Version as of 1st March 2018 · 2018-08-01 · 8 Gifts, hospitality and entertainment are considered as bribery if the intention behind is to affect a person's judgement or other

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Version as of 1st March 2018

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Dear colleagues,

GEFCO is committed to being an exemplary company in

the area of ethics and compliance. As a signatory to the

United Nation Global Compact since 2010, GEFCO has a

zero-tolerance policy towards corruption.

Corruption is unacceptable to us — whatever the

circumstances — because it is a major obstacle to socio-

economic development. It increases the cost of goods and

services, distorts economic relations, hampers competition

and, in certain circumstances, amplifies the lack of trust in

public officials and governments.

Major scandals have occurred in recent years that have led

to heavy fines, extensive media coverage, loss of reputation

for companies and imprisonment of individuals involved.

Not only must GEFCO and its employees not tolerate

corruption in any form — regardless of the countries in

which the Group operates — but our service providers must

also take an active part in combating corruption.

These anti-corruption guidelines — which will be regularly

revised to adjust to changes in law — are designed to

provide you with a clear understanding of the main forms

of corruption, and their implications for you and the Group.

Keep in mind that any actions carried out by or on behalf of

GEFCO must comply with these guidelines.

I am sure you will all behave in an exemplary manner, under

all circumstances.

LUC NADAL

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Main principles ......................................................................................... 6

Understanding corruption ......................................................................... 7

What is bribery? .................................................................................................... 7

What is extortion? ................................................................................................. 8

What is influence peddling? .................................................................................. 9

What is an ‘unlawful taking of interest’? .............................................................. 9

Corruption: a worldwide threat ................................................................. 9

Using one fraud to hide another ............................................................................ 9

Overview of anti-corruption regulations and sanctions .......................... 10

Ever more demanding regulations ....................................................................... 10

Sanctions for the company .................................................................................. 10

Sanctions for the individual ................................................................................. 12

Anti-corruption guidelines ...................................................................... 13

Bribes .................................................................................................................. 13

Facilitation payments .......................................................................................... 13

Gifts, hospitality and entertainment..................................................................... 14

Charitable contributions and sponsorship ............................................................ 15

Conflict of interest ............................................................................................... 16

Political activities ................................................................................................ 16

A shared ambition ................................................................................... 17

Dealing with corruption .......................................................................... 18

Tips for dealing with corruption .......................................................................... 18

Speak up against corruption ................................................................................ 18

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By signing up to the United Nations Global Compact, GEFCO is committed to

supporting and implementing, within its sphere of influence, the ten fundamental

principles relating to human rights, labor, the environment and the fight against

corruption.

Corruption is commonly defined as “the abuse of entrusted power for private gain”.

This convenient short-hand covers a myriad of illegal and illicit acts which are

obstacles to sustainable economic, political and social development, for developing,

emerging and developed economies alike. Overall, corruption reduces efficiency and

increases inequality. The OECD estimates that the cost of corruption is equivalent to

over 5% of global GDP, with over US$1 trillion paid in corruption each year.

We support the fight against corruption and have publicly stated a zero-tolerance

policy on corruption. This principle is laid down in GEFCO’s Code of Ethics and

applies to all employees, officers, directors and members of the Group Executive

Committee and its subsidiaries worldwide.

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Corruption (or bribery) is a generic term that covers a wide range of behaviors that

vary according to cultural and legal factors. These guidelines will focus on some of the

most common forms of corruption: bribery, extortion, influence peddling and unlawful

taking of interest.

Bribery is the offering, promising, giving, accepting or soliciting — directly or

indirectly — of an undue advantage as an inducement for an action which is illegal or

a breach of trust.

Passive bribery is committed when an employee or contractor personally or on behalf

of another person accepts a bribe or other improper reward for the performance of his

or her duties. Giving, promising, or offering an improper reward to an employee or

contractor constitutes active bribery.

In the world of business, bribery takes a variety of forms, such as:

Facilitation payment is the illegal or unofficial payment made in return for services

which the payer is legally entitled to receive without making such payment. It is

normally a relatively minor payment made to a public official or person with a

certifying function in order to secure or expedite the performance of a routine or

necessary action, such as the issue of a visa, work permit, customs or vessel clearance.

A bribe is the promise, offering or giving, to a public official, directly or indirectly, of

an undue advantage, for the official himself or herself or another person or entity, in

order that the official act or refrain from acting in the exercise of his or her official

duties.

