agent and distributor policy 3-4-10

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  • 8/13/2019 Agent and Distributor Policy 3-4-10

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    March 2010

    GLOBAL GUIDELINES FOR

    AGENTSAND DISTRIBUTORS

    The marketing of products through agents and distributors (including service providers

    and joint venture partners) presents special problems which can give rise to ethical

    issues and serious violations of U.S. laws dealing with corrupt payments, antiboycott

    regulations, and export control laws.

    The following guidelines should be followed by Nalco and all of its affiliated entities in all

    dealings and agreements with domestic and foreign agents and distributors:

    1. All such agreements will require approval by the applicable regional President or

    a Group Vice President.

    2. All distributor and agency agreements must be approved by Nalco Legal.

    3. As a condition for approval, each prospective agent and distributor will be subject

    to a due diligence review and assessment. See Attachment A for a form due

    diligence questionnaire and Attachment B for a qualification form that may be

    used to as part of a due diligence review of any prospective agent or distributor. .

    4. Payments under agency agreements should not exceed 4% of revenues

    generated by the agent without justification and written approval of the Chief

    Financial Officer.

    5. All agreements regarding sales outside the United States must include a clause

    confirming such agent's or distributor's agreement to comply with all applicable

    laws, including without limitation, the U.S. Foreign Corrupt Practices Act. An

    example of such clause is attached hereto as Attachment C.

    6. Required Background Checks.

    For proposed agents, if the agent's expected commission rate is greater than 4%or if the agent is reasonably expected to generate sales in excess of $500,000

    (or equivalent) per year, before the agent can be hired the sponsoring businessgroup must arrange for an outside firm to conduct a background check on theagent and its principals and affiliates.

    For existing agents, if the agent's commission rate is greater than 6% of if theagent has or is reasonable expected to generate sales in excess of $1,000,000(or equivalent) per year, the sponsoring business group must arrange for anoutside firm to conduct a background check on the agent and its principals andaffiliates.

    For new and existing distributors, if the sales by Nalco to the distributor havebeen or are reasonably expected to exceed $2,000,000 (or equivalent) per year,

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    the sponsoring business group must arrange for an outside firm to conduct abackground check on the distributor and its principals and affiliated.

    These background checks are in addition to the other requirements under thepolicy. The sponsoring business group shall identify whether the above financialhurdles are met and shall initiate the background check.

    Internal Audit and the Legal Department can assist in retaining a vendor for the

    background check and setting the parameters for the check. In the event that thebackground check suggests any circumstance which would violate any Companypolicy, any Company employment hiring requirement, any law or regulation orotherwise lead to any suspicion about the ethics of the agent or distributor, theagent or distributor should not be hired or, if an existing relationship, it should beterminated when possible. Any questions on the application of this possible willbe resolved by the Ethics and Compliance Committee.

    I also remind you to read the Nalco Code of Ethical Business Conduct available at

    www.nalco.com and available upon request from the Nalco Human Resources and

    Legal Departments. Finally, the Legal Department will be conducting a review of all

    existing agency and distributor agreements. You will receive additional information on

    this at a latter date.

    Stephen N. Landsman

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    EXHIBIT A

    Form of Due Diligence Questionnaire - For Agent/Distributor to Complete

    [To be completed by prospective agent or distributor. Please use additional pages to

    provide more detailed responses as required.]

    1. Please identify all shareholders, officers, directors and key employees of

    [Agent/Distributor] (the "Company") including:

    i. addressii. nationalityiii. place of workiv. title

    2. If the shareholders of the Company are not individuals please identify the ownershipof all direct and indirect shareholders up to and including individual shareholders of

    the ultimate holding company.

    3. Is any individual shareholder of the Company or any director officer or employee ofthe Company a "Government Official" or the close relative of a "GovernmentOfficial", if yes please describe in detail.

    "Government Official" means: any agent, officer or employee of (1) a government or

    any department, agency or instrumentality thereof, or (2) a political party or candidatefor political office or (3) any company in which any government holds a substantial

    ownership interest or (4) of a public international organization (e.g., United Nations,

    World Bank, Red Cross etc.) or any person acting in an official capacity for any of

    the above listed entities or persons.

