LEGAL

ANTI-BRIBERY, MONEY LAUNDERING, ANTI-TRUST, AND CORRUPT PRACTICES

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Arpin International Group, Inc. (“Arpin”) and all its subsidiaries and global affiliates (collectively referred to as the “Company”) is committed to promoting high standards of ethical business conduct and compliance with all applicable laws, rules, and regulations. As part of this commitment, it is the Company’s policy to comply with any and all applicable provisions of the U.S. Foreign Corrupt Practices Act of 1977, as amended (“FCPA”), the U.K. Bribery Act of 2010, as amended (“Bribery Act”), the U.S. Money Laundering Control Act of 1986, as amended, the OECD Convention on Combating Bribery of Foreign Public Officials, the Sherman Antitrust Act of 1890, as amended, the Clayton Antitrust Act of 1914, the Federal Trade Commission Act, as amended, and other such applicable laws (collectively, the “Anti-Corruption Laws”). Publications and links to the Anti-Corruption Laws can be found at https://www.justice.gov/criminal-fraud/fcpa-guidance, https://justice.gov/criminal/criminal-mlars, https://www.legislation.gov.uk, Convention on Combating Bribery of Foreign Public Officials in International Business Transactions-OECD, https://www.justice.gov/atr and https://www.ftc.gov.  All Company officers, employees, agents, representatives, and contractors worldwide including, but not limited to, individuals employed or contracted by or acting on behalf of the Company or any agent thereof are required to comply with this Policy and procedures developed by management to implement this Policy.

The Company has a zero-tolerance policy towards violations of the Anti-Corruption Laws. The Anti-Corruption Laws can impose severe penalties on perpetrators. For example, the FCPA imposes severe criminal penalties for any violation. A company can be fined up to $2 million per violation, or twice the amount of the benefit it sought to obtain, whichever is greater. Individuals can be imprisoned for up to 5 years and fined up to $100,000 per violation. The Company cannot pay fines imposed on individuals. In addition, the FCPA provides for the imposition of civil penalties on individuals of up to $10,000 per violation. Under the Bribery Act, an individual can be fined an unlimited amount and imprisoned for up to 10 years. Perpetrators shall be responsible for their actions and shall hold harmless and defend the Company from and against any violations thereof of the Anti-Corruption Laws.

ANTI-BRIBERY/CORRUPTION – PROHIBITED CONDUCT

All Company officers, employees, agents, and representatives are prohibited from, either directly or indirectly: (1) offering, requesting or receiving a bribe from any individual or entity, whether public or private; and (2) giving, offering, or authorizing the offer or giving of anything of value (such as money, goods or a service) in order to obtain or retain business, direct business to any person, receive an improper advantage, or influence any act or decision of, any of the following:

  • Any government official or employee (including state-owned enterprises);
  • Any person or firm employed by or acting for or on behalf of any government;
  • Any political party (or party official) or candidate for political office (or party position);
  • Any officer or employee of public international organizations (e.g., United Nations); or
  • Any family member or other representative of any of the above.

All Company officers, employees, and agents must also require sales representatives, agents, distributors, dealers, consultants, and any other person or firm acting on behalf of the Company to refrain from the foregoing, to represent the Company in accordance with this Policy, and to be aware of and obey the Anti-Corruption Laws.

Prohibited conduct includes:

  • Offering, paying, requesting, or receiving a bribe;
  • An offer or promise to make a payment or gift;
  • Payments or gifts to third parties, such as distributors or consultants, where the Company employee knows or believes there is a high likelihood that at least a portion of the payments or gifts will be offered by the third party to a government official, or the circumstances indicate there is a high likelihood of such payments or gifts;
  • Payments to third parties, including charities, hospitals, and relief funds, made at the direction of or for the benefit of a government official;
  • Acts “in furtherance of” an improper payment, such as arranging for funds to be available for the improper payment;
  • Payments to retain assets, such as an “under the table” payment to a tax official to settle a tax claim; and
  • “Facilitating payments”, or payments made for the purpose of facilitating or expediting routine, lawful services or non-discretionary administrative actions.

Additionally, Arpin is a signatory to the FIDI Anti-Bribery and Anti-Corruption Charter (https://www.fidi.org/about-fidi/fidis-commitments/anti-bribery-and-anti-corruption-charter), and by agreeing and committing to the Charter, the Company undertakes to:

  • Never engage in any form of bribery, either directly or through any third party.
  • Never offer or make an improper payment or authorize an improper payment (cash or otherwise) to any individual, including any local or foreign official anywhere in the world.
  • Never attempt to induce an individual, or a local or foreign official to act illegally or improperly.
  • Never offer, or accept, money or anything of value, such as gifts, kickbacks, or commissions, in connection with the procurement of business or the award of a contract.
  • Never offer or give any gift or token of hospitality to any public employee, government official, or representative if there is any expectation or implication for a return favor.
  • Never accept any gift from any business partner if there is any suggestion that a return favor will be expected or implied.
  • Never facilitate payments to obtain a level of service to which one would not normally be entitled.
  • Never disregard or fail to report any indication of improper payments to the appropriate authorities.
  • Never induce or assist another individual to break any applicable law or regulation.

