Seaboard Code of Ethics

updated 2/1/2017

Code of Ethics Policy

The successful operation and reputation of Seaboard Corporation and its consolidated subsidiaries (collectively, the “Company”) depend upon the professional work performance and the ethical conduct of its directors, officers and employees. The Company’s reputation for integrity and excellence requires careful compliance with the spirit and letter of all laws and regulations, as well as a commitment to the highest standards of personal and professional conduct.

This organization was built by people with sound character and a long history of good commercial practices. There is an attitude of trust and respect between the Company and its customers, employees, business partners, suppliers, and shareholders. That trust and the Company’s reputation must be preserved and protected. Directors, officers and employees have a duty to support the goals and objectives of the Company, and to act in a way that will always merit the continued confidence of those who have placed a reliance on the Company.

Accordingly, the Company adopts the following Code of Ethics:

I. Honest and Ethical Conduct

Directors, officers and employees shall exhibit and promote the highest standards of honest and ethical conduct by:

  • Encouraging and rewarding professional integrity thereby eliminating coercion, fear of reprisal, or alienation from the Company itself, which can act as barriers and inhibit responsible and ethical behavior.
  • Avoiding, prohibiting and eliminating any conflict of interest or appearance of a conflict of interest between the Company and what could result in personal gain for a director, officer or employee of the Company, as defined in the attached Conflict of Interest policy.
  • Following a process for employees of the Company to inform senior management of practices which deviate from honest and ethical behavior.
  • Demonstrating their personal support for such policies and procedures.
  • Acting in the best interests of the Company in order to preserve the Company’s reputation as a professional company operating with integrity and good character.
II. Financial Records and Periodic Reports

Directors, officers and employees shall, to the extent applicable within the scope of their job functions, ensure that:

  • Business transactions are properly authorized and completely and accurately recorded on the Company’s books and records in accordance with Generally Accepted Accounting Principles (GAAP) and established Company financial policy.
  • The retention or proper disposal of Company records shall be in accordance with established Company policies and applicable legal and regulatory requirements.
  • Reports and documents the Company files with, or submits to, the Securities and Exchange Commission, or other mandated public communications and disclosures, contain full, fair, accurate, timely and understandable information.

 

III. Anti-Competitive Conduct

Directors, officers and employees shall not enter into any agreement, understanding or arrangement with any competitor about prices, territory restrictions, refusals to sell, allocation of business, or collaborative bidding, or engage in any other type of anti competitive practice in violation of applicable laws or regulations.

 

IV. Compliance with Applicable Laws, Rules and Regulations

Directors, officers and employees shall comply with applicable laws and regulations in the course of all conduct on behalf of the Company, including the United States Foreign Corrupt Practices Act (FCPA) of 1977.

 

V. Related Policies

In addition to the general policies above, the Company adopts the following additional conduct-related policies as part of the Code of Ethics:

  • Conflict of Interest and Confidentiality
  • Trading Seaboard Securities
  • Office of Foreign Asset Control (OFAC) Policy
  • U.S. Foreign Corrupt Practices Act (FCPA) Policy

These policies are attached. As a condition of employment, each employee of the Company must be familiar with these policies and agree to abide by their provisions. Violations of the content or spirit of this Code of Ethics and its related provisions are unacceptable and may lead to disciplinary action up to and including termination of employment or separation of ongoing business relationship with the Company.

 

VI. Reporting Violations

If anyone has knowledge of a violation of this Code, such person should report the matter to one or more of the following: the person’s immediate supervisor or the Company’s General Counsel. Alternatively, the matter may be reported online by visiting www.seaboard.ethicspoint.com; by calling the Company’s dedicated toll free number, 866-676-8886, for calls originating from the United States; or by calling the applicable phone number associated with the specific country, as set forth at the aforementioned website, for international calls.   Matters may also be emailed to SBD_Ethics@seaboardcorp.com.   The Company will not allow any retaliation against an employee who acts in good faith in reporting any such violation or suspected violation.

This Code of Ethics covers a wide range of business practices. It does not address every issue that may arise, but provides general guidance about the Company’s expectations of proper conduct and basic ethical and legal responsibilities. All subsidiaries of Seaboard Corporation shall adopt this Code of Ethics or a similar policy containing only such changes as are approved by Seaboard Corporation’s General Counsel. Any questions as to the meaning of any provisions of this Code of Ethics policy, or whether intended conduct is a violation of this policy, should be addressed to the Company’s General Counsel.

 

CONFLICT OF INTEREST AND CONFIDENTIALITY

Seaboard Corporation and its subsidiaries (collectively, the “Company”) require directors, officers and employees to conduct their non‑work activities in such a manner that they do not conflict with the best interests of the Company or detract from the performance of their responsibilities. Directors, officers and employees shall follow the general guidelines set forth below. The failure of any employee to adhere to these general guidelines may result in discipline, including termination of employment.

  1. Conflicts of Interest:

A. All directors, officers and employees of the Company shall not have, directly or indirectly, any financial or other interest in any entity which is a supplier or customer of the Company. The foregoing shall not prohibit the ownership of not more than one percent (1%) of the stock of any supplier or customer which is listed upon a national stock exchange or actively traded in the over‑the‑counter market.

B. Officers and employees shall not be employed by another entity, participate in self-employment, or serve another entity in any manner where such activity will require an excessive amount of time or materially interferes with the employee’s ability to perform his job function on behalf of the Company. Officers and employees whose job functions involve coordination with commercial institutions shall not conduct similar business with such institutions for such officer’s or employee’s own personal affairs or business.

C. All officers and employees shall be required to complete a form disclosing all known conflicts of interest and all board of director or officer positions held with trade associations or for-profit organizations. The Company may require a person with a conflict of interest to dispense with such activities or positions. The failure of any person to complete such form disclosing all known conflicts of interest or the failure to dispense with conflicts of interest, when requested by the Company, may result in discipline by the Company, including termination of employment.

  1. Personal Gain:

A. All of the business affairs of the Company with all parties, including government officials, suppliers, customers, unions and competitors, shall always be conducted on an ethical, legal and arm’s length basis.

B. Directors, officers and employees shall not accept material payments, gifts, or favorable business arrangements for the purpose of securing preferential consideration from the Company or as inducement to the Company to enter into any transaction. Examples of such prohibited conduct include taking material gifts, gratuities, favors, loans, guarantees of loans, commissions, excessive entertainment, kickbacks, rebates, and other types of financial inducements.

C. Common business practice permits the offer or acceptance of certain courtesies of nominal value, usually in the form of meals and entertainment, provided objectivity of the parties will not be unduly affected.

  1. Confidential Information:

A. It is vital that we protect the privacy of the Company’s confidential information. Confidential information includes proprietary, technical, business, financial, joint venture, customer and employee information that is not available publicly. It is the employee’s responsibility to know what information is confidential and to obtain clarification when in doubt. The failure of any employee to adhere to these general guidelines may result in discipline, including termination of employment and benefits arising from employment and legal action.

B. Employees must not disclose confidential information to any person outside of the Company, unless authorized to do so. This includes, as prohibited, any disclosure of confidential information to family and friends. Where confidential information is entrusted to persons outside of the Company, efforts must be made to ensure the continuing protection and confidentiality of that information. Within the Company, confidential information should be disclosed only on a “need to know” basis.

C. Employees must not use confidential information for unauthorized purposes. They must also take reasonable care to protect confidential information against loss, theft, unauthorized access, alteration or misuse.

D. Employees leaving the Company who have had access to Company confidential information will be reminded of their continuing responsibility to protect it and maintain its confidentiality. The Company expects that employees joining it from other companies will not disclose the confidential information to those companies.

 

POLICY WITH REGARD TO TRADING SEABOARD SECURITIES

1. In General
In the course of their employment with Seaboard Corporation or its subsidiaries (collectively, the “Company”), directors, officers and employees frequently come into possession of confidential and highly sensitive information concerning the Company, its customers, suppliers or other corporations with which the Company has contractual relationships or may be negotiating transactions. Much of this information has a potential for affecting the market price of securities issued by the corporations involved. Under some circumstances, federal securities law imposes potentially substantial civil and criminal penalties on persons who improperly obtain, use or provide material, non public information, in connection with a purchase or sale of securities.