The offer of bribes often creates conflict of interest, because the bribed person has an

interest in receiving and keeping the bribe. When a decision-maker accepts a bribe, he

succumbs to an undue interest which taints his decision — even if it is in conformity

with the law and factually correct.

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Gifts, hospitality and entertainment are considered as bribery if the intention behind

is to affect a person's judgement or other party’s decision-making process, in order to

achieve a financial or other commercial benefit.

In many countries, companies are directly encouraged to make charitable donations

and undertake sponsorships — in some cases as part of their Corporate Social

Responsibility programs. However, charitable contributions or sponsorships can also

be used to conceal bribery. This may be the case if the contribution is channeled to

private purposes, or if a politician benefits directly or indirectly from the contribution.

Support to political parties and candidates is legal in many countries. However, it can

be a way to make direct or indirect contributions to political parties, organizations or

individuals engaged in politics, as a way of obtaining unfair advantage in business

transactions.

Conflict of interest occurs when an individual is in a position to exploit his own professional

or official capacity in some way for personal or corporate benefit. Some situations may

lead to conflicts of interest, particularly the performance of functions or having

financial or moral interests, whether direct or indirect, in a competing company or a

company that is — or that is looking to become — a customer, supplier or service

provider of GEFCO.

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The solicitation of bribes is the act of asking or enticing another to commit bribery. It

becomes extortion when the demand is accompanied by threats that endanger the

personal integrity of individuals or jeopardize the activity of the targeted companies.

Also known as 'traffic of influence', this form of corruption occurs when a person who

has real or apparent influence on the decision-making of a public official exchanges

this influence for an undue advantage.

The offense thus targets not the decision-maker, but “those persons who are in close

to power and who try to obtain advantages from their situation” by influencing the

decision-maker.

‘Unlawful taking of interests’ is a specific French infraction. It is defined by the 432-

12 of the French criminal code as “the taking, receiving or keeping of any interest in a

business or business operation, either directly or indirectly, by a person holding public

authority or discharging a public service, or by a person holding a public electoral

mandate who, at the time in question, has the duty of ensuring, in whole or in part, its

supervision, management, liquidation or payment”.

Over the last few years, it is estimated that 30% of multinationals have lost contracts

due to the corrupt practices of competitors.

Many companies have relocated their production processes and their business has

become increasingly internationalized, taking place in countries where the corruption

risk is high.

In this environment, the transportation & logistics industry has to be vigilant as it is

exposed to a variety of illegal practices such as: procurement fraud, kickbacks, corrupt

practices involving governments or other public actors to bypass taxes, suppliers who

pay bribes to customs officials or licensing authorities, etc.

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When a company pays illegal amounts of money, it usually hides them somewhere in

its financial statements by misclassifying the expenditures in one of the reported

categories of legitimate business operating expenses.

Employees commit financial statement fraud as a secondary act to conceal the primary

fraud. By doing so, they infringe all laws and standards that require that companies

maintain books and records that accurately reflect their transactions, likely to lead to

dissuasive financial and criminal penalties.

Corruption offenses present a very serious risk for all businesses such as severe fines

for companies, imprisonment of individuals and loss of reputation. The enforcement of

corruption laws in many countries is increasingly stringent and also encompasses

activities undertaken by a company through its employees or third parties (suppliers,

middlemen…) acting on its behalf across various international jurisdictions.

Among the anti-corruption legislations in force, the United States Foreign Corrupt

Practices Act (FCPA), the United Kingdom Bribery Act and France’s ‘Loi Sapin II’

are noteworthy.

Naturally, these legislations include provisions prohibiting corporations and

individuals from engaging in bribery and require corporations to maintain accurate

financial records. These laws also have extraterritorial application. This means that

any bribery offense committed overseas by anyone with a close connection to the US,

UK or France can be prosecuted in one of these three countries. This includes not only

nationals or entities from these countries, but also persons ‘ordinarily resident,’

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fraudulent transactions denominated in USD, GBP or EUR, or provided on behalf of a

customer of one of these countries.

If we take the example of GEFCO, any corruption case that might imply a subsidiary

would have consequences in the said country, but would also be prejudicial in France,

in the US or the UK.

In France, if a company fails to implement or to improve its compliance program, the

French Anti-Bribery Agency may issue warnings, injunctions or impose sanctions.

