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BUSINESS ETHICS POLICY

Date of issue: 14-09-2015

BMS0356

BMS0356 Issue 1 Date of issue: 14-09-2015

This document and the information herein are the exclusive property of MBDA and shall not be disclosed to third parties or reproduced, totally or partially, regardless of methods and means, without the prior written authorisation of MBDA. © Copyright MBDA 2015.

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NON - MAINTAINED IF PRINTED

CONTENTS

STATEMENT FROM THE CEO ............................................................................................... 4

1 PREAMBLE .................................................................................................................... 5

2 BUSINESS ETHICS PRINCIPLES ................................................................................. 5

3 BUSINESS ETHICS OBLIGATIONS .............................................................................. 5

4 BUSINESS ETHICS PROGRAMME .............................................................................. 6

4.1 Prevent ................................................................................................................. 7 4.1.1 Risk assessment ................................................................................................... 7 4.1.2 Adequate Group Procedures ................................................................................. 7 4.1.3 Tools ...................................................................................................................... 9 4.1.4 Communication and training ................................................................................ 10

4.2 Detect ................................................................................................................. 10 4.2.1 Business Ethics programme monitoring .............................................................. 10 4.2.2 Audits................................................................................................................... 10 4.2.3 Allegations ........................................................................................................... 10

4.3 Respond ............................................................................................................. 10 4.3.1 Evaluation, maintenance and continual improvement ......................................... 10 4.3.2 Non-Compliance with this Policy ......................................................................... 11

5 ORGANISATION .......................................................................................................... 11

5.1 Business Ethics Committee ................................................................................ 11 5.2 Business Ethics & Corporate Responsibility Directorate .................................... 11

5.2.1 Business Ethics & Corporate Responsibility Directorate’s main roles and responsibilities ................................................................................................................ 11 5.2.2 Reporting to governance bodies .......................................................................... 12

6 IMPLEMENTATION IN COMPANIES .......................................................................... 12

6.1 National Companies ........................................................................................... 13 6.2 Controlled companies ......................................................................................... 13 6.3 Non-controlled companies .................................................................................. 13

7 BENCHMARK ORGANISATIONS ................................................................................ 14

7.1 Shareholders ...................................................................................................... 14 7.2 Proactive participation in professional initiatives ................................................ 14 7.3 Inter-Governmental and Non-Governmental initiatives ...................................... 14

APPENDICES ......................................................................................................................... 15

APP. 1 MAIN INTERNATIONAL AND NATIONAL INSTRUMENTS RELATED TO CORRUPTION ........................................................................................................................ 16

A1.1 International Conventions ................................................................................... 16 A1.1.1 OECD documents ................................................................................................ 16 A1.1.2 United Nations ..................................................................................................... 16 A1.1.3 Europe ................................................................................................................. 16 A1.1.4 International Chamber of Commerce (ICC) ......................................................... 16

A1.2 Major national laws / regulations regarding anti-corruption in MBDA home countries ....................................................................................................................... 16

A1.2.1 France ................................................................................................................. 16 A1.2.2 Germany .............................................................................................................. 17 A1.2.3 Italy ...................................................................................................................... 17 A1.2.4 Spain ................................................................................................................... 17 A1.2.5 UK ....................................................................................................................... 17 A1.2.6 USA ..................................................................................................................... 17

A1.3 Aerospace and Defence sector Initiatives .......................................................... 17



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APP. 2 BEC TERMS OF REFERENCE ......................................................................... 18

A2.1 Mission ................................................................................................................ 18 A2.2 Structure ............................................................................................................. 18 A2.3 Responsibilities ................................................................................................... 18

A2.3.1 Business Ethics Committee ................................................................................. 18 A2.3.2 Chairman ............................................................................................................. 19

A2.4 Operating principles ............................................................................................ 19

APP. 3 TERMS AND DEFINITIONS .............................................................................. 20

A3.1 AIA ...................................................................................................................... 20 A3.2 ASD .................................................................................................................... 20 A3.3 BE&CR ............................................................................................................... 20 A3.4 BEC .................................................................................................................... 20 A3.5 bribery ................................................................................................................. 20 A3.6 business adviser ................................................................................................. 20 A3.7 business partner ................................................................................................. 20 A3.8 Common Industry Standards (CIS) .................................................................... 20 A3.9 compliance culture .............................................................................................. 21 A3.10 conflict of interest ................................................................................................ 21 A3.11 controlled company ............................................................................................ 21 A3.12 corruption ............................................................................................................ 21 A3.13 extortion or solicitation ........................................................................................ 21 A3.14 facilitation payments ........................................................................................... 21 A3.15 FCPA .................................................................................................................. 21 A3.16 GCO .................................................................................................................... 21 A3.17 Global Principles ................................................................................................. 22 A3.18 ICC ...................................................................................................................... 22 A3.19 IFBEC ................................................................................................................. 22 A3.20 laundering the proceeds of corruption ................................................................ 22 A3.21 M&A .................................................................................................................... 22 A3.22 MBDA or MBDA Group ....................................................................................... 22 A3.23 MoU .................................................................................................................... 22 A3.24 National Company .............................................................................................. 22 A3.25 OECD ................................................................................................................. 22 A3.26 policy ................................................................................................................... 22 A3.27 procedure............................................................................................................ 22 A3.28 top management ................................................................................................. 23 A3.29 trading in influence ............................................................................................. 23



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Statement from the CEO

Business Ethics is a subject of crucial importance. For MBDA, as a world leader and global player in the missile and missile systems market, its business activities must be beyond reproach.

