AGCO Anti‐Corruption Compliance Program Manual
AGCO Corporation
Anti‐Corruption Compliance Program Policy Version: 2.2 October 30, 2010 Prepared by: Debra Kuper, Vice President, General Counsel & Corporate Secretary
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AGCO Anti‐Corruption Compliance Program Manual Dear Colleagues, AGCO strives to maintain the highest possible ethical standards. Throughout its worldwide operations, AGCO seeks to avoid even the appearance of impropriety in the actions of its directors, officers, employees and agents. Accordingly, the prohibitions and requirements of this AGCO International Anti‐ Corruption Policy and Compliance Manual are designed not merely to comply with the U.S. Foreign Corrupt Practices Act and other anti‐corruption laws, but to avoid even the appearance of questionable conduct in connection with AGCO. This Policy applies to all AGCO directors, officers and employees worldwide. This Policy generally applies to AGCO’s international agents, consultants, joint venture partners and any other third‐party Representatives when acting on AGCO’s behalf and are expected to comply with all applicable anti‐ corruption laws. This Policy contains standards of conduct and practices that must be followed in representing AGCO. Our success in this endeavor rests in the hands of our employees. All employees play a significant role in maintaining our high level of ethical behavior. You are required to read and understand the materials contained with this manual. If you have questions or concerns, it is an essential part of your job to obtain answers and consult with our Chief Ethics and Compliance Officer or Regional Ethics and Compliance Officers prior to engaging in any activity that may be improper. Remember, while it is important to sell and market our products and always meet the needs of our customers, it is more important to conduct our business in the most ethical and proper manner possible.
Regards,
Martin Richenhagen
Chairman, President and Chief Executive Officer
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Table of Contents TABLE OF CONTENTS ............................................................................................................................................4 AGCO ANTI-CORRUPTION POLICY ...................................................................................................................5 ANTI-CORRUPTION COMPLIANCE PROGRAM MANUAL ...........................................................................8 SECTION 1: INTRODUCTION ................................................................................................................................8 SECTION 2: ANTI-BRIBERY PROVISIONS.........................................................................................................8 2.1 2.2 2.3 2.4 2.5 2.6 2.7
PROHIBITED PAYMENTS ..............................................................................................................................8 THIRD PARTY DUE DILIGENCE ..................................................................................................................10 LIMITED EXCEPTIONS TO PROHIBITION ON PAYMENTS TO FOREIGN GOVERNMENT OFFICIALS ................10 CLAIMING GOVERNMENT-RELATED EXPENSES FOR QUALIFIED PROMOTIONAL ACTIVITIES ....................12 POLITICAL CONTRIBUTIONS ......................................................................................................................12 GIFTS RECEIVED FROM GOVERNMENT OFFICIALS ....................................................................................12 CONTROLS OVER RECRUITMENT ...............................................................................................................12
SECTION 3: COMPLIANCE .................................................................................................................................12 3.1 3.2 3.3 3.4 3.5 3.6 3.7
RESPONSIBILITY FOR COMPLIANCE ...........................................................................................................12 COMMUNICATION OF COMPLIANCE REQUIREMENTS .................................................................................12 VIOLATIONS AND NONCOMPLIANCE..........................................................................................................13 GLOBAL CODE OF CONDUCT .....................................................................................................................14 CERTIFICATION OF KNOWLEDGE AND FAMILIARITY WITH THE FCPA.......................................................14 COMPLIANCE AUDITING ............................................................................................................................14 3RD PARTY COMPLIANCE.............................................................................................................................14
SECTION 4: RECORD KEEPING & INTERNAL CONTROLS.......................................................................14 4.1 4.2 4.3 4.4
POLICY ......................................................................................................................................................14 TRANSPARENCY OF GOVERNMENT RELATED ACTIVITIES .........................................................................15 DOCUMENT MANAGEMENT .......................................................................................................................15 HIGH RISK SALES ......................................................................................................................................15
EXHIBIT A: FORM OF CERTIFICATE OF COMPLIANCE WITH FCPA FOR AGENTS AND CONSULTANTS .......................................................................................................................................................17 EXHIBIT B: HIGH RISK AREAS ..........................................................................................................................18 EXHIBIT C: GOVERNMENT EXPENSE CLAIM FORM .................................................................................23 EXHIBIT D: US DEPARTMENT OF JUSTICE RED FLAGS............................................................................25
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AGCO ANTI‐CORRUPTION POLICY Introduction Combating Corruption: AGCO is committed to the highest standards of ethical conduct. Throughout its global operations, AGCO seeks to avoid even the appearance of impropriety in the actions of its directors, officers, employees and agents. Accordingly, the prohibitions and requirements of this AGCO International Anti‐Corruption Policy (“Policy”) are designed not merely to comply with the U.S. Foreign Corrupt Practices Act (“FCPA”) and other anti‐corruption laws, but to avoid even the appearance of questionable conduct in connection with AGCO’s global business operations. AGCO’s Policy contains a number of important sections meant to prevent corruption and bribery from occurring in AGCO’s activities. Corruption undermines legitimate business activities, distorts competition, ruins reputations and exposes companies and individuals to risk. AGCO is against all forms of corruption and will make active and reasonable efforts to ensure that it does not occur in its business activities. Any real or apparent inconsistency between U.S. and foreign law must be referred to the Chief Ethics and Compliance Officer or Regional Ethics and Compliance Officers for resolution. This Policy is available to all employees on myAGCO.com.