Also keep in mind, the Securities and Exchange Commission (“SEC”) may seek substantial civil penalties from any person who, at the time of an insider trading violation, “directly or indirectly controlled the person who committed such violation,” i.e., an employer. As noted above, civil penalties for persons who control violators can equal the greater of $1,000,000 or three times the profit gained or losses avoided. Employers may also be subject to criminal penalties of $2,500,000 for insider trading violations committed by employees. Accordingly, when the maximum criminal penalty is combined with the maximum civil penalty, employers of persons who trade on the basis of insider information may be liable for up to $3,500,000 – even for employee violations that yield a small profit gained or loss avoided.

The statute provides that any “controlling person” may be liable for civil penalties up to the amount specified above if the controlling person both (i) knew or recklessly disregarded the fact that the employee was likely to engage in a violation; and (ii) failed to take appropriate steps to prevent that violation before it occurred. Moreover, in recent years, the SEC and governmental prosecutors have been vigorously enforcing the insider trading laws against both individuals and institutions.

Given all of these factors, the Company has determined to provide specific guidance concerning the propriety of various personal transactions, and to impose specific procedures in certain cases to attempt reasonably to ensure that neither the Company nor any of its directors, officers and employees violates insider trading laws.

2. Material Non Public Information
The federal securities laws and regulations have been held to prohibit the purchase or sale of a security at a time when the person trading in that security possesses material non public information concerning the issuer of the security, or the market for the security, which has not yet become a matter of general public knowledge and which has been obtained or is being used in breach of a duty to maintain the information in confidence. Whether the information is proprietary information about the Company or information that could have an impact on the Company’s stock price, employees must not pass the information on to others. The penalties discussed above apply, whether or not you derive any benefit from another’s actions.

“Material non public information” includes information that is not available to the public at large which could affect the market price of the security and to which a reasonable investor would attach importance in deciding whether to buy, sell, or retain the security. Examples of information that might be deemed material include the following: annual or quarterly financial results, dividend increases or decreases, the declaration of a stock split or the offering of additional securities, earnings estimates, changes in previously announced earnings estimates, significant expansion or curtailment of operations, a significant increase or decline in business, a significant merger or acquisition proposal or agreement, unusual borrowings or securities offerings, major litigation, impending bankruptcy or financial liquidity problems, significant changes in management, purchases or sales of substantial assets, or the gain or loss of a substantial customer or supplier. This list is not exhaustive. Other types of information may be material at any particular time, depending upon the circumstances. It should be noted that either positive or adverse information may be material.

Information is considered to be available to the public only when it has been released to the public through appropriate channels (e.g., by means of a press release or a statement from one of the Company’s senior officers) and enough time has elapsed to permit the investment market to absorb and evaluate the information. Once public release has occurred, information will normally be regarded as absorbed and evaluated within two or three days thereafter.

3. Company Policy
As long as an officer, director or employee has material non public information relating to the Company or any other issuer, including any of the Company’s customers, it is Company policy that the officer, director or employee may not directly or indirectly buy or sell the securities of the Company or any other affected issuer. Equally important, the information may not be passed along to others. This policy shall apply to officers, directors and employees of the Company or its subsidiaries and affiliates.

To avoid potential liability under this policy, all officers, directors and employees of the Company must not purchase or sell securities of the Company or of any other issuer of a security at a time when the officer, director or employee is aware of any material non public information about the Company or any issuer, regardless of how that information was obtained. The officer, director or employee also must not permit any member of his or her immediate family or anyone acting on his or her behalf, or anyone to whom he or she has disclosed the information, to purchase or sell such securities.

After the information has been publicly disclosed through appropriate channels, a reasonable time should be allowed to elapse (at least three business days) before trading in the security, to allow for public dissemination and evaluation of the information.

Without limiting the generality of the policy stated herein, no director or officer of the Company or its subsidiaries and affiliates, or other employee possessing material non-public information, may make any purchase or sale of securities of the Company (i) from the 25th day of the last month of each fiscal quarter until the beginning of the third business day after the public release of earnings for such quarter; (ii) from the time of the public release of any material information until the beginning of the third business day after such release; (iii) during any period when he or she is aware that the Company expects to make a public release of material information in the near future; and (iv) during any other period when he or she has knowledge of any “material inside information” concerning the Company.

4. Application of Policy to Family Members and Affiliates
The foregoing requirements also apply to any purchase or sale of securities of the Company by a family member or others sharing the same address or by a corporation, partnership, trust or other entity owned or controlled by a director, officer or employee.

5. Prohibition of Short-Sales
Federal securities laws prohibit any short sale or any short sale “against the box” of Company securities by any officers, directors or greater than ten percent shareholders. A short sale is the sale of a security either not owned by the seller, or if owned, not delivered (the so called short sale “against the box”), which involves the borrowing of shares by the seller’s broker for the account of the seller and delivery of the borrowed shares to the buying broker. At some point in the future, the short seller must purchase the securities to cover the short position. Because the short seller hopes that he or she will be able to purchase at a price lower than the price at which the short sale was made, a short seller expects a security to decline in market value from present levels. Since short sales can depress the price of securities, the Company requires that none of its officers, directors or employees ever make short sales of the Company’s securities (whether or not such short sales would be permitted under the federal securities laws).

6. Prohibited Practices
In addition, it is the Company’s policy that officers, directors and employees should not engage in any of the following activities with respect to the securities of the Company:

A. Trading in securities on a short term basis. Any security purchased must be held for a minimum of six (6) months before sale, unless the security is subject to forced sale, e.g., as a      consequence of merger or acquisition;
B. Purchases on margin without the prior, written consent of the Company after disclosure to the Company’s Board of Directors;
C. Short sales; or
D. Buying or selling put or call options.

 

OFFICE OF FOREIGN ASSET CONTROL (OFAC) POLICY

It is the policy of Seaboard Corporation and its subsidiaries (“Seaboard”) to comply with the laws of the United States, which includes rules and regulations of the Office of Foreign Asset Control, a division of the U.S. Treasury (“OFAC”). OFAC was created to enforce trade sanctions and achieve national security goals of the United States against targeted foreign countries and regimes, terrorists, international narcotics traffickers, those engaged in activities related to the proliferation of weapons of mass destruction, and other threats to the national security, foreign policy or economy of the United States. The OFAC regulations prohibit U.S. entities and their foreign branches, U.S. citizens, and any person regardless of citizenship located in the United States, from engaging in or facilitating transactions or making monetary transfers to certain designated countries and designated entities and persons listed on the OFAC list of Specially Designated Nationals and Block Entities (“OFAC SDN List”). The list includes numerous vessels listed by name, and chartering or placing cargo on such vessels is also forbidden.

Before engaging in or facilitating any foreign transaction or making any monetary transfer, the person responsible for the transaction shall review the OFAC SDN List to ensure that the counterparty(ies) to the transaction is not on the list. This search may be done by reviewing the OFAC SDN List and/or by subscribing to a web-based searchable database to confirm that Seaboard trading partners are not on the OFAC SDN List.

In the event of the discovery of any violation of this policy, the violation should be promptly reported to Seaboard Corporation’s General Counsel.

All applicable records of OFAC compliance, violations and audit work papers will be retained according to OFAC guidelines (5 years).

 

U.S. FOREIGN CORRUPT

PRACTICES ACT POLICY

TABLE OF CONTENTS

INTRODUCTION 1
  Policy Summary 1
  Worldwide Application 1
   Other Company Policies 1
   Application of Policy to Affiliated Companies 1
POLICY STATEMENT 2
   Types of Payments Covered 2
   Facilitating Payments 3
   Improper Influence; Corrupt Intent 3
   Indirect Payments 3
   Emergency Health and Safety Payments 4
PROCEDURES FOR DEALING WITH THIRD PARTIES 4
PROCEDURES FOR JOINT VENTURES 4
DOCUMENTATION AND RECORDS 5
DISSEMINATION OF POLICY, CERTIFICATION AND TRAINING 5
IDENTIFYING AND REPORTING VIOLATIONS 5
ANNEX A – FCPA Act 6

 

INTRODUCTION

Policy Summary

This U.S. Foreign Corrupt Practices Act Policy (this “Policy”) of Seaboard Corporation and its consolidated subsidiaries (“SEABOARD,” and together with its divisions and consolidated subsidiaries, the “Company”) is intended to prohibit the payment of bribes and similar conduct in violation of the U.S. Foreign Corrupt Practices Act (the “FCPA”). Failure to comply with the FCPA may result in severe civil, regulatory and/or criminal penalties for the Company and for individuals involved in making prohibited payments or with prior knowledge of such payments. Violations of the FCPA may also result in serious public relations and reputational concerns for the Company. Moreover, failure by any individual to comply with the FCPA or this Policy may result in disciplinary action by Seaboard, including termination of employment.