Our Business Ethics Policy has been updated recently and is a continuation of the previously drafted 2009 version. This latest edition consolidates and reinforces our commitment to this important subject and now covers business practices related to Business Advisers, Gifts and Hospitality, Donations and Sponsorship, M&A activities and our Supply Chain.

This policy underlines the principle of responsibility through the clear allocation of roles via Group Procedures. It also calls for the traceability of decisions which must be properly recorded and lays ever more stress on preventing the risk of noncompliance with our business ethics values and obligations.

The publication of this latest Policy enables us to reaffirm MBDA’s values: Integrity, Transparency and Honesty. It also offers us the opportunity of making these values better known to our external partners and of making sure that they are understood and shared by all our employees.

Compliance with this Policy is crucial. It forms a key element of our commitment to social responsibility and the strict implementation of its principles and procedures also contributes to our operational excellence and ensures MBDA’s sustainability. I’m sure I can rely on you to put these principles into practice in your daily work.

Antoine Bouvier, CEO



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1 PREAMBLE

MBDA is an industry leader and a global player in the missile and missile systems sector.

It operates mainly through National Companies, i.e. MBDA France SAS, MBDA UK Limited, MBDA Italia SpA, MBDA Deutschland GmbH, MBDA España SL and MBDA Inc.; and holds shareholders participations in other industrial companies or Joint Ventures.

Our Customers are mainly governmental authorities or international bodies (such as Ministries of Defence, Armed Forces, NATO etc.). We can deal directly with them or via platform manufacturers (aircraft manufacturers, shipyards, land vehicle manufacturers) or other system manufacturers.

To build its products and offers, MBDA works with subcontractors and suppliers, including in the territories where it operates so as to involve local skills and competences in its projects.

2 BUSINESS ETHICS PRINCIPLES

Operating at the highest ethical standards is key to any company’s reputation. Any misconduct would affect its long term business success and its position on the market. MBDA has stated in its Code of Ethics the ethical principles it has voluntary chosen to abide by.

For the purpose of this Policy, they can be summarized as follows:

Integrity, i.e. respect of fair competition rules and prohibition of undue influence in all our business dealings;

Transparency, i.e. openness about decisions and activities within the framework of this Policy, to the extent allowed by our confidentiality rules; and

Honesty, i.e. truthfulness and accuracy of records, whether financial or else.

In addition to the above business ethics principles, the following are underlying fundamentals:

Responsibility, i.e. clear allocation of roles and responsibilities through adequate Group Procedures; and

Traceability, i.e. ensuring key decision processes and decisions themselves within the framework of this Policy are properly recorded.

3 BUSINESS ETHICS OBLIGATIONS

MBDA is committed to its shareholders, employees, customers, suppliers and industrial peers both to complying with relevant applicable laws and regulations and to applying its business ethics principles.

Taking into consideration the sector and countries in which we operate, and in addition to our business ethics principles, our key business ethics obligations are driven by the relevant applicable laws related to anti-corruption field and the following conventions and guidelines, with a strong focus on anti-bribery:

The OECD “Convention on Combating Bribery of Foreign Public Officials in International Business Transactions” - signed on 17 December 1997 and entered into force on 15 February 1999 (the “OECD Anti-Bribery Convention”);

The OECD “Recommendation of the Council for Further Combating Bribery of Foreign Public Officials in International Business Transactions” - 26 November 2009 (With amendments adopted by Council 18 February 2010 to reflect the inclusion of Annex II, Good Practice Guidance on Internal Controls, Ethics and Compliance);



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The major Aerospace and Defence sector initiatives on this matter:

o The ASD “Common Industry Standards for European Aerospace and Defence” - approved by the ASD Council in April 2007; and

o The ASD and AIA “Global Principles of Business Ethics for the Aerospace and Defence Industry” - Issue 2nd of October 2009.

NOTE: A list of main international and national instruments related to corruption is given in App. 1.

4 BUSINESS ETHICS PROGRAMME

Paying close attention to all phases of business, in particular when operating through business partners

1, is the best way of fulfilling our business ethics obligations.

To this end, MBDA has defined and implemented a strict Business Ethics Programme, taking into account its size, its organization and the nature of its activities.

This programme is structured on three phases as follows:

PREVENT, i.e. to prevent the risk of noncompliance with our business ethics obligations. This is achieved through appropriate risk assessment, adequate Group Procedures, tools and relevant communication and training;

NOTE: The set of Group Procedures, together with this Policy, are hereafter referred to as “Business Ethics Policy and Procedures”.

