Anti-Corruption Policy

Introduction and Purpose

Targray Group Ltd. and its global subsidiaries and affiliates (collectively, “Targray” or the “Company“) is committed to full compliance with all applicable laws relating to improper payments to public officials or other persons such as contractors, suppliers, or the employees and agents of such persons. These laws include the Criminal Code of Canada, the Corruption of Foreign Public Officials Act (Canada) (“CFPOA“) and the U.S. Foreign Corrupt Practices Act (“FCPA“) and the domestic laws of any jurisdictions in which the Corporation operates (“Anti-Corruption Laws”), as well as the principles and best practices promoted under the OECD Anti-Bribery Convention.

The purpose of this Anti-Corruption Policy (“Policy“) is to provide guidance to ensure that any and all persons acting on behalf of Targray conduct business in an honest and ethical manner, reflecting the highest standards of integrity.

Application

This Policy applies to all directors, officers, employees and other representatives (“Personnel“) of Targray. Failure to comply with the Policy will result in disciplinary action, up to and including for cause termination of employment.

Any agents, distributors or other representatives who transact business at the behest or on behalf of Targray shall be given a copy of and shall abide by this Policy. An agent or representative may be exempted from this requirement if the Chief Compliance Officer is satisfied that the agent or representative has implemented and abides by its own equivalent anti-corruption policy.

Any contractors, intermediaries, local sales agents or other third-party representatives engaged by Targray may be required, at the discretion of the Legal Department and as a condition of their engagement, to sign an acknowledgement in a form approved by the Legal Department. This acknowledgement shall indicate that the representative has been made aware of and will comply with this Policy in relation to their work on behalf of Targray. Alternatively, anti-corruption provisions approved by the Legal Department shall be included in the contract executed with the representative.

Administration of Policy

The Policy will be administered by Targray’s Legal Department, as well any designees. For questions relating to this Policy please contact Targray’s Legal Department at legal@targray.com

Requirements of the Anti-Corruption Laws

Anti-Corruption Laws impose restrictions on bribery and corruption, as well as accounting and recordkeeping requirements in connection with Targray’s domestic and foreign business activities. In particular:

Prohibited Conduct

It is prohibited to give or offer, or agree to give or offer, anything of value[1] to a public official of any country or jurisdiction, as consideration for an act or omission by the official, or to use his or her position to improperly influence any acts or decisions of a government or public international organization, in order to obtain or retain a business advantage for the Company.

An “offer” of something of value includes a loan, reward, advantage or benefit of any kind, even if it is not directly financial, including for example favours, introductions, offers of employment or internships. A bribe can be offered to a public official either directly or indirectly and can still constitute an offence if the offer is made to or through a representative, associate or family member of the public official. The restrictions apply to all payments or offers regardless of value.

 

 

Public Officials

The following public officials are included in this prohibition:

  • Any foreign official, which means any officer or employee of a foreign government or member of its armed forces or any department, agency, or instrumentality thereof,[2] or any person acting in an official capacity for or on behalf of any such government or department, agency or instrumentality;
  • Any officer or employee of an enterprise owned or controlled by a foreign government (commonly referred to as State-Owned Enterprises);
  • Any foreign political party or official thereof or any candidate for foreign political office;
  • Any officer, director or employee of a public international organization (e., an organization formed by two or more foreign governments and designated as such by Presidential Executive Order, e.g., the World Trade Organization, the European Union or the Organization for Economic Cooperation and Development); and
  • Any person (including any consultant), while knowing (or being aware of a high probability) that all or a portion of such money or thing of value will be offered, given or promised, directly or indirectly, to any foreign official, any foreign political party or official thereof, or any candidate for foreign political office.

 

[1] The prohibition against payments to public officials extends to the offering or giving of anything of value where criminal intent and business purpose are present. The thing of value given can be of any kind, not just money, and there is no minimum amount or threshold of value that must be exceeded before the gift becomes illegal.

[2] The term “government instrumentality” should be broadly construed to include entities wholly or partially owned by foreign governments and specially chartered private corporations entrusted with quasi-governmental functions.

False Records

It is an offense to create or maintain false records to cover up evidence of corrupt payments or offers to public officials, such as by:

  • establishing or maintaining accounts that do not appear in any books and records required to be kept in accordance with applicable accounting and auditing standards,
  • making transactions not recorded in those books and records or that are inadequately identified in them,
  • recording non-existent expenditures,
  • entering liabilities with incorrect identification of their object in those books and records,
  • knowingly using false documents, or
  • intentionally destroying accounting books and records earlier than permitted by law.

The Company will maintain accounting and record keeping controls that prevent the use of “slush funds” and “off-the-books” accounts as a means of facilitating and concealing questionable foreign payments. In particular, the Company must establish and keep accurate books, records and accounts that “accurately and fairly” reflect in reasonable detail its transactions and disposition of its assets. For these purposes, the term “records” includes items such as commission and subcontractor agreements and invoices from vendors.  The term “reasonable detail” is defined as the level of detail that would “satisfy prudent officials in the conduct of their own affairs.”  The Company must also devise and maintain an adequate system of internal accounting controls sufficient to assure management’s control, authority, and responsibility over the Company’s assets.