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    EXHIBIT B

    Qualification Form

    Proposed Due Diligence Questionnaire for Agents and Distributors

    [To be completed by Nalco sales personnel advocating the use of existing and/orprospective sales representatives. Please use additional pages to provide more detailed

    responses as required.]

    [Note: Representative includes consultants, agents, distributors, dealers and any other

    third parties that provides services to Nalco to help obtain or retain business.]

    Name and Address:

    ________________________________________________________________________

    Ownership/Management (if the representative if a company)

    1. Who owns the company? (if the shareholder(s) is/are not persons please listnames of persons owning parent company shareholders.)

    __________________________________________________________________

    __________________________________________________________________

    2. Who are the principal officers, directors and employees.____________________________________________________________________________________________________________________________________

    Retention

    3. Who recommended the representative?__________________________________________________________________

    4. Did you check references? Please describe.__________________________________________________________________

    __________________________________________________________________

    Contractual Relationship

    5. Is there a written contract with the representative? (Please attach)__________________________________________________________________

    6. If there is no written contract, do any documents describe the relationship?(Please attach)__________________________________________________________________

    Compensation

    7. What is the compensation arrangement with the representative?_____________________________________________________________________

    _____________________________________________________________________

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    _____________________________________________________________________

    8. Is the compensation greater than 4% of sale revenue? If yes, please explain basisfor compensation level.

    _____________________________________________________________________

    _____________________________________________________________________

    9. Does the representative also receive reimbursement of expenses? Please describe.____________________________________________________________________________________________________________________________________

    __________________________________________________________________

    10.Approximately how much has been paid to the representative in each of the lastthree years?

    __________________________________________________________________

    __________________________________________________________________

    11.In what country, currency and how is the representative paid (check, wire transferetc)?______________________________________________________________

    __________________________________________________________________

    12.If payment is made outside the country where services are rendered, what is thejustification for the payment arrangement?

    _____________________________________________________________________

    _____________________________________________________________________

    Capabilities

    13.What physical facilities does the representative have? Please describe.____________________________________________________________________________________________________________________________________

    __________________________________________________________________

    14.Approximately how many persons does the representative employ?__________________________________________________________________

    15.What experience does the representative have that is relevant to the services itprovides?

    __________________________________________________________________

    __________________________________________________________________

    __________________________________________________________________

    16.What relevant technical expertise, if any, does the representative have? Pleasedescribe.__________________________________________________________________

    __________________________________________________________________

    __________________________________________________________________

    17.What other companies, if any does the representative represent?__________________________________________________________________

    __________________________________________________________________

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    __________________________________________________________________

    18.Does the representative offer other types of services besides those provided to theCompany?

    __________________________________________________________________

    ____________________________________________________________________________________________________________________________________

    19.Does the Representative have a brochure or other promotional material aboutitself? (if so, please attach).

    __________________________________________________________________

    Customers

    20.List names of customers serviced by this representative for Nalco or two whomrepresentative sells Nalco products.

    __________________________________________________________________________________________________________________________________________

    _____________________________________________________________________

    __________________________________________________________________________________________________________________________________________

    21.Describe any relationship between representative and any government,government agency, department or instrumentality of a government entity, state-

    owned enterprise, political party, international organization or similar entities or

    persons acting on behalf of such entities (include identification of any customerslisted in item 20 above)

    __________________________________________________________________

    __________________________________________________________________

    ____________________________________________________________________________________________________________________________________

    __________________________________________________________________

    __________________________________________________________________

    Services

    22.What services does the representative provide?__________________________________________________________________

    __________________________________________________________________

    __________________________________________________________________

    23.Approximately how man days/hours per week/month does the representativespend on Nalco business?

    ____________________________________________________________________________________________________________________________________

    __________________________________________________________________

    Connection with Government Officials, Political Party Officials, and Candidates for

    Political Office.

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    For purposes of this section, government official includes any agent, officer or

    employee of (1) a government or any department, agency or instrumentality thereof, or(2) a political party or candidate for political office or (3) any company in which any

    government holds a substantial ownership interest or (4) of a public international

    organization (e.g., United Nations, World Bank, Red Cross etc.) or any person acting in

    an official capacity for any of the above listed entities or persons.

    Please check Yes or No to the questions below.

