Anti-corruption policy Auchan

DEFINITIONS

Allegation of corruption offence

A statement by a person that he or she believes a corruption offence has been or is likely to be committed.

Conflict of interest

A situation in which an employee’s impartiality in the course of his work may be called into question, taking into account the real or potential impact of personal, financial and other factors on his employment. Actions of employees influenced by such factors in business decisions and performance of work duties are inappropriate and unacceptable (ed. Methodological recommendations for working-out and adoption of measures to prevent and combat corruption by organizations. The Ministry of Labour and Social Protection of the Russian Federation of 08.11.2013h).

Internal control

The process introduced by the authorized departments and services of AUCHAN LLC, worked out to ensure risk management in such a way that the Company’s objectives of the anti-corruption policy can be achieved.

Investigation

Search for or collection of direct and/or indirect evidence on the application of a person or, if there are sufficient grounds to assume that a corruption offence has been committed by employees of AUCHAN LLC, with the aim of proving the fact of such offence in order provided for by the current legislation of the Russian Federation and the internal procedures of AUCHAN LLC.

Risk assessment

Analysis of specific business processes and business operations in the activity of AUCHAN LLC which carry risks of corruption infrindgements, both for the purpose of personal gain and for the purpose of obtaining profit for AUCHAN LLC. It is also assessment of a real and potential conflict of interest which can lead to the risk of corruption infringement and other actions that are inadmissible under this Policy, other policies and procedures of AUCHAN LLC aimed to prevent, eliminate and mitigate such risks in the future.

Corruption offences

Corruption offences under this Policy are defined as the following acts relating to unlawful acts stipulated by the current legislation of the Russian Federation, including: art. 158 of the Criminal Code of the Russian Federation (hereinafter «the C. Code of the Russian Federation») «Theft», art. 159 the C. Code of the Russian Federation «Fraud», art. 159.4. of the C. Code of the Russian Federation «Fraud in business activity», art. 159.6. of the C. Code of the Russian Federation «Computer Fraud», art. 160 of the C. Code of the Russian Federation «Misappropriation and embezzlement », art. 165 of the C. Code of the Russian Federation «Damage to property by fraud or abuse of trust», art. 204 «Commercial bribery», art. 304 of the C. Code of the Russian Federation «Provocation of bribery or commercial bribery», art. 201 of the C. Code of the Russian Federation «Abuse of powers», art. 19.28. of the Code of Administrative Law of the Russian Federation (hereinafter - «Code of A.L. of the Russian Federation») «Illegal remuneration on behalf of a legal person», as well as other acts for which liability may be imposed in accordance with the legislation of the Russian Federation and this Policy.

Fraud

Theft of property or acquisition of the right to property by deception or abuse of trust (Criminal Code of the Russian Federation, article 159).

External fraud

Fraud committed by a third person against AUCHAN LLC.

Dismissial

Denouncement of employment contract at the initiative of AUCHAN LLC in accordance with article 81 of the Labour Code of the Russian Federation.

Employees

For the purpose of the present policy, all members of staff connected with AUCHAN LLC on the basis of an employment contract without any distinction related to their location

Manager

Any employee endowed with managerial functions (head of service/department, director, sector chief, team leader, etc.)

Counterparty, supplier

Any Russian or foreign legal entity or individual with whom AUCHAN LLC enters into contractual relations, except labour relations.

Third person

For the purposes of this policy, any legal entity or individual other than employees of AUCHAN LLC, in particular: partners, service providers, suppliers and others persons.

Fraud prevention

Measures to actively prevent, eliminate and reduce fraudulent practices.

1. INTRODUCTION

Regardless of the nature of corruption violations, the result of their commission may be a reduction in funds and other resources needed to create values and develop AUCHAN LLC. As in any other company, corruption violations within AUCHAN LLC can undermine the effective activity of the company and lead to the wasting of valuable resources necessary for conducting a fair business.

All possible losses that AUCHAN LLC may incur as a result of corruption violations at AUCHAN LLC do not cover all possible negative consequences of such actions and go beyond exclusively financial losses.

