COMPANY POLICY Policy Title: Global Anti-Corruption Policy CMS Number: CMS-300-05-PL-00013 Policy Owner: Legal & Compliance Issuing Authority: Executive Vice President, Chief Legal Officer & Secretary GLOBAL ANTI-CORRUPTION POLICY 2 Issued for Use Total rewrite. (No Rev Bars) RC 21 Jan 2014 1 Issued for Use Corrected grammatical error, changed Law Department to Legal Department, No change to intent, issuing authority approval not required. (No Rev Bars) BDR 04 Jan 2011 0 Issued for Use DD 03 Nov 2009 Rev Changes Approved Date UNCONTROLLED COPY IF PRINTED Page 1 of 6 " Chicago Bridge & Iron Company, 2009. All Rights Reserved. For Internal Use Only. NOTICE: THIS DOCUMENT, AND ALL TEXT, DRAWINGS, DETAILS AND DATA SHOWN HERETO, IS THE SOLE PROPERTY OF CHICAGO BRIDGE & IRON COMPANY, AND SHALL NOT BE REPRODUCED IN ANY MANNER, USED FOR ANY PURPOSE WHATSOEVER, OR RELEASED TO ANYONE EXCEPT BY EXPRESS WRITTEN PERMISSION OF CHICAGO BRIDGE & IRON COMPANY."
POLICY CB&I, its subsidiaries and majority-controlled affiliates (collectively referred to as CB&I or Company ) are committed to full compliance with the various anti-corruption laws of the United States, the United Kingdom and other countries and require its employees to comply with the law and the Company s practices. Employees must be knowledgeable of the requirements of these laws and be able to recognize situations that may raise issues under these laws. This policy is intended to ensure compliance with three primary elements regarding anti-corruption: Anti-Bribery Rules: Laws of the United States, United Kingdom and other countries prohibit bribery of both private and foreign government officials, employees or candidates for political office to (1) influence an act or decision for the award of a contract, (2) retain business or to (3) gain an improper competitive advantage. Failure to comply with this element may result in criminal and civil prosecution. Recordkeeping Rules: The Company maintains a system of internal accounting controls to assure the timely and accurate recording of transactions and prevent hiding of corrupt or improper payments such as bribes or inappropriate gifts. Failure to comply with these controls may result in monetary fines and forfeitures. Gifts and Entertainment Rules: The Company has policies and internal controls over gift and entertainment expenses to assure that reasonable and customary business expenses are the only types of expenses that we make and it does not appear that we are providing bribes disguised as gifts or entertainment. Employees violating this policy or applicable other policies or procedures or laws will be subject to discipline, including but not limited to, immediate termination of employment. In addition, such employees may be subject to personal criminal charges and fines by appropriate enforcement entities. This policy applies to any entity owned by CB&I and any of its majority-controlled affiliates and subsidiaries and all employees. Employees engaged in business with Foreign Government entities or officials must comply with this policy. PROHIBITIONS ON BRIBERY (ANTI-BRIBERY) The Company prohibits all bribery in connection with its business anywhere in the world. Specifically, all directors, officers and employees of the Company and all of its wholly owned subsidiaries and others to whom this policy applies, are prohibited from (a) offering, promising or giving a bribe in any form (including but not limited to money, inappropriate business courtesy, or kickback) to another person; (b) requesting, agreeing to receive or accepting a bribe in any form (including but not limited to money, inappropriate business courtesy or kickback) from another person in connection with any current or prospective business for the purpose of improperly obtaining or rewarding favorable treatment. Additionally, the Company prohibits any entity from engaging in any of these prohibited activities on our behalf. In this policy, the reference to inappropriate business courtesy refers to gifts, gratuities, favors, benefits, loans, commissions, discounts, forgiveness or any other benefit which exceeds the normal reasonable value or does not have a Company legitimate business purpose. RECORDKEEPING OF FINANCIAL TRANSACTIONS Employees of the Company must ensure all financial transactions are recorded, described and documented timely and accurately on the books and records of the Company. All financial transactions in connection with foreign business development activities shall be executed in accordance with the appropriate approvals and applicable policies and procedures. Compliance with generally accepted accounting principles for maintaining proper internal books and records and established audit controls and procedures is required at all times. UNCONTROLLED COPY IF PRINTED Page 2 of 6
