codeofconduct

QA7I have received an email from an industry trade publication asking meto submit historical sales data for my facility. Is it acceptable for me toprovide the information?Any current, future or historical competitive information such as pricing,revenues, costs, capacity, sales or downtime must be approved byLegal in advance. No release of information about future pricing oroutput will be approved as this may reduce competition if otherproducers have access to our future plans in the market.

Chapter 7.3Business InducementsSales-related commissions, rebates, discounts, credits and allowancesare customary business inducements, but careful attention is needed toavoid illegal or unethical payments and to ensure compliance withvarious currency exchange controls and tax regulations. Such businessinducement payments must be reasonable in value, competitivelyjustified, properly documented and made to the business entity towhom the original sales agreement or invoice was made or issued.They must not be made to individual officers, employees or agents ofthe business entity, or to a related business entity, and they should onlybe made in the country of the entity’s place of business.Similarly, commission payments related to company purchases ofgoods and services should only be made to the seller or provider in thecountry of their place of business, or in the country in which theproduct was delivered or service rendered.

Chapter 7.4Marketing and AdvertisingMany of the legal jurisdictions in which our company operates haveenacted laws and regulations that apply to marketing, advertising andother promotional materials, and methods to use these materials forpromoting the sale of goods and services. We refer to these collectivelyas “promotional activities.” These laws generally pertain to the truthand accuracy of representations to the public about products andservices the company offers. They may also cover practices forcomparative claims to competitor products or services, deceptivepractices, standards of decency, and requirements to protect theprivacy of individuals or personal data. The laws and regulatorypractices cover a wide range of representations in any format —written, printed, visual, audio or electronic.You must ensure that promotional activities are managed incompliance with applicable laws and that promotional activities donot contain: False or misleading statements or exaggerations, either visual or verbal. Inaccurate testimonials that do not reflect the real opinion of the individuals involved. Comparisons that unfairly disparage a competitive product or service. Material that could be considered offensive to the potential audience.You must also ensure performance claims or other product claims inpromotional activities are approved by appropriately substantiating anddocumenting the claims prior to being released outside the company.As always, our company’s intellectual property must be protected andthe intellectual property rights of others respected.Tag_Set_A

Chapter 7.5Anti-money Laundering LawsMoney laundering is the process by which the proceeds of illegalactivities are moved through legitimate businesses and world bankingsystems to disguise their illegal source. Anti-money laundering internalcontrols are required to ensure that financial transactions are from alegitimate source and not involved in unlawful activities.The objective of our anti-money laundering internal controls is toensure that payments received by the company originate from ourcustomers’ bank accounts or from the bank accounts of the partiesrelated to the transaction and are not otherwise suspicious.Transactions that appear out of the ordinary, such as payments fromunknown sources or to unnamed accounts, cash payments, unusualterms for payment, requests for payments to an unconnected accountin a different name or country, urgent unexplained last minute changerequests, or using a bank account outside of the company’s place ofregistration are all warning signs that should be resolved beforeaccepting funds.We must verify the source of funds and screen the identified source toensure the transaction is legitimate. This can include obtainingbackground information, particularly with respect to the source ofincome, expected level of activity and the reason for the activity.

Chapter 7.6Customs LawsCustoms laws require the company to determine the correctclassification, value and country of origin of all of its imports. Theselaws apply to intra-company transfers as well as third-partytransactions. As an importer, we must be able to demonstrate by adocumented, auditable trail that the company exercised reasonablecare in ensuring that its imports comply with all applicable laws. Thisrequires, at a minimum, the reporting of accurate and completeinformation regarding any imported item, its tariff classification, countryof origin and customs value. Regulatory obligations may differ basedon the facts and circumstances of each transaction. Virtually allcountries in which we do business share these requirements.

Chapter 7.7Export Controls and Trade SanctionsMany countries, including the U.S., have export controls and tradesanctions that restrict economic activities with specific countries,individuals and entities, and limit the export or re-export of specificitems and technologies. This may be for national security, non-proliferation, drug enforcement and general foreign policy reasons.Regulatory obligations may differ based on the facts andcircumstances of each transaction. Certain U.S. laws prohibit or limitU.S. persons and companies, including their foreign subsidiaries insome cases, from conducting business with sanctioned countries,individuals and entities.All counterparties to transactions must be screened to ensurecompliance with these laws.

Chapter 7.8Commodity and Derivatives TransactionsCommodity and derivatives transactions are defined as the purchase orsale of physical commodities or commodity derivatives, includingfutures, swaps and options. Such transactions are increasingly subjectto comprehensive local regulations, even in the case of certain physicalforwards. A single transaction involving counterparties or activities incertain jurisdictions may subject the company to regulation there.  Pre-transaction due diligence is therefore key to ongoing compliance.Reporting prices to anyone external for commodity or derivativestransactions is governed both by commodity and antitrust laws, as wellas company standards. You may not report prices to any external partyunless you have received the appropriate training or guidance and havebeen given specific authority to do so.Tag_Set_M

Chapter 7.9Anti-boycott LawsOur company conducts business in many countries. Some of thesecountries participate in an international boycott of another country,which the U.S. does not support. In those situations, most prominentlyregarding the Arab League boycott of Israel, the U.S. prohibits U.S.persons from participation in such boycotts and imposes tax penaltieson U.S. persons whose foreign subsidiaries participate in suchboycotts.These laws and regulations are extremely complex and technical innature and require that employees review all commercial documents toensure that they do not contain any request to participate in a boycottnot sanctioned by the U.S. government, especially one involving theState of Israel or Israeli nationals. Commercial documents, such asletters of credit, vessel charters, purchase orders and general termsand conditions could contain prohibited boycott requests. Thecompany may have an obligation to report boycott requests to the U.S.government. All employees must immediately inform Legal of anyrequests received to engage in improper boycotting activity.

