INTRODUCTIONCorruption prevents economic development, distorts competition, and undermines both the rule of law and the democratic process. Local and international law applicable to HÉST business activities around the world prohibit HÉST and its employees from engaging in corruption, such as the bribery of public and/or private sector officials. Extraterritorial application of several anti-corruption regimes implies that it is not sufficient to observe local law when dealing abroad. In accordance with well-established principles as described in HÉST's Code of Conduct, HÉST is committed to operate in accordance with responsible, ethical, and sound business principles and comply with all applicable laws and regulations. HÉST specifically does not permit or tolerate engagement in any form of corruption. This manual explains and elaborates the content and implications of HÉST's policy in relation to anti- corruption. No employee should assume that it is in HÉST's interest to engage in any form of corrupt activity. Absolute compliance with HÉST's anti-corruption policy is required by all HÉST employees at all times, and no HÉST employee may authorize another HÉST employee to deviate from this policy. Any failure to comply with applicable anti-corruption law will be considered a serious breach of the employee's obligations towards HÉST and will most likely result in termination of the employment or other applicable sanctions. ABOUT THIS MANUALThis manual provides an overview of HÉST's anti-corruption policies and explains the basic legal and ethical requirements that HÉST employees shall follow to avoid corrupt practices throughout their business activities for HÉST. The policies discussed in this manual are mandatory for all HÉST employees. It is also a requirement that HÉST's departments take reasonable steps under the circumstances to ensure that HÉST's independent business partners, including suppliers, do not engage in corruption or other illegal or unethical activities in relation to their business with HÉST. ANTI-CORRUPTION GUIDANCE AND REPORTINGOn a day-to-day basis, you should seek guidance and direct anti-corruption inquiries from your immediate superior. You may also contact the HÉST Management if you have any questions about this manual or anti-corruption law. Non-compliance with anti-corruption laws and HÉST's anti-corruption policies is a serious breach of HÉST's business principles and may cause great damage to HÉST. If you have reason to believe that employees or agents representing any HÉST company have engaged in, or intend to engage in, corrupt activities this should be duly reported. WHAT IS CORRUPTION?1.3.1 Legal Background International conventions and agreements of the United Nations, the World Bank, the IMF, the WTO, the Organization of American States, the OECD and the EU oblige the participating countries to implement comprehensive national legislation against corruption. Corruption is restricted in most countries around the world. It is important to be aware that Norwegian and other national anti- corruption legislation applies regardless of in which country the actions have been carried out and regardless of whether corruption is lawful according to that country's national law. In practice, citizens and companies may be prosecuted according to national anti-corruption legislation for acts committed anywhere in the world. Notably the United States Government enforces extraterritorial jurisdiction to prosecute corrupt activities anywhere in the world according to the U.S. Foreign Corrupt Practices Act (the FCPA). 1.3.2 Corruption Defined While the specifics of anti-corruption law may be different in different parts of the world, most anti- corruption laws share a common core definition of "corruption". For the purpose of HÉST's anti-corruption policy, corruption will include any attempt to directly or indirectly (through middlemen):
Bribing an official to obtain a contract is corruption. Corruption may also include activities such as paying for illegitimate or unlawful travel or entertainment expenses for officials or their family members; agreeing to purchase goods or services from officials or their friends or family members in return for favours; or donating to a charity linked to an official in expectation of a benefit from that official. 1.3.3 Improper advantage: Whether an advantage or benefit is improper will depend on concrete judgment, where several factors may be relevant such as: the nature of the benefit, the position of the recipient, the relationship between the parties and the specific context in which the benefit is being provided. Any benefit provided in return for the misuse of the receiver's position, task or assignment will generally be considered an improper advantage. Please note that an advantage can be improper even if no benefit is provided in return. An improper advantage will usually be a benefit in the form of cash or objects with economic value but may also include benefits without economic value. Personal benefits provided in relation to the recipient's position, task or assignment, such as services carried out for free or with a discount, invitations to otherwise private organizations or clubs may easily be regarded as improper. Benefits in exchange for, or benefits that constitute, a breach of statutory or contractual obligations, such as the receipt or delivery of proprietary information, will by its nature easily be considered an improper advantage in regard to anti- corruption law. Benefits exchanged in relation to discretionary acts and lack of transparency associated with granting of a benefit should be red flags for a potential improper advantage. 1.3.4 Facilitation payments: Facilitation payments are payments to secure the performance of routine governmental action ordinarily performed by lower level officials, such as issuing non-discretionary permits, processing visas and other papers, providing utility service, loading and unloading cargo, or protecting perishable products or commodities from spoilage. Routine governmental action does not include decisions where the government official has legal discretion on how he or she will act on the issue at hand. In accordance with applicable anti-corruption legislation, HÉST has a general policy against facilitation payments. This is further described in section 1.4.5 below. 1.3.5 Trading in influence: Trading in influence is an offer of an improper advantage to, or acceptance to receive an offer by, someone who has the ability to influence the performance of a position, assignment or duty. Trading in influence is a particular offence similar to corruption and falls within HÉST's anti-corruption policy. 1.3.6 Public and private sector payments prohibited: The Norwegian Penal Code prohibits corrupt payments to any person, including public officials and executives, employees, or agents of private sector companies. HÉST's anti-corruption policy prohibits corrupt activities of any type, whether those activities are related to a position, assignment, or duty within public or private sector. 1.3.7 Liability for corrupt acts of affiliates or representatives: Corruption may also include payments made by subsidiaries, affiliates, agents or others acting on behalf of the parent Company or as part of the parent Company. 1.3.8 Accurate accounting: Anti-corruption law requires that HÉST have in place effective internal accounting controls and maintain books and records that accurately reflect the companies' transactions. All entities within the Group must correctly account for income and expenditures and must ensure that payments are not recorded falsely in Company books. Misreporting or omitting a subsidiary's or affiliates bribes in the parent Company's consolidated accounts may in itself be a breach of anti-corruption law (notably the FCPA) by the parent Company. (This does not mean that accurately reporting bribes will somehow make them legal, but that the misreporting of such payments in an effort to conceal them is itself a violation.) 21.3.9 Consequences of Non-Compliance The potential consequences of non-compliance with applicable anti-corruption laws are substantial:
RELATIONS WITH CUSTOMERS, SUPPLIERS AND PUBLIC OFFICIALS
1.4.1 General Principles
1.4.2 Travel and Entertainment Expenses Payment for reasonable and bona fide expenditures for seminars, travel, meals, lodging and entertainment for potential or existing customers may be permissible if those expenditures are directly related to the promotion, demonstration or explanation of HÉST's products or services or the performance of a contract. The principles in section 1.4.1 above apply correspondingly for HÉST payment for the participants' expenses. In addition, such payments:
1.4.3 Gifts While exchanging gifts with customers, suppliers and business partners is a customary part of international business, under no circumstances should HÉST offer gifts of cash. Gifts other than cash may be permitted, however,they:
1.4.4 Political Contributions Political contributions, such as contributions to the political campaign or fundraising efforts of public officials in support of their ability to run for office may be viewed differently under the laws of the countries in which HÉST does business. Additionally, such contributions may have a potential impact on HÉST's corporate image. Such contributions must therefore be approved in advance by HÉST. Requests for approval should be directed to HÉST Administration. If such contributions are approved, they must be provided in an open and transparent manner in compliance with all applicable laws and accounting principles. 1.4.5 Facilitation Payments "Facilitation payments ", as further explained in chapter 1.3.4 above, are payments to secure the performance of routine governmental action and do not include discretionary decisions or acts. In accordance with applicable anti-corruption legislation, HÉST has a general policy against facilitation payments and does not justify facilitation payments merely because it is customary or profitable in the circumstances. In certain extortion-like situations facilitation payments may be necessary and justifiable in order to avoid a significant harm to HÉST's values or legitimate business interests. This will have to be assessed in the specific circumstances at hand, but will generally not include any of the following:
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