Global Anti-Corruption Policy aricent.com

Transcription

1 Global Anti-Corruption Policy aricent.com ARICENT RESTRICTED 1

2 STATEMENT OF CORPORATE POLICY Aricent (including its subsidiaries and affiliated companies, hereinafter referred to as Aricent or the Company ) is committed to conduct its business with honesty and integrity, and in accordance with ethical and legal standards in all countries in which it operates. Aricent's reputation for honesty, integrity, and fair dealing is an invaluable component of the financial success of Aricent, and of the personal satisfaction of its employees. To conduct its business while conforming to these standards, Aricent endeavors to strictly comply with the requirements of the U.S. Foreign Corrupt Practices Act, (the FCPA ), the U.K. Bribery Act ( UKBA ), the Indian Prevention of Corruption Act, 1988 ( POCA ) and other applicable local anti-corruption laws, (collectively, anti-corruption laws ) as provided in this Global Anti- Corruption Policy (the Policy ). In issuing this statement, we reaffirm our commitment to conducting all of Aricent s business consistent with anti-corruption laws and the highest ethical standards. This Policy is intended to help you understand the pertinent anti-corruption laws, and facilitate day to day compliance with related ethical and legal obligations. Aricent expects you to fully comply with this Policy to ensure strict adherence to applicable anti-corruption laws. This Policy does not override or supersede any other applicable jurisdictional anti-corruption laws. While we do not expect every person to become an expert in the laws governing our business, we do expect each Aricent personnel to adhere to Aricent's policies, to be aware of the applicable host country laws that apply to our business, and to seek guidance from an appropriate source whenever any uncertainty regarding those laws or standards arises. Challenges that arise in the course of our international business can be resolved consistent with all applicable laws and standards. We can remain competitive and achieve our goals if such challenges are identified at an early stage, addressed cooperatively and solved thoughtfully. The Policy is intended to provide our employees with more detailed guidance on the specific compliance issues related to anti-corruption laws that are likely to arise in Aricent's business. Although we have attempted to include general guidance with respect to compliance with anti-corruption laws, this Policy may not address each particular question or issue, or provide all necessary guidance for the specific circumstances you may encounter. As such, you are urged to consult with the appropriate contacts provided in this Policy or write to Compliance@Aricent.com when such a situation arises. General Counsel Amit Shashank ARICENT RESTRICTED 2

3 Copyright 2016 Aricent. All Rights Reserved. No part of this document may be reproduced, stored in a retrieval system, distributed or transmitted, in any form, or by any means, electronic or otherwise, including photocopying, reprinting, or recording, for any purpose, without the express prior written permission of Aricent. Printed in 2016 TRADEMARKS: Aricent and the Aricent logo are trademarks and registered trademarks of Aricent. The use of these trademarks without Aricent s prior written consent is strictly prohibited. Other third party trademarks referenced are the property of their respective owners. NOTE: For information requests or for obtaining permission for the use of this work, please submit a written request to: Corporate Marketing and Legal, Aricent, 303 Twin Dolphin Drive, Suite 600 Redwood City, CA 94065, United States of America. ARICENT RESTRICTED 3

4 TABLE OF CONTENTS STATEMENT OF CORPORATE POLICY Purpose Scope Policy Governance and Responsibilities Role of Legal and GRC Role of Finance Department Role of Procurement Department Role of Business Teams and Departments ( Team ) Basic Compliance Principles Bribes and Kickbacks Facilitation Payments Public / Government Officials Gifts and Entertainment Personal Conflicts of Interest Charitable Donations Political Activities Business Relationships Accounts and Audits Dos and Don ts Due Diligence With Regard to Third Parties, Strategic Transactions More Information and Prompt Reporting Violations Violations and Consequences Training and Monitoring Implementation Related Policies and Procedures Specific Rules for Specific Countries Record Retention Appendix A Details of Compliance with the Policy Compliance Requirements Specific Prohibitions on Giving Bribes to Government Officials Specific Prohibitions on Bribes (to and from) Other Organizations ARICENT RESTRICTED 4

5 1.3 Restrictions on Gifts, Entertainment and Travel Restrictions on Contributions to Political Party and Candidate / Charities Prohibition on Facilitating payments Restriction on Doing Business with "Government Officials" and Companies Wholly or Partly Owned by "Government Officials" Safeguards for Doing Business with Governments Requirements for Accounting of Expenditure and Expense Report Compliance Requirements With Regard to Third Parties Due Diligence of the Third Party A. Third Party Screening Form and Questionnaire B. Red Flags with Certain Third Parties Reducing the Relationship to Writing Monitoring the Relationship: A Continuing Obligation Due Diligence in Connection with Strategic Transactions Appendix B Due Diligence Procedures FORM B-1: DUE DILIGENCE CHECKLIST FORM B-2: THIRD PARTY QUESTIONNAIRE FORM B-3: THIRD PARTY CANDIDATE SCREENING FORM FORM B-4: THIRD PARTY VENDOR SCREENING FORM FORM B-5: RED FLAG REPORT FORM B-6: THIRD PARTY ANTI-CORRUPTION COMPLIANCE CERTIFICATE FORM B-7: ANTI-CORRUPTION COMPLIANCE CERTIFICATE COMPANIES WITH GOVERNMENT OWNERSHIP Appendix C Summary of Key Regulations PART 1 SUMMARY OF THE FOREIGN CORRUPT PRACTICES ACT I. SUMMARY OF THE FCPA A. Anti-bribery Prohibitions B. Accounting and Record Keeping Requirements C. Penalties and Enforcement D. Law and Compliance II. ELEMENTS OF THE ANTI-BRIBERY PROHIBITION A. Applicability to Aricent B. Corrupt intent C. Payment D. Recipient ARICENT RESTRICTED 5

