Third Party Anti Financial Crimes Proceedure

AGREEMENT

Taking into account that in accordance with the Order of the General Director of UZBAT JV JSC (hereinafter referred to as "UZBAT") the Procedure on risk management in relation to Third Parties in financial crimes and the Supplier Code of Conduct, defining the basic provisions of good faith behavior of both UZBAT employees and all UZBAT business partners and their employees (hereinafter referred to as "Company") were approved,

The parties to this Agreement represented by UZBAT and the Company have agreed as follows:

The Company agrees to implement UZBAT's current Supplier Code of Conduct as set forth below and to ensure that all officers and employees of the Company comply with such Supplier Code of Conduct.

Company will Comply with applicable laws, including any such laws relating to bribery, corruption, money laundering, terrorist financing, illicit trade and/or tax evasion (including its facilitation) (including without limitation the UK Bribery Act 2010, the US Foreign Corrupt Practices Act 1977, the UK Criminal Finances Act 2017, the Proceeds of Crime Act 2002 and any applicable local laws (including local taxation laws).

In case of detection of the fact of improper performance by the Company of paragraphs 1-2 of this Agreement, all agreements concluded between the Parties and in force on the date of detection of the fact of improper performance may be terminated by UZBAT unilaterally immediately after the occurrence specified in this paragraph of the event. In the event of termination of existing agreements in accordance with this paragraph, the Parties, by a separate agreement, undertake to agree on further actions on unfulfilled contractual obligations.

Hereby the Company irrevocably agrees and confirms that it will take all legally significant actions available to it to prevent imposition of liability on UZBAT, and/or claims to UZBAT from third parties, including state bodies, arising from bad faith actions/inaction of the Company, including in case of non-performance by the Company of the terms of this Agreement. Besides, the Company shall be liable for any indirect, special, incidental or consequential damages (including loss of profit), incurred by UZBAT due to non-fulfillment by the Company of the terms of this Agreement.

Related to Suppliers

Definitions

«Applicable Laws» means all laws, regulations, directives, statutes, subordinate legislation, common law and civil codes of any jurisdiction, all judgments, orders, notices, instructions, decisions and awards of any court or competent authority or tribunal, all codes of practice having force of law, statutory guidance, regulatory policy or guidance and industry codes of practice. For the avoidance of doubt, “Applicable Laws” includes without limitation the UK Bribery Act 2010, the US Foreign Corrupt Practices Act 1977, the UK Proceeds of Crime Act 2002, the UK Terrorism Act 2000, the UK Criminal Finances Act 2017 and any applicable local laws. 

«Applicable UZBAT Policies» means the UZBAT Supplier Code of Conduct, Standards of Business Conduct and any other policies (including changes and additions) which UZBAT may from time to time notify to the Supplier and as may be amended from time to time.

«Associated Parties» includes officers, directors, employees, shareholders, representatives or agents.

«Public Official» includes, without limitation, any person holding or acting on behalf of a person holding a legislative, administrative or judicial office, including any person employed by or acting on behalf of a public agency, a public enterprise or a public international organisation, any political party or an official thereof or any candidate for any political office, any Associated Party of any government or any department, agency, or part thereof, or of any state owned enterprise or joint venture/partnership with a state owned enterprise (including a partner or shareholder of such an enterprise) or of a public international organisation, or any person acting in an official capacity for or on behalf of any such government or department, agency, or part thereof, or for or on behalf of any such public international organisation, or a relative or Associated Party of any such person.

1.Anti-Bribery and Corruption Financial Crime

1.1 Third Party warrants and represents that:

 (a) in performing its obligations under this Agreement neither it, nor any of its Associated Parties, will:

(i) directly or indirectly, either in private business dealings or in dealings with the public sector, offer, give, receive or agree to offer, give or receive (either itself or in agreement with others) any payment, gift or other advantage with respect to any matters which are the subject of this Agreement which: (A) is intended to, or does, influence or reward any person for acting in breach of an expectation of good faith, impartiality or trust, or which it would otherwise be improper for the recipient to accept; (B) is made to or for a Public Official with the intention of influencing them and obtaining or retaining an advantage in the conduct of business; or (C) which a reasonable person would otherwise consider to be unethical, illegal or improper (any activity described in (A), (B) or (C), a "Corrupt Act");

(ii) commit an offence of: (a) cheating the public revenue or (b) being knowingly concerned in, or taking steps with a view to, the fraudulent evasion of a tax (including any excise duty or tax or levy chargeable in any jurisdiction) (each a "Tax Evasion", and any such offence, a “Tax Evasion Offence”);

(iii) commit an offence of (a) facilitating a Tax Evasion Offence by being knowingly concerned in, or in taking steps with a view to, the fraudulent evasion of a tax by another person; or (b) aiding, abetting, counselling or procuring the commission of a Tax Evasion Offence (each a "Tax Evasion Facilitation");

(iv) engage in any activity which constitutes an offence under the UK Proceeds of Crime Act 2002 or UK Terrorism Act 2000, or which would directly cause the other party to commit an offence under the UK Proceeds of Crime Act 2002 or the UK Terrorism Act 2000 (“AML/CTF Offence”) or

(v) breach any Applicable Laws or cause UZBAT or its Affiliates to breach any Applicable Laws.

(b) neither it, nor any of its Associated Parties have engaged in any Corrupt Acts

(c) it has the requisite skill, knowledge and experience to perform its obligations under this Agreement; and

(d) to the best of its knowledge and belief, neither it nor any of its associated parties has:

(i)       engaged in any Corrupt Act, AML/CTF Offence, Tax Evasion or Tax Evasion Facilitation prior to the date of this Agreement;

(ii)      been found by a court in any jurisdiction to have engaged in any Corrupt Act, AML/CTF Offence, Tax Evasion or Tax Evasion Facilitation (or similar conduct);

(iii)     admitted to having engaged in any Corrupt Act, AML/CTF Offence, Tax Evasion or Tax Evasion Facilitation (or similar conduct); or

(iv)     been investigated or been suspected in any jurisdiction of having engaged in any Corrupt Act, AML/CTF Offence, Tax Evasion or Tax Evasion Facilitation (or similar conduct).

(e)      the information provided by [Third Party] in the UZBAT due diligence process (including but not limited to the external questionnaire response) is complete and accurate. 

1.2 Company further agrees and undertakes:

a) to notify UZBAT immediately in writing if, at any time, it becomes aware that any of the representations set out in Clause 1.1 are no longer correct.
b) to maintain, for a period of at least 7 years, complete, accurate and up to date records of all transactions which relate in any way to this Agreement or to services provided by Company under it, including without limit all services provided and payments made or received;
c) to read and at all times comply with the principles set out in the Applicable UZBAT Policies in respect of its performance under this Agreement, and to notify UZBAT immediately should it learn or have reason to know of any potential breach of the Applicable UZBAT Policies by it or its Associated Parties;
d) to take reasonable steps to ensure that its Associated Parties, and any subcontractors or suppliers providing goods or services in connection with Company's provision of services to UZBAT or its Affiliates under this Agreement ("Subcontractors"), are provided with a copy of and will comply with the principles contained in the Applicable UZBAT Policies, and will undertake appropriate due diligence in relation to financial crime risks on any counterparties proposed to be involved in providing the services to UZBAT;
e) not to use any Sub-contractor without UZBAT’s prior written consent, such consent to be given at UZBAT’s discretion and not to be given unless that Sub-contractor agrees to the same or materially equivalent representations, warranties and obligations as set out in these Clauses 1.1 and 1.2;
f) to provide to UZBAT reports on its activities under this Agreement, in such format and at such frequency, as may be reasonably requested by UZBAT;
g) to undertake any such anti-corruption, tax compliance and/or anti-money laundering training as UZBAT may reasonably require; and
h) to notify UZBAT immediately in writing if at any time it becomes aware of any Corrupt Act being requested by a third party or official in connection with the performance of this Agreement.

1.3. UZBAT, its authorised advisers and other representatives may audit the compliance of the Company and its Associated Parties with the terms of this Agreement (including compliance with Applicable UZBAT Policies) and the accuracy of the Company’s invoicing of the charges payable by UZBAT under this Agreement. For the purpose of facilitating an audit under this clause, the Third Party shall provide to UZBAT (including its authorised employees), its authorised advisers and other representatives on request (at no cost to UZBAT):

a) reasonable access to the records referred to in clause 1.2(b);
b) reasonable access to all relevant information, premises, data, employees, agents, Subcontractors and assets at all locations at which the same are present (or may reasonably be expected to be present), including locations from which obligations of the Company are being or have been or should have been carried out (but not to information which the Company is obliged to keep confidential or information which is legally privileged and/or subject to litigation privilege); and

(c) all reasonable assistance in carrying out any audit.

1.4.All invoices issued in accordance with this Agreement must contain a detailed breakdown of all work completed in relation to that invoice and Company shall keep records and evidence of having completed such work. Specific requirements on record keeping to be included in the draft depending on the nature of the services. This proof of services shall be made available to UZBAT on demand.

 1.5. Save as disclosed in writing in advance to UZBAT, neither Company nor any of its Associated Parties or anyone in their families are: (1) Public Officials; (2) Associated Parties of a Customer or potential customer UZBAT‘s; or (3) persons who might otherwise assert a corrupt or illegal influence on behalf of either Party.

