Bribery, Anti-Corruption and Tax Evasion Policy

BRIBERY, ANTI-CORRUPTION AND TAX EVASION POLICIES

1. POLICY STATEMENT

1.1. It is the policy of Consolidated Timber Holdings Group Limited and all of its subsidiary companies (together the “Group”) to conduct all its business in an honest and ethical manner. The Group takes a zero-tolerance approach to bribery, corruption and tax evasion and is committed to acting professionally, fairly and with integrity in all business dealings and relationships wherever it operates and implementing and enforcing effective systems to counter bribery and tax evasion.                                                                       

1.2. The Group will uphold all laws relevant to countering bribery, corruption and tax evasion in all jurisdictions in which it operates. However the Group remains bound by the laws of the UK, including the Bribery Act 2010 and the Criminal Finance Act 2017, in respect of its conduct both at home and abroad.

1.3. The purpose of this policy is to:

1.3.1. Set out the Group’s responsibilities, and of those working for the Group, in observing and upholding our zero-tolerance position on bribery and corruption and tax evasion; and
1.3.2. Provide information and guidance to those working for the Group on how to recognise and deal with bribery and corruption and tax evasion issues.

1.4. Bribery and corruption in the UK are punishable for individuals by up to ten years’ imprisonment and if the Group is found to have taken part in corruption or tax evasion it could face an unlimited fine, be excluded from tendering for the public contracts and face damage to the Group’s reputation. The Group therefore takes its legal responsibilities very seriously.

1.5. In the unlikely event where it becomes known that a bribery incident or tax evasion incident has been committed by an employee (when acting in their capacity as a person associated with the Group), it is the Group’s policy to report the matter to the relevant prosecuting authorities and to co-operate fully with them in their investigation and prosecution of the matter.

1.6. In this policy the third party means any individual or organisation you come into contact with during the course of your work for the Group, and includes actual and potential clients, customers, suppliers, distributors, business contacts, agents, advisers and government and public bodies, including their advisors representatives and officials, politicians and political parties.

2. WHO IS COVERED BY THE POLICY?

The policy applies to all individuals working at all levels and grades within the Group, including Directors, senior managers, officers, employees (whether permanent, fixed-term or temporary), consultants, contractors, trainees, seconded staff, homeworkers, casual workers and agency staff, volunteers, interns, agents, sponsors, or any other person associated with the Group, wherever located and irrespective of which company employs them within the Group (collectively referred to as “employees” in this policy).

3. WHAT IS BRIBERY?

A bribe is an inducement or reward offered, promised or provided in order to gain any commercial, contractual, regulatory or personal advantage. A bribe need not only be a direct payment or benefit, but can cover indirect arrangements, which offer a benefit, not necessarily financial, to the recipient.

Bribery refers to the act of offering, giving, promising,asking, agreeing, accepting, or soliciting something of value or of an advantage so to induce or influence an action or decision. If an individual is on the receiving end of a bribe and they accept it, they are also breaking the law.

EXAMPLES:

Offering a bribe – Example 1
You offer a potential client tickets to a major sporting event, but only if they agree to do business with the Group.
This would be an offence as you are making the offer to gain a commercial and contractual advantage. The Group may also be found to have committed an offence because the offer has been made to obtain business for the Group. It may also be an offence for the potential client to accept your offer.

Offering a bribe – Example 2
A potential client requests you to make a donation to his preferred charity as a condition of you obtaining his business.
Notwithstanding that the potential client might not benefit directly from the donation, any such donation offered or made could be considered to be a bribe. Any such requests received should be referred to the Board of Directors which will use impartial criteria to determine whether to make a donation. The potential client should be advised that the Group uses impartial criteria in making donations and each request is judged on purely on its merits against the criteria and not on obtaining new business.

Receiving a bribe – Example 3
A supplier gives your nephew a job, but makes it clear that in return they expect you to use your influence to ensure the Group continues to do business with them.
It is an offence for a supplier to make such an offer. It would be an offence for you to accept the offer as you would be doing so to gain a personal advantage.

Bribing a foreign official – Example 4
You arrange for an additional payment to be made to a foreign official to speed up an administrative process, such as clearing the Group’s goods through customs.
The offence of bribing a foreign public official is committed as soon as the offer is made. This is because it is made to gain a business advantage for the Group. The Group may also be found to have committed an offence.

4. WHAT IS NOT ACCEPTABLE?

4.1 Reasonable, proportionate gifts and hospitality made in good faith and that are not lavish are acceptable. For the avoidance of doubt low value corporate promotional items are acceptable. However, it is not acceptable for you (or someone on your behalf) to:

4.1.1. Give, promise to give, or offer, a payment, gift or hospitality with the expectation or hope that a business advantage will be received, or to reward a business advantage already given;
4.1.2. Give, promise to give, or offer, a payment, gift or hospitality to a government official, agent or representative to “facilitate” or expedite a routine procedure;
4.1.3. Accept payment from a third party that you know or suspect is offered with the expectation that it will obtain a business advantage for them;
4.1.4. Accept a gift or hospitality from a third party if you know or suspect that it is offered or provided with an expectation that a business advantage will be provided by the Group in return;
4.1.5. Accept cash or cash equivalents without the consideration of the nominated compliance manager or a Director;
4.1.6. Threaten or retaliate against another employee who has refused to commit a bribery offence or who has raised concerns under this policy; or
4.1.7. Engage in any activity that might lead to a breach of this policy.

