FCPA Compliance: Third-Party Due Diligence Minimizing Corruption Risks When Using Foreign Agents, Distributors and Other Intermediaries

Transcription

1 presents FCPA Compliance: Third-Party Due Diligence Minimizing Corruption Risks When Using Foreign Agents, Distributors and Other Intermediaries A Live 90-Minute Teleconference/Webinar with Interactive Q&A Today's panel features: F. Joseph Warin, Partner, Gibson Dunn & Crutcher, Washington, D.C. Tara Flanagan, Director, Global Public Sector Compliance, Cisco Systems, Inc., Herndon, Va. Edward J. Fishman, Partner, K&L Gates, Washington, D.C. Thursday, August 5, 2010 The conference begins at: 1 pm Eastern 12 pm Central 11 am Mountain 10 am Pacific You can access the audio portion of the conference on the telephone or by using your computer's speakers. Please refer to the dial in/ log in instructions ed to registrations.

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4 FCPA Compliance: Third Party Due Diligence Minimizing Corruption Risks When Using Foreign Agents, Distributors and Other Intermediaries F. Joseph Warin and Michael S. Diamant, Gibson, Dunn & Crutcher LLP August 5, 2010

5 <Presentation Title/Client Name> A Brief Overview of the FCPA The Foreign Corrupt Practices Act was enacted in 1977 in the wake of reports that numerous U.S. businesses were making large payments to foreign officials to secure business. Anti-Bribery Provisions: The FCPA prohibits giving or offering anything of value to a foreign government official, political party, or party official with the intent to influence that official in his or her official capacity or to secure an improper advantage in order to obtain or retain business. Accounting Provisions: The FCPA also requires publicly traded U.S. companies to maintain accurate books and records and reasonably effective internal controls. 5

6 <Presentation Title/Client Name> Scope of the FCPA: Who Is Covered? Issuers: any company whose securities (including ADRs and registered debt) are registered in the United States or that is required to file periodic reports with the SEC Domestic Concerns: any individual who is a U.S. citizen, national, or resident of the United States (not just U.S. citizens), or any business organization that has its principal place of business in the United States or which is organized in the United States Other Persons who take any act in furtherance of a corrupt payment while within the territory of the United States 6

7 <Presentation Title/Client Name> Definition of Foreign Official The FCPA prohibits corrupt payments to foreign officials, which has been expansively defined to include: Any officer or employee (including low-level employees and officials) of a foreign government or any department, agency, or instrumentality of the government, including government-owned or government-controlled businesses and enterprises. Officers and employees of public international organizations, including the United Nations, World Bank, and others. The FCPA also prohibits corrupt payments to foreign political parties, officials of foreign political parties, and candidates for foreign political office. 7

8 <Presentation Title/Client Name> A Thing of Value Liability exists from the first dollar there is no de minimis exception. It is not limited i to tangible items of economic value and can include: Gifts Entertainment Internships Professional training Education Trips Loans Employment Meals Travel assistance 8

9 <Presentation Title/Client Name> Third Party Liability: Indirect Payments (and Offers) Are Prohibited The FCPA prohibits indirect corrupt payments as well and imposes liability if the U.S. company authorizes a payment to a third party while knowing that the third party will make a corrupt payment. Third parties include local agents, consultants, attorneys, subsidiaries, freight forwarders, etc. Knowledge means either 1. bi being aware of such conduct or substantially ill certain that such conduct will occur, or 2. consciously disregarding a high probability that a corrupt payment or offer will be made. 9

10 <Presentation Title/Client Name> A Brief Overview of the UK Bribery Act The Bribery Act criminalizes bribery by UK incorporated companies, as well as non-uk companies that do business in the United Kingdom. The Bribery Act cleared the final stages of the Parliamentary process on April 8, 2010, and is expected to come into force in April The Bribery Act creates four separate offenses: 1. Bribing, 2. Being bribed, 3. Bribing a foreign public official, and 4. Failing to prevent bribery (applicable to corporate entities only). 10

