ARTHUR J. GALLAGHER & CO.
Policy on Compliance with International Anti-Bribery Laws
We are committed to compliance with all anti-bribery laws affecting our international operations. These laws include, but are not limited to, the U.S. Foreign Corrupt Practices Act (the FCPA), the UK Bribery Act 2010 (the Bribery Act) and laws enacted by other countries in accordance with the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions.
It is our policy that no employee, officer or director of Arthur J. Gallagher & Co. or any of its subsidiaries or affiliates may accept, offer, promise, authorize or provide bribes, kickbacks, other illegal payments or similar favors to or from anyone (whether government officials or individuals employed in the private sector). In addition, all of our expenses must be accurately recorded in our books and records, and supported by accurate documentation and invoices that clearly reflect the economic realities of all transactions.
It is also our policy to require agents, consultants, business partners and other representatives that act on our behalf to comply with these same laws and practices.
CONSEQUENCES OF NON-COMPLIANCE
Failure to comply with anti-bribery laws could have significant negative consequences, both for you and for Gallagher. Violating the FCPA can result in millions of dollars in fines against Gallagher and can subject you to prosecution, criminal fines, and imprisonment (up to 5 years for violating the anti-bribery provisions, and up to 20 years for violating the accounting standards). Violations of the Bribery Act and other anti-bribery laws can also result in millions of dollars in fines against Gallagher and prosecutions, fines and imprisonment for individuals. It is important to note that any fines imposed upon you under the FCPA or Bribery Act cannot be paid on your behalf by Gallagher. Additionally, violations of this policy can result in disciplinary action by Gallagher, including termination of employment.
We have prepared an International Anti-Bribery Compliance Manual (the Compliance Manual) to provide specific guidance on the implementation and enforcement of this policy. The Compliance Manual is available on Gallagher’s Intranet site. Please consult the Compliance Manual if you are involved in any activities related to this policy.
BASIC LEGAL REQUIREMENTS
Anti-bribery laws, including the FCPA and the Bribery Act, prohibit Gallagher—as well as our officers, directors, employees, agents, and others acting on our behalf—from offering, promising, authorizing, or providing anything of value to a foreign official, in order to assist in obtaining or retaining business for or with, or directing business to, any business or person. Anti-bribery laws also impose accounting and record-keeping requirements on Gallagher. All financial accounting books and records must be kept accurately, and all expenses and other payments must be accurately recorded and fairly describe their purpose. In addition, these accounts must be evidenced by accurate and complete documentation.
- The term “foreign official” generally includes officers and employees of government agencies and institutions, as well as officers and employees of state-owned or controlled commercial enterprises, persons representing the government in an official capacity, candidates for political office, political parties and political party officials, and officers and employees of public international organizations (such as the World Bank or the UN). The definition of “foreign official” under anti-bribery laws is much broader than most people would expect. If you have any doubt about whether an individual might qualify as a foreign official under these laws, please call the Gallagher corporate legal department for advice.
- Anything of value will be considered a “bribe” or improper payment, if provided for the improper purposes prohibited by international anti-bribery laws. In addition to payments of money, these can include, among other things, benefits such as travel, entertainment, scholarships, vehicles, property, shoes, watches, electronics, office furniture, stock and share of profits, forgoing a lawful claim against a party, and advantages provided to third parties.
- Enforcement authorities cast a wide net when determining whether a payment was made for the purpose of “obtaining or retaining business.” Beyond the prototypical payment to win a contract award, other prohibited purposes can include, among others, payments to obtain favorable treatment in pending court cases, to obtain product delivery certificates, to obtain preferential customs treatment, to schedule, avoid or expedite necessary inspections, to obtain governmental reports and certifications necessary to market a product, and to reduce taxes.
Commercial or business-to-business bribery not involving a foreign official (which is prohibited by the Bribery Act, various U.S. laws and our Global Standards of Business Conduct) also violates the FCPA’s accounting standards if not accurately recorded in a company’s books and records. To ensure compliance with all applicable laws and our Global Standards of Business Conduct, this policy also prohibits offering, promising, authorizing, or providing anything of value to any person (whether or not a government official) that could be perceived as improperly influencing the recipient’s behavior. We must also not request, agree to receive, or receive anything of value from any person that could be perceived as improperly influencing our behavior.