5. FACILITATION PAYMENTS AND KICKBACKS

5.1. The Group does not make, and will not accept, facilitation payments or “kickbacks” of any kind. Facilitation payments are typically small, unofficial payments made to secure or expedite a routine government action by a government official. It is very rare for them to be paid in the UK, but common in some other jurisdictions.

5.2. If you are asked to make a payment on the Group’s behalf, you should always be mindful of what the payment is for and whether the amount requested is proportionate to the goods or services provided. You should always ask for a receipt which details the reason for payment. If you have any suspicions, concerns or queries regarding a payment, you should raise these with your line manager, nominated compliance manager or a Director.

5.3. Kickbacks are typically payments made in return for a business favour or advantage. All employees must avoid any activity that might lead to, or suggest that a facilitation payment or kickback will be made or accepted by the Group.

5.4. The Group wil not make donations, wether in cash, kind, or by any othr means, to support any political parties or candidates.

5.5. Employees must be careful to ensure that charitable contributions are not used to facilitate and conceal acts of bribery.

6. WHAT IS TAX EVASION?

6.1. Tax evasion occurs when the correct amount of tax is not paid and there is a dishonest intention not to declare it. The tax evasion could relate to UK tax or non-UK tax and could involve any person associated with the Group (which would include an employee, agent or other person who may perform services for or on behalf of the Group such as contractors and suppliers (the “Associated Person”)).

6.2. All employees must avoid any activity when acting on behalf of the Group, and must ensure that an Associated Person is not involved in any activity, that might lead to:

6.2.1. Cheating the public revenue;
6.2.2. Being knowingly concerned in, or in taking steps with a view to, the evasion of tax by them or by another person;
6.2.3. Aiding, abetting, counselling or procuring the commission of tax evasion; or
6.2.4. A tax evasion offence under the laws of a foreign country.

TAX EVASION – Example

An employee of a wood supplier falsifies an invoice to reduce the amount of tax the supplier is required to pay to the public revenue.
The supplier has committed tax evasion. The Group may also have committed an offence if it is found to be an Associated Person of the supplier and knowingly concerned in, or in taking steps with a view to, the evasion of tax by the supplier or aided, abetted, counselled or procured the tax evasion.

7. YOUR RESPONSIBILITIES

7.1. You must ensure that you read, understand and comply with this policy and training or other material you may be given from time to time.

7.2. The prevention, detection and reporting of bribery, corruption and tax evasion are the responsibility of all those working for the Group or under the Group’s control. All employees are required to avoid any activity that might leads to, or suggest, a breach of this policy.

7.3. You must notify your manager, the nominated compliance manager or a Director as soon as possible if you believe or suspect that a conflict with this policy has occurred, or may occur in the future. For example, if a client or potential client offers you something to gain a business advantage with us, or indicates to you that a gift or payment is required to secure their business. Further “red flags” that may indicate bribery or corruption are set out in the Schedule to this policy.

7.4. Any employee who breaches this policy will face disciplinary action, which could result in dismissal for gross misconduct. The Group reserves the right to terminate its contractual relationship with other employees it they breach this policy.

7.5. You must not threaten or retaliate against any employee who has refused to commit a bribery offence or who has raised concerns under this policy.

8. RECORD KEEPING

8.1. The Group wil keep financial records and have appropriate internal controls in place which will evidence the business reason for making payments to third parties.

8.2. You must declare and keep a written record of all hospitality or gifts accepted or offered over £100 using the Group’s on line systems which may be subject to management review.

8.3. You must ensure all expenses claims relating to hospitality, gifts or expenses incurred to third parties are submitted in accordance with the Group’s expenses policy (as set out in the Staff Handbook) and specifically record the reason for the expenditure.

8.4. All accounts, invoices, memoranda and other documents and records relating to dealings with third parties, such as clients, suppliers and business contacts, should be prepared and maintained with strict accuracy and completeness. No accounts must be kept “off-book” to facilitate or conceal improper payments.

9. HOW TO RAISE A CONCERN

9.1. You are encouraged to raise concerns about any issue or suspicion of malpractice at the earliest possible stage. If you are unsure whether a particular act constitutes bribery, corruption or tax evasion, or if you have any other queries, these should be raised with your line manager, the nominated compliance manager or a Director. Alternatively, if you feel you cannot raise the matter with your line manager or a Director you may follow the procedure set out in the Group’s Whistleblowing Policy. A copy of the Whistleblowing Policy is set out in the Staff Handbook which is available from the Personnel Department.