6 E. Business Purpose III. SPECIAL NOTE REGARDING THIRD PARTY PAYMENTS IV. FREQUENTLY ASKED QUESTIONS ABOUT FCPA PART 2 SUMMARY OF U.K. BRIBERY ACT I. SUMMARY OF THE U.K. BRIBERY ACT A. Commercial Bribery B. Bribery of a Foreign Public Official C. Failure to Prevent Bribery by Commercial Organizations D. Adequate Procedures Defense E. Hospitality and Promotional Expenditures F. Facilitating Payments G. Penalties and Imprisonment H. Applicability II. Other Anti-Corruption Laws PART 3 ANTI-CORRUPTION LEGISLATION IN INDIA I. DEFINITION OF A BRIBE II. DEFINITION OF PUBLIC OFFICIALS A. Domestic Public Official B. Foreign Public Official III. PRIVATE SECTOR BRIBERY IV. EXTRATERRITORIALITY V. GIFTS AND HOSPITALITY VI. BRIBERY THROUGH INTERMEDIARIES A. Corporate Liability for the Acts of intermediaries B. Company s Liability for the Action of Subsidiaries C. Liability of Individual Directors and Officers VII. FACILITATION PAYMENTS VIII. COMPLIANCE DEFENSE AND MITIGATION IX. PENALTIES X. ENFORCEMENT TRENDS ARICENT RESTRICTED 6

7 1.0 Purpose Aricent is committed to conduct its business based on the highest ethical standards and consistent with applicable anti-corruption laws. This Policy is designed to inform all Aricent personnel about their roles and responsibilities, and to ensure day-to-day compliance with all ethical and legal obligations relating to anti-bribery and anti-corruption. This Policy describes the Company s standards to ensure compliance with the applicable anti-corruption laws in the countries in which it operates its business. 2.0 Scope This Policy applies to Aricent, its subsidiaries, affiliates, and their respective employees and business associates. A business associate includes current directors, officers, shareholders, consultants, agents, subcontractors and other third parties acting on behalf of Aricent. For the purposes of this Policy, the term employees will include business associates. Please note that the Aricent Code of Conduct ( Code of Conduct ) also incorporates the requirements of compliance with anti-corruption laws. Any violation of this Policy, the Code of Conduct or any applicable law will could result in disciplinary action, up to and including termination of employment. Moreover, where Aricent has suffered damage or loss relating to a violation of these standards or laws, it reserves the right to pursue all remedies available against the responsible employees, individuals or entities. 2.1 Special Note Regarding Individuals that have Contact with Customers, Vendors and other Third Parties Although this Policy applies to all employees, the employees in Procurement, Sales, Marketing and Client Teams should pay particular attention to the requirements and guidelines provided herein. 2.2 Applies to all business dealings and transactions The Policy covers all transactions with government officials as well as other organizations (commercial or charitable, private or public, etc.). The term government official includes all employees, personnel and representatives, at any level, of a governmental department or agency, whether executive, legislative, or judicial. It also includes officers, employees and representatives of companies under government ownership or control. A company or entity owned or controlled by a government includes any entity where the government has more than 50% ownership, or otherwise controls the management or operations of the entity. Thus, the term includes not only individuals such as elected officials, customs and tax inspectors and government procurement officials, but also state-owned enterprises. 3.0 Policy Aricent prohibits any employee from paying, facilitating, giving or accepting any bribes or offering, giving, facilitating or accepting improper inducements or incentives to anyone for any purpose. Aricent values require all employees to demonstrate honesty, integrity and fairness in all aspects of their business dealings and exercise appropriate standards of professionalism and ethical conduct in all their professional activities. To use a third party to channel or facilitate bribes to others is also strictly prohibited by this Policy. ARICENT RESTRICTED 7

