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Anti-bribery and corruption procedure

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 and any applicable local laws.

"Applicable BAT Policies"        means the BAT Supplier Code of Conduct, Standards of Business Conduct, Principles of Engagement and any other policies (including changes and additions) which BAT 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 enture/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.

"Company"                                meansParty contracting with BAT

"BAT"                                         means The JSC JV “UZBAT A.O.” or its Affiliate has entered  into an agreement with the COMPANY

"Parties"                                    meansBAT and the Contracting Company

1. Anti-Bribery and Corruption

 

1.1 Company 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 ("Corrupt Act"); or

(ii) breach any Applicable Laws or cause [BAT] or its Affiliates to breach any Applicable Laws.

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

                (c) to the best of its knowledge and belief, neither it nor any of its Associated Parties has:

(i) engaged in any Corrupt Act prior to the date of this Agreement;

(ii) been found by a court in any jurisdiction to have engaged in any Corrupt Act (or similar conduct);

(iii) admitted to having engaged in any Corrupt Act (or similar conduct); or

(iv) been investigated or been suspected in any jurisdiction of having engaged in any Corrupt Act (or similar conduct).

1.2 Company further agrees and undertakes:

(a) to notify [BAT] 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 BAT Policies in respect of its performance under this Agreement, and to notify [BAT] immediately should it learn or have reason to know of any potential breach of the Applicable BAT Policies by it or its Associated Parties;

(d) to take reasonable steps to ensure that its Associated Parties, and any sub-contractors or suppliers providing goods or services in connection with company’s provision of services to [BAT or its Affiliates] under this Agreement ("Sub-contractors"), are provided with a copy of and will comply with the principles contained in the Applicable BAT Policies;

(e) not to use any Sub-contractor without BAT’s prior written consent, such consent to be given at BAT’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 [BAT] reports on its activities under this Agreement, in such format and at such frequency, as may be reasonably requested by [BAT];

(g) to undertake any such anti-corruption training as [BAT] may reasonably require; and

(h) to notify [BAT] 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          BAT, 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 BAT Policies) and the accuracy of the Company’s invoicing of the charges payable by BAT under this Agreement. For the purpose of facilitating an audit under this clause, the Company shall provide to BAT (including its authorised employees), its authorised advisers and other representatives on request (at no cost to [BAT]):

(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 Third Party 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.

1.5           Save as disclosed in writing in advance to [BAT], neither Company nor any of its Associated Parties or anyone in their families are:

(i) Public Officials;

(ii) Associated Parties of a [Customer] or potential customer,]; or

(iii) 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 BAT 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 BAT Policies.

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

Investigation 

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

1.9              Following the issue of an Advice Letter, [BAT], where permitted by law, will investigate the suspected breach ("Investigation") and Company shall provide any information and assistance reasonably requested by [BAT] 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 [BAT].

1.10           Where [BAT] is not permitted by law to investigate the matter, it may terminate this Agreement forthwith.

1.11           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 [BAT’s] goods, products and services.]

1.12              Where [BAT] 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. [BAT] shall notify company of the date of termination in writing as soon as practicable.

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

Delay

1.14            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 [BAT] immediately of any such demands. Company and its Associated Parties will make no such payments unless an individual's personal safety is at risk.

1.7               [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.]

 

Supplier  Code of Conduct 

1.           FOREWORD

“At BAT, we have a long-standing commitment to operating to the highest standards of corporate conduct. Importantly, this approach covers both our own business operations and our  wider supply chain. Worldwide, we work with thousands of suppliers of direct materials (such as tobacco leaf, cigarette packaging and filter materials), indirect materials (such as machinery) and services (such as IT consultancy). While this Code of Conduct sets out the minimum standards  we expect of our suppliers, we also encourage them to strive  for continuous improvement within their own operations  and supply chains. We recognise the different circumstances and challenges our suppliers face and believe by working together we can raise standards, drive sustainable practices and create shared  value for all.”