1.6. Notwithstanding any other provision of this Agreement, the Company shall to the fullest extent permitted by law indemnify, defend and hold harmless UZBAT and its Affiliates from and against any claim, loss, damage, penalty, liability, expense, attorney's fees and costs of whatever nature arising out of, or related to, or connected with the Company's failure to comply with this Clause 1 or of any Applicable law or Applicable UZBAT Policies.

1.7. UZBAT may terminate this Agreement with immediate effect on giving written notice to the Company if UZBAT reasonably suspects the Third Party is in breach of this Clause 1 or of any Applicable Laws or Applicable UZBAT Policies.

1.8. If UZBAT terminates this Agreement for a breach of this Clause 1, any outstanding payment obligations will be terminated.

1.9. During the term of this Agreement UZBAT may be required under its internal policies and procedures to refresh its risk assessment and due diligence on Company. If this exercise leads to a different set of compliance clauses or conditions being required with Company, UZBAT will notify these clauses and/or conditions to Company in writing.  If Company does not accept the clauses and/or conditions being incorporated into this Agreement then UZBAT may terminate the Agreement immediately, without prejudice to any other termination rights UZBAT has under this Agreement.

Investigation

1.10   Without prejudice to Clause [Termination Clause – [1.7] [and 1.8]], in the event UZBAT considers that there may has been a breach of Clauses [1.1 to 1.5] of this Agreement, UZBAT may notify Company by notice in writing ("Advice Letter") of the suspected breach.

1.11   Following the issue of an Advice Letter, UZBAT, where permitted by law, will investigate the suspected breach ("Investigation") and Company shall provide any information and assistance reasonably requested by UZBAT in connection with such Investigation.  Where permitted by law, Company shall have the opportunity to respond to the findings of the Investigation.  If no time period for a response is notified, such response should be provided within 14 days of the date of the findings of any Investigation being notified to Company by UZBAT.

1.12   Where UZBAT is not permitted by law to investigate the matter, it may terminate this Agreement forthwith.

1.13   Following issue of the Advice Letter, any right to payment of the Fees will be suspended.  [Further, during the course of the Investigation, Company shall not meet or communicate with any Customers or potential customers in connection with UZBAT’s goods, products and services.

1.14   Where UZBAT reasonably considers the results of the Investigation to provide prima facie evidence of a breach of this Agreement and the breach is incapable of remedy or has not been remedied within 20 days of the date of the notification of the findings of the Investigation to Company, this Agreement will be terminated forthwith. UZBAT shall notify Company of the date of termination in writing as soon as practicable.

1.15   Where the breach is remedied to UZBAT 's satisfaction or the Investigation concludes that there is no prima facie evidence of such a breach, then [Third Party] will be notified in writing and Clause 1.12 will no longer apply in relation to that incident of breach.

Delay

1.16. If Company believes that production or delivery of goods or services under this Agreement has been or may be delayed because of demands for illegal payments from Public Officials or other third parties, Company shall notify UZBAT immediately of any such demands. Company and its Associated Parties will make no such payments unless an individual's personal safety is at risk.

1.17. Company will take all reasonable steps to complete production and delivery as quickly as possible without making illegal payments, but Company will not be deemed to be in breach of timeliness requirements or be subject to penalties for delay under this Agreement for the length of any reasonable delay caused by Company's failure to make illegal payments.

2.ECONOMIC SANCTIONS

1.1      In this clause [1]:

“Affiliate” means, (i) an entity (other than Customer) that directly or indirectly, through one or more intermediaries, owns more than 50% of the outstanding voting securities of the Customer, and (ii) an entity that directly or indirectly through one or more intermediaries, is controlled by the Supplier, in each case where the term “control” means possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of an entity, whether through ownership of voting securities, by contract interest or otherwise 

"Associated Parties" includes Affiliates officers, directors, employees, contractors, shareholders, representatives or agents.

"Prohibited Territory" means Afghanistan, Belarus, Iran, Myanmar, North Korea, Russia, Syria and the non-Ukrainian-government-controlled areas of the Donetsk, Kherson, Luhansk and Zaporizhzhia oblasts, and Crimea & Sevastopol, such list as may be updated and notified by UZBAT from time to time. 

"Sanctioned Person" means a person or entity (including any bank) (i) listed on any applicable sanctions list as from time to time amended, including but not limited to the United Nations Consolidated Sanctions List, the United States' Office of Foreign Assets Control ("OFAC") List of Specially Designated Nationals and Blocked Persons, the United Kingdom's Consolidated List of Financial Sanctions Targets and UK Sanctions List, the European Union's Consolidated List of Persons, Groups and Entities Subject to Financial Sanctions, or (ii) incorporated, headquartered or based in Iran, Syria, Cuba, North Korea, the non-Ukrainian-government-controlled areas of the Donetsk, Kherson, Luhansk and Zaporizhzhia oblasts, or Crimea & Sevastopol.

"Economic Sanctions" means any law, regulation, directive, decree or decision relating to economic, financial,  trade or other sanctions, including but not limited to any trade restriction, embargo, import or export ban, prohibition or restriction on dealings with Sanctioned Persons, governments, countries, groups or territories and any prohibition on the provision, receipt or transfer of funds, assets or services, or equivalent measures  imposed, administered, enacted or enforced from time to time by: (i) the European Union or any of its Member States; (ii) the United Kingdom including His Majesty's Treasury and the Department for Business and Trade; (iii) the United States including OFAC, the Bureau of Industry and Security and the United States Department of State; (iv) the United Nations including any United Nations Security Council Sanctions Committee; or (v) or any other relevant governmental or regulatory authority including of any country in which obligations under this Agreement are to be performed.

1.2     The Supplier represents, warrants and undertakes that:

(a)      Neither it nor, to the best of its knowledge and belief, any of its Associated Parties is currently (i) a Sanctioned Person, (ii) owned or controlled directly or indirectly by a Sanctioned Person or (iii) incorporated or resident in, or owned or controlled by or acting on behalf of the government of a Prohibited Territory.

(b)      Neither it nor, to the best of its knowledge and belief, any of its Associated Parties is aware of any circumstance, or has taken any action, directly or indirectly, that could result in a breach of any applicable Economic Sanctions by the Supplier, Supplier’s Affiliates UZBAT and/or UZBAT's Affiliates.

(c)      The Supplier shall maintain a bank account with a non-Sanctioned Person financial institution for the purpose of this Agreement and will procure that all funds transferred in connection with this Agreement, or arising as a result of this Agreement, shall be transferred using non-Sanctioned Person financial institutions exclusively (with no funds originating from or passing through any Sanctioned Person financial institution).

(d)      Any transaction subject to this Agreement is conditional on UZBAT 's designated bank permitting the transfer of funds to or from the Supplier, , where the bank account provided by the Supplier is residing within a Sanctioned Person financial institution, the transfer may not be permitted and the Supplier would be required to provide a bank account with a non-Sanctioned Person financial institution.

(e)      It conducts and has conducted its business in full compliance with applicable Economic Sanctions and has instituted and maintains policies and procedures designed to ensure continued compliance with Economic Sanctions.

(f)       In performing its obligations under this agreement or other agreements between UZBAT and the Supplier, the goods are not and will not be delivered from, to or via transhipment through any Prohibited Territory, or Cuba. If there is no other commercially viable alternative, the Supplier must obtain an express written consent from UZBAT for such transhipment and agrees to cooperate with UZBAT to ensure sanctions-compliant conditions for the entire transaction.

(g)      It will promptly notify UZBAT in writing together with all relevant details if it is unable to perform its obligations under this Agreement as a result of the imposition of Economic Sanctions (including the imposition of Economic Sanctions against a country or person or the addition of an item or service to a list of sanctioned items or services under Economic Sanctions).

(h)      Following notification in accordance with clause 1.2.g it will work with UZBAT to agree, within a reasonable period, a practical solution to permit continuity of this Agreement in a manner that is compliant with Economic Sanctions.

(i)       No supply of services or goods under this Agreement is directly or indirectly destined to or sourced from Cuba, or intended to benefit persons in Cuba. 

1.3      If the Parties do not agree a practical solution within [10] Business Days of receipt of notification under clause 1.2(g), or if UZBAT considers that such a risk is incapable of mitigation to its satisfaction, UZBAT may terminate this Agreement immediately by notice. During such 10 Business Days period the Parties' respective obligations under this Agreement are suspended.

1.4      The Supplier agrees that UZBAT may inspect or otherwise undertake an audit of the records relating to its obligations under this Agreement, including at the Supplier's premises. The Supplier will provide all relevant access, information and documentation to UZBAT to facilitate its audit as promptly as possible.

1.5      Notwithstanding any provision of this Agreement to the contrary, UZBAT shall not be obligated to make any payment or take any other action under this Agreement (and shall not be liable for failure to take or delay in taking any action under this Agreement) if UZBAT determines in its sole reasonable opinion that such action may constitute a violation or contribute to any violation of, or otherwise expose it to negative consequences under, Economic Sanctions.