Attached to this Policy as Annex A is a copy of the FCPA. Reference is also made to: A Resource Guide to the U.S. Foreign Corrupt Practices Act dated November 14, 2012 (the “DOJ/SEC FCPA Resource Guide”), which was published by the U.S. DOJ and the U.S. SEC. The DOJ/SEC FCPA Resource Guide can be found at the following website link: http://www.justice.gov/criminal/fraud/fcpa/guidance/. If there is any question about whether a particular activity or transaction is permitted under the FCPA, consult with the applicable Division General Counsel (“Division General Counsel”) [For Seaboard Marine, Steve Irick, (305) 863‑4477), and for Seaboard Overseas Group, Zach Holden, (913) 676‑8939], or if the applicable Division doesn’t have a General Counsel, the Company’s General Counsel (the “General Counsel”) [David Becker, (913) 676‑8925].

 

Worldwide Application

This Policy applies to all directors, officers and employees of the Company, including all consolidated subsidiaries, whether domestic or foreign (collectively, “Company Personnel”).

This Policy is principally intended to address the restrictions regarding payments to, or other dealings with, foreign government officials and their representatives, as set forth in the FCPA. However, it is the policy of the Company to comply with all laws and regulations applicable to it in any jurisdiction in which it has operations or otherwise conducts business, including all local laws. Company Personnel have a responsibility to use reasonable efforts to ensure that third parties representing the Company in any government dealings adhere to the principles expressed in this Policy through reputational and historical due diligence of the third party. Thus, to the extent that the provisions of any applicable local laws are more restrictive than the FCPA or this Policy, then Company Personnel are required to follow the more restrictive local laws. Accordingly, Company Personnel in foreign jurisdictions should be aware of any applicable local laws. Company Personnel residing or having citizenship in a country (other than the United States or the Country in which they act as an ex-patriate) are required to follow their more restrictive anti‑bribery laws (for instance, the United Kingdom).

From time to time, Seaboard may revise or issue supplements to this Policy.

 

Other Company Policies

Please note that, except as specified below, this Policy is not intended to limit, and shall not be construed to limit, any other Company policies, including the Code of Ethics Policy.

 

Application of Policy to Affiliated Companies

The FCPA requires that the Company use good faith efforts to cause companies which are not consolidated subsidiaries of the Company (i.e., companies as to which the Company has 50% or less voting power and thus are “affiliates”) (“Affiliated Companies”) to use its influence to the extent

reasonable under the circumstances to cause the Affiliated Companies to devise and maintain a system of internal accounting controls consistent with the Company’s obligations under the FCPA. The FCPA recognizes that the Company may not be able to exercise the same level of influence over each of its Affiliated Companies, depending on the circumstances, including the relative degree of ownership or influence.

 

POLICY STATEMENT

The Company and all Company Personnel are prohibited from offering, promising, making, authorizing or providing, either directly or indirectly through third parties, any payments, gifts, or the transfer of “anything of value” to any government official in any jurisdiction, with the intention of:

  • influencing or rewarding any action, inaction or decision by such government official in their official capacity for the Company’s benefit;
  • inducing such government official to use such official’s influence to affect or influence any action, inaction or decision of any government authority, agency or instrumentality, government-owned business, public international organization, or political party (as the case may be), for the Company’s benefit; or
  • securing any improper advantage for the Company.

To violate the FCPA, an offer, promise, or authorization of payment, or a payment to a government official must be made “corruptly.” The elements of this Policy are set forth in more detail below.

 

Types of Payments Covered

Cash payments to bribe a government official, as well as a transfer of anything of value — whether tangible or intangible — may be considered an improper payment under this Policy if made corruptly (unless constituting a facilitating payment, as discussed below), including the following:

  • Loans;
  • Gifts;
  • Expenses for travel, meals, lodging or entertainment;
  • Political contributions to any government official in exchange for political favors;
  • The promise of future employment for any government official; or
  • Contracts or other business opportunities awarded to a company in which a relevant government official holds a beneficial interest.

The above list is illustrative and is not exhaustive of the types of payments that may be prohibited under this Policy.

The mere offer of an improper payment, or the promise of an improper payment, is prohibited by this Policy, regardless of whether the offer is ever accepted or the payment ever made. In other words, at the moment Company Personnel make the offer or promise of improper payment, they have violated FCPA Policy and they personally, along with the Company, can be prosecuted.

Neither Company funds nor funds from any other source, including personal funds, may be used to make a prohibited payment on behalf of, or for the benefit of, the Company.

 

Facilitating Payments

The FCPA and this Policy provides a narrow exception for “facilitating or expediting payments” made in furtherance of a routine governmental action that involves non‑discretionary acts. For example, obtaining routinely issued permits, licenses or other official documents, expediting lawful customs clearances, obtaining entry or exit visas, obtaining security through police or military protection, mail pick‑up and delivery, providing phone service and performing actions that are wholly unconnected to the award of new business or the continuation of prior business or provide a commercial advantage, could all be “routine governmental action.” Routine governmental action does not mean a decision by a foreign official to award new business or to continue business with a particular party (e.g., to obtain a discretionary license or be granted a concession or to renew a license, permit, or a lease). Thus, paying an official a small amount to have the power turned on at a facility might be a facilitating payment; paying an inspector to ignore the fact that the Company does not have a valid permit to operate the facility would not be a facilitating payment. Whether a payment falls within the exception is not dependent on the size of the payment, though size can be telling, as a large payment is more suggestive of corrupt intent to influence a non-routine governmental action. If a facilitating payment is made, it must be recorded in the books and records of the Company in reasonable detail, and must accurately and fairly record the payment.

Although true facilitating payments are not illegal under the FCPA, they may still violate local law in the countries where the Company is operating. In addition, other countries’ foreign bribery laws, such as the United Kingdom’s, may not contain an exception for facilitating payments.

 

Improper Influence; Corrupt Intent

 As described above, prohibited payments are those made, directly or indirectly, to any government official, with the intention of (i) influencing or rewarding any action, inaction or decision by a government official in their official capacity for the Company’s benefit, (ii) inducing a government official to use such person’s influence to affect or influence any action, inaction or decision of any government authority, agency or instrumentality, government-owned business, public international organization, or political party (as the case may be), for the Company’s benefit, or (iii) securing any improper advantage for the Company.

In order to violate this Policy, the relevant payment or offered payment must be made with corrupt intent. Corrupt intent is interpreted broadly—all that is required to satisfy this element is for the relevant payor or offeror to intend to induce the recipient to misuse his or her position for the Company’s benefit. Note that this does not require that the corrupt intent actually succeed in its action or realize its purpose (i.e., that the government official actually takes a given action or is otherwise actually influenced as a result of the payment or offered payment)—only that the payor or offeror intended such a result.

In addition, in order to violate this Policy, the payor or offeror must have knowledge that his or her conduct is unlawful or otherwise prohibited. Knowledge is also interpreted broadly. It does not require that such party specifically be aware of the terms of this Policy or that his or her conduct violated the terms of this Policy. Rather, all that is required to establish this element is for such party to act with a bad purpose, i.e., to know generally that his or her conduct is unlawful or prohibited. Furthermore, the knowledge element would also be satisfied if a party should be aware of, or consciously disregards, circumstances that should reasonably alert it to a high probability of improper or unlawful payments. A party cannot turn a blind eye to suspicious activity, nor can they purposely not train their personnel in this policy as a defense to counter the knowledge requirement. See also “Procedures for Dealing with Third Parties” below.

 

Indirect Payments

Payments that are prohibited under this Policy from being made directly to a government official are also

prohibited from being made indirectly to such government official through a third party. Thus, Company

Personnel cannot pay a third party if they know or should know that any portion of the payment is reasonably likely to be passed on to any government official. See “Procedures for Dealing with Third Parties” below for additional information.