8 Aricent takes bribery and corruption matters very seriously; and has a zero tolerance approach to any breach of this Policy. Aricent encourages its employees to report any suspicious activity that may be in violation of this Policy. Aricent has adopted this Policy built on its corporate values, principles and procedures. In doing so, it has drawn upon the guidance and legal requirements set forth in the following: US: The Foreign Corrupt Practices Act, of 1977 (15 U.S.C. 78dd-1, et seq.) UK: The Bribery Act 2010 (c.23) India: The Prevention of Corruption Act, 1988 Certain jurisdictions may have unique requirements, and that may lead to a deviation from this Policy in which case, prior to deviating from this Policy, you should contact the Legal Department or write to Compliance@Aricent.com to confirm such deviation in order to avoid non-compliance with local law. Local management teams will be responsible for implementing processes and procedures to accommodate any such additional exceptions and/or deviations. 4.0 Governance and Responsibilities The Board of Directors of Aricent (the Board ) has overall responsibility for ensuring that the Company complies with applicable anti-corruption laws. The Compliance Committee of the Board, which is responsible for implementing controls consistent with the Code of Conduct, has entrusted, on behalf of the Board, the Global Risk and Compliance ( GRC ) team with responsibility for ensuring compliance with this Policy; the Legal Department will help GRC to address all relevant queries. 4.1 Role of Legal and GRC GRC will be responsible for ensuring compliance with this Policy. GRC will coordinate with compliance owners from various departments at Aricent to implement appropriate compliance processes and controls. GRC will also assess policy compliance periodically. GRC will respond to employee queries and investigate all alleged violations. The Legal Department will be responsible for providing necessary approvals (as identified in this Policy) for usage of third parties, vetting legal agreements, dealing with third party attorneys and regulators. 4.2 Role of Finance Department The Finance Department has the responsibility with respect to the accounting and record keeping requirements of anti-corruption laws. The Finance Department will maintain all adequate books, records and accounts which, in reasonable detail, accurately and fairly reflect transactions and the disposition of Company assets. This responsibility will include reviewing business arrangements and payments that may be prohibited by the Policy. The Finance Department will also have the responsibility for maintaining a system of internal accounting controls sufficient to provide reasonable assurances that, among other things, transactions are executed in accordance with senior management s authorization consistent with this Policy, and which are accurately recorded to allow for the preparation of the Company s financial statements. ARICENT RESTRICTED 8

9 4.3 Role of Procurement Department The Procurement Department has the responsibility to conduct due diligence on suppliers engaged by the Company. This responsibility will include overseeing due diligence conducted by Aricent Business Managers, raising timely red flags for business arrangements that may be prohibited by the Policy, and reporting such matters to the GRC. Please see the Procurement Policy. The Procurement Department also has the responsibility with respect to developing policies and processes for the selection and evaluation of vendors, suppliers and other third parties in a manner that no Procurement Team member and/or Business Team member can influence a business decision improperly due to receipt of / promise to receive a bribe, financial advance or any other personal favor. 4.4 Role of Business Teams and Departments ( Team ) Each Business Team and Department is ultimately responsible for implementing this Policy by adopting operational procedures, conducting training and monitoring / reporting on its activities that involve customers, vendors and / or third parties. Aricent Business Managers of the Team pursuing the potential relationship with certain types of third parties are responsible for conducting necessary due-diligence mandated by this Policy prior to engaging such third parties. 5.0 Basic Compliance Principles 5.1 Bribes and Kickbacks Aricent does not take part in acts of corruption, or pay bribes or receive kickbacks either directly or indirectly. The Company prohibits its employees from engaging in acts of corruption, and from paying bribes or kickbacks to, or accepting bribes and kickbacks from, public officials and private individuals such as the personnel of companies with which it does business. 5.2 Facilitation Payments Aricent and its employees will not make facilitation payments to public officials or even third parties even if such payments are local practice or custom. 5.3 Public / Government Officials Bribing a public or a government official is a serious offence, can carry severe penalties and can cause significant reputational damage. This Policy provides detailed guidelines in Appendix A Detailed Compliance Requirements, and via the Gift and Entertainment Policy. Approvals must be secured in advance in relation to gifts or benefits received from or offered to government officials, particularly the giving of anything of value to a government official. 5.4 Gifts and Entertainment Company employees may not offer to, or accept from, third parties, gifts, hospitality, rewards, benefits or other incentives that could affect either party s impartiality, influence a business decision or lead to the improper performance of an official duty. Similarly, they may not offer or accept cash donations. Company employees may offer and accept reasonable and proportionate gifts and entertainment, such as dinner, theatre, parties or sporting events. In determining what is ARICENT RESTRICTED 9

