Compliance Policy and Certifications · Code of Business Conduct · Anti-Competition and Trade Regulation Compliance Manual

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Alliance One Compliance Help Line

Director of Corporate Compliance
Nichlas A. Fink

Telephone

(919) 379-2553

Corporate Compliance Manager
Carol D. Whitehead

Telephone

(919) 379-4314

Mailing Address

8001 Aerial Center Parkway
P. O. Box 2009
Morrisville , NC 27560

Fax

(919) 379-4132

Introduction

Statement of Integrity

Alliance One International, Inc. (“AOI” or the “Company”) was created to meet the challenges of a 21st Century business environment and we are committed to meeting those challenges successfully on all fronts.  Foremost among them is our commitment to conduct our business with complete integrity.

Our worldwide reputation for honest and reliable business conduct, built by so many people over so many years, will be tested and proven in each business transaction we make.  We are more global, dynamic and customer-driven than ever before.  But our quest for competitive excellence and customer satisfaction begins and ends with our commitment to lawful and ethical conduct and as a global company we must create and follow a set of global rules. 

Our Code of Business Conduct (“CBC” or the “Code”) is our guide to ethical and lawful conduct.  It clearly defines the Company’s expectations for legal and ethical behavior on the part of every employee – an obligation that is, in fact, a condition of employment.  AOI directors, officers, employees and agents are expected to conduct the Company’s business according to the highest standards of professional ethics, financial integrity and legality.

All of us have many demands on our time, but the information contained in the CBC will only be effective if you take the time and make the effort to read the materials and apply these standards of conduct in your business activities.  If any aspect of the CBC is unclear to you or if you have questions about a situation you are facing, your concerns can be discussed directly with your supervisor, human resource representative, the Corporate Compliance Officer, or the Director of Corporate Compliance. You may also access Alliance One’s Compliance Helpline from each of our locations worldwide through either the toll-free telephone number or the website.
 
Any notion that compliance training and ethical business behavior do not contribute to our “bottom line” success is wrong.  If AOI, through the performance of its directors, officers, employees and agents around the globe, were to fail to achieve or exceed the standards of conduct outlined in this guide, that failure could jeopardize the Company financially, harm individuals and destroy one of AOI’s most valuable assets – its reputation.  Maintaining this most valuable of corporate assets is a matter of the greatest importance to our continued success and a responsibility we all share.

Our future will undoubtedly bring an even more competitive environment and we must be ready to meet its challenges; but we must be prepared to do so without diminishing the standards of ethical conduct that are the cornerstone for the way we conduct our business.                                  

About Our Policy

At AOI one of our core values is our commitment to integrity.  How we do business and how we treat others will define the Company to the rest of the world.  It is important to our shareholders, to our customers and suppliers, to all our employees worldwide and to the communities where we live and work that AOI be known for the integrity of its people and its high standards of business conduct.

Ethical behavior may mean more than complying with the law -- but it starts with the law.  You have an affirmative obligation to acquire sufficient knowledge of the laws relating to your location and your particular responsibilities and duties in order to recognize conduct or situations that raise legal or ethical questions and when to seek legal advice.  It is management’s obligation to ensure and facilitate adherence to our high standard of ethical conduct by clearly articulating the requirements of the CBC and by supporting its fair application to all personnel.

The purpose of the CBC is to summarize the policy of the Company generally and provide guidance for proper conduct in areas of particular concern.  It explains the Company’s basic expectations concerning your professional and personal behavior. The CBC does not describe every specific conduct that is unacceptable or illegal.  Because a particular course of conduct is not discussed this does not mean the act is acceptable and/or lawful.  The Company expects every director, officer, employee, and agent around the world to make a good faith effort to understand and comply with both the letter and the spirit of AOI policies and applicable laws.

It would be impossible to address every situation that you may encounter.  Ultimately, we must support each other in our commitment to doing business the right way and when we are uncertain about the correct course of action we should seek the advice of colleagues and counsel.  In some cases a situation may be so complex that additional guidance is needed.  The Board of Directors has appointed a Corporate Compliance Officer (“CCO”) and a Director of Corporate Compliance (“DCC”) to provide assistance.  If a situation arises that is not addressed in the CBC, it is each person’s responsibility to immediately contact his/her supervisor, the Alliance One Compliance Helpline (see “Compliance Helpline” in this manual) or the CCO or DCC.

Please keep the CBC in a convenient place so you can refer to it in the future.  Additional copies may be easily accessed from AOI’s website (www.aointl.com) or the AOI Intranet.