 

Emergency Health and Safety Payments

This Policy does not prohibit payments made to avoid a risk to an individual’s health or safety; provided, the payment must be fully and correctly recorded in the books and records of the Company so that there is the ability to timely show the amount of all payments made during a given time period, the purpose, to whom paid and their proper accounting classification.

 

PROCEDURES FOR DEALING WITH THIRD PARTIES

Payments by the Company or Company Personnel to consultants, contractors, advisors (including certain financial advisors, legal advisors and accountants), partners (including joint venture partners), agents and other representatives and intermediaries of the Company (collectively, “Third Parties”) who in turn make payments to government officials to secure business or some business advantage for the Company may violate the FCPA and subject the Company and the Company Personnel to liability and/or reputational harm.

Consequently, no Third Party who will deal with government officials on the Company’s behalf should be retained, unless appropriate due diligence has been conducted with respect to the business and reputation of the Third Party.

Prior to the engagement of a Third Party who will deal with government officials on the Company’s behalf, appropriate due diligence should be conducted on the Third Party’s business and reputation, including its FCPA policies, practices and compliance.

The appropriateness and extent of the due diligence will vary depending on the totality of the circumstances. For example, more careful due diligence may be required for Third Parties that (i) are not well known or not subject to rigorous regulatory oversight, or (ii) are located in a country that has a reputation for widespread government corruption (e.g., jurisdictions that score low on various “corruption perception” indices such as the corruption index published by Transparency International at www.transparency.org).

 

PROCEDURES FOR JOINT VENTURES

These procedures apply to the entering into of a joint venture, partnership or similar arrangement (any such arrangement, a “Joint Venture”), in which the Company will own a majority stake, a 50 percent stake or other significant stake in the applicable arrangement (although more rigorous standards will apply to the Company in any Joint Venture in which the Company has a majority stake or otherwise exercises significant control).

Before entering into the Joint Venture, appropriate due diligence should be conducted on the Joint Venture Partner, and reasonable efforts must be undertaken to include in written agreements with such Third Party appropriate provisions with respect to FCPA compliance.

In addition, management of the Joint Venture must take (for any Joint Venture will be a consolidated subsidiary) or must use good faith efforts to take (for any Joint Venture which is an Affiliated Company) appropriate steps to ensure that the Joint Venture complies with FCPA and adopts and abides by FCPA policies and practices that are appropriate to the business, including implementing and maintaining

appropriate internal controls and compliance systems and providing FCPA training to employees, as

appropriate.

 

DOCUMENTATION AND RECORDS

All payments made by the Company or Company Personnel to or for the benefit of any government official (including cash payments, gifts, payment of meal, travel, lodging or entertainment expenses, charitable contributions, political contributions, or otherwise) must be accurately documented in reasonable detail and reported in the Company’s books, records and accounting systems.

 

DISSEMINATION OF POLICY, CERTIFICATION AND TRAINING

This Policy shall be disseminated to each Director and Officer of the Company, each salaried employee of the Company working in accounting, internal audit or finance, and each employee of the Company holding the position of “manager” or higher. These persons will be requested annually to sign a certification as to compliance with the principles underlying this Policy in the form of Annex B hereto. All signed certifications should be forwarded to the Company’s Human Resources Department or the relevant Division’s Human Resources Department for record retention purposes.

In addition, certain employees of the Company will periodically be requested to receive FCPA training. The Human Resources Departments for the Company and each Division, in consultation with the Company’s General Counsel or Division General Counsel, shall compile a list of employees of the Company to receive training, which shall include, at a minimum, the directors and officers of the Company, the General Manager and Financial Director at each foreign office of the Company, and those employees of the Company who may have reason to interact with any foreign government official in the performance of their duties.

The Human Resources Departments for each Division, in consultation with the Division General Counsel, shall also compile a list of the Affiliated Companies as to which this Policy shall be disseminated, and the employees at each such Affiliated Company that the Company should endeavor to sign a certification as to compliance with the Policy and to receive FCPA training.

 

IDENTIFYING AND REPORTING VIOLATIONS

Any activity that violates, is believed to violate, or is reasonably expected to violate, the FCPA or this Policy shall be reported to the applicable Division General Counsel or the Company’s General Counsel. Alternatively, the matter may be reported online by visiting www.seaboard.ethicspoint.com; by calling the Company’s dedicated toll free number, 866‑676‑8886, for calls originating from the United States; or by calling the applicable phone number associated with the specific country, as set forth at the aforementioned website, for international calls. Matters may also be emailed to SBD_Ethics@seaboardcorp.com. Any question regarding a particular transaction, the engagement of a particular Third Party or the application or interpretation of this Policy should be directed to the applicable Division General Counsel or the Company’s General Counsel.

The Company will undertake to protect the confidentiality of any such report or question, subject to any applicable laws, regulations and legal proceedings. Retaliation against any Company employee who reports a violation or potential violation of this Policy is strictly prohibited and any such retaliation will be cause for corrective action, including termination of employment.

 

ANNEX A

 

Anti-Bribery and Books & Records Provisions of

The Foreign Corrupt Practices Act

UNITED STATES CODE

TITLE 15. COMMERCE AND TRADE

CHAPTER 2B–SECURITIES EXCHANGES

  • 78m. Periodical and other reports

 

(a) Reports by issuer of security; contents

Every issuer of a security registered pursuant to section 781 of this title shall file with the Commission, in accordance with such rules and regulations as the Commission may prescribe as necessary or appropriate for the proper protection of investors and to insure fair dealing in the security–

(1) such information and documents (and such copies thereof) as the Commission shall require to keep reasonably current the information and documents required to be included in or filed with an application or registration statement filed pursuant to section 781 of this title, except that the Commission may not require the filing of any material contract wholly executed before July 1, 1962.

(2) such annual reports (and such copies thereof), certified if required by the rules and regulations of the Commission by independent public accountants, and such quarterly reports (and such copies thereof), as the Commission may prescribe.

Every issuer of a security registered on a national securities exchange shall also file a duplicate original of such information, documents, and reports with the exchange.

(b) Form of report; books, records, and internal accounting; directives

* * *

(2) Every issuer which has a class of securities registered pursuant to section 781 of this title and every issuer which is required to file reports pursuant to section 78o(d) of this title shall–

(A) make and keep books, records, and accounts, which, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the issuer; and

(B) devise and maintain a system of internal accounting controls sufficient to provide reasonable assurances that–

(i) transactions are executed in accordance with management’s general or specific authorization;

(ii) transactions are recorded as necessary (I) to permit preparation of financial statements in conformity with generally accepted accounting principles or any other criteria applicable to such statements, and (II) to maintain accountability for assets;

(iii) access to assets is permitted only in accordance with management’s general or specific authorization; and

(iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences.

(3) (A) With respect to matters concerning the national security of the United States, no duty or liability under paragraph (2) of this subsection shall be imposed upon any person acting in cooperation with the head of any Federal department or agency responsible for such matters if such act in cooperation with such head of a department or agency was done upon the specific, written directive of the head of such department or agency pursuant to Presidential authority to issue such directives. Each directive issued under this paragraph shall set forth the specific facts and circumstances with respect to which the provisions of this paragraph are to be invoked. Each such directive shall, unless renewed in writing, expire one year after the date of issuance.

(B) Each head of a Federal department or agency of the United States who issues such a directive pursuant to this paragraph shall maintain a complete file of all such directives and shall, on October 1 of each year, transmit a summary of matters covered by such directives in force at any time during the previous year to the Permanent Select Committee on Intelligence of the House of Representatives and the Select Committee on Intelligence of the Senate.

(4) No criminal liability shall be imposed for failing to comply with the requirements of paragraph (2) of this subsection except as provided in paragraph (5) of this subsection.

(5) No person shall knowingly circumvent or knowingly fail to implement a system of internal accounting controls or knowingly falsify any book, record, or account described in paragraph (2).

(6) Where an issuer which has a class of securities registered pursuant to section 78l of this title or an issuer which is required to file reports pursuant to section 78o(d) of this title holds 50 per centum or less of the voting power with respect to a domestic or foreign firm, the provisions of paragraph (2) require only that the issuer proceed in good faith to use its influence, to the extent reasonable under the issuer’s circumstances, to cause such domestic or foreign firm to devise and maintain a system of internal accounting controls consistent with paragraph (2). Such circumstances include the relative degree of the issuer’s ownership of the domestic or foreign firm and the laws and practices governing the business operations of the country in which such firm is located. An issuer which demonstrates good faith efforts to use such influence shall be conclusively presumed to have complied with the requirements of paragraph (2).