11 <Presentation Title/Client Name> Failing to Prevent Bribery and the Adequate Procedures Defense The Act also creates the offense of failing to prevent bribery. An entity may be held liable for bribery y(public or private) committed for the benefit of the entity by: an employee, agent, distributor, intermediary, subsidiary, etc. An entity charged with violating this provision has a defense if it can prove: it had adequate procedures in place that were designed to prevent bribery. The U.K. Government is expected to issue guidance on what constitutes adequate procedures in early

12 <Presentation Title/Client Name> Recent Third Party Enforcement Cases: Frederic Bourke On July 20, 2009, a jury in New York federal court convicted Frederic Bourke of conspiracy to violate the FCPA in connection with his $8 million investment in a failed business concerning the privatization of the government-controlled petroleum industry in Azerbaijan. On November 10, 2009, Judge Shira Scheindlin sentenced Bourke to one year and one day in prison and ordered him to pay a $1 million fine. Bourke was not accused of bribery or directing others to commit bribery; rather, he was charged with conspiring i to violate the FCPA by investing in an entity that he knew or had every reason to know was engaged in a scheme to bribe Azeri officials. When instructing the jury on knowledge, Judge Scheindlin provided a so-called ostrich instruction: Knowledge may be established if a person is aware of a high probability [that corrupt payments are being offered or made, but] consciously and intentionally avoided confirming that fact... because he wanted to be able to deny knowledge.... [However,] knowledge is not established... if the person merely failed to learn the fact through negligence. Key lesson is that parties operating and investing in countries with a high h risk of corruption must undertake due diligence and implement controls to make good faith and reasonable efforts that funds are not used to make improper payments to government officials. 12

13 <Presentation Title/Client Name> Recent Third Party Enforcement Cases: BAE Systems On March 1, 2010, BAE pleaded guilty to participating in a criminal conspiracy to impair and impede the lawful functions of the U.S. government by making false statements concerning its FCPA compliance program and payments to third party consultants in connection with suspected bribes to government officials in the Czech Republic, Hungary, and Saudi Arabia. According to the charging documents, from the mid-1980s through 2002, BAE regularly retained marketing advisors to assist the company in securing sales to foreign governments. BAE allegedly made substantial payments to these third parties with very little scrutiny as to their purpose and end use, while taking steps to conceal the payments by routing them through various offshore shell entities beneficially owned by BAE[]. BAE agreed to pay a $400 million criminal fine. At twice the alleged gain from the offense of $200 million, this fine represents the statutory maximum and the third-largest disposition in the history of FCPA enforcement. 13

14 <Presentation Title/Client Name> Recent Third Party Enforcement Cases: Daimler AG On April 1, 2010, German automaker Daimler AG and three of its subsidiaries resolved civil and criminal FCPA charges arising from the companies alleged payments to government officials in a number of different countries. According to court documents, over a ten-year period, Daimler and its subsidiaries allegedly funneled improper payments through internal third-party accounts, which were on the companies books, but controlled by third parties, subsidiaries, and affiliates. These accounts were allegedly used for the payments because they were not subject to regular audits or the companies other standard financial controls. To resolve the charges, Daimler AG and its subsidiaries agreed to pay a collective criminal fine of $93.6 million, in addition to Daimler s agreement to disgorge $91.4 million in allegedly ill-gotten gains in connection with settling a related SEC complaint alleging violations of the anti-bribery, books-and-records, and internal controls provisions. 14

15 <Presentation Title/Client Name> Unique Risks Created by Different Third Parties Sales and marketing agents Distributors/resellers Freight forwarders/logistics companies Other consultants 15

