Anti-Bribery and Corruption Policy

Anti-Bribery and Corruption Policy

The policy of combating bribery and corruption of the Private Joint-Stock Company "Ukrgazvydobutok"

Policies to combat bribery and corruption
Private Joint-Stock Company “Ukrgazvydobutok”
(hereinafter referred to as “the Company”)


Content
1. Purpose of the Policy
2. To whom is this policy applied?
3. The meaning of the Policy for the Company’s employees is a brief overview
4. Principles of the Company
5. Compliance and responsibility
6. Definition of “bribery” and “corruption”
7. Business gifts and hospitality
8. Unacceptable practices
9. Fees for simplification of formalities
10. Voluntary contributions
11. Associated persons
12. Responsibility of employees
13. Registration and accounting
14. Notification of suspicion of corruption
15. Protection
16. Monitoring and verification

Annex 1 – POSSIBLE SCENARIOES FOR RISK IMPLEMENTATION. Signs of bribery and corruption

1. Purpose of the Policy
1.1 The purpose of this policy is:
(A) outline the scope of the liability of the Company, its employees or persons associated with the Company to comply with the position of the Company in respect of bribery and corruption;
(B) provide information and instructions to the Company’s employees on the recognition and counteraction of bribery and corruption facts.
It is very important that each employee of the Company read, understand and act in accordance with the provisions of this Policy.

2. To whom is this policy applied?
2.1 This policy applies to all employees at all levels and positions, including directors, managers, employees (full-time, temporary or those working on fixed-term contracts) consultants, contractors, business travelers, employees in outsourcing, interns, agents and any other persons associated with the Company, as well as to all objects of the Company and their employees, regardless of their location (collectively referred to as “employees”).
2.3 The company welcomes the adoption of similar policies and procedures for countering bribery in the companies of their partners.

3. The meaning of the Policy for the Company’s employees is a brief overview
3.1 According to this Policy, an offense is considered (1) bribery of another person; (2) obtaining a bribe; (3) bribing a public official; (4) other actions that, in accordance with applicable law, are considered to be in violation of the rules of anti-corruption legislation.
3.2 Legislation Ukraine (Law of Ukraine “On prevention of legalization (laundering) of proceeds from crime, terrorist financing and the financing of proliferation of weapons of mass destruction” in 2014 and the Law of Ukraine “On Corruption Prevention” 2014) provides a detailed list of subjects which may be participants in corruption acts, and the Criminal Code of Ukraine provides for a detailed description of cases of committing corrupt acts and punishment for such actions.
According to the legislation of Ukraine, punishment for corruption acts may be fines, imprisonment, and confiscation of property.
3.3 It is prohibited to propose, promise or provide financial or other benefits to any person (including government officials) in order to encourage or encourage the improper performance of their official duties.
3.4 It is prohibited to accept or consent to financial or other benefits directly or indirectly in the form of remuneration for improper performance of their official duties. It does not matter who is assigned such benefit – directly to you or a third person.
3.5 If the position of the employee of the Company so provides, he is allowed to organize and participate in representative activities / corporate hospitality (for explanations on this issue, the employee should contact his immediate supervisor). However, such measures should always be reasonable and proportionate in nature. More detailed information on this issue (including rules for the exchange of business gifts) is provided in the following sections of the Policy.

4. Principles of the Company
4.1 Honest and ethical conduct of business is the policy of the Company. We adhere to the strict approach to combating bribery and corruption and adhere to the standards of professional, honest and decent business activities and relationships in all areas of the Company’s activities.
4.2 The Company’s optimal goal is to apply the same rigorous approach to combating bribery and corruption with all persons with whom the Company has business relations.
4.3 In the course of its activities, the Company is subject to the legislation of Ukraine on counteraction to corruption and money laundering, both in the country of location and abroad. The company should also comply with the legislation on combating bribery and corruption in jurisdictions conducting its business operations.
4.4 Bribery and corruption are violations for which criminal liability may occur (up to imprisonment). In the event that the Company is noticed in corruption activities, this could have a significant negative effect on the Company’s business reputation. In this regard, the Company treats its legal and reputational responsibilities extremely seriously and expects a similar approach from its employees.
4.5 This Policy treats the notion of “third party” as any physical or legal entity

and the person with whom the employees of the Company interact in the course of work, and includes such persons: existing and potential clients, suppliers, distributors, persons with whom the Company is associated with business communications, agents, consultants, state and public authorities (including their consultants, representatives and officials), as well as politicians and political parties.