These include a fine on directors of up to €200,000 and a fine on the company of up

to €1 million.

‣ The US authorities found that, from 2002 to 2007, Panalpina World

Transport, through its subsidiaries and affiliates, engaged in a widespread

scheme to bribe numerous foreign government officials on behalf of its

customers, to circumvent local customs processes with respect to the

importation of materials and equipment in many countries — including

Nigeria, Russia, Kazakhstan, Angola, Turkmenistan, Azerbaijan and

Brazil. Given the many Panalpina employees involved in the bribery

scheme, US authorities found that Panalpina had a ‘culture of corruption’

and had paid approximately $49 million worth of bribes, more than half of

which was on behalf of its US customers. The total fine stood at

$81 million including criminal and civil sanctions.

‣ The US authorities charged the France-based oil and gas company Total

SA for paying bribes to intermediaries of an Iranian government official

who then exercised his influence to help the company obtain valuable

contracts to develop oil and gas fields. In 2013, Total agreed to pay

$398 million in fines to settle this FCPA case.

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Legal persons suspected of having committed bribery, influence peddling and/or

laundering of the proceeds of tax fraud, may be imposed a fine up to 30% of their

average annual turnover within the last 3 years at the time the offense was committed.

In the United Kingdom, companies may be fined as much as 400% of the value of

their gain from the criminal conduct. The crime of failing to prevent bribery is

punishable by an unlimited fine.

Under the FCPA, companies incur a fine of up to $2 million per anti-bribery violation

or twice the gross pecuniary gain or loss from the violation, which could be

substantially greater than $2 million per violation. Each accounting provision violation

carry a maximum fine up to $25 million.

Corruption cases receive considerable media coverage — especially those involving

public officials — and damage the image of the companies concerned. This results in

the de facto exclusion of these companies from public calls for tenders or those

launched by international bodies.

In France, companies convicted of a corruption offense are compelled to implement a

compliance program under the monitoring of the French Anti-Corruption Agency for 3

years.

Similar provisions apply in the US. Companies that want to resolve an FCPA

investigation have to appoint an independent compliance monitor selected by the

Department of Justice. The latter controls the implementation of a robust and

functioning compliance program focusing on strong internal controls that seeks to

avoid future violations of the FCPA and financial regulatory measures.

Any violation of anti-corruption laws — or any employee who misleads or hinders

investigators inquiring into potential violations of this anti-corruption policy — may

constitute serious professional misconduct and shall be sanctioned by a disciplinary

measure up to and including dismissal for gross misconduct.

The employee concerned may also incur criminal liability. In France, the penalty for

an individual such as a director, officer, or stockholder of the company, includes a fine

of up to €200,000 and a maximum of 5 years in prison. In the US, penalties range up

to $5 million and a maximum imprisonment of 20 years for each offense.

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In the UK, individuals found guilty face up to 10 years' imprisonment and an unlimited

fine.

GEFCO personnel and third parties acting on its behalf are strictly prohibited from

offering, paying, promising, or authorizing:

‣ any payment or other gift of value

‣ to any private person or government official

‣ directly or indirectly through or to a third party

‣ for the purpose of

- causing the person to act or fail to act in violation of a legal duty,

- causing the person to abuse or misuse their position, or

- securing an improper advantage, contract or concession,

‣ for GEFCO or any third party.

‣ In September 2008, a former Alcatel executive was sentenced to 30 months

in prison, three years of supervised release, and forfeiture of $261,500 for

bribing employees of the state-owned telecommunications authority in

Costa Rica. He had pleaded guilty in June 2007 to two counts of violating

the Foreign Corrupt Practices Act.

‣ In December 2014, the general manager of an entity working on behalf of

the Egyptian Electricity Holding Company, a state-owned electricity

company, was charged and pleaded guilty to mail fraud, conspiring to

launder money and tax fraud for accepting kickbacks from Alstom and

other companies, and was sentenced in March 2015 to serve 42 months in

prison and forfeit approximately $5.2 million in proceeds.

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GEFCO prohibits its employees from engaging in paying bribes or kickbacks — directly

or indirectly — to, or accepting bribes or kickbacks from, public officials and private

individuals such as the personnel of companies with which GEFCO does business.

It is the responsibility of all employees who are involved in engaging the services of

or goods from suppliers or external service providers to ensure that such third parties

are made aware of GEFCO’s zero corruption policy at the beginning of the

relationship and on a regular basis thereafter.