(7) For the purpose of paragraph (2) of this subsection, the terms “reasonable assurances” and “reasonable detail” mean such level of detail and degree of assurance as would satisfy prudent officials in the conduct of their own affairs.

* * *

  • 78dd-1 [Section 30A of the Securities & Exchange Act of 1934].

 

Prohibited foreign trade practices by issuers

 

(a) Prohibition

It shall be unlawful for any issuer which has a class of securities registered pursuant to section 78l of this title or which is required to file reports under section 78o(d) of this title, or for any officer, director, employee, or agent of such issuer or any stockholder thereof acting on behalf of such issuer, to make use of the mails or any means or instrumentality of interstate commerce corruptly in furtherance of an offer, payment, promise to pay, or authorization of the payment of any money, or offer, gift, promise to give, or authorization of the giving of anything of value to–

(1) any foreign official for purposes of–

(A) (i) influencing any act or decision of such foreign official in his official capacity, (ii) inducing such foreign official to do or omit to do any act in violation of the lawful duty of such official, or (iii) securing any improper advantage; or

(B) inducing such foreign official to use his influence with a foreign government or instrumentality thereof to affect or influence any act or decision of such government or instrumentality,

in order to assist such issuer in obtaining or retaining business for or with, or directing business to, any person;

(2) any foreign political party or official thereof or any candidate for foreign political office for purposes of–

(A) (i) influencing any act or decision of such party, official, or candidate in its or his official capacity, (ii) inducing such party, official, or candidate to do or omit to do an act in violation of the lawful duty of such party, official, or candidate, or (iii) securing any improper advantage; or

(B) inducing such party, official, or candidate to use its or his influence with a foreign government or instrumentality thereof to affect or influence any act or decision of such government or instrumentality.

in order to assist such issuer in obtaining or retaining business for or with, or directing business to, any person; or

(3) any person, while knowing 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, to any foreign political party or official thereof, or to any candidate for foreign political office, for purposes of–

(A) (i) influencing any act or decision of such foreign official, political party, party official, or candidate in his or its official capacity, (ii) inducing such foreign official, political party, party official, or candidate to do or omit to do any act in violation of the lawful duty of such foreign official, political party, party official, or candidate, or (iii) securing any improper advantage; or

(B) inducing such foreign official, political party, party official, or candidate to use his or its influence with a foreign government or instrumentality thereof to affect or influence any act or decision of such government or instrumentality,

in order to assist such issuer in obtaining or retaining business for or with, or directing business to, any person.

 

(b) Exception for routine governmental action

Subsections (a) and (g) of this section shall not apply to any facilitating or expediting payment to a foreign official, political party, or party official the purpose of which is to expedite or to secure the performance of a routine governmental action by a foreign official, political party, or party official.

 

(c) Affirmative defenses

It shall be an affirmative defense to actions under subsection (a) or (g) of this section that–

(1) the payment, gift, offer, or promise of anything of value that was made, was lawful under the written laws and regulations of the foreign official’s, political party’s, party official’s, or candidate’s country; or

(2) the payment, gift, offer, or promise of anything of value that was made, was a reasonable and bona fide expenditure, such as travel and lodging expenses, incurred by or on behalf of a foreign official, party, party official, or candidate and was directly related to–

(A) the promotion, demonstration, or explanation of products or services; or

(B) the execution or performance of a contract with a foreign government or agency thereof.

 

(d) Guidelines by Attorney General

Not later than one year after August 23, 1988, the Attorney General, after consultation with the Commission, the Secretary of Commerce, the United States Trade Representative, the Secretary of State, and the Secretary of the Treasury, and after obtaining the views of all interested persons through public notice and comment procedures, shall determine to what extent compliance with this section would be enhanced and the business community would be assisted by further clarification of the preceding provisions of this section and may, based on such determination and to the extent necessary and appropriate, issue–

(1) guidelines describing specific types of conduct, associated with common types of export sales arrangements and business contracts, which for purposes of the Department of Justice’s present enforcement policy, the Attorney General determines would be in conformance with the preceding provisions of this section; and

(2) general precautionary procedures which issuers may use on a voluntary basis to conform their conduct to the Department of Justice’s present enforcement policy regarding the preceding provisions of this section.

The Attorney General shall issue the guidelines and procedures referred to in the preceding sentence in accordance with the provisions of subchapter II of chapter 5 of Title 5 and those guidelines and procedures shall be subject to the provisions of chapter 7 of that title.

 

(e) Opinions of Attorney General

(1) The Attorney General, after consultation with appropriate departments and agencies of the United States and after obtaining the views of all interested persons through public notice and comment procedures, shall establish a procedure to provide responses to specific inquiries by issuers concerning conformance of their conduct with the Department of Justice’s present enforcement policy regarding the preceding provisions of this section. The Attorney General shall, within 30 days after receiving such a request, issue an opinion in response to that request. The opinion shall state whether or not certain specified prospective conduct would, for purposes of the Department of Justice’s present enforcement policy, violate the preceding provisions of this section. Additional requests for opinions may be filed with the Attorney General regarding other specified prospective conduct that is beyond the scope of conduct specified in previous requests. In any action brought under the applicable provisions of this section, there shall be a rebuttable presumption that conduct, which is specified in a request by an issuer and for which the Attorney General has issued an opinion that such conduct is in conformity with the Department of Justice’s present enforcement policy, is in compliance with the preceding provisions of this section. Such a presumption may be rebutted by a preponderance of the evidence. In considering the presumption for purposes of this paragraph, a court shall weight all relevant factors, including but not limited to whether the information submitted to the Attorney General was accurate and complete and whether it was within the scope of the conduct specified in any request received by the Attorney General. The Attorney General shall establish the procedure required by this paragraph in accordance with the provisions of subchapter II of chapter 5 of Title 5 and that procedure shall be subject to the provisions of chapter 7 of that title.

(2) Any document or other material which is provided to, received by, or prepared in the Department of Justice or any other department or agency of the United States in connection with a request by an issuer under the procedure established under paragraph (1), shall be exempt from disclosure under section 552 of Title 5 and shall not, except with the consent of the issuer, be made publicly available, regardless of whether the Attorney General responds to such a request or the issuer withdraws such request before receiving a response.

(3) Any issuer who has made a request to the Attorney General under paragraph (1) may withdraw such request prior to the time the Attorney General issues an opinion in response to such request. Any request so withdrawn shall have no force or effect.

(4) The Attorney General shall, to the maximum extent practicable, provide timely guidance concerning the Department of Justice’s present enforcement policy with respect to the preceding provisions of this section to potential exporters and small businesses that are unable to obtain specialized counsel on issues pertaining to such provisions. Such guidance shall be limited to responses to requests under paragraph (1) concerning conformity of specified prospective conduct with the Department of Justice’s present enforcement policy regarding the preceding provisions of this section and general explanations of compliance responsibilities and of potential liabilities under the preceding provisions of this section.

 

(f) Definitions

For purposes of this section:

(1)      A) The term “foreign official” means any officer or employee of a foreign government or any department, agency, or instrumentality thereof, or of a public international organization, or any person acting in an official capacity for or on behalf of any such government or department, agency, or instrumentality, or for or on behalf of any such public international organization.

(B) For purposes of subparagraph (A), the term “public international organization” means–

(i)   an organization that is designated by Executive Order pursuant to section 1 of the International Organizations Immunities Act (22 U.S.C. § 288); or

(ii)  any other international organization that is designated by the President by Executive order for the purposes of this section, effective as of the date of publication of such order in the Federal Register.

(2)      (A) A person’s state of mind is “knowing” with respect to conduct, a circumstance, or a result if–

(i) such person is aware that such person is engaging in such conduct, that such circumstance exists, or that such result is substantially certain to occur; or

(ii) such person has a firm belief that such circumstance exists or that such result is substantially certain to occur.

(B) When knowledge of the existence of a particular circumstance is required for an offense, such knowledge is established if a person is aware of a high probability of the existence of such circumstance, unless the person actually believes that such circumstance does not exist.