False, inflated or artificial entries are not to be made in the books and records of the Company for any reason, and no employee shall engage in any arrangement that results in such entries. No accounting record or document relating to any transaction shall be falsified in any manner that may disguise the true nature of the transaction. In addition, no transaction shall be left off of the recordkeeping system if required to be included. No payment on behalf of the Company shall be approved without adequate supporting documentation. Payment also may not be made with the intention or understanding that any part of such payment is to be used for any purpose other than that described by the documents supporting the payment. GIFTS AND ENTERTAINMENT Employees of the Company shall follow all policies and procedures with regard to approvals for any gifts and entertainment. See CMS-300-05-PR-00007. I have a client in India. The client is partially owned by the Indian government. I have a meeting scheduled with the client and would like to present a gift to the client leaders at the meeting. What do I need to do? You must seek approval from the compliance office before you can give the gift and must complete the Gift Reporting Form and submit it to the compliance office within ten days of the gift giving event. If the value exceeds $100, you must get pre-approval by the Compliance Officer and the Sector President and a Company Executive by submitting the Gift Approval Form. (CMS-300-05-FM-00010) BONA FIDE BUSINESS EXPENSES Occasionally, employees meet with foreign government officials for business reasons. Reasonable expenditures related to those meetings may be acceptable business-related expenses. These expenses must be reasonable and have a specific and documented business purpose. These must be approved by the compliance office and the Sector President and must be recorded correctly in the books and records of the Company. Examples of expenses that might be acceptable Tours of our projects, offices or shops, a light lunch in conjunction with a meeting or a reasonably priced dinner in conjunction with or immediately following a meeting. Examples of expenses that will not be acceptable Paying for the travel of a foreign official s spouse or family, paying for spa services, paying for tickets to an entertainment event for the foreign official and/or his or her family or paying for entertainment, golfing, hunting and other such activities, of the foreign official when there is no business purpose to the entertainment. CHARITABLE AND POLITICAL CONTRIBUTIONS Any Company charitable or political contributions made to a non-us person or entity requires preapproval by the Compliance office and the communications department. This pre-clearance is crucial to ensure no violations of the anti-bribery laws. I am working on a project in the UAE. My client is partially owned by the UAE government and has requested that CB&I make a charitable contribution to a local charity. How should I proceed? CB&I requires approvals by compliance and communications before any charitable or political contributions can be made by the Company in a foreign country. When approved, any such contributions made on behalf of the Company must be made by check (not cash) and must be documented properly as a charitable contribution. UNCONTROLLED COPY IF PRINTED Page 3 of 6
FACILITATING OR GREASE PAYMENTS The Company discourages facilitating or grease payments. These are very small payments to lowlevel government employees performing routine tasks. In some circumstances, these can be legal and in others they are illegal. These types of payments are illegal under the United Kingdom Bribery Act and laws of other countries. As such, the Company authorizes employees to make these kinds of payments only with the pre-approval by the compliance office. This approval must be documented in writing. Additionally, when such payments are cleared, they must be recorded correctly as facilitating payments in accordance with appropriate accounting procedures and processes. The only exception to this pre-approval requirement is when there is risk of severe consequences related to health or life, and there is not enough time to obtain the approvals. In such cases, they must be disclosed to the Compliance office within forty-eight (48) hours. Proper recordkeeping is still required for emergency situations. I am working on a project located in a foreign country. I am trying to import a piece of equipment for the project, which currently is waiting at the port. When I went to the port to get the equipment released, the customs official told me it would take three weeks to get the necessary paperwork for the release of the equipment. We really need it sooner than that so our progress on the project is not delayed. The customs official said that if I pay him $50 in cash, he could push it to the top of the list and will be released in two days. What should I do? This kind of payment might be considered a bribe under U.S., U.K. or local laws, or it may be legal, depending on the specific facts and the local law. You must request approval of this by the compliance office so it can be reviewed and approved or rejected in accordance with this procedure and applicable law. If the payment is approved, it must be documented in accordance with appropriate accounting procedures or practices. The failure to document this correctly, if allowed, could render a violation of the anti-bribery laws as well as Company policies. FOREIGN REPRESENTATIVES, INTERMEDIARIES AND AGENTS The Company uses independent agents, intermediaries or representatives ( Agents ) in foreign countries to assist in obtaining and executing business. These Agents must follow all applicable