Alan Davy, Group Operations Director

2. INTRODUCTION

BAT’s Standards of Business Conduct (SoBC) express the high standards of business integrity that we require from our companies and employees worldwide. This Supplier Code of Conduct 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 uphold international standards, including the United Nations (UN) Guiding Principles on Business and Human Rights and the Organisation for Economic Cooperation and Development (OECD) Guidelines for Multinational Enterprises.

3. SCOPE AND APPLICATION

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’). This requirement is incorporated into our contractual arrangements with suppliers.

In addition, suppliers should: 

•  Take steps to ensure that all their employees and contract workers 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, training and support.

•  Promote adherence to the requirements of this Code within their own supply chain by making it available to their own new and existing sub-suppliers (including farmers where relevant).

4. COMPLIANCE

We recognise that certain suppliers 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.

In the event of a non-compliance 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 suppliers otherwise demonstrate inadequate commitment, persistent inaction or a lack of improvement, we reserve the right to terminate the business relationship (and any contracts associated with it) with the supplier in question.

5. CONTACTING BAT

Any information that suppliers are required to report to BAT under this Code,  should be communicated to contact person / BAT contract manager.

6. LEGAL COMPLIANCE

We expect our suppliers to comply with all relevant laws and regulations, and to act in an ethical manner.

As such, suppliers must:

•  Comply with all applicable laws and regulations wherever they operate.

•  Promptly notify BAT of any criminal or civil legal actions brought against them.

•  Promptly notify BAT of any fines or administrative sanctions brought against them which relate in  any way to the requirements set out in this Code.

7. RESPECTING HUMAN RIGHTS

BAT is 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.

As such, 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 (but is  not limited to) their own workers and people working for their sub-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 employees and contract workers, we expect suppliers (at a minimum) to:

•  Provide equal opportunities to, and fair treatment of, all workers including migrant labour.

•  Work to eliminate any form of harassment and bullying within the workplace, whether it is of a sexual, verbal, non-verbal or physical nature.

•  Provide a safe working environment, adopt procedures to identify and address workplace health and safety risks, implement safe working practices, and provide (where relevant) appropriate personal protective equipment to prevent occupational injuries or illnesses.

•  Ensure operations are free from child labour. Specifically, not employing anyone under the age of 18 in any work in any capacity. In the case of child labour in farming, certain exceptions apply – as detailed in the box below. 

•  Ensure operations are free from exploitation of labour. Specifically, ensuring their operations are free from forced, bonded, involuntary, trafficked or unlawful migrant labour.

•  Ensure the right to freedom of association. Specifically, ensuring all workers are able (subject to applicable laws) to exercise their right to freedom of association and collective bargaining, including the right to be represented by recognised trade unions or other bona fide representatives.

Child labour in farming

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).

8.           ENVIRONMENTAL SUSTAINABILITY

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

As such, we expect suppliers to:

•  Identify, understand and actively work towards minimising their impacts on the natural environment. Where relevant, these include (but are not limited to) impacts relating to their emissions to air, water and land, use of materials, natural resource consumption and waste management practices.

•   Where practicable, manage, monitor and (where requested) provide available information  to BAT relating to their environmental performance.

•  Integrate environmental considerations into their product design and/or provision of services.

•  Provide BAT (where requested) with reasonable assistance as we seek to reduce the environmental impacts of our products and services.

9.           RESPONSIBLE MARKETING

We are committed to responsible marketing of all our products to adult consumers aged 18 or over. Our marketing is governed by BAT principles and standards appropriate to the product category, including International Marketing Principles for tobacco products, Vapour Products Marketing Principles and Snus Marketing Standards. These are available at www.bat.com/principles.

As such, we expect our suppliers, agents and third-parties to comply with:

• The relevant BAT 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.

10.          BUSINESS INTEGRITY

• 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:

•  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.

•  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 to BAT how it is being managed.