16 <Presentation Title/Client Name> Risks Involving Agents Many corporations have been prosecuted for making improper payments through agents retained to pass along those payments to government officials. Datron Systems Inc. - From 1999 through 2003, an agent for Datron Systems Inc., a subsidiary of Titan Corp., allegedly made payments to Filipino military officials to obtain business for Datron and Titan. To resolve this and other FCPA violations, Titan pleaded guilty to criminal FCPA charges and settled related civil charges, agreeing to pay a total of $28.5 million, including a $13 million criminal penalty and $ million in disgorgement and prejudgment interest. Paradigm BV - Paradigm s Chinese subsidiary was alleged to have used an agent to make payments to representatives ti of a subsidiary of the Chinese National Offshore Oil Company. Faro Technologies: - Although Faro s Chinese subsidiary made payments directly to Chinese officials in 2004 and 2005, in 2005 it allegedly decided to route the payments through an agent to avoid exposure. In its 2008 settlement with the SEC, Faro paid approximately $2.95 million in total penalties. 16

17 <Presentation Title/Client Name> Risks Involving Agents (cont.) UTStarcom, Inc. - On December 31, 2009, UTStarcom, Inc., a California-based telecommunications company, settled FCPA charges arising from the company s operations in China, Mongolia, and Thailand. The government alleged that, between 2001 and 2007, UTStarcom paid $1.5 million to the company s agent in Mongolia, claiming that it was for a license fee, when, in fact, the actual license fee was only $50,000 and the balance was used to make improper payments to a government official. United Industrial Corp. - On May 29, 2009, United Industrial Corp., a Maryland- based aerospace and defense systems contractor, settled administrative charges with the SEC and agreed to pay $337, in disgorgement and prejudgment interest and a $35,000 civil penalty. The SEC claimed that, in 2001 and 2002, UIC subsidiary ACL Technologies, Inc. made more than $100,000 in payments to a third party agent with the expectation that the agent would pass portions of those payments to Egyptian Air Force officials to influence the award of a contract to construct and staff a military aircraft depot in Cairo. 17

18 <Presentation Title/Client Name> Risks Involving Distributors/Resellers Corporations have been prosecuted for improper payments made by distributors under the theory that the corporation was aware of a high probability that the distributor intended to fund [the improper payments] out of the difference between the price the distributor paid [the corporation] to acquire [its products] and the price for which the distributor was able to resell them. SEC v. InVision Technologies, Inc., Compl. 17 (filed Feb. 14, 2005) InVision Technologies, Inc. InVisison Technologies, Inc. s third party distributors allegedly made payments to foreign officials to induce them to buy InVision s baggage screening machines. InVision agreed to pay $1.8 million in total penalties as part of its settlement in AGA Medical Corp. In June 2008, AGA Medical Corp. agreed to pay a $2 million penalty based on $460,000 in alleged payments to physicians at state-owned hospitals through AGA s Chinese distributor. Avery Dennison Corp. In July 2009, the SEC complaint against Avery Dennison Corp. alleged that the company s Chinese subsidiary engaged in a kickback scheme with a distributor. Rather than pay the money directly to the project manager for a state-owned enterprise, a sales manager sold the product to a distributor, which, in turn, paid the kickback to the project manager out of its profit margin. 18

19 <Presentation Title/Client Name> Risks Involving Distributors/Resellers (cont.) Fiat S.p.A. The DOJ and the SEC alleged that after multiple Fiat entities entered into several direct contracts with the Government of Iraq in which their agents made improper payments on their behalf, the subsidiaries i decided d to distance themselves from future payments by turning their agents into distributors. The subsidiaries allegedly did so with full knowledge that their distributors would resell the goods to the Iraqi government and make the improper payments in connection with these sales. The subsidiaries then offered their agents-turned-distributors 20% discounts -- 10% for the improper payments and 10% for the distributor s profits when it resold the products to the Iraqi government. Ingersoll-Rand dco. Ltd. - In another Oil-for-Food case similar il to Fiat, the DOJ and the SEC alleged that the Ingersoll-Rand subsidiaries granted a 65% discount to their distributors -- 10% more than their standard 55% distributor discount -- in order to cover the distributors obligations to make improper p payments to the Iraqi government. AB Volvo In a third Oil-for-Food case, it was alleged that AB Volvo s subsidiaries sold their products at a price that ensured the distributors would have enough spread to make the improper payments even though hthere was no discount afforded d the distributors explicitly for the improper payments. 19

