Supplier Code of Conduct

Agreement

British American Tobacco Uzbekistan (UZBAT/BAT) and its Business Partner (Supplier, Customer, Third Party) hereinafter agreed about the following:

Third Party 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 a case of violation of terms and conditions of the present agreement by the Third Party, UZBAT will have an undisputable right to unilaterally terminate any contracts, agreements and other relations with the Third Party.

Related to Suppliers

Supplier Code of Conduct 2022

Definitions

‘BAT’, ‘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 BAT 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.

Message from our Director of Operations

At BAT, we’re on a purpose-led journey to build A Better Tomorrow™ by reducing the health impact of our business. By working together to achieve this purpose, we will deliver sustainable value for all our stakeholders.

The BAT of tomorrow will be a high-growth consumer goods company: global, consumer-centric, multi-category, with sustainability at our core.

Our Sustainability Agenda includes 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. This Code has been updated to reflect our shift to a multi-category portfolio of non-combustible products, our enhanced focus on ESG, and the ever-changing external environment.

The BAT Group works with a vast network of suppliers worldwide, from smallholder farmers, international leaf suppliers, and product materials suppliers, including our growing supply chain for consumer electronics and e-liquids for our New Category products.

We also work with numerous suppliers of indirect goods and services, such as professional services, marketing, and facilities management.

We know that many global issues, such as climate change and social inequality, cannot be addressed in isolation. Initiatives like the UN-backed Race to Zero global campaign, aiming for net zero value chain emissions by 2050, require collective action. By working together with our suppliers, contracted farmers and business partners on such initiatives we can develop solutions to bring about lasting change.

We recognise the critical roles our suppliers play in the Group’s overall success – they are valued business partners and we have many long-established and successful relationships.

A key part of this relationship is having the confidence to Speak Up if something feels wrong. BAT 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 mistaken.

I believe that by working together with our suppliers through our supplier programme ‘A Better Tomorrow™, Together’, we can raise standards, drive sustainable practices, and create shared value.

Zafar Khan

Director of Operations
January 2022

Introduction

BAT’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.

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.

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 BAT and any BAT Group company (collectively ‘BAT’).

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 BAT, as defined here.

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.

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.

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.

BAT’s ESG priorities

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

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 relevant 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, including ensuring relevant documentation and data is held for as long as required by the Group and/ or relevant laws and the granting of independent access to relevant personnel, sites, documentation and data.

Such cooperation shall be discussed and agreed to by the BAT 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 BAT;
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 BAT 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 BAT, the Supplier is expected to liaise with BAT 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 noncompliance with any of the requirements of this Code, BAT 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.

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 assessment appropriate to the workplace or facility, and implement fire safety plan and appropriate fire prevention and emergency evacuation systems and procedures;
Providing (where relevant) appropriate personal protective equipment to prevent occupational injuries or illnesses;
Implementing (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. Such representatives should not be discriminated against and be able to carry out their activities in the workplace within the framework of law, regulation, prevailing labour relations and practices, and agreed company procedures.

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

Ensure operations are free from child labour.

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. 77 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. 241 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. If identity papers are ever retained or stored for reasons of security or safekeeping, this must only be done with the informed and written consent of the Worker, which should be genuine; and with unlimited access for the Worker 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.

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.

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.

Responsible marketing

We are committed to responsible marketing of all our products to adult consumers aged 20 or over.

Our marketing is governed by our International Marketing Principles available at www.bat.com/principles.

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, BAT marketing principles.

Illicit trade

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

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:
Collaborate with authorities in any official investigation of illicit trade
- 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.

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.

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 BAT;
Disclose to BAT if any BAT employee may have any interest of any kind in their business or any economic ties with them; and
Inform BAT 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 BAT 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 BAT’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 BAT;
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 BAT’s advantage;
Never make facilitation payments (directly or indirectly) with regard to BAT 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 BAT’s behalf.

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 BAT 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 BAT’s G&E policy principles, as set out in the SoBC, when doing business with BAT companies and employees;
The exchange of G&E is prohibited during any tender or competitive bidding process involving BAT; and
Suppliers must not, directly or indirectly, seek to influence a Public Official on BAT’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, and provide training and support to ensure their employees understand them and implement them effectively, particularly where their work involves 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 territory which is under comprehensive US sanctions, 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 BAT 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 BAT, 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 BAT; 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 BAT data, including personal data, and, where appropriate, access to BAT systems. Many Suppliers hold or have access to personal data or confidential information of BAT.

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 BAT’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 BAT data and to ensure that any access to BAT 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 BAT data or systems to BAT; and
When required to do so, put in place such remedial measures as may be required by BAT.

Assessing data protection and cyber risk

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

Suppliers must consider the risk attaching to BAT data in their possession, or that any access to BAT 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.