Corruption violations, as a form of illegal acquisition of benefits, advantages and personal benefits, cause serious damage to democratic institutions, the national economy and the rule of law in general. Corruption violations deprive AUCHAN LLC of the necessary development resources, create threats and restrictions for its stable and safe development, undermine the moral principles and values adopted by AUCHAN LLC, hamper fair competition and sustainable development of AUCHAN LLC and also instigate other forms of crime, including laundering of proceeds of crime.

Moreover, the very existence of corrupt practices poses a serious risk of distrust of AUCHAN LLC as a truly reliable, conscientious, ethical and effective partner.

Citizens of the Russian Federation, foreign citizens and stateless persons for committing corruption offenses are held criminally, administratively, civilly and disciplinarily liable in accordance with the legislation of the Russian Federation and other applicable norms.

The policy of AUCHAN LLC with regard to combating fraud and other corrupt practices is an important element of management, as the company sets up activities to prevent, identify, inform and effectively combat corruption offences.

As part of the anti-corruption policy and the setting up of measures to implement such a policy aimed at preventing corruption and fraudulent practices at AUCHAN LLC, it is also necessary to be guided by the Procurement Policy, the Voluntary Allegation Reporting Policy, the Internal Investigation Instructions, and the Code of Ethics in force in AUCHAN LLC.

Another important element of this mechanism is the tasks and functions facing the Risk Direction, which is responsible for the overall control, monitoring, evaluation, reporting, investigation and handling of corruption allegations.

The above activities are aimed at:

Awareness and acceptance of responsibility by structural divisions of the Company;
Ensuring the effectiveness of internal control;
Prevention, detection and verification of corruption violations and professional errors;
Promoting integrity and enhancing the image of the company.

This Policy also takes into account the adoption by AUCHAN LLC of international obligations to direct all efforts to the fight against fraud and corruption everywhere as a part of the AUCHAN Group's joining in 2010 of the United Nations Global Compact Program. AUCHAN LLC, therefore, identified ethics as a priority for 2020.

Based on this, this Policy reflects the principles of the United Nations Convention against Corruption Violations (UNCAC) and the United Nations Convention against Transnational Organized Crime (UNTOC).

2. SCOPE

AUCHAN LLC directs all efforts to preventing, detecting, eliminating and reducing fraudulent and corrupt practices against the Company, regardless of whether such actions were performed by AUCHAN LLC employees or third parties.

The tolerance of AUCHAN LLC to corruption infringements and fraud is zero. This means that all cases of real and potential fraud and corruption should be reported and investigated in accordance with the basic principles for investigations of this type.

Therefore, AUCHAN LLC aims to draw special attention of its employees to the possible risks of corruption violations, as well as to exercise control aimed at preventing corruption practices. AUCHAN LLC implements appropriate procedures aimed at identifying corrupt practices, and in addition, implements the principles of this Policy in practice and strictly respects them.

The provisions, instructions, obligations, prohibitions established by this Policy are an integral part of the mechanism to combat corruption and fraud and apply to all employees of AUCHAN LLC, regardless of their position, length of service at AUCHAN LLC and other conditions, if committing corruption violations by them in connection with their work duties at AUCHAN LLC. They are equally applicable to all third parties who have commercial relations (contractual relations) with AUCHAN LLC or may have them in the future.

The provisions of this Policy as a local regulatory act of AUCHAN LLC are communicated to all employees of AUCHAN LLC, which is confirmed by the signature of the employee on the familiarization sheet with the Policy. An employee of AUCHAN LLC is obliged to comply with the provisions established by this Policy for the entire duration of an employment contract with AUCHAN LLC, regardless of the further career growth of the employee at AUCHAN LLC. Non-compliance with the provisions of this Policy by employees of AUCHAN LLC may entail the application of appropriate liability measures provided for by applicable law, including the application of disciplinary sanctions. Violations by third parties will also entail measures by AUCHAN LLC unilaterally, including commercial contract cancellation and exclusion of suppliers of goods or services from the Company base.

This Policy applies to all types of activities and processes carried out by AUCHAN LLC, in relation to all projects implemented by AUCHAN LLC, as well as in relations between AUCHAN LLC and third parties.

The executives of AUCHAN LLC are personally responsible for implementing the anti-corruption policy and taking measures to combat corruption and fraud and must monitor the strict respect by employees, third parties in their relations with AUCHAN LLC of the provisions enshrined in this Policy.