Which Law Applies

AOI conducts business in many countries around the world and our employees are citizens of many different countries.  Further, the Company’s primary business involves the movement of products in international trade.  As a result, our operations are subject to the laws of many countries, provinces, states and municipalities. 

Because AOI is incorporated in the United States, the laws of the United States often extend to our operations throughout the world as well as to the business activities of employees wherever they live or work.  Similarly, other countries may also apply their own laws outside of their borders to their own citizens and to corporations that are organized under their laws, such as AOI subsidiaries.

Obviously, the laws of different countries can vary widely, and in some instances a conflict may exist between the applicable laws of two or more countries.  When you encounter such a conflict, it is especially important to consult company legal counsel to understand how to resolve that conflict properly.

Alliance One International and You

After reading the CBC, you may have questions or encounter situations which you think are not adequately covered.  To make inquiries or seek explanations relating to applicable laws or concerns about business practices, you may elect to communicate with your immediate supervisor or directly with the CCO or DCC.  Any employee, officer, director, or agent is authorized and encouraged to communicate directly with the CCO or DCC without any necessity for intermediate inquiries to or permission from supervisory management.

                                                Henry C. Babb
                                                Corporate Compliance Officer
                                                Alliance One International, Inc.
                                                P. O. Box 2009
                                                Morrisville, NC 27560
                                                Telephone:  919-379-4312
                                                Email: hbabb@aointl.com

                                                Nichlas A. Fink
                                                Director of Corporate Compliance

                                                Alliance One International, Inc.
                                                P. O. Box 2009
                                                Morrisville, NC 27560
                                                Telephone:  919-379-2553
                                                Email: nfink@aointl.com

Compliance Helpline

Additionally, and if you wish, anonymously, you may communicate questions or concerns by means of the Alliance One Compliance Helpline, a simple way for you, 24 hours a day, seven days a week, to ask questions, raise concerns or clarify issues covered in the Alliance One Code of Business Conduct, including questionable accounting, internal accounting controls, and auditing matters. 

You are encouraged to bring compliance issues to the attention of the Company and you may do so without providing your name.  There are no records or any devices that can identify or trace the number from which you are calling.  When you call the Compliance Helpline, you will be connected with Global Compliance Services in Charlotte, NC, where one of its Communications Specialists will handle your call.

The Communications Specialist will greet you and ask how he or she can be of service.  After you identify the reason for your call, information will be gathered by the Communications Specialist to fully understand the purpose of the call.  You will be given a case number and an agreed-upon call back date.

A report will be prepared by Global Compliance Services and forwarded to the Alliance One Compliance Manager (a company employee).  The Compliance Manager will review the concern, contact you, if necessary, and initiate an appropriate investigation.  In cases where you have chosen anonymity, Global Compliance Services will be notified of the results of the investigation in order to respond to you by the agreed-upon follow-up date. 

You are encouraged to use the Compliance Helpline in voicing your concerns and questions. Alliance One cannot achieve the high standards of business conduct addressed in this Code of Business Conduct without your support and assistance. 

The Compliance Helpline phone number in the United States is 1-800-268-4670.  Dialing instructions for employees calling from outside the United States are posted on all bulletin boards in all Alliance One offices and factories and are available from local compliance managers or human resources representatives. Additionally, the Compliance Helpline can be accessed through the Internet at aoicompliancehelpline.alertline.com

 

Policies

Working for our Company

Personal Privacy

It is the Company’s policy to vigorously protect the privacy of its employees.  In that regard:

 

Conflicts of Interest

A conflict of interest occurs when an individual’s private interest interferes in any way – or even appears to interfere – with the interests of the Company as a whole.  A conflict situation can arise when a director, officer, employee, or agent takes actions or has interests that may make it difficult to perform his or her job objectively and effectively.  Conflicts of interest also arise when a director, officer, employee, agent or a member of his or her family, receives improper personal benefits as a result of his or her position with the Company.  The following topics relate to specific instances that you may encounter.