1.6      UZBAT shall additionally have the right at any time to terminate its commercial relationship with the Supplier (including this and any other relevant agreement) by giving written notice to the Supplier in the event that: 

(a)      UZBAT reasonably believes the Supplier and/or its Affiliates:

(i)       has breached or committed any offence under any Economic Sanctions; or

(ii)      has taken any action which would cause UZBAT to breach any Economic Sanctions;

(b)      UZBAT, in its sole discretion, determines that any action, performance, or non-performance by the Supplier  and/or its Affiliates may be or is likely to be in violation of, inconsistent with or could expose UZBAT and/or its affiliates to any negative consequences under Economic Sanctions; or

(c)      the Supplier  and/or its Affiliates becomes a Sanctioned Person or owned or controlled by a Sanctioned Person. Prior to UZBAT issuing a notice of termination under clause 1.6(a) and (b), 

the Supplier shall have the opportunity to respond to any breaches and /or violations alleged by UZBAT.  If no time period for a response is notified, such response should be provided within 14 days of the date of the alleged breaches and / or violations being notified to the Supplier by UZBAT.

Supplier Code of Conduct

1. Definitions

«UZBAT», «Group» «we», «us» and «our» means British American Tobacco plc. and all its subsidiaries.

«SoBC» means the Group Standards of Business Conduct, available at www.bat.com/sobc and/or in our SoBC app, local versions of the SoBC adopted by a Group company and available on their local website.

«Code» means this Supplier Code of Conduct, available at www.bat.com/principles, www.bat.com/suppliercode  and in our SoBC app.

«Suppliers» means any third party that supplies or provides direct product materials or indirect goods or services to any UZBAT Group company, including consultants, independent contractors, agents, manufacturers, primary producers, sub-contractors, distributors and wholesalers.

«Workers» means suppliers’ employees, workers and contractors, including permanent, full-time, part-time, temporary, contingent, sub-contracted, agency and migrant workers.

2. Message from our Director of Operations

Transformation at UZBAT means reducing the health impact of our business, whilst focusing on our environmental, social and governance (ESG) priorities. Crucially, our approach to sustainability applies not only to our own business operations, but also to our wider supply chain. We rely on a complex but critical supply chain, and we need it to be fit for the future. That’s why we’re using our influence to improve sustainability from crop, all the way to the consumer. The UZBAT Group works with a vast network of Suppliers worldwide, from smallholder farmers and international leaf Suppliers to Suppliers of materials like paper and filters for cigarettes. For our New Category products, we have a growing supply chain in consumer electronics and e-liquids. We also have a vast number of Suppliers of indirect goods and services that are not related to our products, such as IT services and facilities management. This Code has been updated to reflect our enhanced focus on ESG, and the ever-changing external landscape in which we operate. At the same time, we remain committed to delivering a positive social impact and ensuring robust corporate governance across the Group. In 2023, we invited over 600 Suppliers to take part in the CDP Supply Chain programme. Such collaboration enables us to strengthen our Supplier engagement, to drive environmental progress and further build resilience. We know that many global ESG focus areas, such as tackling climate change, eliminating waste and progressing towards a circular economy, protecting biodiversity and forests, and water stewardship, as well as delivering a positive social impact, cannot be addressed in isolation. By working with our Suppliers, contracted farmers, and other supply chain stakeholders on such initiatives, we can develop solutions to bring about lasting change. A key part of our relationship with Suppliers is having the confidence to Speak Up if something feels wrong. UZBAT takes allegations of breach of this Code, and our Standards of Business Conduct, very seriously. So please Speak Up via the various channels mentioned in our Code if you know of, or suspect, wrongdoing. I offer my personal assurance that all concerns raised will be treated in strict confidence. You will not face reprisals for speaking up, even if you are unsure. I believe that by working closely with our Suppliers we can continue to raise standards, enhance sustainable practices, and create shared value.

Zafar Khan Director of Operations

3. Introduction

UZBAT’s Standards of Business Conduct (SoBC) express the high standards of integrity we are committed to upholding. This Supplier Code of Conduct (Code) complements the SoBC by defining the minimum standards we expect our Suppliers to adhere to.

International standards

This Code supports our continuing commitment to respect human rights and is based on international standards, including:

- The United Nations (UN) Guiding Principles on Business and Human Rights;
- The International Labour Organization’s (ILO) Declaration on Fundamental Principles and Rights at Work; and
- The Organisation for Economic Cooperation and Development (OECD) Guidelines for Multinational Enterprises.

Legal priority

If this Code conflicts with local laws, then the laws take precedence.

If this Code defines standards which are more stringent than local laws, then those higher standards should be followed – unless to do so would be unlawful under local laws.

Scope and application

In the event of a discrepancy between the requirements of this Code and the requirements of local law, the requirements of local law will prevail.  All suppliers should comply with the requirements of this Code in order to supply goods or services to UZBAT and any UZBAT Group company (collectively ‘UZBAT’).

Suppliers are expected to meet the requirements of this Code and this is incorporated into our contractual arrangements.

In addition, Suppliers should:

- Take steps to ensure that all their Workers, Suppliers, agents, sub-contractors and other relevant third parties understand and adhere to the requirements of this Code, including (where appropriate in terms of the nature of Supplier and the goods or services provided) maintaining adequate policies, procedures, due diligence, training and support.
- Promote adherence to the requirements of this Code and conduct appropriate due diligence within their own supply chain for their own new and existing Suppliers (including farmers where relevant).This Code applies to all Suppliers to UZBAT, as defined here.

Contacting the group:

Any information that Suppliers are required to report to the Group under this Code should be communicated to:

- The Supplier’s usual Group company contact; or
- The UZBAT Group Head of Procurement by email (procurement@bat.com), phone (+44 (0) 207 845 1000) or by writing to them at British American Tobacco plc, Globe House, 4 Temple Place, London WC2R 2PG, United Kingdom

4. Work with suppliers

Our Suppliers are valued business partners and we believe, by working together, we can raise standards, drive sustainable practices, create shared value and build A Better Tomorrow™ for all.

Commitment to integrity

Our actions must always be lawful. Having integrity goes further. It means our actions, behaviours and how we do business must be responsible, honest, sincere and trustworthy. We are committed to upholding our contractual obligations with Suppliers and to treat them fairly.

Suppliers should expect clear and constructive engagement from UZBAT, and to be treated in a professional and inclusive manner, with dignity and respect, in accordance with the Group SoBC.

If a Supplier has a grievance or concern regarding the behaviour of a UZBAT employee, contrary to the Group SoBC, this should be reported to UZBAT.

Striving for best practice

While this Code sets out the minimum standards we expect of our Suppliers, we encourage them to strive for best practice and continuous improvement within their own operations and supply chains.

To this end, we seek to give preference to Suppliers that demonstrate best practice and strong performance against the Group’s environmental, social and governance (ESG) priorities.

This is reflected in our Supplier programmes, including (but not limited to):

- The industry-wide Sustainable Tobacco Programme for our tobacco leaf Suppliers, which includes a wide range of ESG criteria – from labour and human rights to climate change and biodiversity;
- Our supply chain due diligence programmes for non-tobacco Suppliers, which includes human rights risk assessments and independent labour audits, are aligned to international standards.

Supporting suppliers

We recognise the different circumstances of our Suppliers worldwide, and that some will face legitimate challenges in immediately meeting every facet of this Code.

As our ultimate goal is to drive the continuous improvement of standards within our supply chain, we are committed to working with such Suppliers over time to help them achieve adherence with the requirements of this Code.

By working together, allowing Suppliers to benefit from our resources and experience, we aim to increase awareness and capacity, and help our Suppliers improve and achieve best practice standards.

UZBAT’s ESG priorities

Details of the Group’s ESG priorities can be found in our annual ESG Report, available at: www.bat.com/ESGReport 

5. Compliance

We are committed to monitoring compliance to the requirements of this Code, and ensuring any issues identified are investigated and remediated.

Legal compliance

We expect our Suppliers to comply with all applicable laws, codes and regulations, and to act in an ethical manner.

As such, Suppliers must:

- Comply with all applicable laws, codes and regulations wherever they operate and however they may apply to them;
- Promptly notify the Group of any significant criminal or civil legal actions brought against them; and
- Promptly notify the Group of any fines or administrative sanctions brought against them which relate in any way to the requirements set out in this Code.

Compliance monitoring

We reserve the right to verify new and existing Suppliers’ compliance with the requirements of this Code through internal and/or external assessment and audit mechanisms.

Suppliers must provide all reasonable cooperation with any verification activity linked to this Code (whether carried out by the Group or by third parties engaged by the Group), including ensuring relevant documentation and data is held for as long as required by the Group and/or applicable laws, and the granting of independent access to relevant personnel, sites, documentation and data.

Such cooperation shall be discussed and agreed to by the UZBAT and the Supplier, to ensure that it is performed within working hours and that reasonable notice is given in advance.

This is notwithstanding legitimate restrictions applicable to commercially sensitive and/or confidential information – in such cases (and where such information is believed to be of material relevance to verification activity), Suppliers should work with the Group to try to identify mutually acceptable mechanisms for its safe and legitimate disclosure.

Reporting concerns

Suppliers are expected to support the identification, investigation, addressing and reporting of suspected or actual breaches of the requirements of this Code and/or the SoBC.