20 <Presentation Title/Client Name> Risks Involving Freight Forwarders/Logistics Corporations Companies are being prosecuted for improper payments allegedly made through freight forwarding and logistics companies. On July 2, 2007, the DOJ sent letters to eleven oil and oil-service companies asking them to detail their relationship with Panalpina Welttransport Holding AG. The firms were asked to list the countries where Panalpina provided them with services in the past five years and specify what they paid for those services. Each firm was asked to meet separately with federal prosecutors in Washington, D.C. In April 2010, Panalpina announced that it had reserved approximately $110 million for an expected FCPA settlement in the near future. Also, several of the oil and oil-service companies have announced that they have set aside millions of dollars for anticipated FCPA settlements with the DOJ and SEC. 20

21 <Presentation Title/Client Name> Risks Involving Consultants Several corporations have been prosecuted for improper payments or benefits allegedly made by consultants to government officials in order to secure sales. BAE Systems - According to the charging documents, from the mid-1980s through 2002, BAE regularly retained marketing advisors to assist the company in securing sales to foreign governments. BAE allegedly made substantial payments to these third parties with very little scrutiny as to their purpose and end use, while taking steps to conceal the payments by routing them through various offshore shell entities beneficially owned by BAE[]. Siemens AG - Siemens transportation systems division allegedly paid approximately y$ $22 million to business consultants who used some portion of the funds to make payments to foreign officials in China in connection with seven projects for the construction of metro trains and signaling devices. Control Components Inc. - CCI allegedly made improper payments, sometimes directly and sometimes through its representative or consultants retained who performed no legitimate services for CCI. 21

22 <Presentation Title/Client Name> Risks Involving Consultants (cont.) Haiti Teleco Prosecution - DOJ filed a number of cases in 2009 arising from its investigation of several Florida-based telecommunications companies and their allegedly corrupt arrangements with officials of Telecommunications D Haiti, Haiti s state-owned telecommunications company. In all, eight people have now been charged, including three third-party consultants used as intermediaries to make the alleged payments. Veraz Networks, Inc. - On June 29, 2010, the SEC filed a settled civil action charging Veraz Networks, Inc., a California-based telecommunications firm, with violating the FCPA s books-and-records d and internal controls provisions i in connection with sales in China and Vietnam. In China, a third-party consultant of Veraz allegedly provided approximately $4,500 in gifts to officials of a statecontrolled telecommunications company in what one Veraz employee purportedly referred to as a gift scheme. The consultant t also allegedly offered to pay a $35,000 bribe to officials at this same state company but Veraz discovered the improper offer before the transaction was completed and cancelled the sale. Without admitting or denying the allegations, Veraz agreed to pay a $300,000 civil iilpenalty. 22

23 <Presentation Title/Client Name> Use of Agents Specific Red Flags Reputations for improper payments or lax anti-money laundering controls Pitches near contract award dates Explanations of special relationships with government officials Insistence of payment in advance of contract award Off-shore accounts Requests that a commission be paid to or through a third party, in a different name, or in a different currency or country Unusually large commissions Unexpected access to usually unavailable information Lack of relevant experience in the business Lack of staff to do technical work Residence outside the relevant country Refusals to sign agreements indicating compliance with the FCPA Refusal to agree to audit rights Owned by or familial relationships to government officials Recommended by government officials 23

24 Tara Flanagan Director, Global Public Sector Compliance Cisco Systems, Inc. 24

25 Process should be designed to offer an efficient, meaningful review of identified business partners on a defined and periodic basis so that your organization can make intelligent/informed decisions about the business partners and take other actions to mitigate against potential risks associated with doing business with the partners. Process should be documented (policy/guidelines/other communications), transparent, and communicated to partners as well as to your employees who engage with the partners. 25