10 reasonable and proportionate, please look at the Gift and Entertainment Policy for guidance. 5.5 Personal Conflicts of Interest Company employees must avoid situations and transactions in which their personal interests could conflict or might be seen to be in conflict with the interests of the Company. Conflicts of interest can arise if individuals have a personal interest in business dealings involving the Company. Employees must disclose any personal conflict of interest or perceived conflict. 5.6 Charitable Donations As part of its corporate citizenship activities, the Company may support local charities or provide sponsorship. Any such sponsorship must be transparent and properly documented. The Company will only provide donations to organizations that serve a legitimate public purpose, and which are themselves subject to high standards of transparency and accountability. Appropriate due diligence must be conducted on the proposed recipient charity and a full understanding obtained as to its bona fides. 5.7 Political Activities The Company has a policy of strict political neutrality; it does not make donations to any political parties, organizations, or individuals engaged in politics. Employees are entitled to their own political beliefs, but they may not use Company premises to promote those beliefs, or associate their beliefs with those of the Company. 5.8 Business Relationships The Company expects its business partners to approach issues of bribery and corruption in a manner that is consistent with the principles set out in this Policy. This requirement applies to all third parties that we do business with. 5.9 Accounts and Audits The Company s policies require employees to keep accurate accounts throughout the Company s operations. The regular auditing procedures will include a review of the local circumstances that may make particular departments, teams or projects vulnerable to corruption, and the defenses and strategies that are in place to mitigate such risks Dos and Don ts DOs Consult this Policy whenever you deal with an international business opportunity where payments may flow to a government official or a third party. Engage with the Legal Department early in the process after you have identified an opportunity. DON Ts Don t make payments to third parties or authorize expenses, offer gifts or anything of value for any purpose without all required approvals. Never pay in cash on behalf of the Company. Don t make commitments or undertake any activity with a third party without consulting with the Business Unit Vice President and the Legal Department. ARICENT RESTRICTED 10

11 DOs Complete all applicable Forms provided in this Policy. DON Ts Don t enter into oral agreements or side agreements that are not documented. Request and obtain all applicable information and Forms required from the third party contact. Review the potential opportunity and proposed transaction and compensation structure with the Business Unit Vice President. Obtain all required approvals before proceeding with any opportunity. Report any red flags or suspicious activity immediately. Contact GRC or the Legal Department if you have any questions. Don t engage with local agents that provide unspecified services. Don t ignore or engage in willful blindness when confronted with questionable conduct or red flags. Don t assume that conduct permitted or acceptable in the local culture/practice is permissible under the anti-corruption laws. Don t delay reporting any incident where you may feel forced to make a facilitation payment. Don t assume compliance with Anticorruption laws or make your own judgment calls when questions or issues arise. Consult with the Legal Department immediately. For more details on how to comply with this Policy, please refer to Appendix A Detailed Compliance Requirements. 6.0 Due Diligence With Regard to Third Parties, Strategic Transactions Aricent will not enter into any relationship with a third party who will participate in Aricent's international sales or marketing efforts, or who may have contact with commercial organizations or government officials in connection with Aricent's international operations, without an inquiry into the third party's background and/or reputation. Due diligence and resolution of red flags, if any, is mandatory in these situations and needs to be conducted as per the guidance given in Appendix B. Similarly, due diligence on other third party vendors that will interact on behalf of Aricent with government or other suppliers needs to be done prior to engaging such third parties. Further, Aricent Business Managers sponsoring such third parties need to reduce such relationships to legally-vetted written agreements and monitor third party s activities, expenses, and other requests for payment to ensure continued compliance with the applicable anti-corruption laws and this Policy. ARICENT RESTRICTED 11

12 Refer to Appendix B - Due Diligence Guide for details and templates. 7.0 More Information and Prompt Reporting Violations To assist you in this regard, attached to this Policy are certain reference materials, which include a list of Dos and Don ts (section 5.0 above), detailed compliance requirements (Appendix A), due diligence guide (Appendix B), and additional details regarding interpretations of the key anti-corruption laws and their FAQs (Appendix C). Please note, however, that these materials are provided for your reference only. You should not act independently, or exercise any individual judgment or discretion when dealing with potential anti-corruption question, issue or violation. If you have a question or become aware of any potential or alleged violation of anti-corruption laws, you should contact the Legal Department immediately. Your communication will be considered confidential unless otherwise required by law. It is also the policy of Aricent to forbid retribution or retaliation of any kind against employees who report potential or actual ethical or legal violations, including violations of anti-corruption laws and non-compliance with this Policy or with the Code of Conduct. Every employee has the right to address ethical concerns in good faith without fear of punishment or harassment from co-workers, supervisors, or senior management. In this regard, we have established a helpline to report potential or alleged violations, if you are unable to speak with a representative in the Legal Department in a timely manner. You may report such matters in a confidential (and anonymous manner, as necessary) through one of the following ways: Toll-free compliance helpline: Website: compliance@aricent.com 8.0 Violations and Consequences Failure of any employee to comply with this Policy could result in disciplinary action, including the possible termination of employment and the pursuit of all available remedies against the employee. For the avoidance of doubt, any violation of anti-corruption laws, this Po licy or the Code of Conduct shall be considered Cause as such term may be used in any employment or benefit related agreement, policies or plan. A violation of anti-corruption laws can result in serious consequences for Aricent and for the individuals involved. You should consult directly with the Legal Department when questions arise regarding any violation or alleged violation of anti-corruption laws. Please see Appendix C Summary of Key Regulations for regulation-specific penalties and sanctions. 9.0 Training and Monitoring Targeted training with regard to this Policy and related procedures will be conducted for all leaders (AVP equivalent and above) and select teams within Aricent that are susceptible to relationships with third parties for instance, business development teams, Procurement, HR, IT, Real Estate and Facilities Management ( RE&FM ) teams, etc. All targeted employees are expected to complete these trainings. ARICENT RESTRICTED 12