Securities Trading

there is a substantial likelihood that a reasonable investor would consider the information important in determining whether to trade in a security; or

Information may be material even if it relates to future, speculative or contingent events and even if it is significant only when considered in combination with publicly available information.  Material information can be positive or negative.  Nonpublic information can be material even with respect to companies that do not have publicly traded stock, such as those with outstanding bonds or bank loans.  Therefore, depending on the facts and circumstances, information that could be considered material includes, but is not limited to:
potential or actual

Corporate Opportunities

Bribery and Corruption

The anti-bribery provisions of the FCPA criminalize improper payments to a government official. The basic elements of the FCPA anti-bribery provisions are:
A payment, offer, or promise of anything of value;
to any government official, any non-U.S. political party or party official, any candidate for foreign political office, or any other person while knowing that any portion of the payment or promise to pay will be provided to one of those persons;
with corrupt intent for the purpose of influencing an official act or decision, inducing that person to do or not do any act in violation of his or her lawful duty, or inducing that person to use his influence with a foreign government to affect or influence any government act or decision;
to assist in obtaining or retaining business for or with, or directing business to, any person or company.

Cash, cash equivalents, or other benefits (travelers checks, travel benefits);
Personal services;
Employment or the offer of employment;
Charitable contributions for the benefit of the official;
Political contributions; and
Use of the Company’s facilities (including but not limited to aircraft, houses, vehicles, boats, etc.) by government officials or their staff other than for purposes of promoting, demonstrating or explaining the Company’s products or services.

The accounting provisions of the FCPA require companies to maintain books and records that accurately and fairly reflect all business transactions and to maintain internal accounting controls for that purpose.  Among other things, these provisions aim to prevent “slush” funds, off-book transactions and improper expense classifications that can be a means of paying a bribe and concealing the nature of payment.

Violation of the FCPA or other local anti-bribery laws can lead to imprisonment, significant fines, and other penalties.  For example, individuals may be fined up to $250,000 USD and/or imprisoned for up to 5 years for each violation of the anti-bribery provisions; or, for violations of the accounting provisions, individuals may be fined up to $5 million USD and/or imprisoned for up to 20 years.  Additionally, the Company itself faces criminal prosecution, significant fines and other penalties.  Local business practices that ignore or even condone these practices are not a defense.  Any employee who makes or arranges for a gift, offer, or promise of anything of value in violation of this policy is subject to serious discipline by the Company, including dismissal.

The FCPA applies equally to gifts, offers, and promises made directly by an employee or through someone not employed by the Company.  In that regard the FCPA makes it illegal to “look the other way” or ignore facts or circumstances which reasonably suggest that a third party is making illegal gifts, offers or promises on our behalf.  Further, giving money to a third party or intermediary in the belief or with the intention that the third party will make inappropriate or illegal gifts, offers or promises or in willful disregard of the facts of the transaction(s) is itself illegal.

What does this mean?  It means that any person who works for a government, from the Prime Minister to a postal carrier, is considered a “government official” for purposes of Company policies.  Any Court employee, including judges, clerks, etc., are all “government officials” under these policies.  “Government officials” can also include family members of government officials or individuals designated by a government official to receive something of value if the thing of value offered to the family member or other designated individual is really just a way of getting the benefit to the government official.

If you have questions about whether a person involved in a transaction is covered by the relevant anti-corruption laws, you should consult with the CCO or DCC.

Gifts, Travel and Entertainment

The FCPA prohibits providing “anything of value” to foreign officials, except under narrow guidelines.

Gifts:  You may not offer or provide gifts to a government official with an expectation that the offer or gift will provide the Company with a competitive advantage.  Any gift to a government official must be in strict compliance with this Policy.  As a general matter the following principles apply:  (i) cash gifts to government officials are never permitted; (ii) small gifts bearing the Company’s logo may be provided to a government official as a token of esteem or courtesy or in return for hospitality; (iii) the gift should be of nominal value, customary for the country involved and appropriate for the occasion; and (iv) the gift must be permitted under local law and the guidelines of the relevant government agency.  If you have any doubt about whether any such gift is appropriate you must first contact the Company’s CCO or DCC.

Travel Expenses:  Any payment by the Company for travel and lodging for government officials (including our monopoly customers) must be approved in advance by the CCO or DCC.  As a general matter, the following principles will apply:  (i) only expenses directly related to the promotion or facilitation of Company business will be reimbursed; (ii) only reasonable (no first class) airfare will be reimbursed; (iii) the Company may not select the particular government officials who will travel (rather, the government agency or AOI customer must do so); (iv) only the designated officials’ travel may be reimbursed, not expenses incurred by the officials’ family members; and (v) expenses associated with leisure activities and the payment of per diems to government officials are in all cases subject to prior written approval by the CCO or DCC.

