, direct business to another or secure an improper advantage. The definition of knowing includes an awareness that a result is substantially certain to occur or that a high probability exists that a certain circumstance will occur or that such circumstance exists. Under this standard, actual knowledge of the actions of a company s agent or partner is not necessarily required. Purposeful ignorance will not shield an individual or a company from prosecution under the FCPA. Thus, employees may not turn a blind eye to activity that appears to violate the FCPA. B. Permissible Payments The FCPA permits payments to foreign government officials in very limited situations. However, NO PAYMENTS TO FOREIGN OFFICIALS, including those described below in subsection (1) and (2) may be made or authorized without the prior written approval of the Company s Legal Department and any authorized payments must be properly documented and recorded in the Company s books and records. 1. Lawful Payments The FCPA permits payments that are lawful under the written laws and regulations of the foreign official s country. The fact that payments to foreign officials may be customary in the foreign country does not make the payment lawful under the FCPA. The fact that foreign officials may routinely solicit and receive bribes does not make the payment of such bribes acceptable corporate action or legal under the FCPA. 2. Payment of Reasonable and Bona Fide Expenses The Company may pay bona fide and reasonable expenditures (including travel and lodging) incurred by or on behalf of a foreign official, if the payments are directly related to either (a) the promotion, demonstration, or explanation of products or services or (b) the execution or performance of a contract with a foreign government or agency thereof. These types of expenditures must be modest and not violate the written laws and customs of the country where incurred. All such payments must be approved in writing in advance by the Legal Department and properly documented in the Company s books and records when paid.

3 3. Extortion or Duress Payments A situation might arise in which the Company is compelled to pay a foreign official in order to avoid threats to the health and safety of our personnel. Situations involving extortion or duress will not give rise to liability under the FCPA because a payment made in response to true extortionate demands under imminent threat of physical harm cannot be said to have been made with corrupt intent. Mere economic coercion, however, does not amount to extortion. Although an individual who makes a payment under duress (i.e. upon threat of physical harm) will not be criminally liable under the FCPA, a bribe payer who claims payment was demanded as a price for gaining market entry or obtaining a contract would not be able to argue that he lacked the intent to bribe the official because he made a conscious decision to pay the official when he could have refused to pay the bribe and walked away. Extortion occurs when the person demanding the payment instills in the payer the fear that, absent payment, the payer will suffer physical harm, an unlawful threat to his or her personal safety or freedom of movement. All demands for extortionate payments must be reported to the Division President or her/his designees. Absent unusual circumstances, such as where the personal safety or freedom of movement of an employee or family member is at risk if such a payment is not made, the Company will not make extortionate payments. If possible, the General Counsel should be contacted, and pre-clearance should be obtained prior to making any extortionate payment. Emergency situations may dictate that such payments cannot be pre-cleared, e.g., if an improper payment is demanded to secure the release of an employee s passport which prevents that employee from departing the country. Any expense must thereafter be submitted for approval, and the reason why pre-clearance was not obtained must be clearly documented. If pre-clearance cannot be obtained, then as soon as possible after the extortionate payment has been made and the threat has passed, the payment must be reported to the General Counsel, providing a full and complete description of the facts and circumstances surrounding the payment, including the exact amount of the payment. The payment must then be recorded accurately in the books and records of the Company as an extortionate payment. C. Accounting Standards The accounting provisions of the FCPA require that companies establish accounting and internal record-keeping controls that will prevent the use of slush funds and off-the-books accounts which have been used in the past by some companies as a means of concealing questionable foreign payments. In particular, the FCPA requires companies to establish and

4 keep books, records, accounts, and controls which accurately and fairly reflect their transactions and dispositions of their assets. This includes transactions that relate in any way, directly or indirectly, to a foreign official. The use of Company funds or assets for any unlawful, improper, or unethical purpose, the establishment of any undisclosed, unrecorded, or otherwise secreted funds or assets of the Company, and all false or artificial entries in its books and records, are all strictly prohibited. These FCPA mandates are in addition to the Company s other policies requiring approvals for transactions and expenditures, and its other accounting controls and procedures. D. Due Diligence and Selection of Representatives and Business Partners The Company will compete for all business opportunities vigorously, fairly, ethically and legally and will negotiate contracts in a fair and open manner. Regardless of any pressure exerted by foreign officials, the Company will conduct business using only legal and ethical means. This practice of fairness and professionalism must extend to the activities of the Company s agents, consultants, representatives and business partners. The Company should be careful to avoid situations involving third parties that might lead to a violation of the FCPA. It is much better not to hire an agent or consultant, for example, than to conduct business through the use of a third party s questionable payments. Therefore, prior to entering into an agreement with any agent, consultant, joint venture partner or other representative who acts on behalf of the Company with regard to foreign governments on international business development or retention, the Company will perform proper and appropriate FCPA-related due diligence and obtain from the third party certain assurances of their FCPA compliance and commitment to the Company s FCPA Policy. E. Penalties for Violations Violations of the FCPA s antibribery provisions could subject individuals to criminal fines of the greater of $250,000 or twice the gross gain or loss from each violation, $16,000 in civil fines, and imprisonment up to five years per violation. The Company could be fined up to $2 million or twice the gross gain or loss from each offense or a civil fine of $16,000. Violations of the FCPA s accounting provisions could subject individuals to fines of $5 million and up to 20 years imprisonment per violation. The Company could be fined up to $25 million per violation. Employees in violation of this policy will be subject to disciplinary action, up to and including termination from employment. IV. Reporting Violations Any employee who suspects or becomes aware of a violation of this FCPA policy should contact our Whistleblower Hotline via the internet or telephone as follows: Link: Telephone:

5 Every effort will be made to investigate confidential and anonymous reports within the confines of the limits on information or disclosure such reports entail. While self reporting a violation will not excuse the violation itself, the extent and promptness of such reporting will be considered in determining any appropriate sanction, including dismissal. The Company will investigate any matter which is reported and will take appropriate corrective action. The Company will not tolerate retaliation against any person who communicates bona fide concerns to the Company or law-enforcement officials concerning a possible violation of any law, rule, regulation, or this policy.