26 Who are they? What are they to do/doing for your organization? Where are they located? What kind of contracts currently exist? Do existing contracts include appropriate anti-bribery terms? Can you assess/categorize by risk? Transparency International CP Index: ces/cpi/2009 The emergence of other risk-based scoring systems by third party due diligence service providers 26

27 Resellers Distributors Sales agents Consultants Attorneys Joint Venture Partners Investment Partners Prospective acquisitions Customs Brokers/Agents Marketing Agents Vendors/suppliers/oth er third parties who interact with government-affiliated organizations 27

28 Do you have internal support/buy in by the business? Plan for the long term. Who will own this process? Who are key internal stakeholders? What kind of budget/staffing resources are available? Can you leverage existing systems/tools/processes? 28

29 Evaluate/Establish a Workable Process Flow Chart out your process flow (beginning to end) Typical Key Steps For a Partner Under Review: Completion of a Questionnaire, Certifications Anti-bribery training, providing any follow up information, agreement to anti-bribery contract terms Typical Key Internal Company Steps: Collection of data/information/due diligence report Review/decisions by key stakeholders Final Disposition/documentation: Retention/contracting process or termination of the partner 29

30 What is your process for addressing any identified red flags? Do you have a clear escalation/decision- making path? Where and how do you retain/store your due diligence findings? How do you document your final resolution/dispositions? Do you have a document retention policy for your due diligence-related reports/work? 30

31 Multiple languages for questionnaire and training Using web-based tools Recognize that you may need to have different levels of review for different partners Process should be consistent Develop a communication plan about the process to increase understanding and awareness for both internal personnel as well as your business partners Design your process to be as simple as possible Be prepared to constantly reevaluate your process in light of changing business activities and laws Stay on top of industry best practices-trend toward development of a wider range of commercially available tools/processes Ongoing training for your due diligence team 31

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33 A history of corruption in a country Any family relationship between business partner principals/employees and government officials Any unusual means of payment The size of the commission paid to the agent in relation to the services performed Apparent lack of qualifications on the part of the agent to perform services 33

34 Refusal by business partner to sign affidavits or make representations that they will not violate FCPA Any misrepresentations in connection with proposed transaction or in due diligence process Requests for false or incomplete documentation Lack of transparency in financial records Disclosure of extensive gift-giving i i or entertainment practices 34

35 Please Pay Me In Cash Pay Me Through h My Swiss [Or Offshore] Bank Account My Close Relative Is A Government Official, and You Don t Have A Chance To Win the Contract Unless You Hire Me I Have No Facilities or Staff, But I ll Get the Job Done I Have Never Worked In Your Industry Before, But I Know The Right People While My Commission Rate is Twice The Market Rate, I m Well Worth It Because of My Connections 35

36 BEST PRACTICES FOR ANTI- CORRUPTION DUE DILIGENCE ON THIRD PARTIES Prepared for: Strafford CLE Webinar/Teleconference FCPA Compliance: Third-Party Due Diligence August 5, K&L GATES LLP All Rights Reserved Ed Fishman K&L GATES LLP 1601 K Street, NW Washington, DC (202) ed.fishman@klgates.com 36

37 Overview of Presentation Topics Review Best Practices for Third Party Diligence and Cost Effective Strategies for Conducting Diligence in a Global Business Discuss Practical Challenges of Implementing Third Party FCPA Diligence Program Identify Unique Issues Raised By Third Party FCPA Diligence In M&A Context 37

38 Third Party FCPA Due Diligence Fundamentals Four Core Elements: Background Evaluation/Risk Assessment Questionnaire Response/Interview/Documentation Reps and Warranties/Certification/Training Investigation of Potential Problems and Remediation 38