As such, Suppliers must:

- Have effective grievance or equivalent procedures in place to enable their Workers, in confidence and without fear of reprisal, to ask questions, raise concerns and/or report suspected or actual breaches – either to the Supplier itself or directly to the UZBAT;
- Promptly investigate any credible concerns about suspected or actual breaches of the requirements of this Code, and take appropriate action to avoid any potential breaches taking place, and/or minimise the impact of, and stop, any actual breaches; and
- Report any suspected or actual breaches of the requirements of this Code and/or the SoBC to the UZBAT as soon as they become aware of them as explained under Speaking Up.

Speaking Up

Any actual or suspected breaches of this Code or the SoBC can be raised with the Supplier’s usual Group contact, or through our confidential, independently managed Speak Up channels available at www.bat.com/speakup

Our Speak Up channels are managed independently and available online, by text and telephone hotlines, 24 hours a day, seven days a week and in multiple local languages. They can be used in confidence (and anonymously, if you prefer to do so), without fear of reprisal. If you prefer to use the hotline, you can choose your location from the list provided on the website for the international number assigned to your country.

You will not suffer any form of reprisal (whether directly or indirectly) for raising concerns about actual or suspected wrongdoing, even if you are mistaken. We do not tolerate the harassment or victimisation of anyone raising concerns or anyone who assists them.

Investigations

We take any concerns, allegations or reports of suspected or actual breaches of this Code and/or our SoBC seriously. Where appropriate, we will investigate such matters fairly and objectively in accordance with our internal policies and procedures.

In other cases, we may ask a Supplier to lead investigation of the matter in accordance with its own procedures.

Where required by UZBAT, the Supplier is expected to liaise with UZBAT and keep us informed as to the scope, progress and outcomes of its investigation (subject to confidentiality or other applicable legal requirements).

Consequences of a breach

In the event of non-compliance with any of the requirements of this Code, UZBAT reserves the right to require the Supplier in question to:

- Demonstrate material progress towards compliance with the requirement(s) in question within a defined and reasonable time period; and/or
- Bring itself into full compliance with the requirement(s) in question within a defined and reasonable time period.

In the event of serious, material and/or persistent non-compliance, or where a Supplier otherwise demonstrates inadequate commitment, persistent inaction or a lack of improvement, we reserve the right to terminate the business relationship with the Supplier in question.

Contacting the Group:

Your usual Group Company contact

Group Head of Procurement: procurement@bat.com

Speak Up channels: www.bat.com/speakup  

6. Human rights

We are committed to applying the UN Guiding Principles on Business and Human Rights and, by extension, respecting human rights in our own operations and our supply chain.

Respecting human rights

We expect our Suppliers to conduct their operations in a way that respects the fundamental human rights of others, as affirmed by the Universal Declaration of Human Rights. This includes their own Workers and people working for their Suppliers.

Suppliers should seek to identify potential and actual adverse human rights impacts related to their activities and business relationships.

They should take appropriate steps to ensure their operations do not contribute to human rights abuses and to remedy any adverse impacts directly caused, or contributed to, by their activities or business relationships.

For their own Workers, we expect Suppliers (at a minimum) to meet the following requirements.

Equality and no discrimination

Suppliers must provide equal opportunities to, and fair treatment of, all Workers.

This should include:

- Working to eliminate any form of harassment and bullying within the workplace, whether it is of a sexual, verbal, non-verbal or physical nature; and
- Treating all Workers with dignity and respect, promoting diversity and inclusion, and not practising any form of unlawful discrimination.

Discrimination can include (but is not limited to) allowing race, ethnicity, colour, gender, age, disability, sexual orientation, class, religion, politics, marital status, pregnancy status, union membership, or any other characteristic protected by law to influence our judgement when it comes to the recruitment, development, advancement or exit of any employee.

Protecting health and safety

Suppliers must provide and maintain safe and healthy working conditions.

Specifically, this should include (but not be limited to):

- Adopting procedures to identify and address occupational health and safety hazards and associated risks, and implement safe working practices;
- Conducting fire risk assessments appropriate to the workplace or facility, and/or activity, and implementing fire safety plans and appropriate fire prevention and emergency evacuation systems and procedures;
- Providing (where relevant) appropriate personal protective equipment to prevent occupational injuries or illnesses;
- Providing (where relevant) appropriate control measures to ensure the safe handling, storage, transfer and disposal of substances hazardous to health or the environment, including flammable materials;
- Providing appropriate and regular training and communications so that Workers are aware of the health and safety risks and procedures relevant to their work; and
- Where accommodation is provided, ensure it is clean, safe and meets basic standards for acceptable living conditions and the needs of the Workers.

Respect freedom of association

Suppliers must ensure all Workers are able (subject to applicable laws) to exercise their right to freedom of association and collective bargaining.

This includes the right to be represented by recognised trade unions or other bona fide representatives within the framework of law, regulation, prevailing labour relations and practices, and agreed company procedures.

Such Workers and representatives should be able to carry out their lawful activities in the workplace without detriment.

Fair wages and benefits

Suppliers must provide fair wages and benefits.

At a minimum, these must comply with applicable minimum wage legislation and other applicable laws or collective bargaining agreements.

No child labour

We are committed to working towards zero child labour in our supply chain.

Specifically, following the guidelines of the International Labour Organization that:

- Any work which is considered hazardous or likely to harm the health, safety or morals of children should not be done by anyone under the age of 18 (or 16 under strict conditions);
- The minimum age for work should not be below the legal age for finishing compulsory schooling and, in any case, not less than the age of 15;

Where local law permits, children between the ages of 13 and 15 years old may do light work, provided it does not hinder their education or vocational training, or include any activity which could be harmful to their health or development (for example, handling mechanical equipment or agro-chemicals). We also recognise training or work experience schemes approved by a competent authority as an exception.

Child labour in agriculture

The reality of rural agricultural life in many parts of the world means certain kinds of work can play  a formative, cultural, social and familial role for children.

According to Art. 118 of the Labor Code of the Republic of Uzbekistan "For the preparation of young people for work, it is allowed to hire students from general education schools, secondary specialized and vocational schools to perform light work that does not harm their health and moral development, which does not violate the learning process, during their free time – at the age of fifteen with the written consent of one of the parents or one of the persons substituting the parents."

According to Art. 412 of the Labor Code of the Republic of Uzbekistan "The use of labor of persons under the age of eighteen years is prohibited for work with unfavorable working conditions, underground and other jobs that may damage the health, safety or morals of this category of workers. Persons under the age of eighteen years are not allowed to lift or move of heavy objects exceeding the established standards. The list of works specified in part one of this article and the maximum permissible standards for lifting and moving heavy objects by persons under the age of eighteen years are established by the Ministry of Employment and Labor Relations of the Republic of Uzbekistan and the Ministry of Health of the Republic of Uzbekistan in consultation with the Federation Council of Trade Unions of Uzbekistan and representatives of employers."

Thus, it is permitted by local laws that children of 15 years of age to help on their family provided it is light work, does not hinder their education or vocational training and does not involve any activity which could be harmful to their health or development  (for example, handling mechanical equipment or agro-chemicals).

No modern slavery

Suppliers must ensure operations are free from modern slavery and exploitation of labour.

This includes slavery, servitude and forced, compulsory, bonded, involuntary, trafficked or unlawful migrant labour.

As such, Suppliers and agents/labour brokers working on their behalf, should not require Workers to:

- Pay recruitment fees, take out loans or pay unreasonable service charges or deposits; or
- Surrender original identity papers, passports or permits.

Where national law or employment procedures require use of identity papers, Suppliers must use them strictly in accordance with the law. Identity papers should only ever be retained or stored for reasons of security or safekeeping and only with the informed, genuine and written consent of the Worker. The Worker should have unlimited access to retrieve them, at all times, without any constraints.

Conflict minerals

Suppliers must ensure responsible sourcing of conflict minerals.

Conflict minerals include cobalt, gold, tantalum, tin and tungsten (and the ores from which they originate), originating from conflict-affected and high-risk areas that could directly or indirectly finance or benefit armed groups or human rights abuses.

Where products or materials supplied to the Group contain any such conflict minerals, we expect Suppliers to:

- Work to exercise appropriate due diligence;
- Perform reasonable country of origin enquiries, including requiring its Suppliers to engage in similar due diligence; and
- Provide the Group (where requested) with available information relating to due diligence and country of origin enquiries.

Working hours

Suppliers must comply with all applicable working time laws and other applicable laws or collective bargaining agreements, including taking account of any legally mandated maximum working hours requirements.

Contacting the Group:

Your usual Group Company contact

Group Head of Procurement: procurement@bat.com

Speak Up channels: www.bat.com/speakup  

7. Environmental sustainability

We are committed to pursuing best practice in environmental management and reducing the impacts of the Group on the natural environment both in our own operations and in our wider value chain.

Environmental impacts

We expect Suppliers to identify, understand and actively work towards avoiding, minimising and mitigating their associated impacts on the natural environment.

Where practicable, this should include establishing an environmental policy and management system.

Environmental impacts can include (but are not limited to) impacts relating to emissions to air, water, land and forests, use of materials, natural resource consumption and waste management practices.

Where relevant, Suppliers should also have consideration for protecting biodiversity, including the prevention of deforestation and fragmentation of habitats, and the protection of endangered and threatened species.

