Anti-Corruption

Purpose

This policy sets forth the requirements for interacting with government officials and private sector customers on behalf of Entrust.

Policy Requirements

This policy sets forth the requirements for interacting with government officials and private sector customers on behalf of Entrust.

4.1 DEFINITIONS

Bribe: An offer, payment, promise to pay, or authorization of the payment of anything of value in order to influence an official act or decision by a government official or private sector customer or to secure any other improper advantage in order to obtain or retain business (e.g., to prevent governmental action such as the imposition of a tax or fine, to obtain confidential information about business opportunities, to obtain the right to open an office or secure a zoning ruling, to influence the award of a government contract, to resolve government disputes such as an alleged tax deficiency or duty payable) as well as the solicitation or receipt of something of value from an individual to influence an act or decision by or to secure any other improper advantage in order to obtain or retain business from an Entrust colleague. A bribe can take many forms including, but not limited to, cash, cash equivalents (e.g., gift certificates, personal loans, stocks or other securities), free or discounted products and services, gifts, travel, entertainment, political or charitable contributions and offers of internship or employment.

Channel Partner: Any entity that does business with Entrust through a pre-existing, written agreement to market and resell Entrust’s products and services.

Consortium Member: An entity that participates with Entrust through means of a written consortium/joint venture agreement to respond to an open or limited RFP issued by a government entity.

Customer: Any non-government, private sector individual to whom Entrust sells product or services.

Facilitating Payment: A small payment to a government official to expedite or facilitate nondiscretionary, routine government action. These payments are also referred to as “kickbacks,” “expediting payments” or “grease payments,” and include, but are not limited to, payments to expedite the processing of ordinary licenses, business permits or visas, or to secure police protection.

Government Official: Any officer or employee of any government entity, department, or agency; any officer or employee of a state or government-owned business, school, hospital or other entity; any political party or official; any candidate for political office; any officer or employee of a public international organization such as the World Bank or the International Monetary Fund; or any person acting in an official capacity for or on behalf of any government entity, department, agency, instrumentality or public international organization. Examples include, but are not limited to, customers or tax officials, regulatory agency officials, local police officers, military personnel, judges, prosecutors, court clerks, employees of a state-run manufacturing facility and employees of a state-run pension plan.

Money Laundering: Knowingly engaging in, attempting to engage in, or facilitating a monetary transaction involving property or funds related to a crime. This includes such offenses as tax evasion, bribery, fraud, or any other serious offense, regardless of where the underlying misconduct took place. Both movement of funds to enable a crime to occur (such as funds to pay a bribe) and movement of funds that are the proceeds of a crime constitute money laundering.

Systems Integrator: Any entity that purchases products from Entrust to integrate into a broader solution offering for an end-user customer. Systems integrators may also provide technical and/or professional services to the end-user customer.

Technology Alliance Partner: Any entity that is a member of the Entrust Technology Alliance Partner Program, which provides partners with a platform for developing and delivering solutions that meet regional and market specific trusted identity and secure transactions requirements.

Third Party: Any individual, company or entity that performs services for or acts on behalf of a company or government official. Examples include, but are not limited to, agents, brokers, consultants, sales representatives, distributors, resellers, attorneys, accountants, tax or customs advisors, travel agents, consortium partners and other business partners or joint venture partners.

4.2 PROHIBITION ON BRIBERY

Entrust prohibits paying, offering to pay, promising to pay or authorizing the payment of money or anything of value, directly or indirectly, to any government official or customer in order to secure an improper business advantage. Entrust also strictly prohibits any colleague from soliciting or accepting a bribe from any individual or entity as an Entrust colleague. International law prohibits all of the above—anti-bribery laws are not just restricted to offers of improper payment to government officials.

Extortion or coercive practices – impairing or harming, or threatening to impair or harm, any individual, organization, or their property or financial interests in order to influence that person or organization will not be tolerated and will result in disciplinary action, up to and including termination of employment.

4.3 FACILITATING PAYMENTS

Entrust prohibits facilitating payments. While the laws of certain jurisdictions allow for nominal payments to government officials to expedite or facilitate routine, non-discretionary governmental action, other laws do not allow such payments. Global standards strongly discourage such payments since it is often difficult to distinguish facilitating payments from bribes.