Applicability: This Policy contains standards of conduct and practices that must be followed in representing AGCO before governmental authorities. This Policy applies to all AGCO directors, officers and employees worldwide (hereinafter collectively referred to as “Associates”). By written agreement, the Policy may also apply to AGCO’s distributors, international agents, consultants, joint venture partners and any other third‐party representatives who has or is likely to have contact with a foreign customer (including contact in the U.S.) and is retained to provide services on AGCO’s behalf directly related to obtaining, retaining, or facilitating business or business opportunities, in or with any foreign country or foreign firm (hereinafter collectively referred to as “Representatives”). AGCO recognizes that our Associates are citizens of many countries and that our operations are subject to many different laws, customs and cultures. As a global manufacturer, it is important to understand that the term “foreign,” as used in applicable laws and this Policy, may include any given country. You are responsible for complying with the national and local laws of the countries in which we operate.
AGCO International Anti‐Corruption Policies 1. Unlawful, Improper or Unethical Activities: The use of AGCO funds, assets or personnel for any unlawful, improper or unethical purpose is strictly prohibited. Associates and Representatives must conduct AGCO business in compliance with all applicable laws in the countries in which AGCO does business. Associates and Representatives must avoid any activity that might involve AGCO (either directly or indirectly) in any violation of the FCPA or other applicable anti‐corruption laws. 2. Payments to Foreign Government Officials are Prohibited: Associates and Representatives are prohibited from directly or indirectly making, promising, authorizing or offering anything of value to a government official on behalf of AGCO. Things of value include money, gifts and loans. The term “government official” applies broadly and includes employees of government‐owned or controlled entities, political parties, party officials and political candidates. October 2010 Version 2.2
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AGCO Anti‐Corruption Compliance Program Manual This prohibition shall apply in all circumstances except the following three limited situations. Depending on the circumstances, advance written approval from the Chief Ethics and Compliance Officer, Regional Ethics and Compliance Officers, or other designated official may be required prior to making any of the following payments: a) Facilitating Payments: Under very limited circumstances, AGCO Associates and Representatives may make payments of nominal amounts to ensure or speed the proper performance of a government official’s routine, non‐discretionary duties or actions. A facilitating payment may be made only if the Associate or Representative reasonably believes that refusal or failure to make such a payment may severely and adversely affect AGCO’s ability to do business in that country. Additionally, a facilitating payment must be: (a) customary in the country and legal under the laws applicable to the AGCO business concerned; (b) nominal in amount of value; (c) made to a low‐level government official; and (d) not in consideration of any improper action by the recipient or to influence any discretionary governmental action. b) Promotional Hospitality and Marketing Expenses: AGCO may pay for the reasonable cost of a foreign government official’s meals, lodging or travel if, and only if, the expenses are directly related to the promotion, demonstration or explanation of AGCO products or services, or the execution of a contract with a foreign government or agency thereof. Such promotional or marketing expenses must be bona fide and reasonable in light of routine business travel and entertainment. Payment must also be legal under the written laws, rules or regulations of the foreign country. c) Promotional Gifts: Promotional gifts of nominal value may be given as a courtesy, as a token of regard or esteem, in recognition of services rendered properly or to promote goodwill. Such gifts must be nominal in value and reasonable in light of customary gifts and generally should bear the trademark of AGCO or one of its products. 3. Political Contributions: This Policy prohibits contributions to candidates for foreign political office unless pre‐approved in writing by the Chief Ethics and Compliance Officer or Regional Compliance Officers. Associates and Representatives may not make political contributions, in cash or otherwise, through, or on behalf of, AGCO, without prior authorization noted above. 4. Record Keeping: Associates and Representatives must ensure that AGCO’s books and records and internal controls meet the highest moral, ethical and professional standards. Associates and Representatives must make and keep books, records and accounts that, in reasonable detail, accurately and fairly reflect all payments, expenses and transactions. All transactions and related expenses involving government officials must be recorded completely and accurately so that the purpose and amount of any such payment is clear. No undisclosed or unrecorded funds or assets of AGCO may be established for any purpose. False, misleading or artificial entries must never be made in the books and records of AGCO for any reason. 5. Gifts Received from Government Officials: Associates must not, directly or indirectly, accept gifts from government officials. If, under extraordinary circumstances (e.g., diplomatic protocol, ceremonial recognition), where it would clearly give offense to refuse and it is not practical for the Associate to reject or return a gift, the gift must be turned over promptly to the Company, regardless of its nature or value and will be regarded as AGCO property.