DETECT, i.e. to detect any failure to implement our Group Procedures or any breach of our business ethics. This is achieved through effectiveness and efficiency monitoring of our Business Ethics Programme, regular audits and analysis of allegations raised, if any;

RESPOND, i.e. to effectively respond to any identified weakness of Group Procedures or any violation of business ethics. This will be achieved by improvement of our Business Ethics Programme and remedial actions which will be defined and implemented together with appropriate disciplinary action.

1 See definition in Appendix App. 3



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4.1 Prevent

4.1.1 Risk assessment

Risk assessment constitutes the basis for the implementation of our Business Ethics programme by helping us focusing on high compliance risk situations and setting priorities. It also helps planning allocation of appropriate and adequate resources and processes to manage identified compliance risks.

Compliance risks are analysed by considering causes and sources of noncompliance and the severity of their consequences (potential impact), as well as the likelihood that noncompliance and associated consequences can occur (probability of occurrence).

The compliance risks are reassessed on an ongoing basis so that any changes in our activities or significant external changes (such as financial‐economic circumstances, market conditions, changes in the regulatory environment etc.) are properly captured.

4.1.2 Adequate Group Procedures

4.1.2.1 General

The Business Ethics Policy is implemented through Group Procedures.

Key principles to be implemented in each domain covered by this Policy are given in the following chapters. Wherever necessary, detailed requirements and guidance are provided in the respective Group Procedure.

These Procedures must be strictly observed at all times by all MBDA employees, including executives and managers

2.

4.1.2.2 Contractual arrangements with Business Advisers

To support its future business development and assist its marketing and sales activities, MBDA may engage business advisers. They bring their knowledge of the Territory where we intend to do business, the Customer, the users, the local industrial fabric or of any other subject of interest or value to support MBDA sales activities. They can give guidance and advice on development of business opportunities, strategy to adopt on a commercial campaign, our industrial aims and other MBDA business dealings.

Selection, appointment, monitoring and payment of such advisers is governed by strict rules. In particular:

Their competences with respect to the expected mission and their compliance with MBDA business ethics criteria are thoroughly assessed prior to any appointment (“Business Adviser due diligence”);

They are assigned clear mission and duties;

They must certify their understanding and compliance with the MBDA business ethics principles;

2 In Germany subject to an agreement with the works council for all domains for which co-determination must be observed.



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Their remuneration is among others linked to the complexity of the assigned mission, to their added value, and to benchmark in the market or territory concerned; and

Payments are managed through a rigorous internal approval process and are subject to clear and rigorous substantiation of their activity.

The same rules apply to Business Advisers engaged to support MBDA offset activities.

4.1.2.3 Gifts and Hospitality

MBDA employees may have, in connection with our business activities, to offer gifts or hospitality to customers, business partners or visitors. This is recognised as part of doing business when seeking to improve our image, better present our products and services or establish cordial business relations.

However, MBDA must ensure that such gifts or hospitality are not and cannot be perceived as influencing the beneficiary in the exercise of his or her functions. Therefore offering of any gifts or hospitality is submitted to clear rules, in particular:

They are in all cases subject to the following cumulative conditions:

o In accordance with beneficiaries’ laws, regulations and national customs in this matter;

o For business purposes;

o Proportionate;

o Socially acceptable; and

o Traceable;

Prior approval by hierarchy will be requested when appropriate, in accordance with criteria defined in the dedicated Group Procedure; and

Appropriate records shall be kept.

Particular attention will be paid to this matter during negotiating phase of commercial contracts.

As a matter of clarification, receipt of gifts or hospitality by any MBDA employee is also subject to clear rules which are detailed in the dedicated Group Procedure.

4.1.2.4 Donations and Sponsorship

MBDA operates in many countries worldwide, through its industrial activities or the commercial campaigns and projects it carries out. This may involve MBDA in supporting and contributing to local public interest causes, humanitarian relief or any other community engagement in those countries.

MBDA must then ensure such activities and related funding fully comply with its business ethics principles and the objectives that led to the decision of carrying them out. To this end:

Any donation or sponsorship operation shall be subject to prior written approval of MBDA designated responsible person/s, in accordance with criteria defined in the dedicated Group Procedure;

Any donation or sponsorship operation should relate to the opportunity to enhance MBDA’s reputation as a good citizen, to advertise the MBDA products and brand or to be relevant to the community in which MBDA operates;

Responsibility for managing and monitoring such operations once decided shall also be allocated; and

Any donation or sponsorship operation shall be properly recorded.



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4.1.2.5 Mergers and Acquisitions and other alliances3

The development of MBDA may involve mergers, restructuring or acquisitions of other companies’ businesses. Such operations must be conducted while minimizing the risk of MBDA being involved in any corruption allegation or evidenced case that could imply its liability, including where it relates to activity which occurred prior to MBDA being involved in the transaction.