13 10.0 Implementation This Policy shall be available to Company personnel through the Company s Intranet and on the helpline website: This Policy may be revised at any time and will be reviewed from time to time by the Legal Department. Notice of significant revisions shall be provided to Company personnel through the Company Intranet Related Policies and Procedures This Policy is intended to be interpreted and applied in a manner that is consistent with the Code of Conduct and Supplier Conduct Guidelines. The Procurement Policy, and the Gift & Entertainment Policy should also be complied with in connection with this Policy Specific Rules for Specific Countries The Company may publish, from time to time, guidelines that apply in specific countries. These will be posted and made available via the Company s intranet Record Retention The records of due diligence conducted and approved shall be maintained by the GRC team for a period of five (5) years for compliance and regulatory purposes and to aid / assist any future investigations. ARICENT RESTRICTED 13

14 Appendix A Details of Compliance with the Policy 1.0 Compliance Requirements 1.1 Specific Prohibitions on Giving Bribes to Government Officials Unless permitted by this Policy or pursuant to documented approvals outlined in the Policy, no offer, payment, promise to pay, or authorization to pay or provide any money, gifts, entertainment, travel, or anything of value will be made by or on behalf of the Company to: Any government official, including any member of the armed forces, and including any official, employee, or person acting on behalf of a public international organization; Any foreign political party, official of a foreign political party, or candidate for foreign political office; or Any person, while knowing or being aware of a high probability that all or a portion of any payment will be offered, given or promised, directly or indirectly, to any of the above. 1.2 Specific Prohibitions on Bribes (to and from) Other Organizations In accordance with applicable anti- corruption laws, Aricent prohibits all forms of bribery in connection with its business anywhere in the world for improperly obtaining or rewarding favorable treatment. Do not give or facilitate bribes: Offering, promising, facilitating or giving a bribe in any form (money, business courtesy, kickback, financial or any other advantage) to another person is strictly prohibited. Do not take or accept bribes: Requesting, agreeing to receive, accepting or facilitating a bribe in any form (money, business courtesy, kickback, financial or any other advantage) from another person is strictly prohibited. Business courtesies are gifts, gratuities, favors, benefits, loans, commissions, discounts, forbearances, or other tangible or intangible items having monetary value for which fair market value is not paid by the recipient. Such courtesies include but are not limited to cash, honoraria, entertainment and recreation (tickets, passes, fees, etc.), services, training, transportation, discounts, promotional items, lodging, meals, drinks, door prizes, or use of a donor s time, materials, equipment, or facilities. Refer to the Company s Gifts & Entertainment Policy for certain situations wherein gifts / entertainment can be given or accepted and process of seeking approval for, as well as, reporting such instance. The Procurement Department is responsible for developing suitable supplier selection and evaluation processes and procedures. These processes should ensure fair competition between suppliers and mitigate risk of any person(s) in the Procurement team or the team requesting the purchase or others accepting bribes, ARICENT RESTRICTED 14

15 gift, financial or other advantage in lieu of favorable treatment towards a supplier(s) in securing Company s business by performing improperly. If there is any question regarding the nature or propriety of the payment, you should contact the Legal Department or GRC immediately. 1.3 Restrictions on Gifts, Entertainment and Travel Anti-corruption laws do not prohibit aggressive, creative marketing activities. However, care must be taken to avoid any appearance that we are providing those government officials or decision makers in the private sector with economic benefits to influence them improperly in their official duties. Legitimate promotional expenses, including travel-related expenses, are permissible under anti-corruption laws under certain limited circumstances. However, whether any activity is permissible requires a careful analysis of the facts and circumstances and the requirements of the relevant anti-corruption laws. To minimize the risk of a possible violation, you should not conduct this analysis independently and should always refer your questions to the Legal Department and obtain all proper approvals, including under the Gifts & Entertainment Policy of the Company. Moreover, all employees, officers and directors are prohibited from making payments of any kind to government officials or party officials without the prior written approval of the General Counsel. Company employees must also exercise caution when inviting government Officials to attend Company-sponsored events, such as sporting events, concerts, trade shows, and user conferences. These special events frequently involve more elaborate hospitality than the routine business entertainment covered above. They may extend over several days, and often involve a significant expense to cover gifts, travel, and lodging for individuals. Therefore, an invitation to any official for these events requires prior written approval. Refer to the Gift and Entertainment Policy for approval process and other details. 1.4 Restrictions on Contributions to Political Party and Candidate / Charities Contributions, whether cash or in-kind, to political parties and candidates are restricted by anti-corruption laws to the same extent as payments to current government officials. In addition, contributions, whether cash or in-kind, to charities may also be restricted by the FCPA, to the extent the charities are conduits for payments to individual officials. Consult with the Legal Department if you have any questions or desire to make such a contribution. 1.5 Prohibition on Facilitating payments In some circumstances, a payment to a "foreign official" may qualify under a narrow and limited FCPA exception for payments made to secure routine governmental actions. Such "facilitating" payments are payments made to expedite or facilitate: obtaining certain non-discretionary business permits; processing non-discretionary governmental papers such as visas; providing police protection, mail delivery, or scheduling inspections associated with contract performance or the shipment of goods; ARICENT RESTRICTED 15

