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Foreign Corrupt Practices Act

Policies and Procedures

Purpose

It is Global Shipping Services fundamental policy that all of its business and other activities be conducted at all times in strict compliance with all applicable laws and regulations of the countries and jurisdictions in which the Company conducts business. The purpose of this policy is to ensure compliance by employees and representatives of the Company with the Foreign Corrupt Practices Act (the “FCPA”). The full text of the FCPA can be found at www.usdoj.gov/criminal/fraud/fcpa. The Lay Person’s Guide to the FCPA is located
at www.usdoj.gov/criminal/fraud/docs/dojdocb.html.

Application

This policy is applicable to all divisions of the Company and to all employees and representatives acting for or on behalf of the Company. Strict adherence to this policy is required, except to the extent that a more stringent, applicable law exists.

Overview of the FCPA

The FCPA consists of two sections. The first section, the “anti-bribery section,” makes it a crime to bribe or attempt to bribe foreign officials in order to obtain or retain business or to secure an improper advantage. The second section, the “accounting section,” requires companies to keep accurate and complete books and records and to maintain a system of internal controls.

A. Anti-Bribery Section

1. Prohibited Payments

The FCPA anti-bribery section prohibits payments, offers or gifts of money or anything of value, with corrupt intent, to a “foreign official” in order to obtain or retain business or to secure an improper advantage anywhere in the world.

A “foreign official” means any person acting in an official capacity for or on behalf of a government, department, agency or instrumentality outside of the United States (“U.S.”).

Foreign officials include:
• officers or employees of a non-U.S. government, department, agency or instrumentality;
• customs officials;
• non-U.S. candidates for political office; and
• officials of public international organizations (i.e., the Red Cross or the World Bank).

The FCPA prohibits both direct and indirect payments to foreign officials. Thus, a company can face FCPA liability based on improper payments made by any representative of such company.

Accordingly, except as set forth in this policy, neither Global Shipping Services nor any of its employees or representatives shall make, promise or authorize any gift, payment or offer anything of value on behalf of the Company to a foreign official or to any third party who, in turn, is likely to make a gift, payment or offer of anything of value to a foreign official.

If confronted with a request or demand for a bribe, the request or demand must be immediately rejected and reported to management and the FCPA policy officer.

If any employee or representative of Global Shipping Services knows or believes that a bribe has been or will be committed, the employee or representative must immediately report this to his/her manager and the FCPA policy officer.

2. Permissible Payments

a. Facilitating Payments

Although the FCPA allows an exception for “facilitating payments” to foreign officials, Global Shipping Services prohibits such payments without prior written authorization from the FCPA policy officer, except where a threat to personal health and safety exists. In any situation where health and safety
concerns do not allow enough time for prior approval, the payment may be provided and immediately thereafter reported to management and the FCPA policy officer.

Any facilitating payment must be fully and accurately reflected in the Company’s books and records.

What is a facilitating payment?

A facilitating payment is a payment made to a foreign official for the purpose of facilitating routine governmental action or to speed up the performance of essentially clerical activities that are not discretionary in nature. “Routine governmental action” is defined to encompass only actions that are ordinarily performed by a foreign official.

Routine governmental action does not include discretionary decisions by foreign officials such as “whether, or on what terms, to award new business to or to continue business with a particular party.”

b. Promotional or Marketing Payments

In some circumstances, the FCPA permits payments to foreign officials that are lawful under the written laws of the local country. These payments may include expenses directly related to the promotion of products or services or the performance of a contractual obligation. Because promotional or marketing payments are not always clearly defined and frequently require some degree of legal analysis, Global Shipping Services prohibits such payments without the prior written authorization of the FCPA policy officer.
In addition, such payments, when made, must be fully and accurately reflected in the Company’s books and records.

B. Accounting Section

The accounting section of the FCPA requires companies to accurately maintain their books, records and accounts in reasonable detail, such that they fairly reflect all transactions and dispositions of assets. The accounting section also requires companies to maintain a system of internal controls to prevent concealment of bribes and discourage fraudulent accounting practices. Thus, the FCPA prohibits the mischaracterization or omission of any transaction on a company’s books or any failure to maintain proper internal controls designed to discourage, prevent and detect bribes.

Accordingly, no false or misleading entries may be made in Global Shipping Services’ books or records. Company employees and representatives are prohibited from engaging in any arrangements that would result in such entries. No undisclosed or unrecorded funds or assets may be established.