These provisions are not intended to prevent suppliers dealing with BAT’s 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 corrupt practices.

As such, suppliers must:

•  Never offer, promise or give any gift, payment or other benefit to any person (directly or indirectly),  to induce or reward improper conduct or illegitimately influence any decision by a public official to  their or BAT’s advantage.

•  Never solicit, accept or receive any gift, payment or other benefit from any person (directly  or indirectly) as a reward or inducement for improper conduct.

•  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 employee and/or contract worker.

•  Maintain effective controls to ensure that improper payments are not offered, made, solicited  or received by third parties on their or BAT’s behalf.

“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 payments made to smooth or speed up performance by an official  of a routine action to which the payer is already entitled.

• Gifts and entertainment

Offering and accepting business entertainment or gifts is perfectly acceptable when what is given is modest, reasonable, appropriate and lawful. However, suppliers must not offer or accept business entertainment where to do so would constitute, or would be perceived as constituting, corrupt activity.

As such:

•  Suppliers are expected to respect BAT’s policy on entertainment and gifts when doing business with  BAT companies and employees.

•  The exchange of entertainment and gifts is prohibited during any tender or competitive bidding process involving BAT.

•  Suppliers must not, through the provision of any gifts or hospitality, seek to influence any public official on BAT’s behalf by providing any advantage either to that official or to any person at his or her request or with his or her assent or acquiescence.

• Sanctions

Suppliers should ensure they conduct their business in compliance with all lawful international  sanctions regimes.

As such, suppliers must:

• Fully comply with all lawful sanctions regimes affecting their business.

•  Implement effective internal controls to minimise the risk of any non-compliance with relevant sanction regimes, including training and support for their employees and contract workers.

What are sanctions?

Sanctions, trade embargos, export control or other trade restrictions are political trade tools, mainly put in place by the US, the United Nations and the European Union, with the aim of changing the behaviour of the target country’s regimes, individuals or groups in a direction which will improve the situation in that country.

• Illicit trade

The fight against the illicit trade in tobacco is an important priority for BAT. So 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 illicit trade.

•  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 individuals suspected of involvement in illicit trade.

•  Collaborate with any official investigations into illicit trade in an active and constructive way.

Types of illicit tobacco products

- Counterfeit or fake: Unauthorised copies of branded products that have been manufactured without the knowledge or permission of the trade mark 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.

11. REPORTING CONCERNS

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

As such, suppliers must:

 •  Have effective procedures in place to enable their employees and contract workers, in confidence and without fear of reprisal, to ask questions, raise concerns and/or report suspected or actual breaches of the requirements of this Code – either to the supplier itself or directly to 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.

•  Report any suspected or actual breaches of the requirements of this Code to BAT as soon as they become aware of them through contact person / BAT contract manager.

12. COMPLIANCE MONITORING

BAT reserves the right to verify new and existing suppliers’ compliance to the requirements of this Code through internal and/or external assessment mechanisms.

As such, suppliers must:

• Provide all reasonable cooperation with any verification activity linked to this Code (whether carried out by BAT or by third parties engaged by BAT), including the granting of independent access to relevant personnel, sites, documentation and data.

• 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 BAT to try to identify mutually acceptable mechanisms for its safe and legitimate disclosure. 

13. FINAL REGULATIONS

13.1. The company undertakes to implement the Supplier code of Conduct in force in Uzbekistan and to ensure compliance with it by all officers and employees of THE Company.

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

13.3. The Company hereby irrevocably agrees and confirms that it will take all legally significant actions available to it to prevent the imposition of liability on UZBAT, and/or the presentation of claims to UzBAT by third parties including public authorities, arising out of negligent actions/omissions of the Company, including in the case of non-fulfillment by the Company of the terms of this Agreement. In addition, the Company shall be liable for any indirect, special, incidental or consequential damages (including loss of profits) incurred by UzBAT as a result of the Company's failure to comply with the terms of this Agreement.