We expect Suppliers to provide the Group (where requested) with available information relating to their environmental performance, and with reasonable assistance as we seek to reduce the environmental impacts of our operations, products and services.

Performance management

Where practicable, we expect Suppliers to manage, monitor and maintain a record of their environmental performance.

Where relevant and practicable, this should include setting key performance indicators to measure progress against environmental plans or targets and to drive continuous improvement.

Environmental considerations

We expect Suppliers to integrate environmental considerations into their product design, operations and/ or provision of services.

Where relevant, this should include contributing to a circular economy by using less virgin and finite materials and designing out waste to keep materials in use for longer.

Cooperating with the Group

We expect Suppliers to provide the Group (where requested) with available information relating to their environmental performance and with reasonable assistance as we seek to reduce the environmental impacts of our operations, products and services.

Where relevant, this may include (but not be limited to):

- Life cycle assessments in relation to the Group’s products;
- Data and information relating the waste footprint of Group products; and
- Carbon reduction plans in relation to the Group’s Scope 3 emissions.

What are Scope 3 emissions?

Carbon emissions are categorised into three groups or ‘Scopes’ by the World Business Council for Sustainable Development (WBCSD) Greenhouse Gas (GHG) Protocol:

- Scope 1 covers direct emissions from an organisation’s owned or controlled sources;
- Scope 2 covers indirect emissions from the generation of purchased electricity, steam, heating and cooling consumed by the organisation; and
- Scope 3 includes all other indirect emissions that occur in an organisation’s value chain, including purchased goods and services.

Environmental Management

In line with UZBAT Group’s Environment Policy Statement, we encourage Suppliers to take environmental considerations into account across the following priority areas:

Tackling climate change.

Eliminating waste and progressing towards a circular economy.

Protecting biodiversity and forests.

Water stewardship.

We expect Suppliers to integrate environmental considerations into their product design, operations and/or provision of services, and to comply with all applicable local legal and regulatory requirements governing environmental management.

These arrangements should also cover their supply chain.

Doing so could include integrating ESG policies and practices into their business strategy and operations.

Suppliers should work towards continual improvement in environmental performance, underpinned, where relevant and practicable, through the implementation of environmental management standards and practice, using ISO 14001 or an equivalent.

Additionally, we encourage Suppliers to report on and publicly disclose their performance and progress, including through initiatives such as the Science Based Target initiative (SBTi), the Science Based Target Network (SBTN) and the Carbon Disclosure Project (CDP).

Tackling Climate Change

We expect Suppliers to manage, monitor and maintain a record of their environmental performance with regards to greenhouse gas (GHG) emissions, with the aim of:

Understanding their own GHG emissions (Scope 1 and 2);

Reducing their own GHG emissions;

Understanding the GHG emissions of their supply chain (Scope 3);

Working with their Suppliers to reduce GHGs in their supply chain.

As a minimum we expect Suppliers to:

Undertake reasonable efforts to aim for 100% of their purchased electricity to be from renewable sources by 2030;

Report on Scope 1 and 2 emissions to the UZBAT Group (where requested).

We expect Suppliers to work towards:

Reporting on their Scope 3 emissions to the UZBAT Group (where requested).

Where relevant and practicable, Suppliers should work towards:

Implementing a GHG management system (e.g. ISO 50001, PSA 2060);

Setting a target of Net Zero by no later than 2050 across their value chain;

The provision of an externally verified report on Scope 1, 2 and 3 emissions;

Improving primary data for products and services to specific emissions factors (through LCAs).

For details of GHG accounting and reporting standards visit https://ghgprotocol.org

Water Stewardship

Where relevant, we expect Suppliers to reduce the amount of water withdrawn and increase water recycling across their operations.

Suppliers must be aware of the water risk level in the area they are operating in, as defined, for example, by the World Resource Institute (wri.org).

We expect Suppliers to work towards understanding water dependencies and impacts in their own operations and their value chains, with a focus on areas threatened by water scarcity.

Where relevant and practicable, Suppliers should work towards mitigating operational and supply chain water risks, ideally using, or based on an equivalent level of, the Alliance for Water Stewardship Standard (https://a4ws.org/about/).

Protecting Biodiversity and Forests

Where relevant, we expect Suppliers to take steps towards protecting, preserving and regenerating nature, and to aim for Net Zero deforestation in the supply chain of products and materials provided to the UZBAT Group.

Suppliers of wood and wood pulp-based materials (including but not limited to primary and secondary packaging, fine paper, acetate tow and point of sale materials) and leaf Suppliers are expected to supply materials and tobacco that are Deforestation and Conversion Free (DCF status), with independent certification where possible, produced or cured (if applicable) with wood from sustainable and traceable sources.

Where relevant and practicable, Suppliers should work towards understanding biodiversity dependencies and impacts in their own operations and their value chains.

Eliminating Waste and Progressing Towards a Circular Economy

We expect Suppliers to aim to use fewer resources, create less waste and enable reuse, recycling, and circularity in products and processes.

Suppliers must ensure all materials provided to the UZBAT Group for the purpose of packaging are designed to be fully reusable, recyclable or compostable, by 2025 or sooner.

We expect Suppliers to work towards inclusion of recycled content in the materials provided to the UZBAT Group for the purpose of packaging.

Where relevant and practicable, Suppliers should work towards designing for the circularity of their products, including but not limited to increasing the use of renewable sources and reducing the use of virgin materials.

Contacting the Group:

Your usual Group Company contact

Group Head of Procurement: procurement@bat.com

Speak Up channels: www.bat.com/speakup

8. Marketing and trade

We are committed to ensuring the responsible marketing and trade of Group products.

Responsible marketing

We are committed to responsible marketing of all our products to adult consumers aged 21 or over.

Our marketing is governed by our International Marketing Principles available at https://bat.uz/en/sustainability/international-marketing-principles/ and www.bat.com/imp

As such, we expect our Suppliers to comply with:

- Group International Marketing Principles as a minimum standard where they are stricter than local laws; or
- Local laws or other local marketing codes where they are stricter than, or override, UZBAT marketing principles.

Illicit trade

The fight against the illicit trade in our products is an important priority for the Group.

Illicit trade in smuggled or counterfeit products harms our business, while diversion of our genuine products harms UZBAT’s reputation.

We do not condone or tolerate any involvement in illicit trade in our products and it is vital that our Suppliers have no direct or indirect involvement in, or support for, illicit trade in our products.

As such, Suppliers must:

- Not knowingly engage in or support unlawful trade in our products;
- Implement effective controls to prevent illicit trade, including: Measures to ensure supply to market reflects legitimate demand; and Procedures for, where relevant, investigating, suspending and terminating dealings with customers, Suppliers or individuals suspected of involvement in illicit trade.
- Collaborate with authorities in any official investigation of illicit trade, while ensuring this is done in a lawful manner and in line with our zero tolerance for any form of bribery and corruption, given the heightened bribery and corruption risks in dealings with public officials.

Types of illicit products:

Counterfeit or fake: Unauthorised copies of branded products that have been manufactured without the knowledge or permission of the trademark owner and using cheap, unregulated materials.

Local tax evaded: Products which are manufactured and sold in the same country, but are not declared to the authorities, so excise tax is not paid. These products are manufactured in either legitimate or illegal factories.

Smuggled: Products (either genuine or counterfeit) which are moved from one country to another without payment of taxes or duties, or in breach of laws prohibiting their import or export.

9. Business integrity

We are committed to high standards of business integrity in all that we do. Our ethical standards should never be compromised for the sake of business results.

Conflicts of interest

Suppliers are required to avoid conflicts of interest in their business dealings and to operate with full transparency with respect to any circumstances where a conflict does, or may, arise.

As such, Suppliers must (and must take steps to ensure their Workers):

- Avoid situations where their personal and/or commercial interests, or the interests of their officers or employees may, or may appear to, conflict with the interests of UZBAT;
- Disclose to UZBAT if any UZBAT employee may have any interest of any kind in their business or any economic ties with them; and
- Inform the Group of any situation that is, or may be seen as, an actual or potential conflict of interest as soon as the conflict arises, and to disclose how it is being managed.

These provisions are not intended to prevent Suppliers dealing with UZBAT competitors where it is legitimate and appropriate for them to do so.

Bribery and corruption

It is unacceptable for any Supplier (or their employees and agents) to be involved or implicated in bribery or other corrupt practices.

As such, Suppliers must never engage in any conduct which may constitute bribery including to:

- Never offer, promise or give any gift, payment or other benefit (such as hospitality, kickbacks, a job offer/ work placement or investment opportunities) to any person (directly or indirectly), to induce or reward improper conduct or improperly influence any decision by any person to their or UZBAT’s advantage;
- Never ask for, agree to accept or receive any gift, payment or other benefit from any person (directly or indirectly) as a reward or inducement for improper conduct or which influences, or gives the impression that it is improperly intended to influence, decisions of UZBAT;
- Never offer, promise or give any gift, payment or other benefit to a public official intending to influence that individual in their capacity of a public official to their or UZBAT’s advantage;
- Never make facilitation payments (directly or indirectly) with regard to UZBAT business, other than where it is strictly necessary to protect the health, safety or liberty of any Workers; and
- Maintain proportionate and effective controls to ensure that improper payments are not offered, made, solicited or received by third parties performing services for or on their or the UZBAT’s behalf.