    24. Did you ever hear or do you know that the representative has given or promised togive anything of value, directly or indirectly, to any government official, or to a third-

    party with knowledge or reason to believe it could be offered to a Government Official,

    to obtain or retain business or for any other purpose?

    Yes_____ No_____

    25. Did you ever hear or do you know of any close relationships between the

    representative and government officials?

    Yes_____ No_____

    26. Did you ever hear or do you know that the representative has made political

    contributions?

    Yes_____ No_____

    If the representative is an individual, did you ever hear or do you know that:

    27. The representative is or was himself/herself a government official?

    Yes_____ No_____

    28. The representative has a close family member that is or was a government official?

    Yes_____ No_____

    29. If the representative is a company, did you ever hear or do you know that any of the

    representatives employees or owners are or were government officials?

    Yes_____ No_____

    I hereby certify that my answers to the foregoing questions are accurate and complete tothe best of my knowledge.

    Date: _________________________________Signature: _____________________________

    Type or Print Name: _____________________

    Title: _________________________________

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    EXHIBIT C

    U.S. Foreign Corrupt Practices Act

    The parties agree to comply with all applicable laws including the U.S. Foreign CorruptPractices Act. The parties represent that they have not offered, made, transferred, or

    promised, and agrees that each shall not offer, make, transfer, or promise, in connectionwith the services or any transactions contemplated by this Agreement, or in connectionwith any other business transactions involving Nalco, any payment or anything of value,

    directly or indirectly: (a) to any agent, officer or employee of (1) a government or any

    department, agency or instrumentality thereof, or (2) a political party or candidate forpolitical office or (3) any company in which any government holds a substantial

    ownership interest or (4) of a public international organization (e.g., United Nations,

    World Bank, Red Cross etc.) or any person acting in an official capacity for any of the

    above listed entities (in each case, a government official) or to any person or entity

    when such offer, payment, transfer, or promise would violate the laws of the country inwhich made or the laws of the United States; or (b) to any other person or entity while

    knowing that the portion of those payments or transfers will be offered, made, or

    promised, directly or indirectly, to the persons referred to this clause; or (c) to anyonewhere such payment or gift would constitute a bribe or illegal payment under applicable

    laws, regulations or Nalcos Code of Ethical Business Conduct available at

    www.nalco.com. It is the intent of the parties that no offer, payment, transfer, or promiseshall be made that have the purpose or effect of public or commercial bribery, acceptance

    of or acquiescence in extortion, kickbacks, or other unlawful or improper means of

    obtaining or retaining business. The [Agent/Distributor] represents and agrees thatneither it nor any of its officers, directors, partners, principals or shareholders (or

    employees, agents or representatives), is a current government official, political party

    official, or candidate for public office and is not affiliated with any such official or

    candidate. The [Agent/Distributor] covenants and agrees to provide Nalco with writtencertification from its shareholders, directors, officers, employees and agents, in a form

    requested by Nalco, certifying such persons, compliance with this clause and the U.S.

    Foreign Corrupt Practices Act (FCPA) on an annual basis or as otherwise reasonablyrequested by Nalco to ensure compliance withNalcos Code of Ethical Business

    Conduct. [Agent/Distributor]agrees that no products or technical information will be

    sold, re-exported, or transmitted except in full compliance with all applicable laws,

    including U.S. government requirements, if applicable.

    Notwithstanding any other provisions to the contrary, if any party has reason to

    believe that any other party has or may have engaged in conduct proscribed by the FCPAor in breach of this Agreement, the other parties may immediately in its sole discretion

    suspend all payments to pending clarification to its satisfaction of the circumstances thatgave rise to the concern. The [Agent/Distributor] will hold Nalco harmless and indemnifyit for any and all costs, fines, or penalties. Should Nalco terminate this Agreement

    because of failure to comply with this clause, [Agent/Distributor] shall return to Nalco

    any and all payments theretofore earned since the breaching party or any of its officers,directors, partners, principals, shareholders or employees, agents or representatives

    became, or became affiliated with, a government official, political party official or

    candidate for public office and [Agent/Distributor] will hold Nalco harmless and

    indemnify it for any and all costs, fines, or penalties.

    http://www.nalco.com/http://www.nalco.com/http://www.nalco.com/
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