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AGCO Anti‐Corruption Compliance Program Manual 6. Cash Payments: Cash payments of any kind to a third party, other than documented petty cash disbursements or other valid and approved payments, are strictly prohibited. Company checks shall not be written to “cash,” “bearer” or anyone other than the party entitled to payment except to replenish properly used petty cash funds. 7. Representatives: Representatives must fully comply with the FCPA and all other applicable laws. Under certain circumstances, a due diligence review may be undertaken to determine the Representative’s willingness to comply, and history of compliance, with the FCPA and other applicable laws. 8. Compliance: Associates must ensure that they are familiar with and perform their duties in accordance with the requirements set out in this Policy. Managers must ensure that all activities within their area of responsibility are carried out in accordance with the requirements set out in this Policy. Managers are responsible for communicating the requirements and for providing advice with respect to the interpretation and application of the Policy. Associates who violate this Policy are subject to disciplinary action, up to and including dismissal. Representatives who violate this Policy may be subject to termination of all commercial relationships with AGCO. Associates or Representatives who suspect this Policy may have been violated must immediately notify their supervisor, the Chief Ethics and Compliance Officer, Regional Ethics and Compliance Officers, or through the AGCO Ethics Hotline. Any person who, in good faith, reports suspected legal, ethical or policy violations will not suffer any adverse consequence for having done so. 9. Duty to Cooperate: There may be occasions where the company chooses to undertake a more detailed review of certain transactions. As part of these reviews, Associates and Representatives are obligated to cooperate with the AGCO representatives undertaking the review; this may also include outside legal counsel, outside forensic or accounting, or other similar parties. As part of this obligation you must provide these representatives with true and complete answers to any questions and provide them with any materials they may request under your control. Failure to cooperate in an internal review will be viewed as a serious breach of your obligations to the company and will be dealt with severely in accordance with any local laws or regulations.
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ANTI‐CORRUPTION COMPLIANCE PROGRAM MANUAL Section 1: Introduction AGCO and all of its subsidiaries and affiliates, employees, officers and directors and all persons or entities that act as a representative, agent or advisor to AGCO (collectively, “AGCO”) must fully comply with the FCPA, as well as the national and local laws of the countries where AGCO operates. This Manual focuses primarily on the FCPA and is divided generally into two components. The first component prohibits AGCO from providing a bribe to any foreign official to secure some improper action over that official’s actions. The second component requires AGCO to maintain accurate books and records and devise a system of internal accounting controls governing everyday financial transactions. AGCO’s management has prepared this Manual to provide specific guidance on the implementation and enforcement of AGCO’s Anti‐Corruption Policy. This Manual is not intended to be a substitute consulting with the Chief Ethics and Compliance Officer or Regional Ethics and Compliance Officers when you have questions regarding the substance of the Manual. All levels of management fully support the procedures outlined in this Manual and AGCO must follow these procedures. Non‐ compliance with anti‐corruption laws and regulations may not only expose AGCO to fines, penalties, and additional damages, but also expose individual employees, directors, officers and agents to criminal liability when acting on behalf of AGCO, whether or not AGCO itself is found liable for a violation. AGCO may also be liable for the acts of its employees, officers, directors or agents. Any conduct that violates either the Policy or this Manual will not be tolerated and could subject the offending employee to internal discipline, including termination. If there are any questions regarding the material in this Manual, you are obligated to consult with the Chief Ethics and Compliance Officer or Regional Ethics and Compliance Officers prior to moving forward with any transaction.
Section 2: Anti‐Bribery Provisions 2.1
Prohibited Payments
AGCO is prohibited from making improper payments to foreign public officials. While AGCO may lawfully interact with foreign public officials when conducting business, the FCPA establishes the acceptable level of conduct. The Anti‐Bribery provisions of the FCPA prohibit AGCO from paying, offering to pay, authorizing, or promising to pay money or give anything of value to a foreign government official for the purpose of influencing an official act in order to obtain, retain, or direct business to any person or gain an improper advantage.
A. Giving Money or Anything of Value Monetary payments to foreign government officials are prohibited. Giving anything of value in order to secure improper influence over official actions is also prohibited, with limited exceptions as defined in October 2010 Version 2.2
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AGCO Anti‐Corruption Compliance Program Manual 2.3 herein. The term “anything of value” is very broad, and includes: (1) cash payments, (2) gifts, benefits and favors, and (3) in certain circumstances, business expenditures such entertainment, free‐ trips, training, and other forms of non‐cash favors.