ECONOMIC SANCTIONS

1.1 In this clause [1]:

“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 Iran, Cuba, Crimea and Sevastopol, Syria, North Korea, the so-called Luhansk and Donetsk People's Republics

1.2 The Supplier represents, warrants and undertakes that:

1.2.1 neither it nor any of the Supplier Personnel or any of their directors, officers, agents, employees or Affiliates is:

currently a target of any Economic Sanctions; owned or controlled by one or more Economic Sanctions targets; or incorporated or resident in, or owned or controlled by the government of or acting on behalf of a High Risk Territory or Venezuela (collectively, “Restricted Persons”);
aware of any circumstance, or has taken any action, directly or indirectly, that could result in a breach of any Economic Sanctions by Supplier, BAT and/or BAT's Affiliates;

1.2.2 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;

[1.2.3 The goods are not delivered to BAT via transhipment through any High Risk Territory unless there is no other commercially viable alternative, and the Supplier obtains an express consent from BAT for such transhipment and agrees to cooperate with BAT to ensure sanctions compliant conditions for the entire transaction;] [Drafting Note: this clause 1.2.3 is not required in the context of provision of services only. If removed, consider the consequential changes to clauses listed in following clauses.]

1.2.4 it will promptly notify BAT 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 against a country or person or the addition of an item or service to a list of sanctioned items or services under an applicable Economic Sanctions regime; and

1.2.5 following notification in accordance with clause [1].2.[4], it will work with BAT to agree, within a reasonable period, a practical solution to permit continuity of this Agreement in a manner that is compliant with Economic Sanctions.

1.3 If BAT is notified or becomes aware of circumstances under which the Supplier or any of the

Supplier Personnel or Affiliates has exposed or may, in BAT’s opinion, expose BAT 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 Supplier shall, if BAT requires, engage with BAT to agree a practical solution that is acceptable to BAT, taking into account its obligations under applicable laws.

1.4 If the Parties do not agree a practical solution within [10] Business Days of receipt of notification under clause [1].2.[4] or within [10] Business Days of BAT becoming aware of the risk referred to at clause [1].3, or if BAT considers that such a risk is incapable of mitigation to its satisfaction, BAT may terminate this Agreement immediately by notice. During such [10] Business Days period the Parties’ respective obligations under this Agreement are suspended.

Related to Customers

Compliance

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

it has seen, read and will comply with the Standards of Business Conduct, Summary of SCC Procedures, and [other relevant policies];
the Customer will not, 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");
it is fully aware of and understands the provisions of applicable Money Laundering, Terrorist Financing and Taxation Laws and that it has in place robust and reasonable internal procedures to ensure that its employees, agents, contractors, representatives and Subsequent Customers comply with the applicable Laws (including, but not limited to, appropriate policies, approval processes, training and monitoring);
to the best of its knowledge and belief, none of its assets or funds are or represent the proceeds or benefit of criminal activity;
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;
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
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

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

there is a material change in its ownership/control structure or route to market structure.
The information provided by the Customer in the BAT due diligence process (including but not limited to the external questionnaire response) is complete and accurate.

Trade Sanctions

1.2 The Customer represents, warrants and undertakes that:

neither it nor any of the Associated Parties is:
- currently a target of any Economic Sanctions; owned or controlled by one or more Economic Sanctions targets; or incorporated or resident in, or owned or controlled by the government of or acting on behalf of a High Risk Territory or Venezuela (collectively, “Restricted Persons”);
- aware of any circumstance, or has taken any action, directly or indirectly, that could result in a breach of any Economic Sanctions by the Customer, BAT and/or BAT's Affiliates;
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;
it will promptly notify BAT 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 against a country or person or the addition of an item or service to a list of sanctioned items or services under an applicable Economic Sanctions regime; and
following notification in accordance with clause [X.1.2(c)], it will work with BAT to agree, within a reasonable period, a practical solution to permit continuity of this Agreement in a manner that is compliant with Economic Sanctions.
If BAT is notified or becomes aware of circumstances under which the Customer or any Associated Parties has exposed or may, in BAT’s opinion, expose BAT 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 BAT requires, engage with BAT to agree a practical solution that is acceptable to BAT, taking into account its obligations under applicable laws.
[The goods are not delivered to BAT via transhipment through any High Risk Territory unless there is no other commercially viable alternative, and the Customer obtains an express consent from BAT for such transhipment and agrees to cooperate with BAT to ensure sanctions compliant conditions for the entire transaction.] [Drafting Note: this clause 1.2.3 is not required in the context of provision of services only. If removed, consider the consequential changes to clauses listed in following clauses.]

Indemnity

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

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.

Termination of Customer Relationships

1.6 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:

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

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.

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

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);
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;
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);
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;
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;
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
in the event that the Parties do not agree a practical solution relating to Economic Sanctions risks pursuant to clause [X.1.2(d) or X.1.2(e) above] within [10] Business Days of receipt of notification under clause [X.1.2(c)] or within [10] Business Days of BAT becoming aware of the risk referred to at clause [X.1.2(e)], or if BAT 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.

[Drafting note: include this clause if your contract term exceeds the periodic recertification requirement for the risk rating, including if it is a rolling / evergreen term. Ideally, the contract term would be aligned with the recertification period.] 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

"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" means the contracting BAT 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

“High Risk Territory” means Iran, Cuba, Crimea and Sevastopol, Syria, North Korea, the so-called Luhansk and Donetsk People's Republics

"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.

Supplier Code of Conduct

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