Sufficient detail must especially be provided when handling: (i) commissions or royalties; (ii) consulting fees; (iii) sales and marketing expenses; (iv) scientific incentives or studies; (v) travel and entertainment expenses; (vi) rebates or discounts; (vii) after sales service fees; (viii) miscellaneous expenses; (ix) petty cash withdrawals; (x) intercompany accounts; (xi) supplier/vendors payments; and (xii) write-offs.

Red Flags

The following is a list of examples of red flags of possible corruption, bribery or false records efforts:

  • Unusual or convoluted payment patterns or financial arrangements, including requests that payments be made to third countries;
  • Unusually high commissions;
  • Over-invoicing (e., an agent asks that a check be cut for more than the actual amount of expenses) or invoices that lack specificity in terms of the services provided;
  • Requests that checks be made out to “cash” or “bearer,” that payments be made in cash, or that bills be paid in some other anonymous form;
  • Lack of transparency in expenses and accounting records;
  • Requests for unusual bonuses, extraordinary payments, or substantial upfront payment;
  • Apparent lack of qualifications or resources on the part of a person to perform services offered;
  • Recommendation by a potential government customer of a person or a company to perform services;
  • A sales agent has family or business ties with a government official;
  • A person requires that his or her – or their company’s – identity not be disclosed;
  • Any odd request that reasonably arouses suspicion (g., requests that certain invoices be backdated or altered may warrant further investigation by the company);
  • A person or company’s “bad reputation”;
  • A history of corruption in a particular country or industry; and
  • A person’s refusal to certify that he or she will not take any action in furtherance of an unlawful offer, promise, or payment to a foreign public official, or that he or she will not take any action that would cause the company to be in violation of anti-bribery or anti-corruption laws.

Intermediaries

Bribes can be made indirectly through intermediaries, meaning that actions by third party representatives or agents can implicate Targray in a corruption offence. The required “knowledge” of the offence can be present even where a company had no actual knowledge of an improper offer or payment, in situations where a company has a conscious disregard or deliberate ignorance of facts that suggested an improper payment could occur. Company personnel must ensure transactions with third parties do not carry heightened risk of providing improper benefits and should ensure that any compensation provided to third parties is not structured in improper manner (as noted in the above red flags).

Before engaging any third-party representative on behalf of Targray or entering into any joint ventures or business partnerships, Personnel must consult with the Legal Department to assess corruption risk related to the engagement and conduct appropriate due diligence.  Further, it is Company policy to have written agreements with third parties.  Such an agreement may include provisions related to the services provided by the third party (e.g., scope of work, territory covered, applicable fees and expenses, etc.), but it must also include the terms and conditions to ensure that the third parties are in compliance with anti-bribery and anti-corruption laws applicable to it and Targray.  When working on behalf of the Company, all retained third-parties are required to comply with this anti-corruption policy.

Facilitation Payments

Facilitation payments, sometimes known as “grease” payments, are small value payments made to speed up a routine, non-discretionary government action, such as the issuance of a permit or license, processing of paperwork or visas, customs clearance, loading or unloading of cargo, etc. Facilitation payments are prohibited as bribes by most Anti-Corruption Laws. This Policy strictly prohibits the offer or payment of facilitation payments.

Permitted Payments

Payments or offers to public officials may be acceptable in certain circumstances:

  • Reasonable and Bona Fide Hospitality and Travel Expenditures. Anti-Corruption Laws do not prohibit payments that constitute a reasonable and bona fide expense incurred by or on behalf of a public official directly related to the promotion, demonstration, or explanation of products or services or the execution or performance of a contract or business with a government or public entity. Such expenditures may include expenses for reasonable business travel, meals and hospitality. All expenditures must be in accordance with customary business practices and professional courtesy, not excessive in the circumstances, and must not create a potential appearance of bias or conflict of interest. Personnel should consult with the Legal Department if in doubt about the appropriateness of any payments to public officials.
  • Risk to Health and Safety. If Company Personnel reasonably believe that not paying a request or demand for something of value would result in an imminent threat to their health or safety or the health or safety of any other person, then the payment may be made. This exception only applies to physical health or safety; threats to commercial or financial interests do not justify the payment of such requests. Any payment made under physical duress circumstances to a public official should be immediately reported to the Legal Department.

Gifts, Meals, Lodging and Entertainment Compliance

Company employees are permitted to provide certain benefits to customers and business partners if the benefits are directly related to the promotion or demonstration of the Company’s products and services or are necessary for the Company to fulfill its contractual obligations.  Although reasonable and bona fide promotional expenditures are permitted, it may be difficult to distinguish appropriate expenditures from those that are excessive.  All Company personnel must exercise good judgment and moderation when entertaining and providing travel and other expenses to customers and business partners. 

Company employees shall not be influenced by receiving favors nor shall they try to improperly influence others by providing favors.  Employees may only offer or accept reasonable meals and symbolic gifts which are appropriate under the circumstances or particular cultural customs, and they shall not accept or offer gifts, meals, or entertainment if such behavior could create the impression of improperly influencing the respective business relationship.  Further, the offering of such meals, gifts, or entertainment must be in conjunction with legitimate business meetings, conferences or events hosted or supported by the Company.  They may never be provided on a stand-alone basis.