B. Foreign Officials The FCPA applies to any officer or employee of a foreign government (non‐U.S.) or any of its departments, agencies or instrumentalities, regardless of the person’s rank or position. Determining whether a person is a “foreign official” may be especially challenging in certain countries. Therefore, in deciding whether the recipient if a foreign official, the person’s status under local law is extremely important. In general, a foreign official is any officer, employee, agent or representative of: •
a government outside the United States or any department, agency or instrumentality thereof (this includes political parties or party officials, and political candidates);
•
a public international organization, such as the, International Monetary Fund, European Union, World Bank, International Finance Corporation, Inter‐American Development Bank, and government run utilities;
•
any person acting in an official capacity for or on behalf of any such government or department, agency or instrumentality, as described above;
•
any employee of any State‐owned or State‐controlled entity. An entity is State “owned or controlled” if the foreign government holds or controls, either directly or indirectly, a controlling interest or has effective ownership of the entity. In countries such as China and Vietnam, where the government owns or controls a significant percentage of all businesses, any employee of such State‐owned or controlled entities is a foreign official. The term “foreign official” also includes spouses and other immediate family members of foreign officials. Payments to dependents of officials are treated the same as payments made directly to the officials themselves, and are therefore, prohibited.
C. Covered Payments Any payment intended to (a) influence an official act or decision, (b) induce a foreign official to do or omit to do any act in violation of an official duty, (c) secure an improper advantage, or (d) induce a person to use his or her influence with a foreign government to affect any government act or decision is prohibited. For example, as highlighted in the following non‐exhaustive list of examples, AGCO Associates and Representatives may not give anything of value to foreign officials, directly or indirectly, to: •
Obtain preferential treatment in contract negotiations or unfair advantage in the bidding process;
•
Prevent some government action, such as the imposition of a tax or fine, or the cancellation of a contract or obligation;
•
Obtain a discretionary license or authorization, such as the right to import goods;
•
Affect the application of regulations to AGCO.
D. Offer, Payment, Promise or Authorization of a Payment and Payments to Third Parties AGCO may not offer, promise or make prohibited payments, directly or indirectly to any foreign official through an Associate, or by using a consultant, distributor, agent, sponsor, joint venture partner, or other third party knowing that the foreign official will be the ultimate beneficiary. Importantly, an October 2010 Version 2.2
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AGCO Anti‐Corruption Compliance Program Manual actual payment is not necessary to violate the FCPA. A mere offer, promise or authorization to pay an improper payment is enough to violate the FCPA. For example, the promise to pay a third party, while knowing that all or part of the payment will be offered or given to a foreign official, violates the FCPA to the same extent as an offer or payment made directly to the foreign official. Additionally, merely approving a bribe may subject AGCO to prosecution for authorizing the payment. AGCO may even be held responsible for improper payments by third parties without AGCO’s knowledge.
2.2
Third Party Due Diligence
It is often necessary for AGCO to partner with third parties in order to conduct business in certain countries. The use of third parties in any business transaction creates risk, as the third party may engage in prohibited conduct beyond AGCO’s immediate control. It is therefore essential that AGCO carefully choose its business partners. Subject to local laws, for all agreements with business partners such as agents, consultants, third party representatives, and majority owned joint venture partners, AGCO must conduct a due diligence investigation. Subject to any specific regional policies, such an investigation at a minimum will include a World Compliance Database check and may include a review of the third party’s reputation, beneficial ownership, professional capability and experience, financial standing and credibility. The investigation may also look at the history of compliance with applicable provisions of the FCPA or similar legislation in other countries, as well as take into consideration any criminal and/or financial improprieties and relationships with government entities. An important aspect of FCPA due diligence is recognition of certain “red flags” which may indicate a potential FCPA problem. A list of red flags as published by the US Department of Justice is attached as Exhibit D. The Chief Ethics and Compliance Officer, Regional Ethics and Compliance Officers or other designated officials are responsible for determining what information must be obtained and reviewing the final results prior to the engagement of any third parties. All dealings with third parties must also be monitored throughout the relationship for the presence of “red flags” (Exhibit D). Any unusual or suspicious activity must immediately be reported to a supervisor, the Chief Ethics and Compliance Officer or Regional Compliance Officers, or the AGCO Ethics Hotline. See Section 3.3. U.S. law also prohibits making payments to, or having business relationships with, individuals identified on the U.S. Department of Treasury’s List of Specially Designated Nationals and Blocked Persons (“SDN list”) and other relevant lists. To prevent payments to individuals or organizations which are on these lists or that have been identified by AGCO as organizations that AGCO will not do business with, all third parties should be screened using the World Compliance database. The SDN list can be found on the www.myAGCO.com or directly from the U.S. Department of Treasury website at http://www.treas.gov/offices/enforcement/ofac/sdn/. As part of the ongoing maintenance of AGCO’s vendor master databases, all new suppliers must be checked against the relevant lists before being entered into the master data files, and before AGCO enters into any activities that commit the business.