39 FCPA Third Party Due Diligence Goals Determine the Competence, Expertise, Reputation and Integrity of the Third Party Agent Determine Third Party s Relations With Government Officials i through Business, Family, Employment or Political Activity Caution: Carefully Scrutinize Success Fees and Gift/Entertainment Practices Sources of Inquiry: Commercial Services, Risk Management Firms, U.S. Embassy/Commerce Service ICP Reports, Private Investigators, and Local Legal Opinions 39

40 Third Party FCPA Diligence Best Practices Step 1: Identify Universe of Third Party Agents Internal Inventory Process ( Know Your Agents ) Separate into Relevant Categories Sales and Marketing Reps/Commercial Agents Distributors, tors Resellers and Third Party Purchasers Consultants (Tax, Customs Brokers, Freight Forwarders) Suppliers/Vendors/Other Service Providers Identify Those Likely to Interact with Government Officials as defined under Anti-Corruption Laws 40

41 Third Party Diligence Best Practices Step 2: Design Diligence Program Based on Risk Select Reasonable Method of Assessing Risk Category of Third Party Agent Likelihood of Interactions with Government Officials Local Corruption Risk and Other Red Flags Use Objective Risk Evaluation Scoring Methodology Create Standard Written Policy for Different Categories of Third Parties Separate Policy for Commercial Agents, Consultants and Other Types of Intermediaries Different Levels of Review/Approval within Same Policy 41

42 Third Party Diligence Best Practices Step 3: Implement and Enforce Policy Establish reasonably achievable controls and clear guidelines/enforcement mechanisms Ensure support from business leaders Anticipate i t varying levels l of compliance and develop responsive strategies in advance Maintain some degree of objectivity in the process (e.g., independent agent review committee ) 42

43 Common Practical Challenges Internal Resource and Priority Considerations Start with Highest Risk Categories if Necessary Identify Third Party Commercial Agents and Government Business Consultants in Highest-Risk Countries Work Backwards Through Inventory of Agents Seek Automated Solutions Without Compromising Effectiveness of Diligence Process Ensure Management Understands Third Party Risks 43

44 Common Practical Challenges Varying Levels of Responsiveness from Agents Internal and External Education Process Why should I have to worry about US law? Global Convergence Should Help Expect To Deal With Difficult Intermediaries Refusal to Submit Information/Complete Questionnaire Refusal to Participate in Interview Refusal to Sign Certification/Agree to Reps and Warranties Resistance Not Always a Red Flag Some Agents Will Sign Anything (But Risks Remain) Some Agents Are More Careful About Foreign Laws Challenge is Finding Right Balance 44

45 Common Practical Challenges Potential Solutions to Agent Resistance Business relationship manager involvement Continue to educate throughout the process Search for alternative solutions Confidentiality Concerns: Non-Disclosure Agreement Outside Counsel/Independent Third Party Review Negotiated Certification/Reps and Warranties Legitimate Threat of Termination Heightened Monitoring/Oversight Conditions Avoid temptation to back down if Red Flags persist 45

46 Unique Issues Raised in M&A Diligence Issue: Buyer needs to ensure itself that Target s agent relationships do not pose unacceptable risk Challenge: Target may be unwilling or unable to provide full access for diligence review Non-U.S. Target may be unfamiliar with typical anti-corruption diligence procedures Target may be unable to provide direct access to third parties because of confidentiality concerns or local law restrictions Anti-corruption diligence access may be subject to larger negotiation over due diligence process 46

47 Unique Issues Raised in M&A Diligence Potential Solutions Negotiate Pre-Closing Access to Target Relationship Managers and Plan for Post-Closing Diligence on Third Party Agents Conduct Full Background Check on Third Party Agents Through External Sources Risk Management Firm Report Commercial/Government Sources Local Counsel Opinion Arrange for Preliminary Pre-Closing Interview with Third Party Without Revealing Full Purpose 47