This Policy aims to prevent and detect the following fraudulent or corruption violations:

Internal: committed by the employee in relation to AUCHAN LLC;
External: committed by a third party in relation to AUCHAN LLC;
Mixed: committed by an employee of AUCHAN LLC and third parties in relation to AUCHAN LLC.

3. GENERAL PRINCIPLES

The key principles of this Policy are:

1. The principle of responsibility and inevitability of punishment. The inevitability of punishment for employees of AUCHAN LLC, regardless of their position, length of service and other conditions in case of corruption offenses in connection with the work duties, as well as the personal responsibility of the management of AUCHAN LLC for the anti-corruption policies implementation.

2. Strict compliance with the ethical standards of AUCHAN LLC as well as standards in accordance with international obligations undertaken by AUCHAN LLC which should be supported by adequate training and the ability to seek advice in case of ethical dilemmas.

3. Appropriate control over the planning of all processes, including the identification and assessment of risks, as well as the ability to resolve these issues within the various divisions of AUCHAN LLC.

4. Control of distribution of tasks which involves monitoring of fulfillment of work function by employees, preventing the concentration of multiple functions and the possibility of making decisions at different stages in one person.

5. Compliance with the principle of transparency in the activities of AUCHAN LLC.

6.The principle of a personal example of leadership. The key role of the management of AUCHAN LLC is to create a culture of intolerance to corruption and to create an internal organizational system for preventing and counteracting of corruption violations. Monitoring and control of the anti-corruption practices implementation.

7. Timely and complete reporting of all cases of fraud and corruption violations.

4. LOCAL REGULATORY ACTS RELATED TO THE POLICY:

Internal rules and regulations of AUCHAN LLC;
Procurement policy of AUCHAN LLC;
Voluntary Allegation Reporting Policy of AUCHAN LLC;
Instructions for conducting official investigations in AUCHAN LLC;
Code of Ethics of AUCHAN LLC.

5. DEFINITION OF CORRUPTION VIOLATIONS

For the purposes of this Policy in the field of combating corruption violations and fraud in AUCHAN LLC, corruption violations as part of this Policy are understood to mean the following acts having characteristics of unlawful acts provided for by the current legislation of the Russian Federation, including:

Art. 158 of the Criminal Code of the Russian Federation (hereinafter - the "Criminal Code") "Theft" - the secret theft of another's property which means the actions of the person who committed the unlawful seizure of property in the absence of the owner of this property, or by unauthorized persons, or even in their presence, but invisible to them. In those cases, when these persons saw that the theft is being carried out, but the perpetrator, based on the environment, believed that he was acting secretly, the deed was also a secret theft of another's property.
Art. 159 of the Criminal Code of the Russian Federation "Fraud" - theft of another's property or the acquisition of the right to another's property by fraud or breach of trust. In this case, theft refers to unlawful seizure of and / or treatment of another's property for the benefit of the guilty person or other persons committed for the mercenary purpose that caused damage to the owner or other holder of this property.
Art. 159.4. Criminal Code of the Russian Federation “Fraud in the field of entrepreneurial activity” - fraud involving intentional non-fulfillment of contractual obligations in the field of entrepreneurial activity.
Art. 159.6. The Criminal Code of the Russian Federation “Computer Information Fraud” - computer information fraud, that is, theft of someone else’s property or acquisition of the right to another person’s property by entering, deleting, blocking, modifying computer information or otherwise interfering in the functioning of storage, processing or transmission of computer information or telecommunications networks.
Art. 160 of the Criminal Code of the Russian Federation “Embezzlement and waste” - theft of property entrusted to a person. Assignment consists of gratuitous, committed with a mercenary purpose, unlawful treatment by a person of the property entrusted to him in his favor against the will of the owner. The unlawful actions of a person who, for personal gain, has spent the property entrusted to him against the will of the owner by consuming this property, spending it or transferring it to other persons, should be qualified as a waste.
Article 165 of the Criminal Code of the Russian Federation “Causing property damage through fraud or breach of trust” - causing property damage to the owner or other holder of the property by fraud or breach of trust in the absence of signs of theft, committed on a large scale.

