20A. Compliance with Import and Customs Laws. Section. Code of Ethics A. SUMMARY B. APPLICABILITY C. POLICY D. RESPONSIBILITIES E.

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1 C O R P O R A T E P O L I C Y M A N U A L Section 20A Compliance with Import and Customs Laws A. SUMMARY B. APPLICABILITY C. POLICY D. RESPONSIBILITIES E. PROCEDURES F. REFERENCES Exhibit 1 Procedure Implementation Code of Ethics United Technologies Corporation 2016

2 C O R P O R A T E P O L I C Y M A N U A L S E C T I O N 2 0 A A. SUMMARY The U.S. government and many other governments control the importation of goods in order to safeguard national security, ascertain that goods entering the country are legitimate, and ensure that appropriate duties and fees are paid. In addition to the Customs laws and regulations, other government agencies may impose separate import requirements to ensure goods meet health, safety or other standards. Failure to comply with applicable import laws and regulations can result in civil or criminal penalties, including fines, seizure and forfeiture of goods, and/or the denial of the Corporation s privilege to participate in import trade. B. APPLICABILITY This Policy applies to United Technologies Corporation ( UTC ), all of its principal business segments, units and divisions, and all other operating entities wherever located (including joint ventures, partnerships and other business arrangements where UTC has effective management control) (collectively operating units ). For purposes of this Policy, UTC s principal business segments, units or divisions are: UTC Climate, Controls & Security Systems, Pratt & Whitney, Pratt & Whitney Canada, UTC Aerospace Systems, Otis, Sikorsky, and United Technologies Research Center. Unless the context indicates otherwise, references to UTC include all operating units, their employees and contractors. C. POLICY 1. UTC will comply with all applicable laws and regulations governing the importation of goods. 2. UTC will arrange, approve and execute the import of goods only if: a) There is authority under applicable laws and regulations to make the import; b) The shipper of the imported item is not restricted; c) The intended recipient and all intermediaries are authorized to receive the imported item; d) All required documents are complete, accurate, and compliant with local import regulations, and e) All applicable duties/fees are paid. D. RESPONSIBILITES 1. UTC employees and contractors must comply with this Policy and all policies and procedures established in furtherance of this Policy. United Technologies Corporation 2016 Page 2 of 11

3 C O R P O R A T E P O L I C Y M A N U A L S E C T I O N 2 0 A 2. The UTC Senior Vice President and General Counsel will be the senior responsible official for matters arising under this Policy. 3. The President or other chief executive of each principal business segment, unit or division will establish and maintain an import compliance program sufficient to ensure compliance by all of its respective operating units with all applicable laws and regulations pertaining to the import of goods. With the concurrence of the UTC Associate General Counsel, International Trade Compliance ( ITC ), he/she will appoint a Senior Import Official in the Legal Department and such additional personnel as may be required to ensure compliance with the import laws and regulations of all countries into which the operating units are importing, and with UTC policies and procedures with respect to importation activity under this Policy. 4. The Director, UTC Internal Audit will perform or provide for periodic audits of import compliance at UTC s operating units, sufficient to provide UTC management reasonable assurance that operating unit internal control programs are adequate. E. PROCEDURES The UTC Senior Vice President and General Counsel is authorized to prescribe and amend Exhibit 1 hereto as deemed necessary to foster and assure import compliance. F. REFERENCES Corporate Policy Manual Section 20 Compliance with Export Controls and Economic Sanctions Corporate Policy Manual Section 34 Ethics and Compliance Programs and the UTC Code of Ethics United Technologies Corporation 2016 Page 3 of 11

4 A. BACKGROUND AND OBJECTIVES EXHIBIT 1 Implementing Procedures U.S. and non-u.s. government import regulations, and the internal controls required to assure compliance with these regulations are extremely complex and touch virtually every aspect of business activity. For example, the U.S. government regulates the following: 1. The proper entry of merchandise into the United States; 2. The correct classification of merchandise under the Harmonized Tariff Schedule of the United States (HTSUS); 3. The duty rates assigned to imported commodities, including antidumping and countervailing duties; 4. The valuation of imported commodities; 5. The country of origin determination and marking of imported commodities; 6. The type of imported commodities (e.g., defense articles, radio frequency devices); 7. The importer s eligibility to use special duty preference programs; and 8. Importer security programs (e.g., Importer Security Filings, Customs-Trade Partnership Against Terrorism). U.S. government regulatory and enforcement authorities hold corporate parents like UTC accountable for the compliance of their operating units, and the legal, reputational and business consequences to UTC of import compliance failures could be material. To support UTC in fulfilling its responsibility to promote and oversee import compliance by operating units with Section 20A of UTC s Corporate Policy Manual (the Policy ), these Procedures: Require the appointment of a Senior Import Official in the Legal Department at each principal business unit or division to serve as the central functional owner for import compliance matters arising under this Policy; Prescribe minimum standards for operating unit import compliance programs required under Part D.3 of the Policy; Define the general responsibilities of the operating units in (a) handling submissions and communications to Customs; (b) authorizing and supervising the use of customs brokers and third party experts; and (c) investigating and addressing potential import compliance violations; and United Technologies Corporation 2016 Page 4 of 11