5. Compliance and responsibility
5.1 The Director of the Company bears primary responsibility for the application of procedures that prevent bribery and corruption.
5.2 The management of the Company is responsible for the daily application of this Policy in the course of work, as well as verification of the Policy for its compliance with legislative requirements, adequacy and effectiveness. The management and senior staff of all levels are responsible for bringing the requirements of this Policy to the attention and understanding of their subordinates. Any work opportunities identified in this regard should be implemented without delay and subject to regular review in order to guarantee their effectiveness.
5.3 All Company employees are individually and collectively responsible for the successful application of this Policy and must comply with the procedures described in the Policy. If an employee sees opportunities to improve this Policy, he should contact his immediate supervisor with a request, comments and suggestions on such a matter.

6. Definition of “bribery” and “corruption”
6.1 Corruption is the use by the public or private person of his authority for personal gain.
6.2 A bribe is a proposal, a promise, or a direct promotion or reward for the purpose of obtaining a bribe of any commercial, contractual, regulatory or personal advantage as a result of improper performance of the duties by the person who received the bribe.
6.3 Inappropriate performance of duties by a person is a case of (1) abusive actions, (2) prejudiced judgments, or (3) abuse of power by a person holding a post of authority.
6.4 In the context of this Policy, a bribe is considered to be a situation in which one person is offering, paying, requiring or accepting a payment, gift, service, financial or other kind of benefit from another person in order to influence the course and business results of the business or to encourage or rewards for improper performance of duties.
6.5 Bribes and corruption affecting government officials or commercial enterprises, including joint ventures, may be direct or indirect through the involvement of third parties such as agents, brokers, consultants and joint venture partners. These concepts also include payments for simplification of formalities, even if in some countries they are completely legal.

7. Business gifts and hospitality
7.1 This Policy does not prohibit the wise and appropriate exchange of business gifts with third parties, as well as corporate hospitality. However, any gifts received or provided must comply with the provisions of this Policy.
7.2 This Policy allows you to present and receive business gifts on behalf of the Company under the following conditions:
(A) the business gift is served not with the purpose of influencing the employee of the Company (in case of receiving a gift) or a third party (in the case of a gift) to encourage the employee of the Company / a third party to improper performance of duties;
(B) the delivery / receipt of a business gift under any circumstances is not contrary to local law, is proportional and takes place at the appropriate time;
(B) the presentation / receipt of a business gift is open and is not a secret;
(D) the business gift is not by its nature the provision / receipt of cash or equivalent (eg, gift certificates);
(D) In ​​the case of public officials, an employee of the Company can not present gifts / receive gifts from them without prior agreement with their direct supervisor.
7.3 Although the Policy provides for cases in which the receipt of a business gift is considered acceptable, employees of the Company should always take into account all available circumstances when making a decision on the appropriateness and justification of the gift. In each case, the employee must take into account the intentions associated with the gift and assess whether the gift is due to the desire to encourage him to improper performance of official duties.
7.4 All donated or accepted gifts must be registered in the appropriate journal.

8. Unacceptable practices
In addition to the foregoing, is unacceptable when a Company employee (or other person on his behalf):
(A) presents, promises to be served, and also offers payment, gift or corporate hospitality in order to influence, encourage or encourage inadequate performance of duties;
(B) presents, promises to hand in, and also offers payment, gift or corporate hospitality to a public official, agent or representative in order to “facilitate” the passage or

to speed up the established procedure (in cases when such payments are unlawful according to local laws);
(B) accepts a payment from a third party, and if such employee knows / suspects that such payment is intended to receive in exchange for business benefits that may be obtained as a result of improper performance of their duties by an employee or the Company;
 (G) accepts a gift or provided corporate hospitality from a third party, while realizing or suspecting that a gift or hospitality is offered or provided in order to induce an employee or the Company to malfunction its duties;
(D) threatens or takes revenge upon another employee of the Company who has refused to participate in a bribe-related offense or has reported his suspicions of corruption in accordance with the provisions of this Policy;
(E) is involved in any action that might potentially lead to a breach of the provisions of this Policy.

9. Fees for simplification of formalities
9.1 The Company does not and does not accept any kind of “repayments” or payments for simplification of formalities.
9.2 Fees for simplifying formalities are usually small informal payments to government officials that are carried out in order to guarantee or speed up the implementation of established state procedures. Such payments are not the usual practice agreed by the Company, but are widespread in some other jurisdictions in which the Company may operate.
9.3 If an employee of the Company is requested to make a payment on behalf of the Company, he shall always take into account the purpose of the payment and the proportionality of the requested amount of the cost of the returned goods or services. Employees of the Company must always require an invoice indicating the purpose of the payment. If there is any suspicion, concern or doubt about payment, the employee must contact his immediate supervisor.
9.4 As Ukrainian legislation prohibits payments for simplification of formalities and bans, employees should not undertake such actions. Any incident of this nature or an inducement to an employee is obliged, at the earliest opportunity, to inform his immediate supervisor.
9.5 Typically, “rollback” is a payment made in response to a certain business benefit or benefit. Employees of the Company should avoid any actions that may lead to the payment / receipt or assumption of the possibility of payment / receipt of a “rollback” / payment for simplification of the Company’s formalities.

10. Voluntary contributions
10.1 The company does not make contributions in favor of political parties. The Company makes sole donations for charitable purposes that do not contradict the norms of local laws and ethics. In no case can contributions be made without prior approval from the head of the Company.

11. Associated persons
11.1 The definition of the term “associate” is quite large and may include any person who provides services to the Company and on its behalf. Taking into account all possible circumstances, the associate may be employees, subsidiaries and partners.
11.2 The following provisions should be taken into account when cooperating with affiliated persons:
(A) due diligence – conducting a comprehensive legal assessment of the alleged associate and assessing related risks. In doing so, it is necessary to take into account the type of work performed by such persons, the location of their activities, related cases of non-compliance with laws / laws or bribery, as well as any other relevant risks. Although the Company does not envisage any high-risk contracts, if, in the opinion of the employee, any employee is exposed to high corruption risks, the employee is obliged to report such information to his immediate supervisor.
(B) conclusion of contracts – if the Company decides to conclude a contract with an associate, the Company employee responsible for concluding such an agreement should consider the need to include additional anticorruption provisions in the text of the agreement. In the case of contracting with such a person, the employee must discuss with the company’s legal adviser the inclusion in the contract of the most appropriate provisions that would exclude the possibility of committing an associate of unlawful actions that can be considered as a corrupt offense.
(B) Awareness – all associated persons must comply with anti-corruption laws and bribery, as well as be familiar with the provisions of this Policy prior to the commencement of any type of work / service on behalf of the Company. The provisions on the availability of this Policy and the need for familiarization with it should be included in the contracts to be concluded by the Company with its counterparties.
(D) monitoring – it is necessary to monitor the work / services performed by the associated persons. Employees must ensure the right to organize

the conduct of the audit of the works / services performed, as well as the procedure for action in case of violation by such associate of obligations.
(D) Joint ventures (JVs) – When establishing joint ventures, it must be ensured that JPA partners are guided by their own respective policies and procedures to combat bribery and corruption that do not materially diverge from this policy.

12. Responsibility of employees
12.1 Every employee of the Company shall read, understand and ensure consistent compliance of its actions with the provisions of this Policy.
12.2 An employee is required to inform his / her immediate supervisor of the business gifts and corporate hospitality received / provided (if possible, in advance or immediately after receipt / delivery of a gift or corporate hospitality).
12.3 All persons working or under the control of the Company are required to take measures to prevent, detect and report on bribery facts, as well as other forms of corruption. All employees are obliged to avoid any actions that could potentially lead to a violation of the provisions of this Policy.
12.4 If an employee is confident or suspects that any action at the moment or in the future may violate or contravene the provisions of this Policy, he must promptly notify his or her immediate supervisor or director of the Company. For example, if a client or a potential client offers an employee something to gain business benefits from the Company or suggests the need to present a gift or a monetary reward for the opportunity to work with him. Other signs of bribery or corruption are listed in Appendix 1.
12.5 Any employee who violates this Policy may be subject to disciplinary action, up to dismissal.
12.6 Subject to labor law, the Company reserves the right to terminate employment relations with employees in case of violation of this Policy.