ANTI-BRIBERY/CORRUPTION COMPLIANCE GUIDELINES:

GIFTS, ENTERTAINMENT & PROMOTIONAL EXPENDITURES

All gifts to, entertainment of, and expenses related to promotional activities with government officials require prior written authorization from Arpin’s Compliance Department. Giving ordinary Company promotional materials that reflect the Company’s business and/or logo and are of a nominal value (e.g., shirts, office supplies) and providing modest refreshments on an occasional basis in connection with business activities do not require prior approval if they conform to the customs and laws of the official’s country.

In all cases, entertainment expenses must not exceed the amount permitted by the customs and laws of the official’s country. All gifts, entertainment, and other expenses for government officials must be modest, reasonable, paid directly to the providers, fully and accurately reflected in the Company’s books and records, and backed by receipts.

All improper payments, gifts, entertainment, or promotional expenses, regardless of their value, are prohibited. Gifts to government officials and employees of cash or items readily converted to cash (such as traveler’s checks, gift cards, or gambling chips at a casino) are prohibited under all circumstances.

TRAVEL & LODGING

Travel and lodging expenses that are modest, reasonable, and necessary under the circumstances, and that directly relate to the promotion, demonstration, or explanation of the Company’s products or services, may be paid for on behalf of government officials. In every case, the Company employee or officer should obtain advance written approval from Arpin’s Compliance Department for such expenses, and such expenses must not be contrary to the law of the foreign country. Payment for travel and expenses for spouses, family, or other guests of the officials and stipends or spending money are prohibited. All expenses must be properly and accurately recorded in the books and records and backed by receipts.

POLITICAL & CHARITABLE CONTRIBUTIONS

Any contribution of Company funds or other assets for political or charitable purposes must be approved in advance by Arpin’s Compliance Department. This does not prevent employees from taking part in political activities or making charitable contributions on their own behalf. However, officers and employees of Company must never give or offer, directly or indirectly, monies or anything of value (including goods or services) to any political party, party official, candidate for political office, or charitable organization of any country to influence or reward any governmental act or decision or to obtain any improper advantage. Even where not intended for an improper purpose, political contributions by the Company to U.S. federal, state, or local candidates may be prohibited or regulated under U.S. election laws. In addition, contributions by the Company to candidates in other countries may be prohibited or regulated by local law.

RED FLAGS

The following types of activities may involve FCPA violations. If you encounter one, please discuss it with Arpin’s Compliance Department before taking further action.

  • Payment is being made in a country with a widespread history of corruption – e.g., China, Russia, certain Middle Eastern, Eastern European, South American, African, and Asian countries (Transparency International publishes an annual corruption perceptions index available online at http://www.transparency.org/cpi2015/).
  • Unusual payment patterns or financial arrangements, including payments to third parties or payments made to bank accounts outside the country.
  • Representative refuses to make FCPA-related certification.
  • Use of a shell or holding company that obscures ownership without a credible explanation.
  • A business reference who declines to respond to questions or who provides an evasive response.
  • Accusations of improper business practices or bribes (credible rumors or media reports, etc.).
  • Family or business relationship with the government or a government official.
  • Refusal to disclose officers, directors, owners, partners, or other principals.
  • Statements that a particular amount of money is needed to “get the business,” “make the necessary arrangements,” or comparable expressions.
  • Requests to receive commission or other payment before the award decision or other up-front payments.
  • Unusually high commissions, agents’ fees, or payments for goods or services.
  • Unusually high discounts for transactions involving representatives or other third-party intermediaries.
  • Lack of transparency in expenses and accounting records.
  • Apparent lack of qualifications or resources on the part of the representative to perform the services offered.
  • The representative or joint venture partner has been recommended by an official of the potential governmental customer.
  • Requests for payment or reimbursement of exorbitant travel and entertainment expenses or gifts for foreign officials.
  • Requests to be able to make agreements without the Company’s approval.
  • Requests that agreements or communications be kept secret.
  • Lack of standard invoices, including invoices that lack detail as to services performed, or other substantiation.
  • Checks drawn to “cash” or requests for payment in cash.