(3)      (A) The term “routine governmental action” means only an action which is ordinarily and commonly performed by a foreign official in–

(i) obtaining permits, licenses, or other official documents to qualify a person to do business in a foreign country;

(ii) processing governmental papers, such as visas and work orders;

(iii) providing police protection, mail pick-up and delivery, or scheduling inspections associated with contract performance or inspections related to transit of goods across country;

(iv) providing phone service, power and water supply, loading and unloading cargo, or protecting perishable products or commodities from deterioration; or

(v) actions of a similar nature.

(B) The term “routine governmental action” does not include any decision by a foreign official whether, or on what terms, to award new business to or to continue business with a particular party, or any action taken by a foreign official involved in the decision-making process to encourage a decision to award new business to or continue business with a particular party.

 

(g) Alternative Jurisdiction

(1) It shall also be unlawful for any issuer organized under the laws of the United States, or a State, territory, possession, or commonwealth of the United States or a political subdivision thereof and which has a class of securities registered pursuant to section 12 of this title or which is required to file reports under section 15(d) of this title, or for any United States person that is an officer, director, employee, or agent of such issuer or a stockholder thereof acting on behalf of such issuer, to corruptly do any act outside the United States in furtherance of an offer, payment, promise to pay, or authorization of the payment of any money, or offer, gift, promise to give, or authorization of the giving of anything of value to any of the persons or entities set forth in paragraphs (1), (2), and (3) of this subsection (a) of this section for the purposes set forth therein, irrespective of whether such issuer or such officer, director, employee, agent, or stockholder makes use of the mails or any means or instrumentality of interstate commerce in furtherance of such offer, gift, payment, promise, or authorization.

(2) As used in this subsection, the term “United States person” means a national of the United States (as defined in section 101 of the Immigration and Nationality Act (8 U.S.C. § 1101)) or any corporation, partnership, association, joint-stock company, business trust, unincorporated organization, or sole proprietorship organized under the laws of the United States or any State, territory, possession, or commonwealth of the United States, or any political subdivision thereof.

  • 78dd-2. Prohibited foreign trade practices by domestic concerns

 

(a) Prohibition

It shall be unlawful for any domestic concern, other than an issuer which is subject to section 78dd-1 of this title, or for any officer, director, employee, or agent of such domestic concern or any stockholder thereof acting on behalf of such domestic concern, to make use of the mails or any means or instrumentality of interstate commerce corruptly in furtherance of an offer, payment, promise to pay, or authorization of the payment of any money, or offer, gift, promise to give, or authorization of the giving of anything of value to–

(1) any foreign official for purposes of–

(A) (i) influencing any act or decision of such foreign official in his official capacity, (ii) inducing such foreign official to do or omit to do any act in violation of the lawful duty of such official, or (iii) securing any improper advantage; or

(B) inducing such foreign official to use his influence with a foreign government or instrumentality thereof to affect or influence any act or decision of such government or instrumentality,

in order to assist such domestic concern in obtaining or retaining business for or with, or directing business to, any person;

(2) any foreign political party or official thereof or any candidate for foreign political office for purposes of–

(A) (i) influencing any act or decision of such party, official, or candidate in its or his official capacity, (ii) inducing such party, official, or candidate to do or omit to do an act in violation of the lawful duty of such party, official, or candidate, or (iii) securing any improper advantage; or

(B) inducing such party, official, or candidate to use its or his influence with a foreign government or instrumentality thereof to affect or influence any act or decision of such government or instrumentality,

in order to assist such domestic concern in obtaining or retaining business for or with, or directing business to, any person;

(3) any person, while knowing 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, to any foreign political party or official thereof, or to any candidate for foreign political office, for purposes of–

(A) (i) influencing any act or decision of such foreign official, political party, party official, or candidate in his or its official capacity, (ii) inducing such foreign official, political party, party official, or candidate to do or omit to do any act in violation of the lawful duty of such foreign official, political party, party official, or candidate, or (iii) securing any improper advantage; or

(B) inducing such foreign official, political party, party official, or candidate to use his or its influence with a foreign government or instrumentality thereof to affect or influence any act or decision of such government or instrumentality,

in order to assist such domestic concern in obtaining or retaining business for or with, or directing business to, any person.

 

(b) Exception for routine governmental action

Subsections (a) and (i) of this section shall not apply to any facilitating or expediting payment to a foreign official, political party, or party official the purpose of which is to expedite or to secure the performance of a routine governmental action by a foreign official, political party, or party official.

 

(c) Affirmative defenses

It shall be an affirmative defense to actions under subsection (a) or (i) of this section that–

(1) the payment, gift, offer, or promise of anything of value that was made, was lawful under the written laws and regulations of the foreign official’s, political party’s, party official’s, or candidate’s country; or

(2) the payment, gift, offer, or promise of anything of value that was made, was a reasonable and bona fide expenditure, such as travel and lodging expenses, incurred by or on behalf of a foreign official, party, party official, or candidate and was directly related to–

(A) the promotion, demonstration, or explanation of products or services; or

(B) the execution or performance of a contract with a foreign government or agency thereof.

 

(d) Injunctive relief

(1) When it appears to the Attorney General that any domestic concern to which this section applies, or officer, director, employee, agent, or stockholder thereof, is engaged, or about to engage, in any act or practice constituting a violation of subsection (a) or (i) of this section, the Attorney General may, in his discretion, bring a civil action in an appropriate district court of the United States to enjoin such act or practice, and upon a proper showing, a permanent injunction or a temporary restraining order shall be granted without bond.

(2) For the purpose of any civil investigation which, in the opinion of the Attorney General, is necessary and proper to enforce this section, the Attorney General or his designee are empowered to administer oaths and affirmations, subpoena witnesses, take evidence, and require the production of any books, papers, or other documents which the Attorney General deems relevant or material to such investigation. The attendance of witnesses and the production of documentary evidence may be required from any place in the United States, or any territory, possession, or commonwealth of the United States, at any designated place of hearing.

(3) In case of contumacy by, or refusal to obey a subpoena issued to, any person, the Attorney General may invoke the aid of any court of the United States within the jurisdiction of which such investigation or proceeding is carried on, or where such person resides or carries on business, in requiring the attendance and testimony of witnesses and the production of books, papers, or other documents. Any such court may issue an order requiring such person to appear before the Attorney General or his designee, there to produce records, if so ordered, or to give testimony touching the matter under investigation. Any failure to obey such order of the court may be punished by such court as a contempt thereof.

All process in any such case may be served in the judicial district in which such person resides or may be found. The Attorney General may make such rules relating to civil investigations as may be necessary or appropriate to implement the provisions of this subsection.

 

(e) Guidelines by Attorney General

Not later than 6 months after August 23, 1988, the Attorney General, after consultation with the Securities and Exchange Commission, the Secretary of Commerce, the United States Trade Representative, the Secretary of State, and the Secretary of the Treasury, and after obtaining the views of all interested persons through public notice and comment procedures, shall determine to what extent compliance with this section would be enhanced and the business community would be assisted by further clarification of the preceding provisions of this section and may, based on such determination and to the extent necessary and appropriate, issue–

(1) guidelines describing specific types of conduct, associated with common types of export sales arrangements and business contracts, which for purposes of the Department of Justice’s present enforcement policy, the Attorney General determines would be in conformance with the preceding provisions of this section; and

(2) general precautionary procedures which domestic concerns may use on a voluntary basis to conform their conduct to the Department of Justice’s present enforcement policy regarding the preceding provisions of this section.

The Attorney General shall issue the guidelines and procedures referred to in the preceding sentence in accordance with the provisions of subchapter II of chapter 5 of Title 5 and those guidelines and procedures shall be subject to the provisions of chapter 7 of that title.