To this end, particular attention shall be paid to compliance issues while conducting Mergers and Acquisitions activities, including:

Performing a compliance risk assessment of the future partner or target business (with focus on its anti-corruption measures); and

Assessing compliance of the target company with MBDA business ethics criteria.

Any new entity set up as a result of any M&A operation shall apply this MBDA Business Ethics Policy or put in place a policy in line with it depending on MBDA’s participation in such entity (see § 6).

Similar attention shall be paid to compliance issues when considering entering into any other kind of cooperation agreements or arrangements such as JVs, Teaming Agreements, MoUs etc.

4.1.2.6 Supply Chain

MBDA works with subcontractors and key suppliers, very often on a long duration relationship. Their performance is a critical part of our own performance. The selection of these subcontractors and key suppliers must comply with various criteria, including price, quality, performance, delivery and suitability in accordance with MBDA rules. Local added value may also be part of selection criteria.

In addition, MBDA must also pay particular attention to the business ethical conduct of these subcontractors and key suppliers in order that MBDA only deals with those having appropriate business ethics principles.

Detailed methodology shall be defined accordingly, such as issuance of guidelines enabling procurement to establish and implement the necessary arrangements.

4.1.2.7 Conflicts of interest

The Code of Ethics requires that all employees avoid conflicts of interest between their obligations to MBDA and their personal affairs.

Nevertheless potential situations of conflicts of interest cannot all be addressed in a simple way and must be resolved to remain workable and not conflict with other rights. Therefore clear guidance must be given on:

How to disclose, resolve or remove a conflict of interest; and

Conditions of recording of such situations.

4.1.2.8 Facilitation payments

As stated in the Code of Ethics, facilitation payments are prohibited by MBDA.

4.1.3 Tools

To help employees fully understand and apply these Policy and Procedures, specific tools are at their disposal where appropriate, such as templates, guidelines, booklets, etc.

Suitability, adequacy and effectiveness of these tools is regularly reviewed and tools updated accordingly, so as to ensure they still meet our needs and employees’ expectations.

3 This includes shareholdings and cooperation alliances and agreements such as JVs, Teaming Agreements, MoUs, Marketing Agreements etc.



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4.1.4 Communication and training

The Business Ethics Policy is communicated to all MBDA employees, including executives and managers, and is available on MBDA’s intranet. It is also published on MBDA’s public website.

To support continuous awareness and ensure common compliance culture throughout the Group, key information relating to business ethics and compliance is directly available to all MBDA employees in our domestic countries via a dedicated section of our intranet. Additional communication is made via MBDA other communication channels when deemed appropriate.

Finally, MBDA continually reminds its employees its business ethics rules through various training and awareness sessions. This aims at ensuring all employees, including executives and managers, and in particular persons in sensitive positions, have clear guidance on how to conduct business and act in a responsible way.

4.2 Detect

4.2.1 Business Ethics programme monitoring

Adequacy, implementation and effectiveness of the Business Ethics programme, and in particular of the Business Ethics Policy and Procedures, are regularly assessed via internal reviews organized on specific topics as per necessity. Such reviews are led by the Business Ethics organisation and include various attendees depending on the topic dealt with.

In addition, performance of the Business Ethics programme and in particular of the Business Ethics Policy and Procedures is regularly reviewed by the Business Ethics Committee (“BEC” – see § 5.1) and reported to other MBDA governance bodies, such as the Executive Committee, the Audit Committee and the Board of MBDA (see § 5.2.2).

4.2.2 Audits

As for all MBDA processes, the Group Internal Audit ensures an efficient and regular control of the Business Ethics Policy and Procedures and proposes potential process upgrades to address possible weaknesses.

Specific audits can also be requested to be performed at any time by the BEC or the Group Director Business Ethics & Corporate Responsibility. Such request shall be approved in accordance with MBDA relevant procedures.

4.2.3 Allegations

Similarly, one channel for detecting any breach of our business ethics principles or consequently any weakness in our Business Ethics programme is allegations, regardless of how they are raised. Any such allegation shall be dealt with in accordance with the dedicated Group process and appropriate actions undertaken depending on the outcomes (see § 4.3.1).

4.3 Respond

4.3.1 Evaluation, maintenance and continual improvement

Any breaches or weaknesses highlighted thanks to the detection phase, whether reported, detected or reasonably suspected, shall be appropriately analysed. Appropriate corrective and/or preventive actions shall then be undertaken, thus enabling to improve our Business Ethics programme and preventing repetition of failure.

Finally, the Business Ethics Policy and Procedures will be regularly updated to take into consideration the most recent relevant changes both at national and international level, new business challenges and international best practices in the field of ethics and compliance, as well as any relevant circumstances justifying such amendment, including circumstances such as actual or alleged instances of corruption. The BEC shall validate any update of the Business Ethics Policy and Procedures.



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4.3.2 Non-Compliance with this Policy

Adherence to the Business Ethics Policy and Procedures is mandatory and critical to MBDA’s reputation, future business success and sustainability. Breaches will not be tolerated.

