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Trade Sanction screening policy

INTRODUCTION AND PURPOSE

Trade sanction rules are adopted globally by a large number of states and state-like institutions, such as the USA, the EU, the UN and Russia. The objective of trade sanctions, which prohibit trade with certain persons or entities, is to sanction the behaviour of a particular state or state-like institution in an attempt to make it comply with the political ethos of another state or state-like institution. Sanctions may limit the possibility of the Carlsberg Group doing business in certain countries and may restrict some Group employees from participating in certain business activities. Furthermore, sanction rules generally prohibit the export of certain types of equipment to certain countries.

Infringements of trade sanction rules may have significant negative implications, including fines for Carlsberg Group companies, fines and/or imprisonment for the Carlsberg Group’s management and employees, breach of material loan facilities and material reputational damage.

The purpose of this Trade Sanction Screening Policy is to define the roles and responsibilities of relevant employees in order to mitigate the above-mentioned risks.

SCOPE

This policy applies globally to the management, employees and contract workers of all entities in the Carlsberg Group that are responsible for negotiating, concluding or signing contracts, including loan facility agreements, and procurement.

REQUIREMENTS

1. Timing of screening

  • In order to avoid material negotiations with sanctioned individuals or entities, screenings and subsequent clearance from a trade sanctions perspective must be carried out as early as possible and always before the conclusion of an agreement.

2. Company procedures and compliance with company

LAWS

2.1. In the event that there is any indication that a (potential or existing) business partner may be the subject of sanctions, that business partner must be screened, even if the thresholds mentioned below are not met.

2.2. The Carlsberg Group’s risk-based approach requires that the Group Trade Sanctions Manager must be informed in writing about any potential issue relating to trade sanctions, whether this stems from a screening, a red flag or another source. 

2.3. In addition, in the event that there is a risk of potential or actual infringement of trade sanctions, the Head of Competition Law and the General Counsel must always be notified.

3. Screening thresholds

3.1. The Country List (Appendix 1), which designates countries as “high risk”, “medium risk”, “lower risk” or “green”, must be consulted in relation to trade sanction screenings. Countries are moved from one risk category to another if new sanctions are adopted or existing sanctions lifted. The appendix is therefore a living document and you must ensure that you use the latest version.

3.1.1. High-risk countries

All the Carlsberg Group’s potential and existing (contract-renewing) business partners in high-risk countries, the directors of these business partners, their (direct and indirect) shareholders and the directors of these shareholders, as well as the banks involved, must be screened.

US citizens and green card holders represent a special risk for the Carlsberg Group and are also exposed to personal risk when doing business in high-risk countries, as they may be personally prohibited from working on projects in high-risk countries and could therefore be liable to prosecution for violation of such prohibitions. Consequently, US citizens and green card holders must always consult the Group Trade Sanctions Manager before working on projects in high-risk countries.

Furthermore, the Group Trade Sanctions Manager must always be informed and sign off when business is being considered for a high-risk country.

3.1.2. Medium-risk countries

Screening must be carried out if a (potential or existing) business partner is

a citizen or resident of, or an entity incorporated under the laws of, a

medium-risk country and:

  • the transaction involves a Carlsberg Group entity incorporated under the law of a “western”[1] country; or
  • the transaction is authorised or approved by a Carlsberg Group decision-maker who is a citizen of a “western” country; or
  • the transaction is carried out in USD.

Furthermore, if the (expected) yearly turnover with such a (potential or

existing) business partner exceeds EUR 100,000, the directors of that

business partner, its (direct and indirect) shareholders and the directors of

these shareholders, as well as the banks involved, must also be screened.

Irrespective of the above thresholds, before doing business in a medium-risk

country or with a business partner who is a citizen or resident of, or an

entity incorporated under the laws of, a medium-risk country, you must contact local legal to get potential risks signed off.

3.1.3. Lower-risk countries

Screening must be carried out if a (potential or existing) business partner is

a citizen or resident of, or an entity incorporated under the laws of, a lower

risk country and the (expected) yearly turnover with the business partner

exceeds EUR 1,000,000, and:

  • the transaction involves a Carlsberg Group entity incorporated under the law of a “western” country; or
  • the transaction is authorised or approved by a Carlsberg Group decision-maker who is a citizen of a “western” country; or
  • the transaction is carried out in USD.