5 Establish an Import Compliance Steering Group under the auspices of the UTC International Trade Compliance Council to support the exercise of UTC s policy and oversight responsibilities under this Policy. B. IMPORT COMPLIANCE PROGRAMS 1. Scope For the purpose of Part D.3 of the Policy, UTC principal business segments, units or divisions are UTC Climate, Controls & Security Systems, Pratt & Whitney, Pratt & Whitney Canada, UTC Aerospace Systems, Otis, Sikorsky, and United Technologies Research Center. Each principal business segment, unit or division will establish and maintain an Import Compliance Program ( ICP ) which shall extend to, and its effectiveness shall be assessed with respect to, each discrete operating unit and/or location that engages in import activities under a unique importer of record number ( site ). Adherence to this Policy is expected within 180 days of the effective date of this Policy for existing operating units, and within 180 days of acquisition for new operating units. 2. Appointment of Senior Import Officials The Associate General Counsel, ITC shall be notified through UTC s Corporate International Trade Compliance Office ( CITC ) of the appointment of Senior Import Officials and any subsequent changes or renewals. Such appointments and renewals require his/her concurrence and must be in writing, include commensurate delegations of authority and responsibility, and renewed every two years. It is contemplated, but not expressly required, that a Senior Import Official appointed under this Policy will also serve as a Senior Empowered Official for purposes of Corporate Policy Manual, Section 20, Compliance with Export Controls and Economic Sanctions. Senior Import Officials are required to timely notify CITC of their appointment or removal as the official responsible for matters arising under this Policy. Senior Import Officials shall be directly employed by UTC or an operating unit, and must have the following minimum qualifications: A. Executive grade level (grade level L3 or higher) responsible for policy or management within UTC or an operating unit; B. Knowledge of the provisions and requirements of applicable U.S. import laws and regulations, including Title 19 of the Code of Federal Regulations, commensurate with their range of duties and responsibilities; and C. Completion of LRN online customs and trade compliance training modules available through the UTC Business Practices Education Center. United Technologies Corporation 2016 Page 5 of 11

6 3. Responsibilities of Senior Import Officials At a minimum, ICPs must provide that with respect to the activities of each operating unit or site, a Senior Import Official, or his/her designated additional personnel as may be required: 1. Inquires and verifies, as needed, the legality of any transaction and the accuracy of information to be submitted in relevant import documents, filings, permits, authorizations, disclosures and related communications; 2. Reviews and signs all relevant import documentation, disclosures and related communications, as applicable; 3. Has independent authority to inquire into any proposed import, verify the legality of the transaction, and halt any import transaction without prejudice or other adverse recourse; 4. Performs the analogous responsibilities with respect to assuring compliance with any applicable non-u.s. import or customs regime; and 5. Is otherwise responsible for ensuring compliance with this Policy and Procedures, and implementation of the ICP, with respect to the foregoing and all other assigned functions and responsibilities. It is contemplated that Senior Import Officials will exercise, through the appropriate chain of management as necessary, functional supervision and directive authority over personnel that carry out full time import compliance responsibilities under this Policy. Additional duties must not conflict with or materially impair Senior Import Officials in diligently fulfilling the foregoing responsibilities. 4. Import Compliance Program Requirements Each principal business segment, unit or division must develop and implement an ICP that addresses the minimum performance standards prescribed below, as applicable to each site s importation activities. Compliance with these minimum standards does not supersede the obligation to understand and comply with any applicable import/customs laws, rulings, or regulations. The ICP will address, but will not be limited to the following: a) Import Entry Process ICP must ensure proper entry of merchandise into the importing country, including establishing the right to make entry, preparing and timely filing the necessary import documentation, use and control of customs brokers and complying with customs bond requirements. b) Tariff Classification ICP must address classification of merchandise for import based on the Harmonized Commodity Description and Coding system (or other applicable classification system), maintaining such classifications in a database accessible by United Technologies Corporation 2016 Page 6 of 11