Deception as a way of committing theft or acquiring the right to another's property may consist in knowingly reporting false information that does not correspond to reality, either in silence about the true facts, or in deliberate actions (for example, in providing falsified goods or another subject of a transaction, using various fraudulent methods when making payments for goods or services or when playing gambling, in imitation of cash transactions, etc.), aimed at misleading the owner of the property or other person. The false information provided during fraud (or information about which is silent) may relate to any circumstances, in particular to legal facts and events, the quality, value of property, the identity of the perpetrator, his powers, intentions.

The abuse of trust consists in the use of vested relations with the owner of the property or another person authorized to make decisions on the transfer of this property to third parties. Confidence may be due to various circumstances, for example, the official position of a person or the personal or family relationship of a person with a victim.

Confidence is also abused in cases where a person assumes obligations, if he obviously has no intention to fulfill them with the aim of free conversion in his own favor or in favor of third parties of another's property or acquisition of the right to it (for example, obtaining an individual loan, advance payment for works, services, prepayments for the delivery of goods, if it did not intend to repay the debt or otherwise fulfill its obligations).

Art. 204 of the Criminal Code of the Russian Federation “Commercial bribery” - illegal transfer to a person performing managerial functions in a commercial or other organization of money, bonds, other property, rendering property services to him, providing other property rights for performing actions (inaction) in the interests of the giver in connection with the official position held by this person; illegal receipt by a person performing managerial functions in a commercial or other organization of money, bonds, other property, as well as illegal use of property-related services or other property rights for taking actions (inaction) in the interests of the giver in connection with the official position held by this person, including conspiracy (article 204 of the Criminal Code of the Russian Federation).
Art. 304. The Criminal Code of the Russian Federation “Provocation of a bribe or commercial bribery” - an attempt to transfer to an official or a person performing managerial functions in commercial or other organizations, without his consent, bonds, other property or the provision of property services to him.
Art. 201 of the Criminal Code of the Russian Federation “Abuse of authority” - the use by a person performing managerial functions in a commercial or other organization of his powers contrary to the legitimate interests of this organization and in order to derive benefits and advantages for himself or other persons or to harm others if this act has caused substantial harm to the rights and legitimate interests of citizens or organizations or the interests of society or those of the State protected by law.
Art. 19.28. Of the Code of Administrative Offenses of the Russian Federation (hereinafter referred to as “the Code of Administrative Offenses of the Russian Federation”) “Illegal remuneration on behalf of a legal entity” - illegal transfer, offer or promise on behalf of or in the interests of a legal entity to an official manager in a commercial or other organization, to a foreign official or an official of a public international organization of money, bonds, other property, rendering property services to him, providing property rights for performing in the interests of this legal entity by an official, a person performing managerial functions in a commercial or other organization, a foreign official or an official of a public international organization of action (inaction) associated with their official position.

as well as other acts if committed, risk to entail liability measures in accordance with the legislation of the Russian Federation and this Policy, such as:

“Conspiracy”: a plan or fraud of two or more partners, employees, suppliers of goods or services known or unknown to AUCHAN LLC, committed to set artificial uncompetitive prices;

“Coercion”: direct or indirect harm or the threat of harm to persons or their property with the aim of impact on procurement process, selection of products, goods or services, hiring, promotion, staff mobility or fulfillment of contractual terms.

In this Policy, the term “fraud” has a broader meaning and among other things includes any theft, embezzlement, falsification of documents and other illegal acts.

Simply put, fraud is any action or inaction deliberately aimed at deceiving or attempting to deceive the other party in order to obtain financial or other, personal or collective benefits, or in order to evade obligations to that party.

In general, corruption violations are understood to mean any action consisting in offering, giving, receiving or demanding, directly or indirectly, any tangible or intangible good aimed at influencing the actions of the other party.