GEFCO employees are not allowed to make facilitation payments even if such

payments are local practice or custom. The company accepts that refusal to make such

illicit payments may lead to commercial delays, for example, in the processing of

official papers or customs clearance, and that there may be a commercial cost to the

company attributable to this policy.

However, GEFCO recognizes that some facilitation payments requests are backed by

extortion and that in exceptional circumstances resistance may not be feasible (i.e., an

immediate payment request to ensure safe passage out of a particularly difficult

geographic area or a demand for payment to secure an emergency admission into

hospital). In such circumstances, GEFCO accepts that you need to use your best

judgement when facing such a situation.

If you encounter a demand for a facilitation payment — or think you are likely to do so

— or if you have been facing an extortion issue, you should report the situation to

your line manager without delay and in absolute transparency. The line manager and

General Manager will then ensure that the Geographical Zone Director and Compliance

Officer are informed as soon as possible.

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GEFCO recognizes that practices regarding gifts, hospitality and entertainment differ

across countries depending on local customs. GEFCO encourages the use of good

judgment, discretion, and moderation when giving or accepting gifts, hospitality or

entertainment in business. In determining what is a reasonable and proportionate

practice, you should consider the value of the gift as well as the frequency with which

the same or similar gift or benefit is offered. In all cases, you must ensure that the gift

or benefit:

‣ is being given as an expression of goodwill and not in expectation of a return favor

(which could be seen as a bribe);

‣ is being provided openly and transparently, and is of a nature that will not cause the

company embarrassment if publicly reported;

‣ is infrequent, meaning that such giving or receiving is not a regular happening

between the giver and the recipient;

‣ complies with local laws and regulations, including the recipient’s own rules;

‣ is adequately processed in the financial records. Payment or reimbursement of

expenses shall not be misused to hide inappropriate gifts, hospitality or

entertainment;

‣ meets the value limits set hereafter by GEFCO. (i) Nominal gifts with a combined

market value of €50 or less, to or from a single source per year, are acceptable. (ii)

Occasional meals with a business associate should follow the Group Global Expense

Policy. (iii) Occasional entertainment (for example, attendance at sports, theater, or

other cultural events) valued at less than €100, per source, per year, is acceptable.

These amounts may vary slightly depending on the countries in which the Group

operates. Gifts, hospitality and entertainment provided by GEFCO to a third party

which exceed these limits should be requested in writing by the General Manager

to the Geographical Zone Director.

Furthermore, as a GEFCO employee:

‣ you are not authorized to solicit gifts, hospitality, entertainment or favors of any

value — on behalf of yourself, your spouse, your family, or any person associated

with you — from persons or firms with which GEFCO currently or potentially

conducts business;

‣ you do not offer or accept gifts, hospitality or entertainment during a tender or

competitive bidding process;

‣ you do not offer or accept cash or a cash equivalent (such as loans, stock, bank

checks, travelers’ checks, cash cards, money orders);

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‣ you are not authorized to offer gifts likely to cause embarrassment to GEFCO or

damage the Group’s reputation. As such, alcoholic beverages, tobacco products are

prohibited.

For any meal or entertainment provided to a third party, a GEFCO employee must be

in attendance.

Expenses incurred for meals, invitations, etc. must be paid by the GEFCO employee

in the most senior position within the company. These expenses shall be reimbursed

in accordance with the procedure in force regarding business expenses.

Before providing any gift, hospitality or entertainment to government officials or

candidates, you must always seek written approval from the Geographical Zone

Manager and Chairman of the Management Board.

GEFCO may provide donations — within the framework of its Corporate Social

Responsibility policy — to organizations that serve a legitimate public purpose, and

which are themselves subject to high standards of transparency and accountability.

Such organizations must fall within the following criteria: (i) education and youth

programs, (ii) safety, health and human services, (iii) community civic needs, (iv)

economic development activities, (v) conservation and environmental programs, (vi)

arts and culture.

GEFCO is likely to sponsor projects, programs and events which are aligned with our

sustainability vision and which promote the company’s name, image and services.

GEFCO does not sponsor individuals, sports people or teams, events related to

gambling, or programs or events that exclude any sectors of the community based on

culture, gender, religious belief, race or disability.

Charitable contributions and sponsorships must be transparent and properly

documented by the General Manager and formally approved beforehand by the Group

Communication Division, based on the following information:

‣ purpose and mission of the group requesting support,

‣ type of support requested,

‣ description of how any funds will be used,

‣ description of what kind of recognition or benefit GEFCO will receive.

Any charitable contribution and sponsorship above €50,000 requires the validation of

the Chairman of the Management Board.

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Some situations may lead to actual, potential or perceived conflicts of interest,

particularly the performance of functions or having financial or moral interests,

whether direct or indirect, in a competing company or a company that is — or that is

looking to become — a customer, supplier or service provider of GEFCO.

If you know of any circumstance that could conceivably put you in a conflict of

interest, you should voluntarily disclose this, in writing, to your management team

and refrain from any intervention in the relations between GEFCO and the third party

concerned until a solution has been found.

If you are uncertain whether a situation constitutes a conflict of interest, you should

raise the issue with your line manager for discussion.

GEFCO does not take part in the activities of political parties and refrains from any

donation to political parties and candidates.

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GEFCO expects its business partners (i.e. customers, subcontractors, agents,

representatives and partners) to approach issues of corruption in a manner that is

consistent with the principles set out in this document.

GEFCO communicates its anti-corruption guidelines to its suppliers and contractors,

and expects them to abide by the principles set out in this policy when working on the

company’s behalf. If those principles are breached, the company reserves the right to

re-evaluate or terminate the contract.

GEFCO also carries out due diligence on its current and potential business partners,

based on the following questions:

‣ identification of the direct, indirect owners/shareholders, as well as its main officers

and directors, to identify potential conflicts of interest or connections with relevant

public bodies, public officials, or current or prospective clients;

‣ the third party’s general business track-record, reputation and experience;

‣ relevant past incidents, investigations or convictions related to the third party and

its officers, directors, employees, at least in the field of corruption and fraud;

‣ gifts or entertainment the third party may have recently offered to the company’s

employees or relevant public officials, clients or prospects;

‣ the third party’s possible own anti-corruption systems, such as the existence of a

code of conduct, relevant policies and procedures on issues such as gifts and

entertainment or their use of third parties, employee training,

reporting/whistleblowing line.

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GEFCO recognizes that you may face corruption situations in the context of the

company’s business. The following actions are provided as examples, but do not apply

to all situations. That is why we ask you to raise the issue, each time such a situation

presents itself, and refer more generally any doubts or questions you may have to your

management, the human resources department and/or the Legal and Compliance

Department (contact details on the Group Intranet under Strategy and Finance /

Compliance) for discussion.

‣ Refuse to pay or to accept an undue advantage,

‣ If the demander persists with the request for an undue advantage, inform him/her

that your employer prohibits payment of bribes and that, if you pay the bribe, you

will have to report it to your employer who will then report it to the demander’s

employer and the criminal authorities. Bribes shall not be hidden in the company’s

financial statements.

‣ If your personal safety or that of another person would be endangered by a refusal

to pay, then pay the bribe. Even though threats do not constitute a defense to

liability, it is better to pay the bribe than to endanger your own or another person’s

safety.

‣ If you participate in the activity knowing or suspecting that bribery or fraud is

involved, it is likely that you and your management will be liable for bribery or

fraud. Claiming that you were requested to commit the offense by a senior person,

or that you were not personally benefiting, or that you thought it was normal

business practice are not grounds for defense. Likewise, being convinced to act in

the company’s best interests cannot in any case justify, even partially, behaviours in

contradiction with applicable laws and these guidelines.

GEFCO has a whistleblowing system accessible to all of the Group’s employees and

implemented by an external service provider which allows individuals to report

corruption issues.

The use of this system is left entirely to your discretion. It supplements your usual

hierarchical reporting channels, such as your line manager, your Human Resources

Director, the Compliance Officer or any member of the GEFCO Management Board.

You can report any issue via a free phone number (contact details available on the

Group Intranet) or the dedicated website: www.ethics.gefco.net.

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All questions and concerns can be submitted confidentially, with no fear of reprisals.

All cases will be subject to a prompt and thorough investigation in accordance with

the laws and policies applicable to the company.

GEFCO does not tolerate retaliation or discrimination against employees who, in good

faith, have shared their concerns and/or assisted in investigations into suspected

breaches of these guidelines, or damages to their career progression. ’Good faith’ can

be taken to mean the submission of a concern without malice and with no pursuit of

personal profit, by an individual with plausible grounds to believe its veracity.

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