Any failure to comply with the Business Ethics Policy and Procedures will lead to appropriate disciplinary actions, which may include termination of employment, in accordance with applicable laws and regulations and MBDA Human Resources policies.

5 ORGANISATION

5.1 Business Ethics Committee

Overall responsibility and authority for the implementation of the Code of Ethics within the framework of this Business Ethics Policy has been assigned by the Executive Committee to an ad hoc committee, the Business Ethics Committee (“BEC”). This includes in particular responsibility for:

Defining the Business Ethics Policy and Procedures and validating any update before approval; and

Promoting, overseeing and guaranteeing proper implementation of the MBDA Business Ethics Policy and Procedures within MBDA.

The BEC is composed of senior MBDA executives, specifically designated to achieve the above mission.

NOTE: BEC Terms of Reference are detailed in Appendix App. 2.

5.2 Business Ethics & Corporate Responsibility Directorate

The MBDA Group Directorate Business Ethics & Corporate Responsibility (“BE&CR”), is responsible for defining, implementing and maintaining the Business Ethics Policy, under BEC’s authority.

To ensure proper independence, the Group Director Business Ethics & Corporate Responsibility, also acting as Group Compliance Officer (“GCO”) directly reports to the CEO; he or she has the appropriate status and level of authority to execute countervailing power and is accountable to the BEC and MBDA highest reporting structures: the Executive Committee, the Audit Committee and the Board of MBDA.

To successfully fulfil its mission as regards Business Ethics, the Group Director BE&CR is supported by suitably qualified or experienced resources including:

A National Compliance Officer in each of MBDA National Companies;

The Group Head of Business Ethics Programme; and

Additional Compliance Correspondents, appointed where appropriate in other MBDA Group companies (see § 6).

5.2.1 Business Ethics & Corporate Responsibility Directorate’s main roles and responsibilities

The Group Director BE&CR is responsible for:

Defining, establishing and maintaining the MBDA Group Business Ethics Policy and Procedures in accordance with international and national applicable laws and regulations and best practices in the domain;

Organizing and leading the Business Ethics Committee’s activities, in accordance with Chairperson(s) and BEC Terms of Reference;

Promoting a compliance culture within MBDA via appropriate communication actions; and



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Establishing and leading the network of Compliance representatives within MBDA.

Detailed roles and responsibilities of National Compliance Officers, Group Head of Business Ethics Programme and Compliance Correspondents in MBDA companies are described in Group Directorate Business Ethics & Corporate Responsibility organisation note, available in MBDA’s intranet.

The Group Directorate BE&CR are at any employees’ disposal to provide guidance, recommendations, clarifications and answer any question or concern as regards business ethics and compliance.

5.2.2 Reporting to governance bodies

Reporting to the MBDA governance bodies on business ethics and compliance matters is ensured on an ongoing basis by the Group Director BE&CR as follows:

To the Business Ethics Committee on a quarterly basis

To the Executive Committee twice a year

To the Audit Committee twice a year

To the Board of MBDA on demand

The Group Director BE&CR is a permanent guest of the Audit Committee.

6 IMPLEMENTATION IN COMPANIES



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6.1 National Companies

Within each of these controlled companies, the relevant Managing Director and the Group Director BE&CR are responsible for jointly appointing a suitably qualified or experienced compliance correspondent (hereafter referred to as “National Compliance Officer”)

4.

The National Compliance Officer is in particular responsible for implementing the MBDA Group Business Ethics Policy and Procedures, taking into account:

The specific requirements of applicable national legislation if any; and

The specificities of the National Company where appropriate;

He or she is also responsible for ensuring the MBDA Group Business Ethics Policy and Procedures are properly implemented in the companies controlled by his or her National Company, with the support of the relevant Compliance Correspondent if one has been appointed (see § 6.2).

He or she is the focal point in his or her National Company for any business ethics and compliance matter.

Detailed roles and responsibilities of National Compliance Officers are described in Group Directorate Business Ethics & Corporate Responsibility organisation note, available in MBDA’s intranet.

6.2 Controlled companies

Within those of MBDA 100% controlled companies which are not “National Companies”, top management is, when deemed appropriate by MBDA, responsible for assigning business ethics and compliance management responsibility to a suitably qualified or experienced compliance correspondent, in agreement with MBDA Group Director BE&CR. This function (hereafter referred to as “Company Compliance Correspondent”), preferably one individual, may be assigned to an existing position.

The Company Compliance Correspondent is in particular responsible for:

Implementing the MBDA Business Ethics Policy and Procedures within its company;

Establishing and implementing, in accordance with relevant national legislation, implementation procedures in its company if appropriate; and

Keeping National Compliance Officer of MBDA parent company regularly informed and escalating to him or her any issue which may arise.

For controlled companies where MBDA has not full control, the above principles apply subject to agreement with other major shareholders.