16 providing phone, power or water service, loading and unloading cargo; or other similar activities that are ordinarily and commonly performed by an official. However, the U.K. Bribery Act prohibits facilitating payments that carry the intent to influence a foreign public official in his or her official capacity or a private citizen in a commercial context to obtain or retain business or a business advantage. Facilitating payments may not be made to induce a government official or employee to ignore his or her lawful duty. Official decisions whether to award new business or continue business with a particular party (including discretionary decisions regarding clearing goods for entry through customs) will never be considered routine governmental action. Except in an emergency situation, where, for example, the personal safety of employees is involved, facilitating payments are not permitted. If an emergency renders prior written approval impossible, the payment should be reported to the General Counsel as soon as possible following the payment. Questions about payments that could be classified as facilitating payments must be vetted with the General Counsel prior to deciding whether or not to make a payment. 1.6 Restriction on Doing Business with "Government Officials" and Companies Wholly or Partly Owned by "Government Officials" Anti-corruption laws govern and in some instances restrict our ability to do business directly or indirectly with individual government officials. Accordingly, all business transactions with government officials or companies wholly or partly owned by a government official must be reviewed in advance by the Legal Department. This is a particularly difficult analysis when dealing with countries where private enterprise and government entities are intertwined, such as China. Moreover, the significant increase in recent enforcement activity in China has increased the risk of anticorruption law related issues when conducting business in China, or in any other country where private and public enterprise may be intertwined. If there is any question regarding the nature of the enterprise, you are required to contact the Legal Department before you take any action to further the contact or the relationship. 1.7 Safeguards for Doing Business with Governments Anti-corruption laws do not strictly prohibit business with governments, agencies, and government owned or controlled companies. Indeed, Aricent's business may require direct dealings with government entities and officials, including sales to governmentowned companies, joint ventures with government-owned or controlled telecommunications companies, and similar relationships. However, given the potential contacts with government officials, prior written approval is required for any payment or transfer of assets in connection with these transactions. If Aricent will be providing services to any entity with government ownership, the Compliance Certificate set forth in Form B-7 (Appendix B) is required to be completed and signed by the client entity verifying that no payments in connection with its transaction with Aricent went to a government official. ARICENT RESTRICTED 16

17 1.8 Requirements for Accounting of Expenditure and Expense Report Anti-corruption laws (more specifically, the FCPA) impose strict accounting and record keeping requirements on Aricent, including its foreign operations and foreign affiliates controlled by Aricent. In particular, these requirements are: The keeping of books and records that, in reasonable detail, reflect the transactions and asset dispositions of the business entity; and The development and maintenance of a system of internal accounting controls including periodic audits. To comply with these requirements, all Company employees must without exception follow Aricent s accounting requirements. Company should never accede to requests for false invoices or for payment of expenses that are unusual, excessive, inadequately described, or otherwise raise questions under this Policy or related Company guidelines on accounts and recordkeeping. Any such requests or payments must be adequately disclosed in the attached forms as instructed in this Policy. In addition, all personal expense reports submitted for reimbursement are subject to review and investigation to the extent a potential violation of FCPA may have occurred. Please consult with the Legal or the GRC teams if you have any questions or concerns regarding these requirements. 2.0 Compliance Requirements With Regard to Third Parties To conduct its business, Aricent regularly engages with third parties, such as local sales representatives, subcontractors, consultants, agents, resellers, distributors, joint venture partners, or teaming partners. Under the Anti-corruption laws, Aricent may be held liable for payments made by such third parties who may have dealings with "Government officials", even if the third party is not subject to the specific Anti-corruption laws, and even if Aricent does not actually know of the payment. FCPA imposes liability if Aricent, or its officers or employees, give, pay, promise, offer or authorize such payment when Aricent knows or has reason to know that payment will be made in whole or in part to a "foreign official". This reason to know standard is aggressively enforced by U.S. enforcement officials. Furthermore, offering, promising, or giving a financial or other advantage regardless of its size or amount, to any foreign public official or a commercial organization is a violation of the U.K. Bribery Act if it is done with the intent to influence the foreign public official / commercial organization in his or her official capacity and to obtain or retain business or a business advantage. For example, offering, promising, or giving a financial or other advantage, including a payment, regardless of its size or amount, to another person violates the general bribery provisions of the U.K. Bribery Act if it is done with the intent to induce or reward improper performance of a relevant function or activity, or when knowing or believing that acceptance of the advantage would itself constitute the improper performance of a relevant function or activity. Additionally, bribes or corrupt payments to any third party (government official or not) are impermissible. ARICENT RESTRICTED 17