Definitions Improper Conduct means performing (or not performing) a business activity or public function in breach of an expectation that it will be performed in good faith, impartially or in line with a duty of trust.

Facilitation Payments are small payments made to smooth or speed up performance by a low-level official of a routine action to which the payer is already entitled.

They are illegal in most countries.

In some, such as the UK, it is a crime for their nationals to make Facilitation Payments abroad.

Gifts and entertainment (G&E)

Occasional offering or acceptance of business-related G&E can be an acceptable business practice,  when what is given is modest, reasonable, appropriate and lawful. However, improper or excessive G&E can be a form of bribery and corruption and cause serious harm to UZBAT and our Suppliers.

Suppliers must not offer or accept G&E where to do so would constitute, or would be perceived as constituting, bribery or other corrupt activity. As such:

- Suppliers are expected to observe the Group’s G&E chapter principles, as set out in the SoBC, when doing business with Group Companies and Employees;
- The exchange of G&E between UZBAT Employees and Suppliers is prohibited during any tender or competitive bidding process involving the Group ; and
- Suppliers must not, directly or indirectly, seek to influence a Public Official on UZBAT’s behalf by providing any G&E (or other personal advantage) to them or any person, such as a public official’s close relative, friend or associate. Gifts to public officials of more than token value will rarely be appropriate.

Sanctions and export controls

Suppliers should ensure they conduct their business in compliance with all applicable international sanctions regimes, and that they do not engage with any sanctioned territories or sanctioned parties where it is prohibited to do so.

As such, Suppliers must:

- Be aware of, and fully comply with, all applicable sanctions regimes affecting their business;
- Implement effective internal controls to minimise the risk of breaching sanctions or causing the Group to breach sanctions, and provide training and support to ensure their employees understand them and implement them effectively, particularly where their work involves sourcing from sanctioned territories, international financial transfers or cross-border supply or purchase of products, technologies or services; and
- Inform the Group of any situation where they intend to supply goods or services to the Group originating from or transshipped through a sanctioned territory or intend to make payments or supply Group products to/through any sanctioned territory or party.

What are sanctions?

Sanctions are restrictions or prohibitions on trade or dealings, including funds transfers, with or involving certain targeted countries or persons, imposed by individual countries, such as the United States (US) United Kingdom (UK); or supra-national bodies, such as the United Nations and the European Union, on another country, entity or individual.

Some sanctions regimes are very broad; for example, US sanctions can apply even to non-US persons when acting entirely outside the US. In particular, US sanctions prohibit the use of US dollars and US banks for payments between non-US parties involving sanctioned parties, as well as exports/transshipments of US-origin products and products with US-origin content to, or for, sanctioned territories or certain sanctioned persons.

Some sanctions regimes apply to exports/re-exports of products originating from territories under comprehensive US sanctions or products with such origin content; as well as transshipping products through such high risk sanctioned territories.

Separate from sanctions, export controls impose licensing obligations on the cross-border movement of certain items, such as “dual-use” goods, and associated software and technology because of their potential for military use, and regardless of who is involved. Examples of “dual-use” items include certain types of machinery, encryption software and IT equipment.

Breaching sanctions and export controls carries serious penalties, including fines, loss of export licences and imprisonment, in addition to significant reputational harm and damage to banking partner relationships.

Anti-money laundering and counter-terrorist financing

It is unacceptable for any Supplier (or their employees and agents) to be involved or implicated in money laundering or terrorist financing.

Suppliers must put in place effective controls to ensure that they do not engage in any activity which would constitute a money laundering or terrorist financing offence in any relevant jurisdiction or which could cause UZBAT to commit such an offence – this includes (but is not limited to): concealing or converting illegal funds or property; possessing or dealing with the proceeds of crime; or knowingly assisting in financing, transferring assets for the benefit of, or otherwise supporting, terrorist groups and terrorist activity.

Business records and confidentiality

In order to conduct business with UZBAT, Suppliers may need to access confidential and private records relating to our business.

As such, Suppliers must

- Ensure this information is protected and remains confidential;
- Not disclose confidential information without prior authorisation from the UZBAT; and
- Be mindful of the risk of unintentional disclosure of confidential information through discussions or use of documents in public places.

Suppliers must also maintain up-to-date business records, whether financial or non-financial, in accordance with applicable laws and ensure they handle personal data in accordance with all relevant data protection and privacy laws. Any records related to the business of the Group should also be held for as long as required by the Group.

Data privacy and cyber risk

We are committed to protecting the integrity and security of our systems and data (including personal data) throughout our supply chain.

Suppliers are required to maintain appropriate systems and controls to protect UZBAT data, including personal data, and, where appropriate, access to UZBAT systems. Many Suppliers hold or have access to personal data or confidential information of UZBAT.

As well as complying with global data privacy laws, such as the General Data Protection Regulation, maintenance of good cyber hygiene by Suppliers is critical to the security of that data and Group systems and to protect the UZBAT’s business. As such, we expect our Suppliers to comply with data protection and cybersecurity laws, regulatory guidance and industry best practice (including data protection assessments where required by law and the assessment of cyber threats).

Cybersecurity threats and risks on how we manage data (including personal data) are constantly changing. It is vital that our Suppliers have appropriate technical measures, policies and processes in place to protect UZBAT data and to ensure that any access to UZBAT systems, or processing of all data, is secure and managed in accordance with documented processes.

As such, Suppliers must:

- Maintain all appropriate data protection, information security and cybersecurity policies, and update them regularly;
- Monitor compliance with those policies on a continuous basis and ensure that any remedial action is taken promptly;
- Immediately investigate potential breaches of data protection policies, security incidents and report any such incidents or events that may affect UZBAT data or systems to UZBAT; and
- When required to do so, put in place such remedial measures as may be required by UZBAT.

Assessing data protection and cyber risk

Suppliers should assess risk to their organisation, and how that risk may impact on the handling of UZBAT data (including personal) or access to UZBAT systems and data, on an ongoing basis.

Suppliers must consider the risk attaching to UZBAT data in their possession, or that any access to UZBAT systems may present, in accordance with threat and risk models.

Fair competition and antitrust

We believe in free competition, in line with competition (or ‘antitrust’) laws.

As such, Suppliers must compete fairly and ethically and comply with competition laws in each country and economic area in which they operate.

Tax evasion

Suppliers must ensure they comply with all applicable tax laws and regulations in the countries where they operate, and be open and transparent with the tax authorities.

Under no circumstances should Suppliers engage in deliberate illegal tax evasion or facilitate such evasion on behalf of others.

As such, Suppliers must put in place effective controls to minimise the risk of tax evasion or its facilitation, and provide appropriate training, support and whistleblowing procedures to ensure their employees understand and implement them effectively and can report any concerns.

Contacting the Group:

Your usual Group Company contact

Group Head of Procurement: procurement@bat.com

Globe House 4 Temple Place London WC2R 2PG United Kingdom Tel: 44 (0)207 845 1000

Speak Up channels: www.bat.com/speakup

Related to Costumers

Compliance

1.1 Customer warrants and represents, together with its employees, agents, contractors, representatives and Subsequent Customers, that:

(a) he has read and will comply with the Business Conduct Policy, Summary of Procedures to Support Supply Chain Control and Prevent Illicit Trade in Tobacco Leaf and/or UZBAT Products;

(b) directly or indirectly either in transactions with private entities or in dealings with the public sector, offer, give, receive or agree to offer, give or receive (whether independently or by agreement with others) any payment, gift or other material benefit relating to any matter which is the subject of this Treaty which (A) are intended or acted upon, or influence or encourage any person to act contrary to good faith, impartiality or trust, or which it would be improper for the person to accept; (B) are given to or for a public official, with the intent to influence the person and to gain/retain an advantage in the conduct of business or (C) which a reasonable person would consider unethical, illegal or improper (under anti-corruption laws (any activity described in (A), (B) or (C), hereinafter "Corrupt Practices");

(c)      neither the Customer nor any persons performing services for or on behalf of the Customer have engaged in any Corrupt Acts;

(d)      save as disclosed in writing in advance to UZBAT, neither Customer nor any of its Associated Parties or anyone in their families are: (i) Public Officials; (ii) Associated Parties of a Subsequent Customer or potential customer,; or (iii) persons who might otherwise assert a corrupt or illegal influence on behalf of either Party.