As an example of other corruption violations as a part of this Policy, beyond acts having the signs of unlawful acts provided for by the current legislation of the Russian Federation, the following cases can be cited:

Falsification, substitution of documents, entering false data into the systems of AUCHAN LLC or submitting false statements made for personal purposes, in the interests of third parties, in order to obtain financial or other benefits;
Illegal transfer or receipt of money, bonds, other property, provision of property services, other property rights for the commission of actions (inaction) in the interests of the giver, aimed at impact on procurement process;
Illegal transfer or receipt of money, bonds, other property, provision of property services, other property rights for the transfer of information and information to the benefit of the giver as part of the conclusion or execution of contracts for the supply of goods and / or services;
Illegal transfer or receipt of money, bonds, other property, provision of property services, other property rights for assisting a candidate in the process of hiring, promotion or staff changes;
Extortion, that is, the requirement to transfer another's property or right to property or to carry out other actions of a property nature under the threat of violence or the destruction or damage of another's property as well as under the threat of dissemination of information that stigmatizes the victim or his relatives or other information that may cause substantial harm to the rights or legitimate interests of the victim or his relatives;
Fraudulent use or theft of a password to gain unauthorized access to information systems of AUCHAN LLC;
Conspiracy between suppliers means such actions of suppliers participating in the same tender selection which are aimed at obtaining advantages in business activities, are contrary to the legislation of the Russian Federation, business customs, requirements of integrity, reasonableness and fairness and have caused or may cause losses to AUCHAN LLC and other competitor suppliers, have either inflicted or may harm their business reputation which leads to the risk of restricting competition in the selection of suppliers and conclusion of contracts at AUCHAN LLC, risk of transparency regarding supplier selection process or creates risk of concerted actions by these persons in supplier selection process.

6. FRAUD PREVENTION MEASURES

6.1. Informing and training

It is necessary to create an action plan to disseminate information and drawing attention to this Policy with the aim to integrate it into the processes and procedures in force at AUCHAN LLC to ensure that all managers of AUCHAN LLC (“executives”) as well as all other employees of the Company will fully recognize their personal responsibility in the fight against corruption violations and fraud.

To this end, the Executive Committee should remind and pay particular attention to the employees' obligation to inform on any fact of fraud or corruption violations.

The program of measures to inform about the ongoing fight against fraud and corruption violations and the anti-corruption policy pursued by AUCHAN LLC includes two areas:

Informing all interested parties about the anti-corruption policy pursued by AUCHAN LLC in the media, on the Internet as well as posting information on AUCHAN LLC’s external Internet platforms available to company employees;
Training for all employees regarding the application of this Policy.

7. RISK MANAGEMENT OF FRAUD AND CORRUPTION VIOLATIONS

The overall risk management associated with fraud and corruption is the responsibility of the Risk Management Direction of AUCHAN LLC..

Under the leadership of the Risk Director, the Risk Direction is obliged to control the application of this Policy in the field of combating fraud and corruption by all employees of all services of AUCHAN LLC.

The Risk Direction is the only subdivision of AUCHAN LLC authorized to conduct investigations on these issues. The tasks of the Risk Management Direction also include updating this Policy and related documents.

The Risk Direction centralizes and coordinates activities to combat fraud and corruption within AUCHAN LLC. As part of this activity, the Risk Direction is a key structure where all employees of AUCHAN LLC as well as third parties can apply.

The Risk Direction determines the direction and approves the plan and programs of communication and training in the field of combating fraud and corruption in AUCHAN LLC.

Executives with assistance of all employees, and, if necessary, third parties involved in individual processes, projects or programs, should identify and assess the risks of committing corruption violations in their own programs and projects.

Risk assessment consists in the systematic identification of those areas, specific business processes and business operations in the activities of AUCHAN LLC the implementation of which is most likely to result in employees committing corruption violations both for personal gain and for the benefit of AUCHAN LLC as well as an assessment of the real and potential conflict of interests which may lead to the risk of corruption violation and other actions that are unacceptable in compliance with this Policy, other policies, procedures of AUCHAN LLC carried out with the aim of preventing, eliminating and reducing such risks in the future. Risk assessment also includes working out and presentation of appropriate strategies, for example, in the form of internal audits, quality control, verification of the work of programs and measures aimed at transparency ensuring.

All structural units and services of AUCHAN LLC must coordinate with the Risk Direction any changes in the processes, the introduction of new forms of control or new approaches regarding the fight against corruption violations. This is necessary to maintain the unity of approach and the relevance of new measures and their distribution among all department and services of AUCHAN LLC.