REPRESENTATIVES, PARTNERS, CONSULTANTS, SUPPLIERS, AGENTS AND OTHER THIRD PARTIES

Before hiring a representative (including a product representative, partner, consultant, distributor, agent, or other third parties) outside of the U.S., the supervisor must conduct appropriate due diligence before initiating a relationship with any such representative, which typically will include considering such factors as the representative’s qualifications for the position or task at issue, whether the representative has personal or professional ties to the government, the number and reputation of the representative’s clientele, its reputation with local bankers, clients, and other business associates, the reasonableness of its compensation, the absence of secret partners, and the existence of any “red flags.” Contracts with representatives outside of the U.S. must be in writing and must contain certain provisions approved by Arpin’s Compliance Department. The supervisor is responsible for monitoring and conducting continued due diligence on existing representatives to ensure that such representative has not and will not engage in any improper conduct. The Company must terminate contracts with any third party who is unwilling or unable to represent the Company in a manner consistent with this Policy.

ANTI-TRUST COMPLIANCE

Antitrust laws protect free and unrestricted competition between all players at all levels of the supply chain. In summary, antitrust laws prohibit agreements or concerted practices (such as a common understanding) that aim at or result in the restriction of competition, and the abuse of a dominant position. Essentially, this means Arpin must compete independently from other market players and must not coordinate its competitive behavior with other companies to try to avoid or reduce the rigors and uncertainty of a competitive marketplace. This covers both contacts with competitors and interactions with customers and suppliers. The most obvious examples of unlawful behavior are price fixing, market sharing, bid rigging, and exchanging confidential and commercially sensitive information between competitors. Company officers, employees, agents, and representatives are prohibited from, either directly or indirectly, engaging in such activities.

Trade associations provide a venue for market actors to legitimately meet and discuss industry trends and issues, such as legislation impacting their industry sector. However, trade associations also present an inherent risk of facilitating intentional or inadvertent illegal information exchanges or even cartels. All Company officers, employees, and other representatives must stay vigilant when attending trade associations to ensure there are no inadvertent breaches of antitrust laws. Passively listening to attendees engage in anti-competitive exchanges is sufficient to breach the law.

Employees must:

  • Seek management approval for all trade association memberships.
  • Ensure trade associations have an antitrust policy and guidelines in place.
  • Insist that a written agenda be circulated to participants well in advance of any trade association meeting and contact the Arpin Compliance Department in case of any potential antitrust concerns with the agenda in advance of attending the meeting.
  • Object to deviations from the agenda during the meeting and leave the meeting if any potential anticompetitive practices (price fixing, market sharing, etc.) are discussed.
  • Ensure that your objection and/or departure is/are properly recorded in the minutes of the meeting and contact Arpin’s Compliance Department.
  • Report immediately to Arpin’s Compliance Department any other incident in the environs of the meeting which could have antitrust law consequences.
  • Keep minutes of each such meeting.

The general principles of antitrust law apply also to Arpin’s relationships with its customers, agents, and other supply chain partners. Generally, such entities must be free to determine their commercial strategy independently.

Be advised that Arpin is also a signatory to the FIDI Anti-Trust Charter, which may be accessed at (https://www.fidi.org/fidi-anti-trust-charter-0) and is incorporated herein by reference.

RECORDS, REPORTING AND ENFORCEMENT

BOOKS AND RECORDS

The Company will maintain a system of financial and other internal controls and procedures designed to detect and prevent violations of the Anti-Corruption Laws. All payments must be clearly and accurately reflected in the financial records and reports of the Company. All employees are responsible for following the Company’s procedures for carrying out and reporting business transactions, including receipt of appropriate authorizations and following internal auditing controls. Company employees must maintain accurate records of all transactions—particularly those which relate in any way, directly or indirectly, to government officials.

REPORTING BREACHES OF THIS POLICY

If you are aware of a suspected or actual violation of this Policy by others, you have a responsibility to report it to your supervisor, Arpin’s Compliance Department, or the Human Resources Director. Whether you choose to speak with your supervisor, Arpin’s Compliance Department, or the Human Resources Director, you should do so without fear of any form of retaliation for any report of a possible violation of the Policy made in good faith. We will take prompt disciplinary action against any employee who retaliates against you, up to and including termination of employment. Please note, however, that any report of a possible violation must be made in good faith. If you make a report of a possible violation without a good faith belief that a violation of the Policy may have occurred, then you will not be protected against retaliation and may be subject to disciplinary action.

CERTIFICATION AND ENFORCEMENT

From time to time, Company personnel may be required to complete Anti-Corruption Laws training and sign a certification acknowledging commitment to, the full understanding of, and compliance with this Policy. The acknowledgment statement shall be included in the personnel file of each such employee. Any Company personnel who violate this Policy or who fails to make or falsify any certification required under this Policy may be subject to disciplinary action, up to and including termination of employment or of the business relationship. Should you have any questions or concerns regarding this Policy, please do not hesitate to contact Arpin’s Compliance Department at compliance@arpinintl.com or any local Arpin office. Please visit www.arpinintl.com to locate the nearest Arpin office.