GUIDELINES FOR COMPLIANCE
Indirect Payments and Benefits
Direct payments to government officials and other outside parties are not the only activities that can subject Gallagher to risk. Providing indirect payments or benefits can also subject Gallagher to risk. Indirect benefits may include, for example, charitable contributions to such person’s favorite charity, political contributions, or providing benefits to such person’s family member. Given the complexity of the legal requirements, those in a position to provide gifts or other benefits to government officials or other outside parties must familiarize themselves with and follow the Compliance Manual and not hesitate to ask the Gallagher corporate legal department for advice if there is any uncertainty about a particular situation.
Due Diligence on Outside Parties
The conduct targeted by international anti-bribery laws is prohibited whether engaged in by Gallagher employees directly or by any person who may be acting on Gallagher’s behalf. These outside parties may include, among others, introducers, consultants, contractors, agents, co-brokers, correspondents, joint venture partners or other business partners. In addition, Gallagher could be subject to successor liability for violations of anti-bribery laws by acquisition targets before Gallagher acquires them.
Therefore, to minimize the risk that outside parties engage in activities that could create liability for Gallagher, any outside parties with whom you do business must be carefully vetted and regularly reviewed in accordance with the due diligence procedures described in the Compliance Manual.
Lawful Payments and Reasonable Business Expenses
The FCPA generally allows (i) payments that are expressly permitted by the written laws of the relevant country (in practice, an extremely narrow category) and (ii) payments that constitute reasonable and bona fide expenses incurred for or on behalf of a foreign official directly related to the promotion, demonstration, or explanation of products or services or the execution or performance of a contract with a foreign government or agency. The Bribery Act does not explicitly allow payments for reasonable and bona fide expenses, instead giving UK enforcement authorities broad discretion to determine whether benefits were given with the intent to influence the recipient to act improperly or, in the case of benefits provided to foreign officials, when there is no local law permitting the benefits and there is reason to believe they were given to influence the judgment or conduct of the official.
While clearly modest corporate entertainment and gifts should be permissible under these standards, and clearly lavish expenses will not be, it is difficult to draw a line between the two on a case-by-case basis. In addition to the general guidelines set forth in our Global Standards of Business Conduct, please also refer to the Compliance Manual for specific guidance regarding permissible expenses for corporate entertainment and gifts involving foreign officials. You should familiarize yourself with and follow this guidance if you are in a position to provide corporate entertainment and gifts or otherwise incur business expenses in connection with dealings with government officials or other outside parties.
Facilitating or “Grease” Payments
Our policy makes no general exception for so-called facilitating or grease payments. While often illegal under local law, in some countries it is common for government employees to receive such payments to expedite or secure the performance of routine governmental action. These payments are not categorically banned by the FCPA, but they do violate the Bribery Act, and this policy does not allow such payments unless specifically approved by Arthur J. Gallagher & Co.’s General Counsel. In extreme circumstances (for example, personal safety concerns require the making of a facilitating payment for protection), the payment should be reported to the General Counsel as soon as possible. Failure to report any such payment is a violation of this policy.
It is important to note that a facilitating payment lawful under the FCPA can be the basis for a criminal violation (leading to millions of dollars in fines against Gallagher and up to 20 years in prison and fines for the individuals involved), if knowingly accounted for in a misleading way in the company’s books and records.
Education and Monitoring
We are implementing a program to provide ongoing anti-bribery education and training to employees and certain agents acting on our behalf, and a program to actively monitor compliance with such training requirements. Details of these programs can be found in the Compliance Manual.
If you become aware of any demand or solicitation for a bribe, kickback or other improper payment, or any other transaction, no matter how seemingly insignificant, that might give rise to a violation of the FCPA, the Bribery Act, other applicable anti-bribery laws and regulations, or this policy, you must immediately report it to the Gallagher corporate legal department or call our Ethics Hotline at (888) 878-6236 in the United States, or (770) 582-5298 outside of the United States. Gallagher will not retaliate or take any adverse action against you for making such a report in good faith. However, your failure to report known or suspected wrongdoing of which you have knowledge may, by itself, subject you to disciplinary action (including termination of employment).
Please do not hesitate to contact Gallagher's Chief Compliance Officer, Sarah DiLorenzo, if you have any questions regarding this policy or the Compliance Manual. You can reach her at (630) 285- 4441.