4.4 SAFETY EXCEPTION

The safety of Entrust colleagues and third parties working on the Company’s behalf is of paramount importance. Thus, payments or transfers of value that would otherwise be disallowed under this policy may be made when an individual’s safety is at risk. For example, when necessary to secure critical government services (e.g., police protection, medical evacuation) in response to a medical or safety emergency, when there is a reasonable fear of serious harm, or when there is a threatening situation involving unlawful or unreasonable imprisonment, detainment, prosecution or punishment, and no prudent alternatives are available. Payments made under these circumstances must be reported immediately to Entrust’s Chief Legal and Compliance Officer and must be accounted for accurately in Entrust’s books and records. Continuous demands for payment must also be reported to the Chief Legal and Compliance Officer as the Company may need to reconsider its relationship with any third party who regularly makes demands for payments that are or appear to be improper.

 

4.5 OTHER TRANSFERS OF VALUE

Certain transfers of value (whether giving or receiving) are permitted in very rare circumstances where the expenditures are reasonable, bona fide and associated with the promotion of Entrust, its products and services, or the execution of an existing contract.

Repeated transfers of value to or from the same individual, whether in the same form or different forms, can create the appearance of improper influence even when each transfer is of limited value. For example, the giving of multiple gifts as well as entertainment to the same purchasing manager at a customer can create the appearance of impropriety, even if each is of reasonable value. As a rule of thumb, the same individual should not receive more than one transfer of value in a quarter or more than four times a year, or multiple high-value transfers in one year. Colleagues and managers should be mindful of multiple transfers, and if there are specific reasons for more frequent or higher value transfers to or from the same individual, seek guidance from Legal. The following transfers of value are never permissible:

• Any transfer that would be illegal;
• Anything of value to any government official; political party or party official; or any candidate for political office; official or employee of an international organization; or officer, director, or employee of a customer, for the purpose of inducing the recipient to misuse their position to provide any improper or undue business advantage to Entrust;
• Anything of value given to an Entrust colleague by a vendor, supplier, or partner or an officer, director, or employee of a vendor, supplier, or partner for the purpose of inducing the colleague to misuse their position at Entrust to the provide any improper or undue business advantage to the payor or to any other person or entity;
• Gifts or entertainment involving parties engaged in a tender or competitive bidding process;
• Any gift of cash or cash equivalent (such as bank check, money order, negotiable instrument, gift certificates, gift cards, or loans);
• A gift or entertainment that you pay for personally to avoid having to seek approval; and
• Any hospitality or entertainment that is inappropriate, indecent, or sexually oriented or might otherwise adversely affect Entrust’s reputation.

4.5.1 GIFTS, MEALS, ENTERTAINMENT, TRAVEL AND OTHER HOSPITALITY

Nominal gifts, meals, entertainment, travel and lodging may be provided or accepted if all of the following requirements are met.¹ If any of the requirements are not satisfied, approval must be received from the Chief Legal and Compliance Officer before proceeding with the transaction.

• Transfer of value is not offered, provided or accepted to influence any act or decision or to secure any other improper business advantage;
• Transfer of value does not involve the provision of cash or cash equivalents (unless the cash equivalent has been pre-approved by Legal)²;
• Transfer of value complies with local laws and regulations;
• The total value of the transfer of value is reasonable under the circumstances and does not include premium travel accommodations, extravagant meals, unreasonable alcohol consumption or “adult entertainment;”
• Gifts are nominal (e.g., pens, calendars, promotional items and less than 50 USD in value) and provided under circumstances in which gift-giving is widely accepted as a professional courtesy in the recipient’s home country and is the type of gift customarily provided in such circumstances;³
• Prior approval in writing has been obtained by the colleague’s manager or SLT member and sent to [email protected] before receiving or providing any of the following:
  • Entertainment that exceeds 150 USD or equivalent;
  • Lavish meals that cost more than 150 USD or equivalent per person (or 50 USD for government officials);
  • Special events such as a World Cup game or major golf tournament (as these usually have a value of more than 150 USD); and
  • Travel or overnight accommodation, as this normally raises the personal benefit to material levels;
• Prior approval in writing has been received by the CEO and sent to [email protected] for gifts over 250 USD and entertainment valued at more than 500 USD.

