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Anti-corruption Compliance Guidelines

Introduction

The commitment of Vodafone Group Plc ("Vodafone") to the highest ethical and legal standards extends to its business dealings throughout the world. This commitment is well established as one of our Values, through the Business Principles and our "Doing what is right" initiative. This anti-corruption compliance guidance is intended to build on this commitment by raising awareness of the relevant international laws, standards and principles in order to ensure compliance by Vodafone Group Plc, its subsidiary companies and all directors, officers and employees within the Vodafone Group with the anti-corruption Business Principles.

Definitions

The following definitions apply:

  • "Applicable Laws and Regulations" means and includes the UK Anti-Corruption Laws, the substantive anti-bribery and accounting provisions of the U.S. Foreign Corrupt Practices Act, as amended and the substantive provisions of the OECD Convention on Combating Bribery of Foreign Public Officials in International Transactions dated 21 November 1997.
  • "Government Official" means (i) any officer or employee of a government, department (whether executive, legislative, judicial or administrative), agency or instrumentality of such government, including a regional governmental body or a government-owned or government-controlled business, or of a public international organisation, (ii) any person acting in an official capacity for or on behalf of such government, department, agency, instrumentality or public international organisation; (iii) any candidate for a political or government office or appointee to such office; or (iv) any political party or party official. For purposes of this definition, an "instrumentality" of a government means any entity in which a government has direct or indirect majority ownership or over which it exercises affirmative control, directly or indirectly. A person does not cease to be a Government Official by purporting to act in a private capacity or by the fact that he or she serves without compensation.
  • "UK Anti-Corruption Laws" means the common law offence of bribery and the substantive anti-bribery and accounting provisions of the Public Bodies Corrupt Practices Act 1889, the Prevention of Corruption Acts 1906 and 1916, and the Anti-Terrorism, Crime and Security Act 2001.

Applicable Laws and Regulations

While many laws apply to both domestic and foreign business actions, the Applicable Laws and Regulations focus on corruption in international business activities and warrant particular emphasis. The Applicable Laws and Regulations prohibit improper payments - including bribes, gifts, or promises to give anything of value for improper purposes - to Government Officials to obtain business or any other benefit. The Applicable Laws and Regulations also require companies to keep accurate financial records and institute internal controls to ensure compliance.

The OECD Convention on Combating Bribery of Foreign Public Officials in International Transactions dated 21 November 1997 requires the signatory countries to criminalise bribery and to minimise the opportunities for bribery through strict accounting, record-keeping and reporting procedures Individual signatory countries may have implemented anti-corruption legislation that is more onerous than this convention requires and any such legislation is beyond the scope of these guidelines.

However, individuals must familiarise themselves with domestic legislation in addition to the Applicable Laws and Regulations.

Violating these laws can result in significant civil penalties for the company and for you personally and may even result in criminal penalties, including multi-million dollar fines and imprisonment.

In the event of any conflict between any of the Applicable Laws and Regulations, the most stringent will apply.

The following guidelines generally describe these laws and will help you recognise issues of concern.

Please call the Group Legal Department for advice on specific issues related to these laws. It is important to remember that, although private sector bribery is not specifically covered by these guidelines, it is illegal in most jurisdictions and carries criminal penalties. Our Business Principles state that "No form of bribery, including improper offers or payments to or from employees will be tolerated".

Prohibitions on Direct Payments

The Applicable Laws and Regulations prohibit a company or its representative from paying or offering anything of value to any Government Official to persuade that official to help the company obtain business or other benefits. The Applicable Laws and Regulations bar payments even if: (1) the benefit flows to someone other than the party making the payment; (2) the business desired is not with the government; (3) the payment does not result in an award of business; or (4) the Government Official initially suggested the payment. For example:

  • You may not pay a building inspector to approve a new facility that does not meet local building codes
  • You may not entertain a Government Official to convince that official to award or renew a licence
  • You may not give goods or services to a manager of a government-affiliated enterprise to encourage that manager to do business with Vodafone
  • You may not offer employment or other benefits (such as travel expenses or gifts) to a family member of a Government Official in order to influence a decision
  • You may not give a campaign contribution to a political candidate in return for that candidate's promise to vote for legislation that will benefit Vodafone's business in his or her country.

Prohibitions on Indirect Payments

It is also illegal to pay any person when you know or even have reason to know that all or part of that payment will or may be channelled to a Government Official, political party, or candidate to help obtain business or any other benefit. For example:

  • You may not pay an agent, or other third party, unless you are comfortable, having made due enquiry, that such third party will not make contributions on Vodafone's behalf to a political candidate in order to secure that candidate's support for Vodafone initiatives
  • You may not hire an agent, or other third party, unless you are comfortable, having made due enquiry, that such third party will not make payments or gifts to Government Officials to increase the likelihood that Vodafone will receive official approval for new licences.

Procedures for Hiring Third Parties

Because Vodafone could be held responsible for payments made by intermediaries, we must be careful in hiring and dealing with third parties, such as consultants and agents. The following factors are "red flags" to consider before hiring any third party:

  • The transaction involves a country known for a high incidence of corrupt payments
  • The agent's commission exceeds an objectively reasonable market rate
  • The agent is appointed late in the process
  • A customer recommends the agent's appointment
  • The agent lacks the facilities that one would normally expect to find.

It is important for Vodafone to conduct a suitably detailed investigation to ensure that any third party will not engage in any improper practices. The scope and extent of such an investigation will vary depending upon the circumstances of each proposed transaction. Each of the following factors is a "red flag" that warrants further investigation:

  • The agent objects to anti-corruption representations and warranties in commercial agreements or responds negatively when told of such requirements
  • The agent has a personal or family relationship with a Government Official
  • The agent requests unusual payment arrangements, such as payment in cash, payment in another country's currency, or payment in a third country
  • A reference check reveals the agent's flawed background or reputation
  • The agent requires that his or her identity not be disclosed. Seek advice from the Group Legal Department whenever particular questions arise relating to third parties that Vodafone has hired or is considering hiring. In particular, if any "red flags" arise or exist during the appointment process, advice from the Group Legal Department must be sought before the third party is appointed.

Record Keeping

The following general rules seek to assure compliance with the record-keeping and accounting standards of the Applicable Laws and Regulations:

  • You must not use any funds, assets, or services for any purpose that is unlawful under the law of the United States, any state, or any other foreign or domestic jurisdiction
  • You must accurately record and disclose any set-aside or disbursement of assets and must never make false or artificial entries in any books or records for any reason. Even where only private parties are involved, improper accounting can violate the Applicable Laws and Regulations
  • You must keep complete and accurate records of all transactions, including those that relate in any way to a Government Official
  • You may not make any payment for any purpose other than that described by the documentation supporting the payment
  • You must question any document that does not appear to support an underlying transaction.

Conclusion

It is your responsibility to avoid any activity that could jeopardise Vodafone's ability to compete legally and ethically in the international marketplace. Although the preceding guidelines should inform you about activities to avoid in international business dealings, you should seek help whenever you are not certain that your actions comply with the above.

You are encouraged to report (see "Doing what is right - living the Values") any activity of which you are aware that you feel may not be in accordance with these guidelines.

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