Facilitating or “Grease” Payments:  In some countries, government employees request small payments to expedite or facilitate routine governmental action.  Such payments are only permitted in the following circumstances:

Of critical importance, and although these payments in very limited circumstances may be permissible under the FCPA, they may not be legal under the laws of other countries, including the country in which the payment is being sought, the UK Bribery Act, the O.E.C.D. Anti-Bribery Convention and others.  Thus, such payments should be considered, if at all, only in exceptional and unavoidable circumstances. When possible, and if you have advance notice, then written approval should be obtained from the CCO or DCC. 

Further, if in a rare circumstance when such a payment cannot be avoided, it is both appropriate and legally required that such payment be adequately explained and recorded accurately in the books and records of our relevant company entity  Under no circumstances should any such payment be disguised in our books and records. If you have questions concerning facilitating payments, consult with AOI’s CCO or DCC.

Accepting / Providing Gifts to Private Customers and Suppliers

AOI does not want business obtained through the improper use of business courtesies.  You should be sensitive to this issue.  As a director, officer, employee, or agent, you should carry out your duties and responsibilities in a manner that is in the best interest of the Company.  That means you must not let any personal interests conflict with your ability to represent the Company’s best interests.  Use your best judgment as to what courtesies are appropriate, but keep in mind the following principles.

In dealing with private customers, you may give or accept gifts of small value as tokens of respect or friendship.  However, CASH IS NEVER PERMITTED.  Other non-acceptable items include:

Political Activity and Contributions

Political contributions by the Corporation or any of its subsidiaries, whether monetary or non-monetary, must be approved in advance by the Company’s CCO or DCC.

Employees in their individual capacity are encouraged to participate in the political process.  You must, however, scrupulously avoid even the appearance of lending the prestige of the Company in support of a particular candidate or issue.  Under no circumstances may you use Company letterhead in connection with participation in the political process.  Also, under no circumstances will the Company reimburse any employee for making a personal political contribution.

Acting as a representative of the Company, you may only participate in partisan political activities as specifically directed by the Chief Executive Officer.  If you are authorized to participate in a political campaign on behalf of the Company, you must be careful not to engage in activities which could be considered lobbying.  Lobbying is subject to various federal, state, and local laws and entails reporting requirements.  If you have questions concerning political activities, consult with AOI’s CCO or DCC.

Charitable Contributions

Even when given in good faith, corporate charitable contributions are often problematic because of a potential affiliation between the charity and a government official.  Accordingly, all corporate charitable contributions must be approved in advance by the CCO or DCC.

Outside Business Interests

Outside Employment

Use of Software

Confidentiality

Accuracy of Financial Reporting 

Communications to the Public

Compensation and Benefits

The Company’s payroll practices and benefit plans and policies are designed to comply with all applicable laws and regulations governing hours of work, payment of wages, the receipt of benefits, related record keeping obligations and notice requirements.  These requirements are complex and vary among the jurisdictions in the United States and other countries in which the Company engages in business.  Changes should not be effected in the Company’s practices, plans and policies without consultation with AOI’s Director of Human Resources.

Non-Discrimination / Equal Opportunity / Non-Harassment

Cooperation in the Investigation of Wrongdoing

Working in our Environment

Drug-Free Workplace

Health and Safety

 

Environmental Regulations

Working in the Marketplace

Anti-Boycott

Federal Criminal Laws on Fraud

Money Laundering

Antitrust and Fair Competition

Most antitrust and fair competition laws also prohibit the use of a dominant market position to drive a competitor out of business, independent of natural market forces.  Antitrust and fair competition laws differ around the world.  If you are concerned that a business activity in which you are requested to participate may involve an antitrust issue, you should consult the Corporate Compliance Officer for guidance.

Trade Sanctions

Occasionally, governments implement trade and/or travel restrictions on imports from or exports to foreign countries.  U.S. laws may limit or prevent global subsidiaries of the Company from engaging in certain transactions that would result in direct or indirect shipments of goods or the facilitation of credit to such embargoed countries.  It is the Company’s policy to comply with all laws which are enacted to restrict trade with certain countries.

Shipping Laws / Customs

You must comply with all shipping rules and regulations, such as laws regarding appropriate shipping documentation.  In particular, no employees or agents are permitted to make unofficial payments for logistics or customs services without the advance approval of the CCO or DCC.  The activities described below require increased vigilance:

Other Anti-competition Issues

You must consider, with the advice of Company counsel, potential anticompetitive effects of the following:

 

Conclusion

Our Policy in Brief

AOI counts on you to uphold the Company’s standards set forth in this Code.  The following briefly describes how to act responsibly in the work environment consistent with the Code: