Legal Policies

Foreign Corrupt Practices Act / Anti-Bribery Policy

Any translation of this policy is made through an automated process which may not result in accurate or precise translations. Any discrepancies or differences created in the translation from the original English version are not binding and have no legal effect for compliance or enforcement purposes.

SCOPE

This Policy applies to the operations of Novacoast, including all of its divisions, subsidiaries, and affiliated companies (the “Company”) worldwide and to the Company’s various agents and business partners.

PURPOSE

The Company must comply with all applicable anti-corruption laws, both domestically and internationally including the U.S. Foreign Corrupt Practices Act of 1977, as amended (the “FCPA”). This policy sets the expectation and requirements for compliance with those laws. Anti-corruption laws around the world can be complex and far reaching. This Policy is not intended to be an explanation of all the specific provisions of those laws or an exhaustive list of activities or practices that could affect the reputation and goodwill of the Company’s business. This Policy should be read in conjunction with the Company’s other policies governing employee conduct and any questions should be addressed to the Corporate Counsel. This Policy may be more restrictive than the letter of the international anti-corruption laws and the FCPA. In the case of any inconsistency between any other Company policy and this Policy, the provisions of this Policy will govern.

POLICY

No Company director, officer, shareholder, employee, agent, consultant, representative, distributor, licensee, teaming partner, alliance partner, or joint venture partner (“Company Representative(s)”) has authority to violate the FCPA or any applicable anti-corruption law. The policy prohibits Company Representatives from corruptly paying, offering to pay, or giving anything of value to any Foreign Official (as defined below) in order to induce the Foreign Official in his or her official capacity to do or omit to do an act in violation of his or her lawful duty, or to secure any improper advantage, or to assist in obtaining or retaining business for or with, or directing business to, any person. All Company Representatives are obligated to keep books, records, and accounts that accurately and fairly reflect all transactions and disposition of Company assets.

Facilitating payments are strongly discouraged and must comply in all respects with the detailed requirements set forth later in this policy.

COMMITMENT TO COMPLIANCE

Compliance with Laws; No Improper Payments

Compliance is a core value for Novacoast. The Company is committed to conducting its business ethically and in full compliance with the laws of the countries where we work. The Company prohibits all improper or unethical payments to any Foreign Official anywhere in the world. Countries around the world have adopted, or are adopting anti-corruption laws, which make it a crime to make bribes. Both the Company and Company Representatives are governed by these laws and must abide by them.

Reporting Demands for a Bribe

It is absolutely imperative that each and every person who does business with the Company understand that Company Representatives will not, under any circumstances, offer, give or accept bribes or kickbacks. Any demand for a bribe or payment of a bribe must be brought by employees in writing immediately to the attention of the Chief Operations Officer, the Chief Financial Officer, or the Corporate Counsel. Use the e-mail contact information at the end of this policy to make a report.

Novacoast will not Pay Fines or Penalties Assessed against Company Representatives for Violation of Anti-Corruption Laws

Violations of anti-corruption laws will subject both the Company and Company Representatives to fines and criminal penalties, including jail time. The Company will not pay any fines or penalties assessed against a Company Representative who is found guilty of violating any anti-corruption laws.

THE FOREIGN CORRUPT PRACTICES ACT

Even though some Company affiliates and subsidiaries are organized under the laws of a foreign country, because they are directly or indirectly held by a U.S. corporation, their activities may be subject to the U.S. Foreign Corrupt Practices Act of 1977, as amended (“FCPA”). The FCPA generally prohibits any United States person or firm or any foreign person or firm working on behalf of a U.S. person or firm, from paying or giving, or offering or promising to pay or give, any money or any other thing of value, directly or indirectly, to any Foreign Official, foreign political party or candidate for foreign political office for the purpose of obtaining or retaining business or securing an improper advantage.

TERMS TO HELP YOU UNDERSTAND THE FCPA

The following concepts and definitions are essential to understanding the broad scope of the FCPA’s anti-bribery provisions:

  • The Company may be held liable for violating the anti-bribery provisions of the FCPA whether or not it took any action in the U.S. That means that the Company and Company Representatives can be liable for the conduct of overseas employees or agents, even if no money was transferred from the U.S. and no U.S. person participated in any way in the foreign bribery.
  • Foreign Official(s) means any non-U.S. government official (including employees of government-owned and government-controlled companies, and employees of public international organizations), political party, party official or candidate, and anyone working in an official capacity for or on behalf of a non-U.S. government, government-owned or government-controlled company, public international organization or political party. Some examples of Foreign Officials include: employees of national oil or other state-owned companies, members of royal families, members of the military, employees of state-owned universities, employees of the World Bank, the United Nations, the European Union, the Monetary Fund, and immigration and customs officials. Foreign Officials include all levels and all ranks of government officials, whether federal, state, provincial, county, municipal or other level.
  • “Giving, offering or promising” includes direct and indirect payments, gifts, offers, or promises. Even if the improper payment is not consummated or successful in its objective, merely offering it violates the FCPA.
  • Instructing, authorizing, or allowing a third party to make a prohibited payment on the Company’s behalf constitutes a violation of the FCPA by the Company and the individuals involved. This includes ratifying a payment after the fact, or making a payment to a third party knowing or having reason to know that it will likely be given to a Foreign Official.
  • “Anything of value” includes not only cash and cash equivalents, but also gifts, entertainment, travel expenses, accommodations, and anything else of tangible or intangible value, such as employing a relative. For more information on gifts, entertainment, travel expenses, and accommodations please refer to the Company’s policy on Gifts, Entertainment, Travel, Charitable, and Political Contributions and the Business Expense Reimbursement Policy.
  • “Obtaining or retaining business or securing an improper advantage” includes but is not limited to preferential treatment in a bid, a reduction in taxes or customs duties, a favorable change in regulations, tolerance of non-compliance with local rules, or other favors or preferential treatment. The business to be obtained or retained or the improper advantage need not involve a contract with a foreign government or foreign government instrumentality.
WHAT THE FCPA PROHIBITS

The FCPA has two parts: (1) the anti-bribery provisions and (2) the record keeping and the internal controls provisions.

  1. Anti-Bribery

    A violation of the FCPA’s anti-bribery provisions occurs when a payment, offer, or promise to pay anything of value, directly or indirectly, is corruptly made to any Foreign Official or anyone acting on behalf of a governmental international organization for the purpose of obtaining or retaining business for or with or directing business, or to secure an improper advantage.

    1. Knowledge and intent

      1. The improper purpose

        The FCPA prohibits payments intended to influence any act or decision of a foreign official in his official capacity, to induce such official to do or not to do an act in violation of his lawful duty or secure an improper advantage; or induce such foreign official in his influence to affect or influence an act or decision of the government in order to obtain or retain business for or with or to direct business to a person or entity.

      2. Knowledge regarding Third Party Payments

        The FCPA also prohibits payments (as described in (a)1 above) made by third parties where a company pays or provides a thing of value to a third party, knowing that the payment or thing of value will be passed on or made in whole or in part to the third party. A Company Representative’s state of mind is “knowing” with respect to conduct, a circumstance, or a result if the person is aware or has a firm belief a third party is engaging in such conduct, that such circumstance exists, or that such result is substantially certain to occur. The Company and a Company Representative may be held to have “knowledge” of an unlawful transaction notwithstanding any attempts to insulate themselves through willful blindness, ignorance, or conscious disregard of suspicious actions or circumstances.

    2. Facilitating Payments

      Under limited circumstances, the FCPA allows modest payments to expedite or secure the performance of certain routine government actions such as clerical activities which do not involve the exercise of discretion. A “facilitating payment” is a modest payment, usually in cash, given to a government employee to expedite or secure the performance of a routine governmental action. While anti-corruption laws prohibit bribes to government officials to influence decisions, the United States and some other countries may allow facilitating payments in limited situations. Examples include expediting utility services, providing needed police protection, or approving the granting of a work permit, customs clearance or visa to which the applicant is entitled. The term “routine governmental actions” does not include any decision by a foreign official whether or on what terms, to award new business or to continue business with a particular party, or any action taken by a foreign official involved in the decision-making process to encourage a decision to award new business or to continue business with a particular party, or grant something to which a party is not entitled.

      Novacoast strongly discourages the use of facilitating payments and absolutely prohibits facilitating payments over U.S. $100 or the local equivalent without the prior written approval of the Chief Operations Officer or Corporate Counsel. Two or more facilitating payments under U.S. $100 or the local equivalent to the same government official or employee in any twelve-month period without such prior written approval is also strictly prohibited. Approval of facilitating payments in excess of U.S. $100 or the local equivalent will rarely be granted and only for good cause shown. Facilitating payments may not be made in contravention of local laws that prohibit such payments.

      All facilitating payments over $100 or the local equivalent require prior approval. The approval request must list the details of the proposed payment and include the amount, the recipient, the name of his or her employer, and the justification for the proposed payment, as well as any additional information requested by the approver.

      Approval requests are to be submitted to the Chief Operations Officer or the Corporate Counsel using the contact information listed at the end of this policy. The Chief Operations Officer or the Corporate Counsel will make a determination of whether the requested payment is or is not a permitted facilitating payment and will communicate the decision to the requester by e-mail or in a written memo. The decision of the Chief Operations Officer or the Corporate Counsel is final and must be followed.

      All facilitating payments, including those under U.S. $100 or the local equivalent, must be reported immediately after they are made to the Chief Operations Officer by e-mail at the contact information listed at the end of this policy. The report must list the details of the payment to include the amount, the recipient, the name of his or her employer, and the justification for the payment, as well as any additional information requested by the Chief Operations Officer.

      In addition, all facilitating payments must be recorded accurately and fairly in expense accounts and the Company’s books and records. Expense information shall include all information required pursuant to the Company’s expense account policies and procedures. Any facilitating payment must be accurately and fairly recorded in the General Ledger Account “7846 Facilitating Payments” in the JDE Chart of Accounts.

      Making facilitating payments in violation of applicable laws will subject a Company Representative to possible termination of employment and prosecution by authorities. The laws of many countries prohibit the payment of what is otherwise a facilitating payment.

    3. Extortion

      Economic extortion, such as a threat to harm, delay or interfere with the Company’s business or the award of a contract, can never justify a payment that would violate this policy. However a payment arising from threats of physical violence and a genuine concern for one’s personal safety is a payment made under physical duress. When a payment is extorted by a government official who threatens imminent bodily harm, a Company Representative may and should make the payment that is demanded. Any extortion demand must be reported immediately to the Chief Operations Officer, and any extortionate payment must be accurately recorded in the Company’s books and records

    4. Payments that are legal under the written law of the foreign country

      Although the FCPA permits payments, gifts, offers or things of value that are lawful under the written laws and regulations of the foreign country, Company Representatives must follow the Gifts, Entertainment and Travel for Third Parties policy as well as the policies on Charitable Contributions and Political Contributions. The fact that payments or gifts are common and thought by Company Representatives to be widely permitted or authorized by local officials in another country is not sufficient to qualify as “lawful under the written laws or regulations” of that country.

    5. Expenses for promotion of services or performance of government contracts

      Subject to company policy, the FCPA permits reasonable and bona fide expenses, such as travel and lodging expenses, incurred by a Foreign Official in connection with the promotion, demonstration or explanation of the Company’s products and services, or in the execution or performance of a foreign government contract. Such expenses do not include those incurred by the Foreign Official’s spouse or family member or the costs of a personal side trip. Any payment for expenses for promotion of services or performance of government contracts must comply with the Gifts, Entertainment and Travel for Third Parties Policy.

    6. Charitable donations or political contributions

      The FCPA does not prohibit charitable donations or political contributions, but such payments can violate the FCPA when they are made with the intention of influencing an act or decision of a Foreign Official in his official capacity, to induce such official to do or not to do an act in violation of his lawful duty or secure an improper advantage; or induce such Foreign Official to affect or influence an act or decision of the government in order to obtain or retain business for or with or to direct business to a person or entity. Lawful charitable donations or political contributions must comply with the Charitable Contributions Policy and the Political Contributions Policy.

  2. Books and Records

    The Company is required under the FCPA to keep books, records, and accounts in reasonable detail that accurately and fairly show the Company’s assets and how the Company’s money has been spent. The Company has adopted a system of internal accounting and operating controls and procedures that must be strictly adhered to by all Company Representatives in providing financial and business transaction information to and within the Company so that all underlying transactions are properly documented, recorded, and reported. These internal controls are the backbone of the integrity of the Company’s financial records and financial statements.

    A failure to accurately and fairly document any transaction is a separate books and records violation of both the FCPA and this policy, whether the transaction is legitimate, a facilitating payment, or an illegal bribe. This further highlights the need to avoid improper payments altogether, to minimize the use of facilitating payments and to maintain accurate books and records in any event. Any facilitating payment must be accurately and fairly recorded to GL 7846 Facilitating Payments in JDE Chart of Accounts.

    Finally, Novacoast expects its agents and business partners to maintain and keep books and records which accurately and fairly record transactions, services, and the purpose of any payments, including those detailed in invoices submitted to the Company.

CONTACT INFORMATION

or address a letter to the above at the Company’s home office:

Novacoast, Inc.
1505 Chapala Street
Santa Barbara, CA 93101

(Rev. 110114)