13. Registration and accounting
13.1 The Company shall maintain financial reporting and apply appropriate internal control procedures to confirm the business’s need for payment to third parties.
13.2 Employees are required to ensure that all reports on the spending of funds on corporate hospitality, business gifts and other expenses related to third parties are executed.
13.3 All invoices, invoices, explanatory notes and other documents and records related to relations with third parties such as clients, suppliers and business partners shall be conducted in an accurate and complete manner. Accounts can not be taken into account “out of balance” in order to facilitate the implementation or concealment of unlawful payments.
13.4 The Department of Personnel Management is required to keep a register of all donated and accepted business gifts and corporate hospitality. If an employee receives a gift or participates in an entertaining representative event, he must immediately report it to the Department of Personnel Management by e-mail to enter this information in the Register. Such Registries are subject to periodic reviews, including from the management side.

14. Notification of suspicion of corruption
14.1 The Company encourages employees to report as soon as possible any suspicions they have or information that may be related to unlawful actions. If the employee is unsure whether there is a certain act of bribery or corruption or if he has any other doubts, he must apply for clarification to his direct manager or to the director of the Company.

15. Protection
15.1 Employees who have refused to accept or offer a bribe have reported their suspicions of corruption or misconduct by others in some cases fearing possible consequences. The Company encourages openness in such matters and will support any person who will report their concerns about non-compliance with this Policy, even if such fears will be erroneous.

16. Monitoring and verification
16.1 The Company’s management monitors the effectiveness of the implementation of this Policy, and verifies it for compliance, adequacy and effectiveness. Any improvements discovered in this regard should be implemented without delay.
16.2 All Company employees are responsible for the successful application of this Policy and shall be guided by disclosure of information about any potential threats / risks or offenses.
16.3 The Company reserves the right, at its own discretion, to change and / or amend the provisions of this Policy from time to time.

Annex 1 – Possible scenarios of risk implementation: signs of bribery and corruption
The following list includes potential risks that may occur while the Company is operating and cause concern / conflict with different anti-corruption laws. This list is not final or exhaustive and is provided solely to assist employees observe the provisions of this Policy.
If an employee encounters any of the situations described below in the Company’s work, he must immediately inform his immediate supervisor:
(A) the employee becomes aware that the third party is using or was accused of using inappropriate business practices;
(B) the employee finds out that the third party has a reputation as a payer / receiver of bribes or has a “special relationship” with government officials;
(B) a third party insists on obtaining a commission or remuneration for signing a contract with the Company or for the “help” in the performance of the required Company procedure or process, the obligation to which is provided for by the relevant legislation;
(D) the third party requests payment by cash and / or refuses to sign a formal agreement on payment of the fee / remuneration or refuses to provide an account / check on the payment already made;
(D) the third party requires that the payment be sent to a country or geographic location that differs from the country of location or business conduct by a third party;
(E) a third party requests payment of an additional remuneration or commission that was not predetermined for providing / assisting in the provision of services;
(F) the third party requires entertainment or gift to begin or continue negotiations for the conclusion of a contract or provision of services;
(C) the third party requires a payment in its favor to “ignore” potential offenses;
(I) the third party requires the employment or any other benefits to a third party’s relative or relative;
(K) an employee of the Company receives an invoice for payment from a third party that looks non-standard or seems to be changed;
(L) the third party refuses to accept agreed terms in writing;
(M), the employee notices that the Company presents invoices for commission payment or remuneration, the amount of which seems unreasonably high, taking into account the amount of services declared in the account;
 (H) the third party offers the Company employee an extremely generous gift or kind of corporate hospitality;
(O) employees of the Company are asked to organize a representative event and not to visit it;
(P) employees of the Company are invited to take part in a representative event in which the event organizer is not going to participate;
(R) employees of the Company are requested to provide corporate hospitality to persons not associated with a third party company / organization (for example, family members); the Company employee is offered to take advantage of corporate hospitality, which extends to persons not related to the Company’s business (for example, members of the family).