The business partner, the directors of that business partner, its (direct and indirect) shareholders and the directors of these shareholders, as well as the banks involved, must be screened.

3.1.4. Green-listed countries

In the event that a (potential or existing) business partner is a citizen or resident of, or an entity incorporated under the laws of, a green-listed country, no screening is required.

4. Brewery equipment and personal work computers

4.1. Brewery equipment and computers may not be sold or exported to countries outside the EU/EEA and Switzerland without the prior consent of the Group Trade Sanctions Manager.

4.2. When travelling on business to high-risk countries, employees should not take personal laptops and phones.

5. Screening practicalities

5.1. Whenever you need to screen a (potential or existing) business partner and/or related persons, all available data for identifying such parties (name, address, etc.) must be entered in the Trade Sanctions Information and Screening Results Sheet (available on Group Legal’s SharePoint site) and e-mailed to tradesanctionscreening@carlsberg.com.

5.2. Unless other arrangements have been agreed with the Group Trade Sanctions Manger, Group Legal will, as quickly as possible, send a response setting out whether the business partner or related parties are subject to sanctions and, if so, what needs to be done.

Roles and Responsibilities

Body/function/individuals

Roles and responsibilities

ExCom

Responsible for policy approval.

General Counsel

Policy owner with overall responsibility to ExCom for trade sanction issues in the Carlsberg Group and for ensuring that material trade sanction risks in the Group are duly attended to and communicated to ExCom/Audit committee/Supervisory Board as relevant.

Head of Competition Law

Overall responsibility for the Trade Sanctions Compliance Programme.

Group Trade Sanctions Manager

Responsible for developing, implementing and maintaining the Trade Sanctions Compliance Programme. This includes ensuring that the policy, any associated documents and the programme itself are kept up to date, and that training material is created and distributed to local legal in order to ensure continuous compliance with and monitoring of the implementation of the programme. The Group Trade Sanctions Manager is responsible for training in high-risk countries, at Corporate Office and in centralised procurement functions.

Functional heads at Corporate Office/ Country Managing Directors/regional and local management

Responsible for ensuring that this policy is implemented and adhered to, and that all relevant employees are made aware of the policy and its requirements.

Relevant management, employees and contract workers of all entities in the Carlsberg Group

Local legal is responsible for the training of relevant employees in medium- and lower-risk countries. Further details on responsibilities are set out under “Requirements”.

Glossary

Red flag

A sign of risk or a problem relating to trade sanctions that needs to be

taken into consideration before entering into a business relationship with a

partner. Examples of red flags include, but are not limited to:

  • Any indication that a business partner or part of the supply chain is, or has been, subject to sanctions.
  • Links to military persons in a high-risk or medium-risk country.
  • Rumours in the market about a business partner in a high-risk or medium-risk country.
  • Links to government/authorities/public bodies or officials in a high-risk or medium-risk country.
  • Unusual payment or invoicing requests or terms.
  • A partner requesting the involvement of another party (e.g. a sister firm) in a high-risk or medium-risk country.

Screening

Group Legal’s screening of a business partner following a request from a relevant employee using the Trade Sanctions Information and Screening Results Sheet.

DEVIATIONS

No exemptions from this policy can be granted unless there are exceptional circumstances or the policy is obviously not applicable. All requests for exemptions must be made in writing to the policy owner. The policy owner must assess and decide on each request individually. Exemptions must be duly logged and documented.

POLICY REVISION

This policy will be revised when needed, but at least every two years. It may be amended at any time with the approval of ExCom. In the event of any discrepancies between the English version of this policy and a translated version, the English version will be binding. Appendix 1 (Country List) will be updated whenever a country is moved from one risk category to another.

Associated policies and manuals

  • Appendix 1 to Trade Sanction Screening Policy – Country List
  • Trade Sanctions Information and Screening Results Sheet

CONTACT

Group Trade Sanctions Manager

tradesanctionscreening@carlsberg.com

 [1] EU/EEA member states, Switzerland, the USA, Canada, Australia and New Zealand.