2.3
Limited Exceptions to Prohibition on Payments to Foreign Government Officials
As per the Policy, “AGCO Associates and Representatives are prohibited from directly or indirectly making, promising, authorizing or offering anything of value to a government official on behalf of AGCO.” There are, however, certain limited exceptions that only apply in limited circumstances: October 2010 Version 2.2
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A. Facilitating Payments AGCO Policy prohibits all facilitation payments, except in rare circumstances. Facilitation payments, sometimes known as “expediting” payments, to foreign officials are made to secure non‐discretionary, routine government action. Examples of such routine government actions include: •
Obtaining permits, licenses, or other official documents to qualify a person to do business in a foreign country;
•
Processing government papers, such as visas or work orders;
•
Providing police protection, mail pick‐up and delivery, or scheduling inspections associated with contract performance or inspections related to transit of goods across country;
•
Providing phone service, power and water supply, loading and unloading cargo, or protecting perishable products or commodities from deterioration; or
• Actions of similar nature. In the rare and exceptional circumstance when it is clear that a facilitation payment must be made, such payments may only be made after obtaining express written pre‐approval from the Chief Ethics and Compliance Officer. These rare and exceptional payments will only be considered if such payments are legal under the specific laws of the jurisdiction where the payment is intended to be made.
B. Promotional Hospitality and Marketing Expenses In very limited circumstances, AGCO may also pay for certain “promotional hospitality or marketing” expenses. AGCO may pay for the reasonable cost of a foreign public official’s meals, lodging or travel if: (1) the expenses are directly related to the promotion, demonstration or explanation of AGCO products and services, or the execution of a contract with the foreign government; and (2) the expenses are bona fide and reasonable in light of customary business travel and entertainment. Payment must also be legal under the written laws, rules or regulations of the foreign country. Payments for promotional hospitality and marketing expenses must be approved according to regional policies and procedures. The payments must also be accurately recorded in AGCO’s books and records as described below in Section 2.4.
C. Promotional Gifts In limited circumstances, it may be appropriate to provide promotional gifts as a courtesy, as a token of regard or esteem, in recognition of services rendered or to promote goodwill. All such gifts must comply with the following guidelines: •
Gifts must be of nominal value and given solely to increase brand recognition;
•
Bear the trademark of AGCO or one of its products;
•
Directly related to either promotion, demonstration or explanation of AGCO’s products or services;
•
Reasonable in light of customary gifts;
• Legal under the written laws, rules or regulations of the foreign country; Gifts must be approved according to regional policies and procedures. Additionally, any payments for promotional gifts must be accurately recorded in AGCO’s books and records as described below in Section 2.4.
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2.4
Claiming Government‐Related Expenses for Qualified Promotional Activities
When engaging in qualified pre‐approved promotional activities, described in section 2.3, expenses for government officials will only be reimbursed following completion of the Government Expense Claim Report (Exhibit C). A detailed description of the reason for the expense and the names and positions of the associated government official(s) must be included in the expense report. All expenses must also be coded to specific general ledger accounts described in Section 4.2. All expenses must be supported by a valid VAT receipt for those countries collecting VAT, except where no receipt can practicably be obtained (e.g. it is accepted that in certain countries taxi drivers are unable to produce receipts).
2.5
Political Contributions
AGCO Policy prohibits making contributions to candidates for foreign political office unless pre‐approved in writing by the Chief Ethics and Compliance Officer or Regional Ethics and Compliance Officers.
2.6
Gifts Received From Government Officials
All employees are prohibited from accepting gifts from government officials. If, under extraordinary circumstances (e.g., diplomatic protocol, ceremonial recognition), it is not practical for the Associate to reject or return a gift, the gift must be turned over promptly to the Chief Ethics and Compliance Officer or Regional Ethics and Compliance Officers regardless of its nature or value.
2.7
Controls Over Recruitment
Subject to compliance with local laws, a criminal background investigation should be undertaken for all prospective candidates at the level of director or above, as well as all prospective sales, marketing and finance employees. If permissible under relevant local law, employee applications should include written authorization by the prospective candidate granting AGCO permission to carry out such an investigation. Special attention must be made when hiring individuals with ties to a foreign government, in particular where the prospective candidate is related to a foreign government official. In situations where the hiring of an employee with ties to a foreign government official is possible, pre‐approval by the Chief Ethics and Compliance Officer or Regional Ethics and Compliance Officers is required prior to any offer of employment.
Section 3: Compliance 3.1
Responsibility for Compliance
The AGCO Board has directed the issuance and implementation of the Policy and Compliance Program described in this manual. AGCO senior management has overall responsibility, subject to Board oversight, for compliance with the AGCO International Anti‐Corruption Policy and the AGCO Anti‐ Corruption Compliance Program Manual. Responsibility for administration has been delegated to the Chief Ethics and Compliance Officer. In administering AGCO’s Anti‐Corruption Compliance Program, the Chief Ethics and Compliance Officer may utilize the assistance of qualified staff members, investigators, forensic accountants and outside legal counsel. The Chief Ethics and Compliance Officer and Regional Ethics and Compliance Officers have authority to terminate business transactions.
3.2
Communication of Compliance Requirements
Formal guidelines regarding the FCPA and anti‐corruption requirements have been established through the distribution of the Policy to all senior management worldwide. The Policy was translated into local languages where needed, and the Policy is available to all employees at www.MyAGCO.com. The AGCO October 2010 Version 2.2
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AGCO Anti‐Corruption Compliance Program Manual Code of Conduct has also been posted onto www.MyAGCO.com. Posters relating to information on the AGCO Ethics Hotline have been posted around each AGCO facility.