 

(f) Opinions of Attorney General

(1) The Attorney General, after consultation with appropriate departments and agencies of the United States and after obtaining the views of all interested persons through public notice and comment procedures, shall establish a procedure to provide responses to specific inquiries by domestic concerns concerning conformance of their conduct with the Department of Justice’s present enforcement policy regarding the preceding provisions of this section. The Attorney General shall, within 30 days after receiving such a request, issue an opinion in response to that request. The opinion shall state whether or not certain specified prospective conduct would, for purposes of the Department of Justice’s present enforcement policy, violate the preceding provisions of this section. Additional requests for opinions may be filed with the Attorney General regarding other specified prospective conduct that is beyond the scope of conduct specified in previous requests. In any action brought under the applicable provisions of this section, there shall be a rebuttable presumption that conduct, which is specified in a request by a domestic concern and for which the Attorney General has issued an opinion that such conduct is in conformity with the Department of Justice’s present enforcement policy, is in compliance with the preceding provisions of this section. Such a presumption may be rebutted by a preponderance of the evidence. In considering the presumption for purposes of this paragraph, a court shall weigh all relevant factors, including but not limited to whether the information submitted to the Attorney General was accurate and complete and whether it was within the scope of the conduct specified in any request received by the Attorney General. The Attorney General shall establish the procedure required by this paragraph in accordance with the provisions of subchapter II of chapter 5 of Title 5 and that procedure shall be subject to the provisions of chapter 7 of that title.

(2) Any document or other material which is provided to, received by, or prepared in the Department of Justice or any other department or agency of the United States in connection with a request by a domestic concern under the procedure established under paragraph (1), shall be exempt from disclosure under section 552 of Title 5 and shall not, except with the consent of the domestic concern, by made publicly available, regardless of whether the Attorney General response to such a request or the domestic concern withdraws such request before receiving a response.

(3) Any domestic concern who has made a request to the Attorney General under paragraph (1) may withdraw such request prior to the time the Attorney General issues an opinion in response to such request. Any request so withdrawn shall have no force or effect.

(4) The Attorney General shall, to the maximum extent practicable, provide timely guidance concerning the Department of Justice’s present enforcement policy with respect to the preceding provisions of this section to potential exporters and small businesses that are unable to obtain specialized counsel on issues pertaining to such provisions. Such guidance shall be limited to responses to requests under paragraph (1) concerning conformity of specified prospective conduct with the Department of Justice’s present enforcement policy regarding the preceding provisions of this section and general explanations of compliance responsibilities and of potential liabilities under the preceding provisions of this section.

 

(g) Penalties

(1)       (A) Any domestic concern that is not a natural person and that violates subsection (a) or (i) of this section shall be fined not more than $2,000,000.

(B)      Any domestic concern that is not a natural person and that violates subsection (a) or (i) of this section shall be subject to a civil penalty of not more than $10,000 imposed in an action brought by the Attorney General.

(2)      (A) Any natural person that is an officer, director, employee, or agent of a domestic concern, or stockholder acting on behalf of such domestic concern, who willfully violates subsection (a) or (i) of this section shall be fined not more than $100,000 or imprisoned not more than 5 years, or both.

(B) Any natural person that is an officer, director, employee, or agent of a domestic concern, or stockholder acting on behalf of such domestic concern, who violates subsection (a) or (i) of this section shall be subject to a civil penalty of not more than $10,000 imposed in an action brought by the Attorney General.

(3)       Whenever a fine is imposed under paragraph (2) upon any officer, director, employee, agent, or stockholder of a domestic concern, such fine may not be paid, directly or indirectly, by such domestic concern.

 

(h) Definitions

For purposes of this section:

(1)         The term “domestic concern” means–

(A) any individual who is a citizen, national, or resident of the United States; and

(B) any corporation, partnership, association, joint-stock company, business trust, unincorporated organization, or sole proprietorship which has its principal place of business in the United States, or which is organized under the laws of a State of the United States or a territory, possession, or commonwealth of the United States.

(2)        (A) The term “foreign official” means any officer or employee of a foreign government or any department, agency, or instrumentality thereof, or of a public international organization, or any person acting in an official capacity for or on behalf of any such government or department, agency, or instrumentality, or for or on behalf of any such public international organization.

(B) For purposes of subparagraph (A), the term “public international organization” means –

(i) an organization that has been designated by Executive order pursuant to Section 1 of the

International Organizations Immunities Act (22 U.S.C. § 288); or

(ii)any other international organization that is designated by the President by Executive order for the purposes of this section, effective as of the date of publication of such order in the Federal Register.

(3)         (A) A person’s state of mind is “knowing” with respect to conduct, a circumstance, or a result if–

(i) such person is aware that such person is engaging in such conduct, that such circumstance exists, or that such result is substantially certain to occur; or

(ii) such person has a firm belief that such circumstance exists or that such result is substantially certain to occur.

(B) When knowledge of the existence of a particular circumstance is required for an offense, such knowledge is established if a person is aware of a high probability of the existence of such circumstance, unless the person actually believes that such circumstance does not exist.

(4)          (A) The term “routine governmental action” means only an action which is ordinarily and commonly performed by a foreign official in–

(i) obtaining permits, licenses, or other official documents to qualify a person to do business in a foreign country;

(ii) processing governmental papers, such as visas and work orders;

(iii) providing police protection, mail pick-up and delivery, or scheduling inspections associated with contract performance or inspections related to transit of goods across country;

(iv) providing phone service, power and water supply, loading and unloading cargo, or protecting perishable products or commodities from deterioration; or

(v) actions of a similar nature.

(B) The term “routine governmental action” does not include any decision by a foreign official whether, or on what terms, to award new business to or to continue business with a particular party, or any action taken by a foreign official involved in the decision-making process to encourage a decision to award new business to or continue business with a particular party.

(5) The term “interstate commerce” means trade, commerce, transportation, or communication among the several States, or between any foreign country and any State or between any State and any place or ship outside thereof, and such term includes the intrastate use of–

(A) a telephone or other interstate means of communication, or

(B) any other interstate instrumentality.

 

(i) Alternative Jurisdiction

(1)       It shall also be unlawful for any United States person to corruptly do any act outside the United States in furtherance of an offer, payment, promise to pay, or authorization of the payment of any money, or offer, gift, promise to give, or authorization of the giving of anything of value to any of the persons or entities set forth in paragraphs (1), (2), and (3) of subsection (a), for the purposes set forth therein, irrespective of whether such United States person makes use of the mails or any means or instrumentality of interstate commerce in furtherance of such offer, gift, payment, promise, or authorization.

(2)       As used in this subsection, a “United States person” means a national of the United States (as defined in section 101 of the Immigration and Nationality Act (8 U.S.C. § 1101)) or any corporation, partnership, association, joint-stock company, business trust, unincorporated organization, or sole proprietorship organized under the laws of the United States or any State, territory, possession, or commonwealth of the United States, or any political subdivision thereof.

  • 78dd-3. Prohibited foreign trade practices by persons other than issuers or domestic concerns

 

(a) Prohibition

It shall be unlawful for any person other than an issuer that is subject to section 30A of the Securities Exchange Act of 1934 or a domestic concern, as defined in section 104 of this Act), or for any officer, director, employee, or agent of such person or any stockholder thereof acting on behalf of such person, while in the territory of the United States, corruptly to make use of the mails or any means or instrumentality of interstate commerce or to do any other act in furtherance of an offer, payment, promise to pay, or authorization of the payment of any money, or offer, gift, promise to give, or authorization of the giving of anything of value to–

(1) any foreign official for purposes of–

(A) (i) influencing any act or decision of such foreign official in his official capacity, (ii) inducing such foreign official to do or omit to do any act in violation of the lawful duty of such official, or (iii) securing any improper advantage; or

(B) inducing such foreign official to use his influence with a foreign government or instrumentality thereof to affect or influence any act or decision of such government or instrumentality,

in order to assist such person in obtaining or retaining business for or with, or directing business to, any person;

(2) any foreign political party or official thereof or any candidate for foreign political office for purposes of–

(A) (i) influencing any act or decision of such party, official, or candidate in its or his official capacity, (ii) inducing such party, official, or candidate to do or omit to do an act in violation of the lawful duty of such party, official, or candidate, or (iii) securing any improper advantage; or

(B) inducing such party, official, or candidate to use its or his influence with a foreign government or instrumentality thereof to affect or influence any act or decision of such government or instrumentality.

in order to assist such person in obtaining or retaining business for or with, or directing business to, any person; or

(3) any person, while knowing 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, to any foreign political party or official thereof, or to any candidate for foreign political office, for purposes of–

(A) (i) influencing any act or decision of such foreign official, political party, party official, or candidate in his or its official capacity, (ii) inducing such foreign official, political party, party official, or candidate to do or omit to do any act in violation of the lawful duty of such foreign official, political party, party official, or candidate, or (iii) securing any improper advantage; or

(B) inducing such foreign official, political party, party official, or candidate to use his or its influence with a foreign government or instrumentality thereof to affect or influence any act or decision of such government or instrumentality,

in order to assist such person in obtaining or retaining business for or with, or directing business to, any person.