6.3 Non-controlled companies

Within each MBDA non-controlled company, governing body and top management are responsible for ensuring that the company has defined and implemented business ethics policies and procedures which are consistent with this Policy, in accordance with the terms of the shareholders’ agreement.

These company business ethics policies and procedures shall be communicated to MBDA Business Ethics organisation. They can be audited at any time on MBDA’s request.

4 For MBDA Germany the Managing Director will inform the Group Director BE&CR about the appointment of a National Compliance Officer.



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7 BENCHMARK ORGANISATIONS

MBDA Business Ethics principles are in line with international recommendations, organizational and industry ethical standards, professional best practices as well as standards of good corporate governance.

7.1 Shareholders

When reviewing and updating its Business Ethics Policy and Procedures, MBDA considers its shareholder policies and procedures.

7.2 Proactive participation in professional initiatives

To keep up with and contribute to the development of the regulatory environment for Business Ethics, MBDA is a proactive member of the major professional organizations of the aerospace and defence business sector.

In particular, MBDA has signed in September 2008 the Statement of Adherence to the “Common Industry Standards” (CIS) issued by the ASD. The CIS represent a strong commitment of its parties to fight against corruption. MBDA is also a proactive member of the ASD Business Ethics Committee, which aims at continually defining and implementing actions ensuring the integrity commitments of ASD members.

In addition, MBDA is a member of the International Forum on Business Ethical Conduct for the Aerospace and Defence Industry (IFBEC) whose members have jointly developed the “Global Principles”, based on best practices including the CIS for European Aerospace and Defence and the Defence Industry Initiative on Ethics and Business Conduct in the US.

Finally, MBDA proactively participates, as a member of the international delegations, in the ISO (International Organization for Standardization) initiatives aiming at creating international standards both on compliance management systems and on anti-bribery management systems.

7.3 Inter-Governmental and Non-Governmental initiatives

Besides its commitment to abide by the recommendations of the OECD Anti-Bribery Convention, MBDA also pays close attention to the various initiatives launched by Inter-Governmental and Non-Governmental Organisations involved in the fight against corruption (such as the ICC, Transparency International etc.) as part of our continual improvement process.



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APPENDICES



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APP. 1 MAIN INTERNATIONAL AND NATIONAL INSTRUMENTS RELATED TO CORRUPTION

Main international and national instruments related to fight against and prevention of corruption include, but are not limited to, the following:

A1.1 International Conventions

A1.1.1 OECD documents

OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions - signed on 17 December 1997 and entered into force on 15 February 1999

Recommendation of the Council for Further Combating Bribery of Foreign Public Officials in International Business Transactions - 26 November 2009 (With amendments adopted by Council 18 February 2010 to reflect the inclusion of Annex II, Good Practice Guidance on Internal Controls, Ethics and Compliance)

OECD Guidelines for Multinational Enterprises – 2011 Edition

2009 Recommendation on Tax Measures for Further Combating Bribery of Foreign Public Officials in International Business Transactions

A1.1.2 United Nations

United Nations Convention against Corruption (UNCAC), entered into force on 14 December 2005

United Nations Global Compact (10th principle)

A1.1.3 Europe

Criminal Law Convention on Corruption, of 27 January 1999 and entered into force on 1 July 2002 and

o Additional Protocol to the Criminal Law Convention on Corruption of 15 May 2003

Civil Law Convention on Corruption, of 4 November 1999

A1.1.4 International Chamber of Commerce (ICC)

ICC Rules on Combating Corruption – 2011 Edition

A1.2 Major national laws / regulations regarding anti-corruption in MBDA home countries

A1.2.1 France

Law 2000-595 of 30 June 2000 [Loi n° 2000-595 du 30 juin 2000 modifiant le code pénal et le code de procédure pénale relative à la lutte contre la corruption]

Law 2007-1598 of 13 November 2007 [Loi n° 2007-1598 du 13 novembre 2007 relative à la lutte contre la corruption]

Law 2005-743 of 4 July 2005 [Loi n° 2005-743 du 4 juillet 2005 autorisant la ratification de la convention des Nations Unies contre la corruption]

Law 2013-1117 of 6 December 2013 [Loi n° 2013-1117 du 6 décembre 2013 relative à la lutte contre la fraude fiscale et la grande délinquance économique et financière]



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A1.2.2 Germany

OwiG - Administrative Offences Act [Auszüge aus dem Gesetz über Ordnungswidrigkeiten (OwiG) der Bundesrepublik Deutschland]

StGB - Criminal Code [Ausziige aus dem Strafgesetzbuch (StGB) der Bundesrepublik Deutschland]

A1.2.3 Italy

Dlgs 231/2001 - Executive decree no. 231 of 8 June 2001 – “Discipline of the administrative liability of legal persons, of companies and of associations even without a legal status, pursuant to Article 11 of Law no. 300 of 29 September 2000”

A1.2.4 Spain

Criminal Code, as enacted by Organic Law 1/2015, of 30 March, which amends Organic Law 10/1995, of 23 November, into force on 1 July 2015