3.3
Violations and Noncompliance
AGCO is obligated to operate according to the highest possible standards of business conduct. Violations of these standards will not be tolerated. In accordance with AGCO's regulations and any applicable collective bargaining agreements, violations will result in one or more of the following, as appropriate: •
A warning
•
A reprimand (will be noted in individual's permanent personnel record)
•
Probation
•
Demotion
•
Temporary suspension
•
Discharge
•
Required reimbursement of losses or damages
• Referral for criminal prosecution or civil action Associates or Representatives who suspect the Policy may have been violated are obligated to immediately notify their supervisor, the Chief Ethics and Compliance Officer or Regional Compliance Officers, or contact the AGCO Ethics Hotline. Any person who, in good faith, reports suspected legal, ethical or policy violations will not suffer any adverse consequence for having done so. The current AGCO Ethics Hotline numbers are: USA 1‐866‐680‐3083 Argentina 0800‐666‐1596 Australia 800‐42‐2614 Brazil 0800‐891‐4045 Canada 866‐680‐3083 China 10‐800‐711‐0775 or 10‐800‐110‐0719 Denmark 80‐883496 Finland 0800‐1‐19069 France 0800‐90‐5440 Germany 0800‐182‐4842 Italy 800‐787258 Mexico 001‐866‐838‐4504 or 011‐866‐838‐4505 Netherland 0800‐022‐4643 Norway 800‐18836 Russia +1‐877‐861‐6684 Spain 900‐97‐1004 Sweden 020‐790222 U.K. 0800‐028‐1837 Postal: AGCO Chief Ethics and Compliance Officer 4205 River Green Parkway, Duluth, Georgia USA 30096 October 2010 Version 2.2
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3.4
Global Code of Conduct
The Policy and this Manual supplement the AGCO Corporation Global Code of Conduct adopted by the AGCO Board of Directors. All provisions of the Global Code of Conduct remain fully effective.
3.5
Certification of Knowledge and Familiarity with the FCPA
AGCO requires written certification of knowledge and familiarity with the FCPA and all of its provisions from relevant employees, directors, officers and agents. All majority owned joint ventures are required to complete AGCO’s Form of Certificate of Compliance with Foreign Corrupt Practices Act (Exhibit A). In certain high‐risk countries and for high‐risk sales as identified in Sections 4.4 and 4.5, commission agents, consultants and majority owned joint ventures may be required to undergo on‐line anti‐ corruption training. In addition, commission agents and consultants may also be required to complete AGCO’s Form of Certificate of Compliance with Foreign Corrupt Practices Act (Exhibit A). The Chief Ethics and Compliance Officer or Regional Compliance Officers will make any such determinations.
3.6
Compliance Auditing
AGCO Internal Audit will assist the Chief Ethics and Compliance Officer with enforcement of the Policy and Manual by: (1) routinely auditing risk management, internal control, corporate governance and other key business processes to establish effectiveness; (2) independently providing opinions as to whether risks are being managed to a level established by the Board; and (3) improving the risk management systems and internal control framework.
3.7
3rd party compliance
All new or amended standard distributor and dealer agreements shall contain language requiring compliance with the FCPA.
Section 4: Record Keeping & Internal Controls 4.1
Policy
The “books and records” provision of the FCPA requires AGCO to maintain “books, records and accounts, which, in reasonable detail, accurately and fairly reflect the transactions and dispositions” of AGCO’s assets. The FCPA also requires AGCO and majority owned joint ventures to devise a system of “internal controls” sufficient to provide reasonable assurances that: •
Transactions are executed in accordance with management’s general or specific authorization.
•
Transactions are recorded as necessary: a) To permit preparation of financial statements in conformity with generally accepted accounting principles or any other criteria applicable to such statements; and b) To maintain accountability for assets.
•
Access to assets is permitted only in accordance with management’s general or specific authorization.
•
The recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences.
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4.2
Transparency of Government Related Activities
General ledger and sub‐ledger accounts must specifically record all payments discussed in Section 2.3, once specifically authorized by the Chief Ethics and Compliance Officer or Regional Ethics and Compliance Officers. All government expenses are to be charged to the following accounts: •
Gov Travel
•
Gov Entertainment
•
Gov Gifts
• Gov Lobbying Financial controllers are responsible for ensuring that these accounts are maintained within each AGCO reporting entity, as well as the generation of a global quarterly report for review by the Chief Ethics and Compliance Officer and Regional Ethics and Compliance Officers.
4.3
Document Management
Key contract documents and approvals are to be retained, either in hardcopy or in secure electronic format, in line with AGCO’s regional and local record retention policies. Any changes to local retention policies or procedures must be reviewed by the Chief Ethics and Compliance Officer or Regional Ethics and Compliance Officers.