7 relevant personnel and reviewing such classifications on a periodic basis to ensure they remain accurate. c) Customs Valuation ICP must ensure application of an accepted customs valuation method (e.g., transaction value) and that all appropriate additions and deductions (e.g., assists) are made so that the value declared to the relevant customs authority is complete and accurate. d) Country of Origin and Marking ICP must ensure proper country of origin declarations are made on customs entries and that imported goods are correctly marked with their country of origin (as may be required by the importing country). e) Tariff Preference Programs ICP must ensure that any claims made for reduced or duty free treatment under tariff preference programs (e.g., NAFTA, GSP) are correct and that all documentation requirements for such programs are addressed. Specific documentation of origin that is required for a preference program, such as the North American Free Trade Agreement ( NAFTA ) or the Generalized System of Preference ( GSP ), must also be addressed. f) Import Restrictions ICP must ensure compliance with any applicable import restrictions, such as absolute quotas, tariff rate quotas, antidumping and countervailing duties, other special duties, and embargoes. g) Duties and Fees - ICP must address the timely payment of applicable import duties and fees (e.g., anti-dumping duty, value added tax) to the appropriate agencies as required. h) Other Laws Affecting Imports ICP must include provisions that address the import requirements of other government agencies (e.g., Environmental Protection Agency, Nuclear Regulatory Commission, Federal Communications Commission), which may have additional procedures and documentation such as licenses, permits, registration, advance notice requirements and certifications. i) Post Entry ICP must address proper correction of errors that are identified after entry, such as through the filing of post-entry amendments, protests, or prior disclosures. j) Record Keeping ICP must ensure that all records relating to import transactions are maintained as required under applicable import laws and regulations. Record keeping system should provide a complete audit trail for each import transaction. k) Training ICP must include training requirements for all employees who are involved with the importation of goods. Training should be tailored to the employee s duties with regard to import activity and identify the internal procedures to be followed to assure compliance with the import laws and regulations. United Technologies Corporation 2016 Page 7 of 11

8 l) Self-Assessments ICP must include periodic self-assessment of each site s Import Compliance Program to ensure compliance with this Policy and applicable import laws and regulations. The frequency of assessment at each site should be based on each site s risk profile (likelihood of violation + consequences of violation) but will be conducted not less than every two years. Factors to consider in determining a site s risk profile include complexity and variety of tariff classifications, volume and value of imports, complexity of business model, countries in or with which business is transacted, and the site s compliance history. 5. Internal Audit The Director, UTC Internal Audit will consult with the UTC Associate General Counsel, ITC, CITC, appropriate officials in the principal business segment, unit or division headquarters and other subject matter experts as appropriate in planning, scheduling and supporting import compliance audits. C. CORPORATE COMPLIANCE ACTIVITY & CUSTOMS BUSINESS Each principal business segment, unit or division shall ensure that its ICP defines the roles and activities of the Senior Import Official and other responsible personnel in a manner consistent with U.S. customs regulations governing the conduct of corporate compliance activity and customs business. This may require specifying that these responsibilities, as defined below, are to be carried out by designated personnel employed by a particular operating unit or site. Corporate compliance activity ' means activity performed by a business entity to ensure that documents for a related business entity or entities are prepared and filed with U.S. Customs and Border Protection ( CBP ) using reasonable care, but such activity does not extend to the actual preparation or filing of the documents. A business entity is an entity that is registered or otherwise on record with an appropriate governmental authority for business licensing, taxation, or other legal purposes, and the term related business entity or entities encompasses a business entity that has more than a 50 percent ownership interest in another business entity, a business entity in which another business entity has more than a 50 percent ownership interest, and two or more business entities in which the same business entity has more than a 50 percent ownership interest. Customs business means those activities involving transactions with CBP concerning the entry and admissibility of merchandise, its classification and valuation, the payment of duties, taxes, or other charges assessed or collected by CBP on merchandise by reason of its importation, and the refund, rebate, or drawback of those duties, taxes, or other charges. Customs business also includes the preparation, and activities relating to the preparation, of documents in any format and the electronic transmission of documents and parts of documents intended to be filed with CBP in furtherance of any other customs business activity, whether or not signed or filed by the preparer. However, customs business does not include the mere electronic transmission of data received for transmission to CBP and does not include a corporate compliance activity. United Technologies Corporation 2016 Page 8 of 11