If necessary, the Risk Direction should in collaboration with the relevant services develop and improve management processes and offer information solutions able in the best way to identify and reduce risks that may arise between the parties involved.

Heads of departments and / or support services should always be vigilant by monitoring any violations and encouraging employees to report them.

8. TAKING MEASURES

In case when executives and employees who possess information about the existing risk identify and evaluate it on the basis of due diligence as a potential risk of corruption violation they should, in close cooperation with the Risk Direction, determine what measures should be taken to ensure that the risk has not become real.

Such vigilance supposes taking measures to exercise control that go beyond the procedures provided for by internal rules and directives in force at AUCHAN LLC.

9. PREVENTION OF CONFLICT OF INTERESTS

Conflict of interest - a situation in which a personal interest (direct or indirect) of an employee affects or can affect the proper performance of his work duties and in which a conflict arises or may arise between the employee’s personal interest and the rights and legitimate interests of AUCHAN LLC which may damage the rights and legitimate interests, property and (or) business reputation of AUCHAN LLC.

Personal interest of an employee – employee’s interest related to the possibility of receiving income while fulfilling his work duties in the form of money, values, other property or property services, other property rights for himself or for third parties.

Conflicts of interest may be:

Real: personal interests affect the fulfilment of the person’s functions at AUCHAN LLC,
Potential: personal interests could affect the fulfilment of the person’s functions at AUCHAN LLC.

Conflict of interest does not always entail facts of corruption violations or other actions. However, if situations in which a conflict of interest occurs are not identified and controlled appropriately, they may compromise (or appear to discredit) the honor and dignity of the employee or third party and / or indicate a potential risk of corruption.

Employees should avoid (whenever possible) situations and circumstances that could lead to conflicts of interest.

Financially responsible employees - this applies to all employees responsible for budgeting (for result centers), procurement at the international, national, regional and local levels, investment management are required to fill out and submit to the Risk Director or other authorized person the Declaration of Conflict interests in the recommended form in accordance with Appendix 1 to this Policy, regardless of whether these interests are real or potential.

The above declaration is confidential and AUCHAN LLC takes all necessary measures to ensure that the information contained in it is protected from access by third parties.

The purpose of working out and submission of this declaration is to identify, manage, minimize or eliminate the risk of a conflict of interest due to access to financial assets or the existence of income from external activities of employees, their spouses or direct relatives in a descending and ascending line. Moreover, the annual declaration provides not only protection for the reputation of AUCHAN LLC, but also the reputation of employees submitting such a declaration. The interests that should be declared in the declaration are investments, participation or positions in other companies that are capable of creating or can be considered as capable of creating a conflict of interest. Such a declaration will allow the Risk Direction to make recommendations to interested parties on measures that should be taken to manage this type of risk.

10. CONSCIENTIOUSNESS AS A KEY CRITERION IN THE SELECTION PROCESS

Human resources management is a priority area of the AUCHAN LLC project and is an area requiring special attention in matters relating to fraud and corruption violations.

Ethical standards and values of AUCHAN LLC emphasize the importance of the principle of good faith in the selection of employees. Conscientiousness should be the main criterion that must be followed when hiring and promoting employees.

Thus, guided by the principle of good faith as a key criterion in the selection process, employees engaged in this field will be able to apply the principles of this Policy to combat fraud and other forms of corruption violations.

Employees responsible for recruiting personnel must strictly monitor compliance with internal control procedures provided for verifying the conscientiousness of candidates – to confirm information provided by candidates, previous activities and education of candidates.

Exercising control over candidates of the following categories - senior executives, managers, directors, as well as buyers, group leaders and procurement directors is the responsibility of the Risk Direction.

The same rules should apply to the selection and / or promotion of employees who have been identified as employees with high development potential.

As part of the prevention of a potential conflict of interest, the HR department staff responsible for recruiting must provide all the necessary information so that the candidate is aware of his obligations to provide AUCHAN LLC with the required declarations and information about a potential and / or real conflict of interest.

Monitoring and verification of data submitted by employees is carried out in strict compliance with the laws of the Russian Federation, in particular in the field of processing and protection of personal data.