4.4
High Risk Sales
Some AGCO sales present higher risks than others. The following procedure is to be followed to ensure appropriate approvals are obtained prior to entering into a transaction:
a. Bids, Tenders and Direct Sales Checklist A Bids, Tenders and Direct Sales Checklist must be completed for all responses to Invitations to Tender (Bid) or requests for direct sales quotations. The Checklist has been designed to ensure that all responses are adequately evaluated and proper approvals have been obtained before a response is made. Decision Trees have been developed to help determine what approvals are required. Please consult your regional policies and procedures for copies of the Bids, Tenders and Direct Sales Checklist and the applicable Decision Trees.
b. Review of commission‐based expenditures Commissions to third parties involve a high degree of risk. Unusually high commissions or involving unusual payment mechanisms raise serious red flags and are considered high‐risk transactions. All commission payments are to be pre‐approved in accordance with the applicable decision tree. AGCO must also take all reasonable steps to determine how commissions paid to third parties are used beyond payment for services or approved invoices. Associates must ask for and maintain proper documentation regarding use of commission payments. October 2010 Version 2.2
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Periodic Review and Update of Procedures If you have any suggestions for improving the contents of this Manual or find any inaccuracies contact one of the following: •
Debra Kuper, Chief Ethics and Compliance Officer (+1 770 813 6094). Email: debra.kuper@ agcocorp.com
•
Roger Batkin, Regional Ethics and Compliance Officer for EAME/EAPAC (+44 2476 851 234). Email: roger.batkin@ agcocorp.com
•
Fábio Piva, Regional Ethics and Compliance Officer for South America (+55 11 5501 5685). Email:
[email protected]
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Exhibit A: Form of Certificate of Compliance with FCPA for Agents and Consultants The undersigned hereby certifies to [name of AGCO contracting legal entity to be inserted] (the “Company”) as follows: 1.
I am aware of the United States Foreign Corrupt Practices Act (“FCPA”) and I understand its prohibitions.
2.
I will comply fully with the FCPA.
3.
I have not, and will not, do any of the following:‐ a. Make or promise to make, an unlawful or improper payment to a public official; b. Take any action that furthers such an unlawful or improper payment; or c. Take any other action that would cause the company to violate the FCPA.
4.
I will comply with the laws of [local law of country of agent to be inserted].
5.
I am not an official or employee of the government or of any political party, and for the life of my agreement with the Company I will not become an official or employee of the government or of any political party.
6.
All fees and commissions I receive will be disclosed as required by the United States Government and the law of [local law of country of agent to be inserted].
7.
All payments received by me from any AGCO group company will be received in a currency agreed with AGCO at my usual place of business by [method of payment to be inserted].
8.
I understand that from time to time I will be required to certify as to the disposition of any funds I receive from the Company to ensure continued compliance with the FCPA.
Date ___________________
Address _____________________________ _____________________________
____________________________________ Name (Printed)
____________________________________ Title
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Exhibit B: High Risk Areas TRANSPERANCEY INTERNATIONAL CPI 2010 Corruption Perceptions Index
Explanatory notes CPI Score relates to perceptions of the degree of corruption as seen by business people and country analysts and ranges between 10 (highly clean) and 0 (highly corrupt). High Risk Country: AGCO defines a High-Risk Country as one having a CPI Score of 5.0 or less. Surveys used refer to the number of surveys that assessed a country's performance.
Country Rank
1 1 1 4 4 6 7 8 8 10 11 11 13 14 15 15 17 17 19 20 21 22 22 24 25 26
Country / Territory
Denmark New Zealand Singapore Finland Sweden Canada Netherlands Australia Switzerland Norway Iceland Luxembourg Hong Kong Ireland Austria Germany Barbados Japan Qatar United Kingdom Chile Belgium United States Uruguay France Estonia
CPI 2010 Score
Surveys Used
9.3 9.3 9.3 9.2 9.2 8.9 8.8 8.7 8.7 8.6 8.5 8.5 8.4 8.0 7.9 7.9 7.8 7.8 7.7 7.6 7.2 7.1 7.1 6.9 6.8 6.5
6 6 9 6 6 6 6 8 6 6 5 5 8 6 6 6 4 8 7 6 7 6 8 5 6 8