(e) it has full knowledge and understanding of applicable anti-money laundering, counterterrorist financing and taxation laws and that it has sound and reasonable internal procedures to ensure that its employees, agents, contractors, representatives and Subsequent Clients comply with applicable laws (including but not limited to appropriate policies, approval processes, training and monitorin

(f)       it will undertake any anti-corruption, tax compliance and/or anti-money laundering training as UZBAT may reasonably require;

(g) to the best of his knowledge, none of his assets or funds are or constitute the proceeds or benefit of criminal activity;

(h)      it is not and has not been involved in any arrangements which are or could constitute arrangements which facilitate the commission of a Money Laundering or Terrorist Financing Offence;

(i)       it has not committed and will not commit a Bribery and Corruption Offence, Money Laundering or Terrorist Financing Offence, a Tax Evasion Offence or Tax Evasion Facilitation Offence; and

(j) he will promptly notify UZBAT in writing if:

(j)       it will promptly notify the Company in writing if:

- it becomes aware of any Bribery and Corruption Offence, Money Laundering or Terrorist Financing Offence, Tax Evasion Offence or Tax Evasion Facilitation Offence by it, its employees, agents, contractors, representatives or Subsequent Customers[, or that the representation set out in Clause [1(c) or 1(d)] is no longer correct];

- it or its employees, agents, contractors, representatives or Subsequent Customers become the come the subject of any investigation, inquiry or enforcement proceedings by any governmental, administrative or regulatory body regarding any Bribery and Corruption Offence, Money Laundering or Terrorist Financing Offence, Tax Evasion Offence or Tax Evasion Facilitation Offence, or any such investigation is threatened or pending; or

iii.       there is a material change in its ownership/control structure or route to market structure.

(k)      The information provided by the Customer in the UZBAT due diligence process (including but not limited to the external questionnaire response) is complete and accurate.

Trade sanctions

In this clause [1]:

“Affiliate” means, (i) an entity (other than Customer) that directly or indirectly, through one or more intermediaries, owns more than 50% of the outstanding voting securities of the Customer, and (ii) an entity that directly or indirectly through one or more intermediaries, is controlled by the Customer, in each case where the term “control” means possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of an entity, whether through ownership of voting securities, by contract interest or otherwise  "Associated Parties" includes officers, directors, employees, contractors, shareholders, representatives or agents.

"Prohibited Territory" means Afghanistan, Belarus, Iran, Myanmar, North Korea, Russia, Syria and the non-Ukrainian-government-controlled areas of the Donetsk, Kherson, Luhansk and Zaporizhzhia oblasts, and Crimea & Sevastopol, such list as may be updated and notified by UZBAT from time to time.

"Sanctions Authority": (i) the United Nations; (ii) the European Union or any of its Member States; (iii) the United Kingdom; (iv) the United States of America; (v) the governmental authorities of any of the foregoing, including but not limited to, the Office of Foreign Assets Control ("OFAC") of the United States Department of the Treasury, the United States Department of State, the Bureau of Industry and Security, His Majesty's Treasury and the Department for Business and Trade; and (vi) any other governmental authority with relevant jurisdiction or any of its affiliates that imposes, administers or enforces Economic Sanctions;

"Sanctioned Person" means a person or entity (including any bank) (i) listed on any applicable sanctions list as from time to time amended, including but not limited to the United Nations Consolidated Sanctions List, the United States' Office of Foreign Assets Control List of Specially Designated Nationals and Blocked Persons, the United Kingdom's Consolidated List of Financial Sanctions Targets and UK Sanctions List, the European Union's Consolidated List of Persons, Groups and Entities Subject to Financial Sanctions, or (ii) incorporated, headquartered or based in Iran, Syria, Cuba, North Korea, the non-Ukrainian-government-controlled areas of the Donetsk, Kherson, Luhansk and Zaporizhzhia oblasts, or Crimea & Sevastopol.

"Economic Sanctions" means any law, regulation, directive, decree or decision relating to  economic, financial,  trade or other sanctions, including by not limited to any trade restriction, embargo, import or export ban, prohibition or restriction on dealings with Sanctioned Persons, governments, countries, groups or territories and any prohibition on the provision, receipt or transfer of funds, assets or services, or equivalent measures  imposed, administered, enacted or enforced from time to time by: (i) the European Union or any of its Member States; (ii) the United Kingdom including His Majesty's Treasury and the Department for Business and Trade; (iii) the United States including OFAC, the Bureau of Industry and Security and the United States Department of State; (iv) the United Nations including any United Nations Security Council Sanctions Committee; or (v) or any other relevant governmental or regulatory authority including of any country in which obligations under this Agreement are to be performed.

"Subsequent Customer" means a subsequent customer of the Customer (but excluding consumers).

1.2      The Customer represents, warrants and undertakes that:

(a)      in performing its obligations under this Agreement or other agreements between UZBAT and the Customer for the supply of UZBAT products ("Relevant Agreements") / in dealings with UZBAT it will not, and it will procure that its Associated Parties will not: (i) make UZBAT products or any related funds available directly or indirectly to or for the benefit of a Sanctioned Person or any person or entity owned or controlled by a Sanctioned Person; (ii) use any Sanctioned Person or any person directly or indirectly owned or controlled by a Sanctioned Person, with respect to the transportation of the Products or payment to UZBAT (including, for the avoidance of doubt, ensuring no funds paid to UZBAT directly or indirectly originate from or pass or have passed through any Sanctioned Person financial institution)); (iii) without prior written authorisation from UZBAT, sell, distribute, ship, market or divert the Products to or through any Prohibited Territory (such list as may be updated by UZBAT and communicated to the Customer, from time to time at their sole discretion); or (iv) effect payment to UZBAT directly or indirectly using or involving any funds derived or received from any criminal activities or received from or via any person registered or located in, or derived from any business activities related to, a Sanctioned Country.

(b)      Neither it nor, to the best of its knowledge and belief, any of its Associated Parties is currently (i) a Sanctioned Person, (ii) owned or controlled directly or indirectly by a Sanctioned Person or (iii) incorporated or resident in, or owned or controlled by or acting on behalf of the government of a Prohibited Territory.

(c)      The Customer will not use, sell, resell, export, re-export, transfer, divert, dispose of or otherwise supply UZBAT products, directly or indirectly, to or within any destination or to any person without all requisite Economic Sanctions licences and approvals from (i) the applicable Sanctions Authority, (ii) the country of origin and (iii) the original country of export.

(d)      The Customer shall maintain a bank account with a non-Sanctioned Person financial institution for the purpose of this Agreement and will procure that all funds transferred in connection with this Agreement, or arising as a result of this Agreement, shall be transferred using non-Sanctioned Person financial institutions exclusively.

(e)      Any transaction subject to this Agreement is conditional on UZBAT's designated bank permitting the transfer of funds to or from the Customer.

(f)       No supply of services or goods under this Agreement is directly or indirectly destined to or sourced from Cuba, or intended to benefit persons in Cuba. 

(g)      It conducts and has conducted its business in full compliance with Economic Sanctions and has instituted and maintains policies and procedures designed to ensure continued compliance with Economic Sanctions.

1.3      The Customer hereby undertakes that it will promptly notify UZBAT in writing together with all relevant details in the event that:

(a)      it is unable to perform its obligations under this Agreement as a result of the imposition of Economic Sanctions (including the imposition of Economic Sanctions against a country or person or the addition of an item or service to a list of sanctioned items or services under Economic Sanction); or

(b)      it or any of its Subsequent Customers or banks becomes either: (i) a Sanctioned Person; or (ii) owned or controlled directly or indirectly by a Sanctioned Person.

1.4      The Customer agrees that UZBAT may inspect or otherwise undertake an audit of the records relating to its obligations under this Agreement, including at the Customer's premises. The Customer will provide all relevant access, information and documentation to UZBAT to facilitate its audit as promptly as possible.

1.5      Notwithstanding any provision of this Agreement to the contrary, UZBAT shall not be obligated to make any payment or take any other action under this Agreement (and shall not be liable for failure to take or delay in taking any action under this Agreement) if UZBAT determines in its sole reasonable opinion that such action may constitute a violation or contribute to any violation of, or otherwise expose it to negative consequences under, Economic Sanctions.

1.6      Following notification in accordance with clause 1.3, it will work with UZBAT to agree, within a reasonable period, a practical solution to permit continuity of this Agreement in a manner that is compliant with Economic Sanctions.

1.7      If UZBAT is notified or becomes aware of circumstances under which the Customer or any Associated Party has exposed or may, in UZBAT's sole reasonable opinion, expose UZBAT or any of its Affiliates to the risk of a breach of, penalty under, or being or becoming subject to any Economic Sanctions, including but not limited to potential sanctions designation, the Customer shall, if UZBAT requires, engage with UZBAT to agree a practical solution that is acceptable to UZBAT, taking into account UZBAT’s obligations under applicable laws.

1.8      UZBAT shall have the right at any time to terminate its commercial relationship with the Customer immediately (including this and any other relevant agreement) by giving written notice to the Customer in the event that:

(a) UZBAT reasonably believes that the Customer and/or its Affiliates:

(i) has breached or committed any offence under any Economic Sanctions; or

(ii) has taken any action which would cause UZBAT to breach any Economic Sanctions;

(b) UZBAT, in its sole discretion, determines that any action, performance, or non-performance by the Customer and/or its Affiliates may be or is likely to be in violation of, inconsistent with or could expose UZBAT and/or is affiliates to any negative consequences under Economic Sanctions; or

(c) the Customer and/or its Affiliates becomes a Sanctioned Person or owned or controlled by a Sanctioned

Prior to UZBAT issuing a notice of termination under clause 1.8 (a) and (b), the Supplier shall have the opportunity to respond to any breaches and /or violations alleged by UZBAT.  If no time period for a response is notified, such response should be provided within 14 days of the date of the alleged breaches and / or violations being notified to the Supplier by UZBAT.