Providing gifts to beneficiaries is a common practice in some countries.  However, it is possible that providing gifts to beneficiaries may violate local rules, regulations and laws.  Gifts should never be given if they could improperly influence or even appear to improperly influence the beneficiaries’ objective decision-making. Additionally, a gift must meet all of the following criteria:

  • The gift must be given in the name of Targray and not in the name of any individual Company employee.
  • The gift must not be cash or easily converted into cash (g., store gift certificates or gift cards).
  • The gift must be permitted under local law. As some countries are very strict as to the giving of gifts to government officials, and officials may be subject to dollar value limits or reporting requirements with respect to gifts or hospitality they receive. For example, Canada and its provinces and territories impose dollar value limits on gifts or hospitality that public officials may accept from any one source in a 12-month period, with limits ranging from CAD $150-$500, and in all cases the gifts or hospitality must be infrequent, of nominal value, within customary standards of courtesy or protocol, arise out of activities connected with official duties, and not compromise or appear to compromise the official’s integrity. You should verify the legality of the gift under local law and consult with the Legal Department.
  • The gift must be of a type customary or common in the recipient’s country, of reasonable value, and made at an appropriate time or season and in appropriate circumstances.
  • The gift must be made as a courtesy or token of regard or esteem, or in return for hospitality. Making gifts with the intention of influencing a third party in order to obtain a business advantage for the Company, or for any other corrupt purpose, is prohibited.
  • The gift must be given openly, rather than secretly. The gift should be for official use, rather than for the personal use of the recipient.
  • The entire transaction, including the value of the gift and the position of the recipient, must be accurately and completely recorded in the Company’s books and records.

 

Company employees, either directly or through third parties, may only pay appropriate travel expenses to the provider of the travel services (e.g., airline for tickets, hotel tor lodging, etc.).  Travel expenses must not be paid or reimbursed to public officials, except with the written pre-approval of the Legal Department.  Appropriate travel expenses may include: nonrefundable coach airfare, reasonable hotel accommodations, reasonable meals served during the course of the training or marketing event, and related ground transportation.  Prohibited travel and meal expenses include sightseeing, shopping, cash per diems, lavish meals or entertainment, food or accommodation expenses outside of the time period for the Company approved event, and expenses for a government official’s travel companion(s). Travel, lodging, meals, or other expenses of spouses, other family members, friends or other guests of beneficiaries also may not be paid or reimbursed by the Company.

Receipts, other supporting documentation, for gifts, travel, meals, lodging and entertainment must be collected and filed with your expense report.

Prohibition on Private Bribery

Other laws in Canada, the U.S., Europe and other jurisdictions also make it an offence to offer or pay bribes or kickbacks to private individuals or entities in certain circumstances (sometimes referred to as “secret commissions”). Personnel are prohibited under this Policy from making any promises, offers, or giving anything of value to any private party, including a customer, potential customer, supplier, or potential supplier, without first obtaining authorization from the Legal Department, or with the intention or appearance of improperly influencing the business decisions of the person.

Penalties

Individuals who violate the Anti-Corruption Laws, including by making or authorization payments on behalf of a corporate entity, may be subject to fines or imprisonment. An employer is not permitted to reimburse fines for corruption violations. Corporate entities can also face significant penalties for corruption violations committed by Personnel or representatives as well as reputational damage and other negative consequences such as debarment from government contracting. Convicted companies can also be subject to probation orders which require independent monitoring and ongoing reporting to law enforcement agencies.

Discipline and Termination

Personnel who violate any of the Applicable Anti-Corruption Laws or this Policy may have their employment terminated for cause or be requested to resign from the Board. Third party agents or representatives should similarly expect to have their contracts terminated for cause if they violate the Applicable Anti-Corruption Laws or this Policy. Targray will actively seek to recoup any losses which it suffers as a result of a violation of the applicable Anti-Corruption Laws from the individual or entity who carried out the prohibited activity.

Reporting Obligations

All Personnel and representatives are required to report any knowledge, awareness, or suspicion of a potential violation of this Policy or any applicable Anti-Corruption Laws by Targray or any of its Personnel, agents or representatives to the Legal Department at the coordinates listed below. Reports will be kept strictly confidential.

ethics@targray.com

Whistleblower Protection

Targray has zero tolerance for retaliation of any kind against any individual who in good faith makes inquiries or reports regarding, or participates in external or internal investigations of, a potential violation of this Policy, the CFPOA, FCPA or other applicable Anti-Corruption Laws by Targray or any of its Personnel or representatives.

All Personnel and representatives are encouraged to report any concerns or suspected violations through the procedures identified above but are not prohibited from reporting possible violations of federal law or regulation to any governmental agency or entity or from making other disclosures that are protected under whistleblower provisions of applicable law or regulation.

Questions and Further Information

Questions on issues related to this Policy or the applicable Anti-Corruption Laws should be directed to the Legal Department:

legal@targray.com

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