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Slovenia Cyprus United Arab Emirates Israel Spain Portugal Botswana Puerto Rico Taiwan Bhutan Malta Brunei Korea (South) Mauritius Costa Rica Oman Poland Dominica Cape Verde Lithuania Macau Bahrain Seychelles Hungary Jordan Saudi Arabia Czech Republic Kuwait South Africa Malaysia Namibia Turkey Latvia Slovakia Tunisia Croatia FYR Macedonia Ghana Samoa Rwanda Italy Georgia Brazil Cuba Montenegro Romania Bulgaria
6.4 6.3 6.3 6.1 6.1 6.0 5.8 5.8 5.8 5.7 5.6 5.5 5.4 5.4 5.3 5.3 5.3 5.2 5.1 5.0 5.0 4.9 4.8 4.7 4.7 4.7 4.6 4.5 4.5 4.4 4.4 4.4 4.3 4.3 4.3 4.1 4.1 4.1 4.1 4.0 3.9 3.8 3.7 3.7 3.7 3.7 3.6
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8 4 5 6 6 6 6 4 9 4 3 3 9 6 5 5 8 3 4 8 3 5 3 8 7 5 8 5 8 9 6 7 6 8 6 8 5 7 3 5 6 7 7 3 5 8 8
AGCO Anti‐Corruption Compliance Program Manual 73 73 73 73 78 78 78 78 78 78 78 85 85 87 87 87 87 91 91 91 91 91 91 91 98 98 98 101 101 101 101 105 105 105 105 105 110 110 110 110 110 110 116 116 116 116 116
El Salvador Panama Trinidad and Tobago Vanuatu China Colombia Greece Lesotho Peru Serbia Thailand Malawi Morocco Albania India Jamaica Liberia Bosnia and Herzegovina Djibouti Gambia Guatemala Kiribati Sri Lanka Swaziland Burkina Faso Egypt Mexico Dominican Republic Sao Tome and Principe Tonga Zambia Algeria Argentina Kazakhstan Moldova Senegal Benin Bolivia Gabon Indonesia Kosovo Solomon Islands Ethiopia Guyana Mali Mongolia Mozambique
3.6 3.6 3.6 3.6 3.5 3.5 3.5 3.5 3.5 3.5 3.5 3.4 3.4 3.3 3.3 3.3 3.3 3.2 3.2 3.2 3.2 3.2 3.2 3.2 3.1 3.1 3.1 3.0 3.0 3.0 3.0 2.9 2.9 2.9 2.9 2.9 2.8 2.8 2.8 2.8 2.8 2.8 2.7 2.7 2.7 2.7 2.7
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5 5 4 3 9 7 6 6 7 6 9 7 6 6 10 5 4 7 3 5 5 3 7 4 6 6 7 5 3 3 7 6 7 8 6 7 6 6 3 9 3 3 7 4 6 6 7
AGCO Anti‐Corruption Compliance Program Manual 116 116 123 123 123 123 127 127 127 127 127 127 127 134 134 134 134 134 134 134 134 134 143 143 143 146 146 146 146 146 146 146 146 154 154 154 154 154 154 154 154 154 154 164 164 164
Tanzania Vietnam Armenia Eritrea Madagascar Niger Belarus Ecuador Lebanon Nicaragua Syria Timor-Leste Uganda Azerbaijan Bangladesh Honduras Nigeria Philippines Sierra Leone Togo Ukraine Zimbabwe Maldives Mauritania Pakistan Cameroon Côte d´Ivoire Haiti Iran Libya Nepal Paraguay Yemen Cambodia Central African Republic Comoros Congo-Brazzaville Guinea-Bissau Kenya Laos Papua New Guinea Russia Tajikistan Democratic Republic of Congo Guinea Kyrgyzstan
2.7 2.7 2.6 2.6 2.6 2.6 2.5 2.5 2.5 2.5 2.5 2.5 2.5 2.4 2.4 2.4 2.4 2.4 2.4 2.4 2.4 2.4 2.3 2.3 2.3 2.2 2.2 2.2 2.2 2.2 2.2 2.2 2.2 2.1 2.1 2.1 2.1 2.1 2.1 2.1 2.1 2.1 2.1
7 9 7 4 6 4 3 5 4 6 5 5 7 7 7 6 7 9 5 4 8 7 3 6 7 7 7 3 4 6 6 5 4 9 4 3 5 3 7 4 5 8 7
2.0 2.0 2.0
4 5 7
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Venezuela Angola Equatorial Guinea Burundi Chad Sudan Turkmenistan Uzbekistan Iraq Afghanistan Myanmar Somalia
2.0 1.9 1.9 1.8 1.7 1.6 1.6 1.6 1.5 1.4 1.4 1.1
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Exhibit C: Government Expense Claim Form
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Exhibit D: US Department of Justice Red Flags
1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17.
18. 19. 20.
The contracting party has a history of improper practices. The transaction or the contracting party is in a country where there is widespread corruption. The transaction or the contracting party is in a country that has a history of bribes and kickbacks. The transaction or the contracting party is involved in or with an industry that has a history of FCPA violations. The contracting party refuses to agree to comply with FCPA. The contracting party has a family or business relationship with a government official. The contracting party has a poor business reputation. The contracting party insists that its identity remain confidential or refuses to divulge the identity of its owners. A government customer recommends or insists on use of a particular intermediary or consultant. The contracting party does not have an office or a staff. The contracting party does not have significant experience. The contracting party insists on unusual or suspicious contracting procedures. The fee or commission to be paid to the contracting party is unusually high. The payment mechanism to be utilized is secretive or unusual. The contracting party submits inflated or inaccurate invoices. The contracting party requests cash or bearer instrument payments. The contracting party requests payment in a jurisdiction outside its home country that has no relationship to the transaction or the entities involved in the transaction. The contracting party asks that a new customer be granted an excessive credit line. The contracting party requests unusual bonus or special payments. The contracting party requests an unusual advance payment.
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