18 Given the prevalence of third party contacts in our business, Aricent must proactively attempt to minimize the risk of anti-corruption law violations before and during any engagement with a third party. Although all contracts are generally reviewed or screened by the Legal Department, the following additional procedures must be followed with respect to certain third party relationships. 2.1 Due Diligence of the Third Party Aricent will not enter into any relationship with a third party who will participate in Aricent's international sales or marketing efforts, or who may have contact with commercial organizations or government officials in connection with Aricent's international operations, without an inquiry into the third party's background and reputation. The most important step Aricent can take to protect itself from liability for improper payments made by third parties who may have contacts with government officials or other commercial organizations is to choose carefully its business partners, agents, consultants, finders, and other parties and to identify in advance any red flags that a proposed relationship may raise. Thus, Aricent has adopted due diligence procedures designed to screen certain proposed business relationships with third parties in its international business. A sample due diligence checklist of the type of information examined is attached to this Policy as Form B-1 (Appendix B). Different third party relationships pose different levels of risk. The Policy requires a detailed review of all proposed third party relationships in which the third party will participate in any way in Aricent's efforts to obtain business from commercial organization anywhere in the US or internationally, or will otherwise deal with government officials on Aricent's behalf. The scope of a due diligence investigation should be sufficient to determine that (1) the third party is not a government official or a company in which a government official has a significant interest for the purposes of anti-corruption laws; and (2) the third party will not engage in any improper practices that could expose Aricent to liability or are otherwise inconsistent with Company business practices. To that end, the country and the third party must be investigated and any issues raised must be addressed to the satisfaction of Aricent prior to entering into the relationship. The amount of time and effort required for due diligence will depend on the number and complexity of the issues raised during the due diligence investigation. A. Third Party Screening Form and Questionnaire To facilitate these background checks and perform the appropriate level of due diligence with respect to such third parties, the Aricent Business Manager pursuing the potential relationship must present the forms and related documents described below to GRC. The Legal Department must be contacted in the instance of a Red Flag being raised as per Form B-5, and no further action shall be taken in such instances (including signing a contract with the third party) unless approval is sought from the Legal Department. - Get the third party to fill and submit Third Party Questionnaire (Form B-2) (Appendix B), and any supporting documents; - Fill and submit a Third Party Screening Form (Form B-3 in Appendix B for third parties related to Aricent s international sales or marketing efforts / Form B-4 in Appendix B for third parties vendors who interact on behalf of Aricent with ARICENT RESTRICTED 18

19 government authorities in connection with tax, facilities, labor, etc.) and any supporting documentation. In addition, the Legal Department may request the third party candidate to complete and return a separate Compliance Certificate in the form attached to this Policy as Form B-6 (Appendix B). Please note that no work may be done by these third parties until all required approvals have been secured in writing following review of the Third Party Screening Form and the Questionnaire, if applicable. All Company employees involved in the process are expected to act promptly so that the due diligence process will not delay the business negotiations and the potential opportunity related thereto. A1. Third Parties in Connection with International Sales or Marketing Efforts Various types of third party arrangements in connection with international sales or marketing efforts that require usage of Form B-2 and Form B -3 are listed below: Independent Sales Representatives: may be a legal entity or individual qualified in a territory with business or technical experience that is capable of providing sales assistance for the Company s products and services. Essentially, sales representatives may perform the same duties and fulfill the same responsibilities of our internal sales team, and earn a percentage commission on the actual purchase price paid by the customer. A sales representative typically represents the Company and acts on its behalf, and this type of relationship increases the risk to the Company of their activities. Marketing Consultants: may be a legal entity or individual qualified in a particular territory with local expertise or skill to advise the Company with respect to the marketing of the Company s products and services, as well as the identification of potential customers and marketing strategies. The compensation structure may vary, but will typically be in the form of a percentage commission for any realized sale identified by the consultant, or a fixed fee based on deliverables, or on a time and materials basis. A marketing consultant typically does not represent the Company. Finders: may be a legal entity or individual familiar with the local market that may introduce the Company to previously unknown sales opportunities. Finders are generally not substantially involved in the sales process, and do not represent the Company in any dealings with the Customers. Typically, Finder s fees are a small percentage of the value of the sale identified by the Finder. A Finder typically does not represent the Company. Local Agents: may perform any number of unspecified duties on behalf of the Company. As these relationship create a number of operational and compliance risks, the Company should not enter into these relationships. Resellers/Distributors: are typically legal entities that purchase products directly from Aricent, and then resell or distribute the same products to end customers at a higher price. As such, the reseller/distributor typically determines the resale price to the end customer, and therefore controls the compensation to be received from the relationship. A reseller or distributor is independent and does not represent the Company. Teaming Partners: are typically legal entities that engage with Aricent to cooperate and pursue mutually beneficial market opportunities or potentially ARICENT RESTRICTED 19