48 Prompt Response to Potential Violations What to do when you encounter Red Flags in M&A diligence context? Increase Level of Due Diligence Investigation Require Investigation by M&A Target Conduct Joint Investigation Evaluate Potential Successor Liability Risks Weigh Business Risks of Transaction 48

49 Prompt Response to Potential Violations What to do when you discover potential FCPA violation as part of M&A transaction? Require Disclosure Government Public Filings Require Resolution As Condition to Closing Delay to Transaction Material Changes Accept Risk and Close Protection through Escrow Obligation to Continue Investigation 49

50 QUESTIONS? Contact: Ed Fishman K&L Gates LLP 1601 K Street N.W. Washington, D.C (202) (direct) ed.fishman@klgates.com 50

51 Appendix: Sample Third Party Certificate Applicable Anti-Corruption Laws means collectively, (i) the U.S. Foreign Corrupt Practices Act ( FCPA ), (ii) laws enacted pursuant to the Organization of Economic Cooperation and Development (OECD) Convention on Combating Bribery of Foreign Public Officials in International Business Transactions ( OECD Convention ), and (iii) any other applicable laws or regulations of relevant jurisdictions prohibiting bribery and corruption of public officials. Government includes, without limitation: (a) any government, including all levels and subdivisions of government from national to local; (b) any government agency, department, committee or other instrumentality; (c) any government-owned or government-controlled entity; (c) any political party; and (d) any public international organization (including, for example, the United Nations, the World Bank, and the International Monetary Fund). Government Official means an employee, official, legislator, member, agent or representative of any Government, or any candidate for any such position. Third Party Agent includes [Third Party Agent], and any predecessors and all subsidiaries or affiliates of these entities. Third Party Agent Personnel includes all employees, officers, directors, shareholders, representatives and agents of Third Party Agent. 51

52 Appendix: Sample Third Party Certificate Third Party Agent is familiar with and understands the requirements and prohibitions of the Applicable Anti-Corruption Laws; In connection with its role as agent for Company, Third Party Agent has complied and will at all times stay in compliance with the requirements and prohibitions of the Applicable Anti-Corruption Laws for as long as it remains an agent for Company; Third Party Agent understands and certifies that it cannot and will not, under any circumstances, make, offer, promise, or authorize a payment or gift of money or anything of value (including, but not limited to, any loan, reward, advantage or benefit of any kind) to (i) a Government Official, (ii) a family member of a Government Official, or (iii) to any other person or entity with the knowledge or belief that such thing of value might subsequently be given to a Government Official or a family member thereof for purposes of obtaining or retaining business, or obtaining a business advantage, for Company or any other party; 52

53 Appendix: Sample Third Party Certificate Third Party Agent understands and certifies that it cannot and will not assign any right to compensation or reimbursement from Company to any third party; Third Party Agent understands and certifies that it must keep complete and accurate books and records related to its services and activities on behalf of Company; Third Party Agent certifies that it will, upon request, make its books and records available to Company or its designees for inspection to verify compliance with Applicable Anti-Corruption Laws; Third Party Agent certifies that it will notify Company immediately of any request received by Third Party Agent to make, authorize or facilitate a payment of money or anything of value in violation of Applicable Anti- Corruption Laws; No Third Party Agent Personnel are Government Officials or family members of a Government Official. If any Third Party Agent Personnel becomes a Government Official during the term of the Agreement, Third Party Agent will promptly inform Company; 53

54 Appendix: Sample Third Party Certificate Third Party Agent certifies that neither Third Party Agent nor any Third Party Agent Personnel has ever been implicated, accused, investigated, charged, arrested, or prosecuted for bribery or making corrupt payments to any Government Official; Third Party Agent certifies that neither Third Party Agent nor any Third Party Agent Personnel has ever been fined, penalized, or convicted for any violation of any Applicable Anti-Corruption Laws; and Third Party Agent certifies that neither Third Party Agent nor any Third Party Agent Personnel has ever been or is currently under investigation for alleged corruption, bribery or fraud. 54