(b) Exception for routine governmental action

Subsection (a) of this section shall not apply to any facilitating or expediting payment to a foreign official, political party, or party official the purpose of which is to expedite or to secure the performance of a routine governmental action by a foreign official, political party, or party official.

(c) Affirmative defenses

It shall be an affirmative defense to actions under subsection (a) of this section that–

(1) the payment, gift, offer, or promise of anything of value that was made, was lawful under the written laws and regulations of the foreign official’s, political party’s, party official’s, or candidate’s country; or

(2) the payment, gift, offer, or promise of anything of value that was made, was a reasonable and bona fide expenditure, such as travel and lodging expenses, incurred by or on behalf of a foreign official, party, party official, or candidate and was directly related to–

(A) the promotion, demonstration, or explanation of products or services; or

(B) the execution or performance of a contract with a foreign government or agency thereof.

(d) Injunctive relief

(1) When it appears to the Attorney General that any person to which this section applies, or officer, director, employee, agent, or stockholder thereof, is engaged, or about to engage, in any act or practice constituting a violation of subsection (a) of this section, the Attorney General may, in his discretion, bring a civil action in an appropriate district court of the United States to enjoin such act or practice, and upon a proper showing, a permanent injunction or a temporary restraining order shall be granted without bond.

(2) For the purpose of any civil investigation which, in the opinion of the Attorney General, is necessary and proper to enforce this section, the Attorney General or his designee are empowered to administer oaths and affirmations, subpoena witnesses, take evidence, and require the production of any books, papers, or other documents which the Attorney General deems relevant or material to such investigation. The attendance of witnesses and the production of documentary evidence may be required from any place in the United States, or any territory, possession, or commonwealth of the United States, at any designated place of hearing.

(3) In case of contumacy by, or refusal to obey a subpoena issued to, any person, the Attorney General may invoke the aid of any court of the United States within the jurisdiction of which such investigation or proceeding is carried on, or where such person resides or carries on business, in requiring the attendance and testimony of witnesses and the production of books, papers, or other documents. Any such court may issue an order requiring such person to appear before the Attorney General or his designee, there to produce records, if so ordered, or to give testimony touching the matter under investigation. Any failure to obey such order of the court may be punished by such court as a contempt thereof.

(4) All process in any such case may be served in the judicial district in which such person resides or may be found. The Attorney General may make such rules relating to civil investigations as may be necessary or appropriate to implement the provisions of this subsection.

(e) Penalties

(1)        (A) Any juridical person that violates subsection (a) of this section shall be fined not more than $2,000,000.

(B) Any juridical person that violates subsection (a) of this section shall be subject to a civil penalty of not more than $10,000 imposed in an action brought by the Attorney General.

(2)        (A) Any natural person who willfully violates subsection (a) of this section shall be fined not more than $100,000 or imprisoned not more than 5 years, or both.

(B) Any natural person who violates subsection (a) of this section shall be subject to a civil penalty of not more than $10,000 imposed in an action brought by the Attorney General.

(3)        Whenever a fine is imposed under paragraph (2) upon any officer, director, employee, agent, or stockholder of a person, such fine may not be paid, directly or indirectly, by such person.

 

(f) Definitions

For purposes of this section:

(1)        The term “person,” when referring to an offender, means any natural person other than a. national of the United States (as defined in 8 U.S.C. § 1101) or any corporation, partnership, association, joint-stock company, business trust, unincorporated organization, or sole proprietorship organized under the law of a foreign nation or a political subdivision thereof

(2)        (A) The term “foreign official” means any officer or employee of a foreign government or any department, agency, or instrumentality thereof, or of a public international organization, or any person acting in an official capacity for or on behalf of any such government or department, agency, or instrumentality, or for or on behalf of any such public international organization.

For purposes of subparagraph (A), the term “public international organization” means —

(i)      an organization that has been designated by Executive Order pursuant to Section 1 of the International Organizations Immunities Act (22 U.S.C. § 288); or

 

(ii)     any other international organization that is designated by the President by Executive order for the purposes of this section, effective as of the date of publication of such order in the Federal Register.

(3)         (A) A person’s state of mind is “knowing” with respect to conduct, a circumstance, or a result if —

(i)      such person is aware that such person is engaging in such conduct, that such circumstance exists, or that such result is substantially certain to occur; or

 

(ii)     such person has a firm belief that such circumstance exists or that such result is substantially certain to occur.

(B) When knowledge of the existence of a particular circumstance is required for an offense, such knowledge is established if a person is aware of a high probability of the existence of such circumstance, unless the person actually believes that such circumstance does not exist.

(4)          (A) The term “routine governmental action” means only an action which is ordinarily and commonly performed by a foreign official in–

(i)     obtaining permits, licenses, or other official documents to qualify a person to do business in a foreign country;

(ii)     processing governmental papers, such as visas and work orders;

(iii)    providing police protection, mail pick-up and delivery, or scheduling inspections associated with contract performance or inspections related to transit of goods across country;

(iv)    providing phone service, power and water supply, loading and unloading cargo, or protecting perishable products or commodities from deterioration; or

(v)     actions of a similar nature.

(B) The term “routine governmental action” does not include any decision by a foreign official whether, or on what terms, to award new business to or to continue business with a particular party, or any action taken by a foreign official involved in the decision-making process to encourage a decision to award new business to or continue business with a particular party.

(5) The term “interstate commerce” means trade, commerce, transportation, or communication among the several States, or between any foreign country and any State or between any State and any place or ship outside thereof, and such term includes the intrastate use of —

(A) a telephone or other interstate means of communication, or

(B) any other interstate instrumentality.

  • 78ff. Penalties

 

(a) Willful violations; false and misleading statements

Any person who willfully violates any provision of this chapter (other than section 78dd-1 of this title), or any rule or regulation thereunder the violation of which is made unlawful or the observance of which is required under the terms of this chapter, or any person who willfully and knowingly makes, or causes to be made, any statement in any application, report, or document required to be filed under this chapter or any rule or regulation thereunder or any undertaking contained in a registration statement as provided in subsection (d) of section 78o of this title, or by any self-regulatory organization in connection with an application for membership or participation therein or to become associated with a member thereof, which statement was false or misleading with respect to any material fact, shall upon conviction be fined not more than $5,000,000, or imprisoned not more than 20 years, or both, except that when such person is a person other than a natural person, a fine not exceeding $25,000,000 may be imposed; but no person shall be subject to imprisonment under this section for the violation of any rule or regulation if he proves that he had no knowledge of such rule or regulation.

 

(b) Failure to file information, documents, or reports

Any issuer which fails to file information, documents, or reports required to be filed under subsection (d) of section 78o of this title or any rule or regulation thereunder shall forfeit to the United States the sum of $100 for each and every day such failure to file shall continue. Such forfeiture, which shall be in lieu of any criminal penalty for such failure to file which might be deemed to arise under subsection (a) of this section, shall be payable into the Treasury of the United States and shall be recoverable in a civil suit in the name of the United States.

 

(c) Violations by issuers, officers, directors, stockholders, employees, or agents of issuers

(1)       (A) Any issuer that violates subsection (a) or (g) of section 30A of this title [15 U.S.C. § 78dd-1] shall be fined not more than $2,000,000.

(B) Any issuer that violates subsection (a) or (g) of section 30A of this title [15 U.S.C. § 78dd-1] shall be subject to a civil penalty of not more than $10,000 imposed in an action brought by the Commission.

(2) (A) Any officer, director, employee, or agent of an issuer, or stockholder acting on behalf of such issuer, who willfully violates subsection (a) or (g) of section 30A of this title [15 U.S.C. § 78dd-1] shall be fined not more than $100,000, or imprisoned not more than 5 years, or both.

(B) Any officer, director, employee, or agent of an issuer, or stockholder acting on behalf of such issuer, who violates subsection (a) or (g) of section 30A of this title [15 U.S.C. § 78dd‑1] shall be subject to a civil penalty of not more than $10,000 imposed in an action brought by the Commission.

(3) Whenever a fine is imposed under paragraph (2) upon any officer, director, employee, agent, or stockholder of an issuer, such fine may not be paid, directly or indirectly, by such issuer.