A1.2.5 UK

Bribery Act 2010, entered into force on 1 July 2011

Bribery Act 2010 guidance documents:

o Bribery Act 2010: Guidance about procedures which relevant commercial organisations can put into place to prevent persons associated with them from bribing (section 9 of the Bribery Act 2010)

o Joint Prosecution Guidance of the Director of the SFO and the Director of Public Prosecutions on the Bribery Act 2010, of 9 October 2012

Anti-terrorism, Crime and Security Bill of 12 November 2001

A1.2.6 USA

Foreign Corrupt Practices Act (“FCPA”), of 1977

FCPA guidance document:

o A Resource Guide to the U.S. Foreign Corrupt Practices Act, of 14 November 2012

Federal Sentencing Guidelines, as of 1 November 2010

A1.3 Aerospace and Defence sector Initiatives

Industry has also undertaken various initiatives in order to share between themselves and benchmark their integrity practices, with a view to determining, through an industry-wide cooperative effort, commonly established standards.

At European level: ASD “Common Industry Standards for European Aerospace and Defence”

At International level: Global Principles of Business Ethics for the Aerospace and Defence Industry - Issue 2

nd of October 2009



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APP. 2 BEC TERMS OF REFERENCE

A2.1 Mission

The Business Ethics Committee (“BEC”) is a dedicated corporate committee which has been assigned by the Executive Committee overall responsibility and authority for the implementation of the Code of Ethics within the framework of this Business Ethics Policy. This includes issuing appropriate recommendations and disseminating the high MBDA business ethics standards on a continuing basis within the whole MBDA Group

A2.2 Structure

In order to fulfil its mission, the BEC is composed as follows (permanent members):

The Chief Finance Officer;

The Executive Group Director Sales and Business Development;

The Group Director Export Sales;

The Group General Counsel;

The Group Director Business Ethics & Corporate Responsibility (“BE&CR”); and

The Group Head of Business Ethics Programme (Secretary).

By invitation: Other functions when a matter of interest or concern to them is addressed.

Chairman of the BEC is designated by the Executive Committee amongst BEC members.

A2.3 Responsibilities

Within the framework of the general mission defined above, the BEC’s key responsibilities are as follows:

A2.3.1 Business Ethics Committee

The Business Ethics Committee is responsible for:

With respect to the Business Ethics Policy and Procedures:

o Defining the Business Ethics Policy and Procedures and validating any update before approval;

o Promoting, overseeing and guaranteeing proper implementation of the MBDA Business Ethics Policy and Procedures within MBDA;

o Handling any potential issue deriving there from.

With respect to the alert system and the management of allegations:

o The Group Director Business Ethics & Corporate Responsibility is responsible for reporting to the BEC any allegation falling into the BEC’s scope;

o The BEC is kept informed of any evolution of the related procedure.

In addition, the BEC is responsible for:

Ensuring the Code of Ethics is maintained and fully disseminated throughout the whole MBDA Group;

Reviewing recommendations coming from internal and/or external audits and taking appropriate related actions.



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A2.3.2 Chairman

Chairman of the BEC is responsible for:

Approving the agenda of the BEC upon proposal by the Group Director BE&CR;

Leading the BEC meetings and proposing resolutions on discussed issues; such resolutions shall then be approved by the committee; and

Approving the minutes of each BEC meeting which shall be prepared by the BEC secretary.

A2.4 Operating principles

As a basis, the BEC holds quarterly meetings. However, an additional BEC meeting can be called at any time by one of its members to deal with a specific urgent subject.

Reporting to MBDA governance bodies on Business Ethics and Compliance matters is ensured by the Group Director BE&CR in accordance with the Business Ethics Policy (see § 5.2.2).



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APP. 3 TERMS AND DEFINITIONS

For the purpose of this document, the following terms and definitions apply.

A3.1 AIA

Aerospace Industries Association of America

A3.2 ASD

AeroSpace and Defence Industries Association of Europe

A3.3 BE&CR

Business Ethics & Corporate Responsibility

A3.4 BEC

MBDA Business Ethics Committee

A3.5 bribery

offering, promising, giving, authorizing, accepting or soliciting of any undue pecuniary or other advantage to, by or for any person, directly or indirectly, in order that the said person act or refrain from acting in breach of his or her duties in order to obtain or retain a business or other improper advantage

[ICC Rules on Combating Corruption (2011 edition) and UNCAC - Adapted]

NOTE 1: Although bribery and corruption ( A3.12) are often used indifferently, bribery has a narrower meaning than corruption. Bribery generally does not include other criminal offences such as fraud anti-trust/competition offences and money laundering

NOTE 2: Above definition of bribery applies to a “person” and therefore covers both public officials and individual persons

A3.6 business adviser

any company or other legal entity who is engaged or to be engaged to support MBDA future business development and assist its marketing and sales activities.