QA1May I provide a certificate of origin, required by my customer in theUnited Arab Emirates, confirming that none of the components in ourproducts to be supplied are of Israeli origin?This may be a violation of U.S. anti-boycott law if you provide suchconfirmation, called a “negative certification.” Such a request must bereported to the U.S. government. Anti-boycott laws are very complex.You must consult Legal if you receive such a request.

Index WordsAcceptable Electronic UsageAdvertisingAlcoholAnti-boycottAnti-corruptionAnti-money LaunderingAntitrustAnything of ValueAsking QuestionsBriberyBusiness RecordsCareful CommunicationChild LaborCollective BargainingCommissionCommodityCommunicationCompetitionCompetitorComputerConfidential InformationConflicts of InterestCopyrightCorrective ActionCountry of OriginCustomsData ProtectionDisciplineDiscriminationElectronic Communication ToolsEmail

Employee DisciplineEmployee PrivacyEmploymentEntertainmentEnvironmentEqual Employment OpportunityEthicalEthicsExportFacilitation PaymentForced LaborForeignGetting GuidanceGiftsGood FaithGovernmentGovernment OfficialGratuitiesGuideLineGuiding PrinciplesHarassmentHealth and SafetyImportsImproprietyInappropriate ContentInducementsInsider TradingIntegrityIntellectual PropertyInternetIntimidationInvestigationInvestment

JokesKickbackLobbyingMarketingMaterial, Non-public InformationMBMMediaMobile DeviceNon-public InformationNo-retaliation PolicyPatentsPersonal ActivitiesPersonal BusinessPersonal TradingPoliticalPrivacyProhibited SubstancesProprietary InformationRaising ConcernsRebatesRecordsRelativesRequests for InformationRetaliationRisk Management SystemSearchesSecuritiesSecuritySoftwareSolicitingState-owned EnterpriseStockSuppliers

TerminationThreatsTrade AssociationsTrade SanctionsTrade SecretsTrademarkViolenceVoice MailWages and Work HoursWeapons

Front CoverCode of Conduct 

Table of ContentsTable of ContentsPrefaceOur MBM® Guiding PrinciplesIntroductionHow the Code AppliesResponsibilities as EmployeesResponsibilities as Leaders Chapter One: Asking Questions, Raising Concerns and GettingGuidanceOptions for Asking Questions, Raising Concerns and Getting GuidanceNo-retaliation PolicyInternal Investigation of ReportsCorrective Action and Employee DisciplineMaking Decisions With IntegritySeven Element Risk Management SystemAudit and Assurance Chapter Two: Respect for OthersNon-discriminationProhibited HarassmentExpectations of EmployeesCommitment to Lawful Employment PracticesProhibited SubstancesWorkplace Non-violenceProhibition of WeaponsSearchesPrivacy and Data Protection Chapter Three: Proper Use of Assets and IdeasCareful Communication

Privacy ExpectationsAcceptable Electronic UsageOffensive or Harassing CommunicationsElectronic Data and Systems Security ExpectationsUse of Non-company-provided TechnologySecurity and Proper Use of Company PropertyIntellectual Property and Confidential InformationProtecting the Company’s Intellectual PropertyTrademark UsePatents and Trade SecretsOthers’ Patents and Trade SecretsCorporate-developed Software Applications, Code and DocumentationProper Use of Others’ Intellectual PropertyOther’s Confidential and Proprietary InformationCopyrightSoftware License AgreementsCopying, Using or Distributing Unauthorized SoftwareManaging Company Records and InformationAccurate Business RecordsOutside Requests for Information Chapter Four: Personal and Business IntegrityAvoiding Conflicts of InterestGifts, Gratuities and EntertainmentResolving Conflicts of InterestInsider and Personal Trading Chapter Five: Environmental, Health and Safety Excellence Chapter Six: Interactions with the GovernmentInteractions with the GovernmentGovernment Submittals and CommunicationsGovernment Contracts

Political InvolvementLobbying (Advocating Government Policy) Chapter Seven: Conducting Commercial Activity Lawfully and withIntegrityAnti-corruption and Commercial BriberyAntitrust and Competition LawsBusiness InducementsMarketing and AdvertisingAnti-money Laundering LawsCustoms LawsExport Controls and Trade SanctionsCommodity and Derivatives TransactionsAnti-boycott LawsIndex

Back CoverThis is the optional pageThe Code of Conduct cover features a world in motion, symbolizing thechanging and often unstable and uncertain nature of global business.Clarity increases near an arrow that points north, signifying the Code’srole in creating consistency and stability to achieve Koch Industries’vision. The steady band of Koch companies, centered within theillustration, represents our shared commitment to conduct business inan ethical and compliant manner everywhere we operate.  ©2017 Koch Industries, Inc.