9 Under U.S. customs regulations, a business entity is generally required to be licensed by CBP as a customs broker and have a power of attorney in order to conduct customs business on behalf of another business entity. D. CUSTOMS BROKERS AND OUTSIDE CUSTOMS EXPERTS Activities by customs brokers, outside counsel or other third party customs experts with respect to issues that are the subject of this Policy shall be subject to these Procedures. Each principal business segment, unit or division is responsible for ensuring that its ICP requires proper authorization of customs brokers to conduct import business on any operating unit or site s behalf, and adequate oversight of such parties. Use of such parties does not relieve the operating unit or site of liability for the mistakes of those parties and reasonable care must be taken in the selection, oversight, and management of such parties. E. SUBMISSIONS AND COMMUNICATIONS TO CUSTOMS ICPs established under this Policy shall require that all written communications (e.g., protests, ruling requests, requests for information, notices of audits, etc.) to the relevant Customs authority are in compliance with applicable import laws and regulations. In the event that a Customs official contacts an operating unit or site regarding a matter covered by this Policy, the employee receiving the request for information will promptly notify the Senior Import Official for his/her operating unit, or a designee of the Senior Import Official as may be specified in the ICP. The operating unit shall ensure that a complete, accurate and timely response is provided to the requesting Customs official and that a record of that response is maintained. F. SUSPECTED VIOLATIONS 1. Reporting Suspected Violations Employees are required to report actual or suspected violations of U.S. or other import/customs compliance laws or regulations. Contractors are encouraged to do so, and may be required to do so by contract. In all cases, employees, contractors and third parties are encouraged to report concerns and may do so without fear of reprisal. Such reports, and any related concerns regarding actual or potential reprisal, may be raised directly at the employee or contractor s election to any level of the supervisory chain, the operating unit s ITC organization, the operating unit or UTC s Legal Department, a Business Practices Officer, Human Resources, or a UTC Ombudsman, or using DIALOG. 2. Operating Unit/Site Notification and Investigation Operating unit/site procedures for investigating and addressing potential import compliance violations shall observe the following principles: a) Each allegation of a violation of import compliance laws or regulations will be promptly reported to the cognizant Senior Import Official (or his/her designee) and timely entered in the matter management system maintained by the UTC Vice President, Global Compliance; United Technologies Corporation 2016 Page 9 of 11

10 b) The Senior Import Official is responsible to investigate, determine and report promptly through the matter management system referenced above whether a violation has, in fact, occurred; c) Once the Senior Import Official determines that a violation has occurred, s/he will consult with the appropriate principal business segment, unit or division counsel to determine the most prudent approach to use to disclose this matter to the cognizant Customs authority. 3. Remedial Actions The Senior Import Official shall take the steps necessary to assure that all remedial and corrective actions that address the violation are supported by adequate plans, resources and accountability for timely execution, and that they are tracked to completion and documented as closed. Remedial and corrective actions involving personnel must be fully coordinated in accordance with all applicable UTC and operating unit policies and processes. G. UTC INTERNATIONAL TRADE COMPLIANCE COUNCIL The UTC International Trade Compliance Council established under Corporate Policy Manual, Section 20 shall be responsible for coordinating and implementing UTC enterprisewide management initiatives on import compliance. Any Senior Import Official who is not a member of the International Trade Compliance Council as set forth in Section 20 shall be designated as an Associate Member of the International Trade Compliance Council. Associate Members are expected to participate by video or teleconference, and are entitled to voice on all issues. H. IMPORT COMPLIANCE STEERING GROUP An Import Compliance Steering Group is established under the International Trade Council and shall consist of import specialists from UTC principal business units or divisions. The Import Compliance Steering Group shall appoint a Chair who will rotate periodically and serve as an Associate Member of the International Trade Compliance Council. The Chair will be responsible for reporting import compliance issues to the International Trade Compliance Council. The Import Compliance Steering Group will meet periodically at the call of the Chair, and will provide a forum for: 1. Providing periodic training education on import laws and regulations; 2. Updating personnel on recent regulatory, policy, legislative and judicial changes or developments relating to import laws and regulations; United Technologies Corporation 2016 Page 10 of 11

11 3. Promoting information sharing regarding best practices and lessons learned among UTC operating units on matters and transactions arising under this Policy; and 4. Fostering discussion on matters of mutual concern relating to issues and transactions that are the subject of this Policy. I. PERIODIC REVIEW AND REVISION OF PROCEDURES UTC shall review these Procedures as needed, and in any event not less than every two years following issuance, and shall propose revisions for approval by the UTC Senior Vice President and General Counsel. United Technologies Corporation 2016 Page 11 of 11

DATE: 2/24/2017. TO: All Employees & Contractors FROM: Tod Carpenter, President and CEO SUBJECT: Global Trade Compliance Policy Statement

DATE: 2/24/2017. TO: All Employees & Contractors FROM: Tod Carpenter, President and CEO SUBJECT: Global Trade Compliance Policy Statement Donaldson Company, Inc. 1400 West 94 th Street Bloomington, MN 55431 USA Mailing Address PO Box 1299 Minneapolis, MN 55440 USA DATE: 2/24/2017 TO: All Employees & Contractors FROM: Tod Carpenter, President