Indemnity

1.2      The Customer agrees to indemnify the Company against any losses, liabilities, damages, costs (including, but not limited to, legal fees) and expenses incurred as a result of a Bribery and Corruption Offence, Money Laundering or Terrorist Financing Offence, Tax Evasion Offence or Tax Evasion Facilitation Offence by it or its employees, agents, contractors, representatives or Subsequent Customers.

Acknowledgements

1.3      The Customer acknowledges and agrees that the Company has in place various processes, protocols and procedures to minimise the risk of the Company committing a Bribery and Corruption Offence, Money Laundering or Terrorist Financing Offence, a Tax Evasion Offence or a Tax Evasion Facilitation Offence. Where the Customer does not provide information requested by the Company in a timely fashion or where the Company has reasonable cause to suspect that the Customer has or would commit a Bribery and Corruption Offence, Money Laundering or Terrorist Financing Offence, a Tax Evasion Offence or a Tax Evasion Facilitation Offence, then the Company reserves the right to delay delivery of any goods, services or payments being made to the Customer from the Company or any of its affiliates. The Company is not liable for any delay which occurs as a result of the Company taking such reasonable actions to comply with applicable Money Laundering and Terrorist Financing Law.

Audit Rights

1.4      UZBAT, its authorised advisers and other representatives may audit the compliance of the Customer and its Associated Parties with the terms of this Agreement (including compliance with Standards of Business Conduct, Summary of SCC Procedures). For the purpose of facilitating an audit under this clause, the Customer shall provide to UZBAT (including its authorised employees), its authorised advisers and other representatives on request (at no cost to UZBAT):

(a)      reasonable access to the records relating to this Agreement;

(b)      reasonable access to all relevant information, premises, data, employees, agents, subcontractors and assets at all locations at which the same are present (or may reasonably be expected to be present), including locations from which obligations of the Customer are being or have been or should have been carried out (but not to information which the Customer is obliged to keep confidential or information which is legally privileged and/or subject to litigation privilege); and

(c)      all reasonable assistance in carrying out any audit.

Termination of Customer Relationships

1.5      The Customer shall comply promptly upon receipt of any notification from the Company to terminate its commercial relationship with and cease supplying its tobacco leaf and/or products to a Subsequent Customer on the basis that:

a) the Company has Documentary or Other Substantive Evidence that the Subsequent Customer is involved in illicit trade, or has committed a Bribery and Corruption Offence, Money Laundering or Terrorist Financing Offence, Tax Evasion Offence or Tax Evasion Facilitation Offence; or
b) the Company has received a written notification from a regulatory authority that the Customer should terminate its commercial relationship with and cease supplying tobacco leaf and/or products to the Subsequent Customer. For the avoidance of doubt, such written notification from a regulatory authority is accepted by the Customer as conclusive proof that the Subsequent Customer is engaged in illicit trade.

1.6      The Company shall have the right at any time to terminate this Agreement immediately by giving written notice to the Customer:

a) upon the request of a regulatory authority based on credible evidence supporting the view that the Customer has knowingly or recklessly engaged in the unlawful manufacture, sale, distribution and storage of contraband tobacco leaf and/or products and/or related money laundering (including the commission of a Money Laundering or Terrorist Financing Offence, Tax Evasion Offence or Tax Evasion Facilitation Offence);
b) in the event that the Company reasonably believes that the Customer is unreasonably failing to minimise the risk of the sale of tobacco leaf and/or products being illicit trade and where the Customer has been unable to remedy the Company's concerns within a period reasonably determined by the Company in a notice to the Customer;
c) in the event that the Company has Documentary or Other Substantive Evidence to show that the Customer is knowingly or recklessly engaged in the unlawful manufacture, sale, distribution and/or storage of contraband tobacco leaf or products sold by the Customer or its affiliates and/or related money laundering (including the commission of a Tax Evasion Offence or Tax Evasion Facilitation Offence);
d) the Company forms the suspicion that the Customer is committing, has committed or is likely to commit a Bribery and Corruption Offence, Money Laundering or Terrorist Financing Offence;
e) in the event that the Customer fails to provide any information documents reasonably requested by the Company within 20 Business Days of such a request from the Company, or such other time agreed by the parties in writing;
f) in the event that the Customer does not comply with a request to terminate its commercial relationship with a Subsequent Customer as set out in Clause 1.6 above; or
g) in the event that the Parties do not agree a practical solution relating to Economic Sanctions risks pursuant to clause X.1.2 above within 10 Business Days of receipt of notification under clause X.1.3 or within 10 Business Days of UZBAT becoming aware of the risk referred to at clause X.1.2, or if UZBAT considers that such Economic Sanctions risk is incapable of mitigation to its satisfaction. During such 10 Business Days period the Parties’ respective obligations under this Agreement are suspended.

h) In the event that the Company is required under its internal policies and procedures to refresh its risk assessment and due diligence on the Customer, leading to a different set of compliance clauses or conditions being required with the Customer, and the Customer does not accept these clauses and/or conditions being incorporated into this Agreement after the Company has notified the Customer of them in writing.]

Definitions

“Affiliate” means, (i) an entity (other than Customer) that directly or indirectly, through one or more intermediaries, owns more than 50% of the outstanding voting securities of the Customer, and (ii) an entity that directly or indirectly through one or more intermediaries, is controlled by the Customer, in each case where the term “control” means possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of an entity, whether through ownership of voting securities, by contract interest or otherwise 

"Associated Parties" includes officers, directors, employees, shareholders, representatives or agents.

“Bribery and Corruption Laws” means the UK Bribery Act 2010 and the US Foreign Corrupt Practices Act 1977 or any other similar local or national laws, regulations, rules or regulatory guidance relating to anti-bribery and corruption.

“Bribery and Corruption Offence” means a criminal conviction in any official court or tribunal of any jurisdiction for any offence relating to a breach of Bribery and Corruption Laws.

"Company/Supplier/Customer" means the contracting UZBAT operating company.

"Documentary or Other Substantive Evidence" means (i) a criminal conviction in any official court or tribunal of any jurisdiction for any offence relating to the manufacture, sale, distribution and/or storage of counterfeit product or contraband cigarettes/tobacco or any other related illegal activity; or (ii) a finding by any official court or tribunal of any jurisdiction in any civil case of involvement in the manufacture, sale, distribution and/or storage of counterfeit product or contraband cigarettes/tobacco, or any other related illegal activity.

“Economic Sanctions” means all current sanctions administered by HM Treasury, the UK Department for International Trade, US Department of Treasury and any similar sanctions imposed by the European Union, the United Nations and any other equivalent body (governmental or otherwise) and any applicable law or regulation.

“High Risk Territory” means Afghanistan, Belarus, Cuba, Iran, Myanmar, North Korea, Russia, Syria and the non-Ukrainian-government-controlled areas of the Donetsk, Kherson, Luhansk and Zaporizhzhia oblasts, and Crimea & Sevastopol.

"Illicit trade" means the unlawful sale, distribution and/or storage of contraband tobacco leaf or products, including the shipment of such tobacco leaf and/or products without declaration or the payment of excise duties and/or other taxes and/or related money laundering.

"Money Laundering or Terrorist Financing Law" the UK Proceeds of Crime Act 2002 or the UK Terrorist Act 2000 or any other similar local or national laws, regulations, rules or regulatory guidance relating to anti-money laundering or counter terrorist financing.

"Money Laundering or Terrorist Financing Offence" means an offence under applicable Money Laundering or Terrorist Financing Law including without limitation any offence of (i) concealing, disguising, converting or transferring criminal or terrorist property, (ii) becoming concerned in arrangements which facilitate another person’s use acquisition or control of criminal property or terrorist property, (iii) acquiring, using or possessing criminal property or terrorist property, or (iv) inviting another person to provide money or property or receiving money or other property from another person with the intention or suspicion that the property be used for the purposes of terrorism.

"Public Official" includes, without limitation, any person holding or acting on behalf of a person holding a legislative, administrative or judicial office, including any person employed by or acting on behalf of a public agency, a public enterprise or a public international organisation, any political party or an official thereof or any candidate for any political office, any Associated Party of any government or any department, agency, or part thereof, or of any state owned enterprise or joint venture/partnership with a state owned enterprise (including a partner or shareholder of such an enterprise) or of a public international organisation, or any person acting in an official capacity for or on behalf of any such government or department, agency, or part thereof, or for or on behalf of any such public international organisation, or a relative or Associated Party of any such person.

"Subsequent Customer" means a subsequent customer of the Customer.

"Tax Evasion Offence" means an offence of: (i) cheating the public revenue or (ii) being knowingly concerned in, or taking steps with a view to, the fraudulent evasion of a tax. For the avoidance of doubt, "tax" includes any excise duty or tax or levy chargeable in any jurisdiction.

"Tax Evasion Facilitation Offence" means an offence of: (i) facilitating a Tax Evasion Offence by being knowingly concerned in, or in taking steps with a view to, the fraudulent evasion of a tax by another person; or (ii) aiding, abetting, counselling or procuring the commission of a Tax Evasion Offence.

"Taxation Laws" means all applicable taxation laws including but not limited to the UK Criminal Finances Act 2017, modification, or replacement of the same from time to time, and any subordinate legislation made under the same.