antibribery laws. Their failure to do so can create legal problems for the Company. The Company has in place specific due diligence procedures that must be followed to make sure that we have adequately screened any person or company we hire to work as a foreign representative or agent.see CMS-300-05-PR-00001. I am trying to secure a client in Asia and have been told that I need to use an agent to assist with the business relationship. What do I need to do? The Company has very specific requirements and approvals that must be met before hiring a foreign agent to assist in obtaining business. These requirements are in CMS. You should contact a Company attorney who will assist you with the process. Pre-approvals Required by this Policy Gifts to foreign officials valued between $25-100 Gifts to foreign officials valued over $100 Entertainment Expenses for foreign officials Compliance Office X Sector President X Company Executive X X X X X X (if over $250) UNCONTROLLED COPY IF PRINTED Page 4 of 6
Business Expenses for Meetings X X Charitable Donations X X X Political Contributions X X X Facilitation/Grease Payments X X EMPLOYEE CERTIFICATION Employees working with foreign transactions may be required to periodically certify their receipt and understanding of this policy and their agreement to comply. CONSULTANTS Consultants hired by the Company in foreign business transactions or working in foreign countries should certify compliance with anti-corruption and/or other applicable bribery laws either in the contract documents or as a separate document as applicable. They must also be cleared against the prohibited parties lists. JOINT VENTURES The Company requires adequate due diligence with regard to anti-corruption for any potential business partners that will join with us in a Joint Venture. The entity and its principals must be vetted against the government prohibited lists and sufficient due diligence should be done to assess any corruption risks. Company CMS documents regarding the formation of business partnerships, including Joint Ventures, should be consulted. ACQUISITIONS AND MERGERS For any entities that the Company is considering acquiring or merging with that have international sales or operations, a sufficient due diligence of prior anti-corruption due diligence shall be performed to asses any potential risks. ENFORCEMENT OF THE POLICY INTERNAL AUDIT Reports by Employees Employees are required to notify the Company of any information the Employee has of any potential violations of this Policy even if the Employee is not sure that a violation has occurred. Employees should notify any of the following: (1) legal department (2) Compliance Office (3) General Counsel or (4) Ethics hotline. Violations Employees found to be in violation of this policy shall receive appropriate discipline in accordance with Company discipline policies. Consequences of such a violation may include, but are not limited to, termination. Additionally, individuals who are engaging in conduct which is in violation of the law may be subjecting themselves to criminal charges by the applicable government authorities. Reporting of the Company to the Government If a violation of this Policy or applicable law occurs, the legal and compliance departments shall jointly handle any required or desired disclosure to the appropriate government agency. Internal audit may include anti-corruption issues and policy compliance as part of its audit plans. EXCEPTIONS TO POLICY In general, exceptions to this Policy will not be granted. If there are circumstances that justify an exception, it can be approved only by a Company Executive and the General Counsel and the exception must be reported to the Compliance Office. UNCONTROLLED COPY IF PRINTED Page 5 of 6
REQUIREMENTS Written management directions will be developed as needed to implement this policy. RESPONSIBILITIES Corporate Management Corporate Management is responsible for ensuring that written instructions are developed and communicated throughout the organization to provide CB&I employees clear direction for the implementation of this policy. TERMINOLOGY Term CB&I FCPA Definition Chicago Bridge & Iron Company N.V. and its affiliates and subsidiaries Foreign Corrupt Practices Act of the United States of America as Amended. Foreign Official Includes an official or employee of a Company or Agency located outside of the United States (including but not limited to an employee of a state-owned or partially state owned commercial entity), any official of a public International organization such as World Bank or the United Nations and any foreign political party, party official or candidate for political office. Many Clients in non- US countries are owned, at least in part, by government entities. When that is the case, we treat the Client and all of its employees as a Foreign Official. Intermediary Includes agents, representatives, consultants and other nonemployees who may act on behalf of CB&I. REFERENCES CMS-720-01-FM-00020 CMS-720-01-FM-00021 CMS-300-05-PR-00007 CMS-300-05-PR-00001 CMS-300-05-FM-00010 Business Glossary Technical Glossary Giving and/or Receiving Gifts, Entertainment and Expenses Dealing with Potential Intermediaries Gift Approval Form ATTACHMENTS None UNCONTROLLED COPY IF PRINTED Page 6 of 6