If any employee or representative of Global Shipping Services knows or believes that a payment has been or will be recorded improperly or in any manner that conceals, distorts or otherwise misrepresents the true and accurate nature of the transaction, the employee or representative must immediately report this to management and the FCPA policy officer.

C. Penalties

The FCPA imposes criminal liability on both individuals and companies. For individuals who violate the anti-bribery section of the FCPA, criminal penalties include substantial fines and/or imprisonment of up to five years. The FCPA prohibits companies from reimbursing any fine imposed on an individual. Companies may be fined up to U.S. $2,000,000, or, alternatively, twice their pecuniary gain, for criminal violations of the FCPA’s anti-bribery section.

In addition to criminal penalties, a civil penalty of up to U.S. $10,000 per violation may be imposed upon a company that violates the anti-bribery section, and against any employee or representative of a company who violates the FCPA.

Individuals who wilfully violate the accounting section of the FCPA may be fined up to U.S. $1,000,000, imprisoned up to twenty years, or both. A company may be fined up to U.S. $2,000,000. Alternatively, both individuals and corporations violating the FCPA’s accounting section may be subject to fines of up to twice the amount of any pecuniary gain resulting from such violation.

In addition to civil and criminal penalties, a company may suffer disgorgement of profits and the imposition of an independent compliance monitor to oversee compliance matters. An individual and company found in violation of the FCPA may be precluded from doing business with the U.S. government. Other penalties include suspension or termination of export licenses and debarment from programs under the Commodity Futures Trading Commission and the Overseas Private Investment Corporation.

D. Due Diligence and Selection of Representatives

In many instances, the use of local agents, consultants or joint venture partners (collectively “representatives”) is an essential element of doing business. Local representatives are generally retained by the Company in part for their knowledge of and access to persons in the local market and for their ability to secure and retain business.

As discussed above, the prohibitions of the FCPA include payments to foreign officials made by representatives on a company’s behalf. The Company must be careful to avoid situations involving representatives that might lead to a violation of the FCPA.

Therefore, prior to retaining any local representative to act on behalf of the Company with regard to local governments or international business development or retention, the Company must perform appropriate FCPA-related due diligence and obtain from prospective local representatives certain assurances of compliance.

Such due diligence should include where available:
• checking public sources of information, including any published press reports concerning the agent
• interviewing prospective local representatives
• discussing this policy with prospective local representatives and providing the representative with a copy
• discussing local anti-bribery laws with prospective local representatives
• continuous monitoring of activities of local representatives to ensure compliance with the FCPA and local laws.

A separate file must be maintained documenting the FCPA-related due diligence efforts undertaken by the Company in connection with each local representative

All local representatives must be identified and selected on the basis of objective criteria, i.e., a representative should be selected on the basis of identifiable commercial and industry competence and not because the representative is the relative of any government official.

A written agreement must be entered into prior to conducting business with any local representative, the form of which must be approved in writing by the FCPA policy officer.

E. Warnings Signs About Representatives (Red Flags)

Global Shipping Services and their employee’s must continuously monitor the activities of local representatives. The presence of any of the warning signs listed below or other suspicious actions, payments or demands by local representatives should be immediately reported to management and the FCPA policy officer. Global Shipping Services must not retain or conduct business with any local representative if any of the following warning signs exist without first obtaining the written approval of the FCPA policy officer.

• unusual or excessive payment requests, such as requests for over-invoicing, up-front payments, unusual commissions or mid-stream compensation payments, requests for payments in a third country, to another party, to a foreign bank account, in cash or otherwise untraceable funds
• requests for political or charitable contributions
• any refusal or hesitancy by the local representative to promise in writing to abide by the FCPA or this policy
• a demand or strong suggestion by a foreign official that a particular local representative should be retained
• any known or suspected misrepresentation by the local representative in connection with the proposed transaction
• reliance by the local third-party on political/government contacts rather than knowledgeable staff and investment of time to promote Global Shipping Services’ interests
• any known or suspected family relationship between the local representative and any foreign official

F. Reporting Violations

Any Employee or representative who has any question with respect to application of this policy of any other anti-bribery laws should consult with Global Shipping Services’ FCPA policy officer.

In addition, any employee or representative who becomes aware of a violation or potential violation of the FCPA or any other anti-bribery laws must promptly report this to management and the FCPA policy officer.

G. FCPA Policy officer contact details

The FCPA policy officer at Global Shipping Services, LLC is as follows:

Frank Harzold
Global Shipping Services, LLC
21 Fadem Rd, Unit#14
Springfield, NJ 07081
Tel: (908)232-0505
Fax: (908)232-0054
E-mail: Frank-Harzold@glship.com


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