20 common customers. Generally, the specific structure of the compensation or revenue sharing model between the teaming partners is not defined until the specific end customer opportunity is identified and a contract with the customer is signed. Due to the nature of the relationship, Teaming Partners may represent the Company, so special care should be taken with respect to monitoring their activities. Joint Venture: is entity formed by two or more companies, whereby the joint venture partners own a specific equity interest in the joint venture, and therefore share the risks and rewards associated therewith. The compensation and ownership structure of a joint venture varies depending on the particular transaction, the parties involved and the operational purpose. Given the nature of a joint venture, each partner represents the Joint Venture, so special care should be taken with respect to monitoring the activities of the partner. As such, you should obtain the appropriate level of approval from the President of the Business Unit and the Client Partner regarding the proposed third party relationship, including the potential compensation arrangement, before contacting GRC regarding anti-corruption law related due diligence, and submitting the Third Party Screening Form. The Legal Department should be contacted, and corresponding approvals must be sought, only in instances of a Red Flag being raised as per Form B-5. A2. Other Third Parties Vendors in Interacting on Behalf of Aricent with Government or Other Suppliers Further, Aricent Business Manager of the Team pursuing the potential relationship should conduct due-diligence on the third party who will interact on behalf of Aricent with government or other suppliers (working for Aricent or proposing to work with Aricent). As such, the Business Manager should obtain the appropriate level of approval from the relevant Function Head (grade AVP and above) and Procurement (AVP and above) regarding the proposed third party relationship, including the potential compensation arrangement, before submitting the Third Party Screening Form (Form B-4) (Appendix B). Regarding anti-corruption law related due diligence, the Legal Department should be contacted only in instances of a Red Flag being raised as per Form B-5. Such third parties that interact with the Government or other suppliers on Aricent s behalf can include any of the following: Professional Service Providers o Attorneys This category covers attorneys/lawyers who interact on behalf of Aricent with a government entity (including judiciary, regulatory officials, and law enforcement). o Tax advisors and Accountants This category covers tax advisors and accountants who interact on behalf of Aricent with a government entity (including tax authorities) in connection with a tax claim or dispute, or who interact on behalf of Aricent with government entities (including tax authorities) in other ways related to taxes. o Lobbyists A lobbyist is a person or entity who interacts on Aricent s behalf for the purpose of changing, repealing, or enacting legislation or regulation. ARICENT RESTRICTED 20

21 o Regulatory Consultant A regulatory consultant is a person or entity who interacts on behalf of Aricent with a government entity to help Aricent address regulatory or government matters. o Patent Agents A patent agent is a person or entity who interacts on Aricent s behalf with a government entity (including any zoning or property agency or official) in connection with any real estate Aricent owns or leases or would like to own, lease or sell. o Consultants A consultant for any other permit or license or clearance from Government or its agency on behalf of Aricent. An environmental consultant or consultant for any other permit or license is a person or entity who interacts on behalf of Aricent with a government entity for the purpose of helping Aricent obtain permits, licenses, or other authorizations, including environmental permits, or represents Aricent before a government entity regarding claims, including environmental claims. Processing Service Providers o Visa Processors/Immigration Consultants A visa processor or immigration consultant is a person or entity who interacts on behalf of Aricent with a government entity (including immigration officials) to help secure visas, work permits, or other approvals or certifications for Aricent s employees and representatives. o Labor Providers A labor provider is a person or entity who supplies Aricent with labor and who interacts on behalf of Aricent with a government entity (including labor ministry and immigration officials). Others o Building / Construction Contractors or Landlords A building / construction contractor or Landlord is a person who interacts on behalf of Aricent with a government entity for the purpose of obtaining permits, licenses or other authorizations associated with construction or building projects or Aricent offices. o Consultants / Others This category covers any other person or entity not already listed above who - interacts on behalf of Aricent with a government entity; or - interacts on behalf of Aricent with other vendors that provide service to Aricent directly (like Project Management Consultancy, Architects) B. Red Flags with Certain Third Parties In conducting third party due diligence, it is essential that employees be sensitive to circumstances that suggest a higher probability of a risk. For example, circumstances that, in the view of the U.S. Justice Department, may suggest a reason to know of an illegal payment by a third party, and therefore a potential FCPA violation, are commonly referred to as "red flags". The presence of red flags in a transaction suggests a need for greater scrutiny and the implementation of safeguards against a potential violation. Red flags that warrant further investigation when selecting or working with a third party are varied and numerous. Aricent Business manager should refer to Red Flag Report (Form B-5) (Appendix B) while preparing the Third Party ARICENT RESTRICTED 21