10. WHAT TO DO IF YOU ARE A VICTIM OF BRIBERY OR CORRUPTION OR SUSPECT TAX EVASION

10.1. It is important that you contact the nominated compliance manager or a Director as soon as possible if;

10.1.1. You are offered a bribe by a third party, are asked to make on, suspect that his may happen in the future, or believe that you are a victim of another form of unlawful activity; or
10.1.2. You (when acting in your capacity as a person associated with the Group), have been involved in, or suspect that another employee or Associated Person has been involved in tax evasion.

11. PROTECTION

11.1. Employees who refuse to accept or offer a bribe, suspect tax evasion or those who raise concerns or report another’s wrongdoing, are sometimes worried about possible repercussions. The Group aims to encourage openness and will support anyone who raises genuine concerns in good faith under this policy, even if they turn out to be mistaken.

11.2. The Group is committed to ensuring no one suffers any detrimental treatment as a result of refusing to take part in bribery, corruption or tax evasion, or because of reporting in good faith their suspicion that an actual or potential bribery, tax evasion or other corruption offence has taken place, or may take place in the future. Detrimental treatment includes, dismissal, disciplinary action, threats or other unfavourable treatment connected with raising a concern. If you believe that you have suffered any such treatment, you should inform a Director immediately. If the matter is not remedied, and you are an employee, you should raise it formally using the Group’s Grievance Procedure. A copy of the Group’s Grievance Procedure is set out in the Staff Handbook which is available from the Personnel Department.

12. TRAINING AND COMMUNICATION

12.1. All existing employees will receive regular, relevant training on how to implement and adhere to this policy.

12.2. The Group’s zero-tolerance approach to bribery, corruption and tax evasion must be communicated to all suppliers, contractors, agents and business partners at the outset of the business relationship with them and as appropriate thereafter.

13. WHO IS RESPONSIBLE FOR THE POLICY?

13.1. The Board of Directors has overall responsibility for ensuring this policy complies with the Group’s legal and ethical obligations and that all those under the Group’s control comply with it.

13.2. The Board of Directors will ensure, at least annually, that the procedures to prevent bribery, corruption and tax evasion and the monitoring and review thereof, remain effective.

13.3. The Directors have primary and day-to-day responsibility for implementing this policy, and for monitoring its use and effectiveness and dealing with any queries on its interpretation. Management at all levels are responsible for ensuring those reporting to them are made aware of and understand this policy and are given adequate and regular training on it.

14. MONITORING AND REVIEW

14.1. The Board of Directors will monitor the effectiveness and review the implementation of this policy, regularly considering its suitability, adequacy and effectiveness. Any improvements identified will be made as soon as possible. Internal control systems and procedures will be subject to regular audits to provide assurance that they are effective in countering bribery, corruption and tax evasion.

14.2. All works are responsible for the success of this policy and should ensure they use it to disclose any suspected danger or wrongdoing. Employees are invited to comment on this policy and suggest ways in which it might be improved. Comments, suggestions and queries should be addressed to a Director.

14.3. The policy does not form part of any employee’s contract of employment and it may be amended at any time.

SCHEDULE – POTENTIAL RISK SCENARIOS AND “RED FLAGS”

The following is a list of possible red flags that may arise during the course of you working for the Group and which may raise concerns under various anti-bribery, anti-corruption provisions. The list is not intended to be exhaustive and is for illustrative purposes only.
If you encounter any of these red flags while working for the Group you must report them promptly to your line manager, the nominated Compliance Manager or a Director or use the procedure set out in the Whistleblowing Policy:

BRIBERY OR CORRUPTION
• You become aware that a third party engages in, or has been accused of engaging in, improper business practices;
• You learn that a third party has a reputation for paying bribes, or requiring that bribes are paid to them, or has a reputation for having a “special relationship” with foreign government officials;
• A third party insists on receiving a commission or fee payment before committing to sign up to a contract with us, or carrying out a government function or process for us;
• A third party requests payment in cash and/or refuses to sign a formal commission or fee agreement, or to provide an invoice or receipt for a payment made;
• A third party requests that payment is made to a country or geographic location different from where the third party resides or conducts business;
• A third party requests an unexpected additional fee or commission to “facilitate” a service;
• A third party demands lavish entertainment or gifts before commencing or continuing contractual negotiations or provision of services;
• A third party requests that a payment Is made to “overlook” potential legal violations;
• A third party requests that you provide employment or some other advantage to a friend or relative;
• You receive an invoice from a third party that appears to be non-standard or customised;
• A third party insists on the use of side letters or refuses to put terms agreed in writing;
• You notice that we have been invoiced for a commission or fee payment that appears large given the service stated to have been provided;
• A third party requests or requires the use of an agent, intermediary consultant, distributor or supplier that is not typically used by or know to us; and
• You are offered an unusually generous gift or offered lavish hospitality by a third party


The Directors
Consolidated Timber Holdings Group Limited
May 2018