NOTE 1: More detail on what a Business Adviser is is provided in the dedicated Group Procedure

NOTE 2: Professional advisers such as lawyers, accountants, investment bankers, surveyors and tax specialists, acting for MBDA as such as part of their professional practice under their professional rules are NOT advisers for the purposes of the Business Ethics Policy and Procedures

A3.7 business partner

any party excluding employees with whom MBDA contracts or plans to contract. This includes but is not limited to joint venture partners, consortium partners, contractors, consultants, sub-contractors, suppliers, vendors, advisors, agents, distributors, representatives and intermediaries

A3.8 Common Industry Standards (CIS)

“Common Industry Standards for European Aerospace and Defence”, issued by the ASD ( A3.2)

series of anti-corruption principles which European signatory companies commit to applying, approved by the ASD Council in April 2007.



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A3.9 compliance culture

values, ethics and beliefs that exist throughout an organization and interact with the organization’s structures and control systems to produce behavioural norms that are conducive to compliance outcomes

[ISO 19600:2014 “Compliance management systems - Guidelines”]

A3.10 conflict of interest

situation where outside business or family connections could interfere with the judgement of personnel in carrying out their duties for the organization

[BS 10500:2011 “Specification for an anti-bribery management system (ABMS)”]

A3.11 controlled company

any company that, directly or indirectly, is controlled by MBDA SAS

For the purpose of this definition, “control” means (i) ownership of more than fifty per cent of the voting rights exercisable at the general meeting on all, or substantially all, matters or (ii) the right to appoint and remove directors having the majority of the voting rights exercisable at the meetings of the Board of Directors of that company on all, or substantially all, matters or (iii) the power to otherwise control management of the company.

A3.12 corruption

corruption includes bribery ( A3.5), extortion or solicitation ( A3.13), and trading in influence ( A3.29), whether the intended recipient, extorter or solicitor of a bribe is a public official, a politician or a private individual. It also includes laundering the proceeds of corruption ( A3.20)

[ICC Rules on Combating Corruption (2011 edition)]

NOTE: There is no specific definition of “corruption” that is applicable to all the countries in which MBDA operates. However the above definition gives a common approach.

A3.13 extortion or solicitation

demanding of a bribe, whether or not coupled with a threat if the demand is refused


A3.14 facilitation payments

unofficial, improper, small payments made to a low level official to secure or expedite the performance of a routine or necessary action to which the payer of the facilitation payment is legally entitled

Facilitation payments are prohibited in most jurisdictions.


A3.15 FCPA

United States Foreign Corrupt Practices Act

A3.16 GCO

MBDA Group Compliance Officer



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A3.17 Global Principles

“Global Principles of Business Ethics for the Aerospace and Defence Industry”

common set of standards for ethical business conduct jointly developed by the ASD ( A3.2) and the AIA ( A3.1) on the basis of the “Common Industry Standards” ( A3.8) in Europe and the “Defense Industry Initiative on Ethics and Business Conduct” in the US. They were adopted in October 2009

A3.18 ICC

International Chamber of Commerce

A3.19 IFBEC

International Forum on Business Ethical Conduct for the Aerospace and Defence Industry

the IFBEC was set up to promote and foster through the Global Principles ( A3.16) the development of global, industry-wide ethical standards for the companies that are active in the aerospace and defence business sector. It brings together the major member companies of ASD ( A3.2) and AIA ( A3.1)

A3.20 laundering the proceeds of corruption

concealing or disguising the illicit origin, source, location, disposition, movement or ownership of property, knowing that such property is the proceeds of crime


A3.21 M&A

Mergers and Acquisitions

A3.22 MBDA or MBDA Group

the group of companies comprising MBDA SAS and its controlled ( A3.11) and non-controlled companies

A3.23 MoU

Memorandum of Understanding

A3.24 National Company

any (or where plural, all) of MBDA France SAS, MBDA UK Limited, MBDA Italia SpA, MBDA Deutschland GmbH, MBDA España SL or MBDA Inc.

A3.25 OECD

Organization for Economic Cooperation and Development

A3.26 policy

intentions and direction of an organization as formally expressed by its top management ( A3.28)

[ISO/IEC Directives, Part 1, Consolidated ISO Supplement, 2013]

A3.27 procedure

specified way to carry out an activity or process

[ISO 19600:2014 “Compliance management systems - Guidelines”]



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A3.28 top management

person or group of people who directs and controls an organization at the highest level

NOTE 1: Top management has the power to delegate authority and provide resources within the organization.

NOTE 2: If the scope of the management system covers only part of an organization then top management refers to those who direct and control that part of the organization

[ISO/IEC Directives, Part 1, Consolidated ISO Supplement, 2013]

A3.29 trading in influence

offering or solicitation of an undue advantage in order to exert an improper, real, or supposed influence with a view of obtaining from a public official an undue advantage for the original instigator of the act or for any other person


Group Directorate Business Ethics &Corporate Responsibility

1 avenue Réaumur92358 Le Plessis-Robinson cedex – France

[email protected]

www.mbda-systems.com

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