Legal has pre-approved gifts and entertainment up to select values for in-person and virtual events or campaigns hosted by the Marketing team as follows:

• For in-person events, items valued at up to USD 250 may be provided for drawings, but the recipient must visit the Entrust booth and register. Entrust’s Tradeshow Giveaway Official Rules must be placed at the booth, and the following disclaimer language must also be clearly posted at the time of drawing entry: Please note that government officials as that term is defined under applicable anti-corruption legislation including, but not limited to, the US Foreign Corrupt Practices Act (FCPA), are ineligible to participate in this drawing.
• For virtual events or campaigns, hospitality experiences valued at up to USD 150 per person (e.g., wine and cheese virtual event) and gifts valued at up to USD 50 per person may be provided, but the recipient must register and attend the live event. Entrust’s Tradeshow Giveaway Official Rules must be made available by hyperlink, and the following disclaimer language must also be clearly posted at the time of registration: Please note that government officials as that term is defined under applicable anti-corruption legislation including, but not limited to, the US Foreign Corrupt Practices Act (FCPA), are ineligible to participate in this event.
• No cash or cash equivalents may be provided unless Legal has authorized it. For example, providing gift certificates or gift cards eligible for meal reimbursement for a virtual event must still be run through Legal for pre-approval.

It is acceptable to receive a gift that exceeds a designated monetary limit if it would be insulting to decline, but the gift must be reported to management who will decide whether it:

• May be retained by the recipient in accordance with the requirements and approvals set forth in this section;
• Will be retained for the benefit of Entrust;
• Will be sold and the money donated to charity; or
• Will be returned to the donor.

If a colleague is offered hospitality or entertainment that does not comply with these guidelines and there is insufficient time to secure advance approval, every effort should be made to politely decline. If it is not possible to decline without causing offense, the colleague may participate but must report the details to their manager and the Compliance Director at the earliest opportunity. If the hospitality or entertainment involves cash or cash equivalents (with the exception of gift certificates or gift cards in accordance with the requirements and approvals set forth in this section), is at an inappropriate venue, includes “adult entertainment,” or would otherwise embarrass Entrust, colleagues must decline.

A Note about Government Officials: Entertainment may never be provided to government officials, and meals should not exceed 50 USD per person, or the amount permissible by law, whichever is lower. Additionally, meals, travel and lodging may not be provided to spouses, domestic partners, or family members of government officials. Finally, a gift may never be provided to a government official with authority over a pending regulatory decision that may directly affect Entrust unless the Chief Legal and Compliance Officer grants prior approval.

¹ Entertainment where the giver is not present is considered a “gift” for purposes of Entrust policy.

² Note that the provision of cash equivalents is highly discouraged and will only be approved by Legal in exceptional circumstances.

³ When giving gifts, these should be limited to items branded with Entrust’s logo or name wherever possible.

4.5.2 CHARITABLE CONTRIBUTIONS

While contributions to charitable organizations are often permitted and encouraged in order to build positive relations in the communities in which Entrust operates, such contributions could be used to disguise improper payments to a government official or customer. Thus, any charitable contributions or sponsorships made at the request of a government official or customer must be pre-approved in writing by the requesting colleague’s manager, reported to the Compliance Director and approved by the CEO.

4.5.3 POLITICAL CONTRIBUTIONS

While political contributions may be permitted under certain circumstances, such contributions could be used to disguise improper payments to a government official or customer. Thus, any political contributions made at the request of a government official or customer must be pre- approved in writing by the requesting colleague’s manager, reported to the Compliance Director and approved by the CEO.

4.5.4 HIRING OR ENGAGING GOVERNMENT OFFICIALS OR THEIR FAMILY MEMBERS

While it may be appropriate to hire or otherwise contractually engage individuals who have formerly served as government officials or who have current familial or business ties to government officials, if a request to interview or hire an individual has come from a government official or the decision to reach out to a candidate is based on their current or former governmental ties, that must be disclosed and properly vetted with Human Resources and the Compliance Director before an offer of employment or contract for services can be extended.

4.6 THIRD PARTIES

Entrust is legally responsible under applicable anti-corruption laws for any corrupt actions by third parties contracted to represent Entrust or otherwise perform services on its behalf. Misconduct by third parties accounts for the majority of enforcement actions brought against companies, so Entrust must be extremely careful and continuously vigilant in determining which third parties it feels comfortable doing business with.

4.6.1 DUE DILIGENCE

An important aspect of complying with anti-corruption laws is ensuring that Entrust understands the qualifications and associations of its third party partners, including their business reputation and relationship, if any, to government officials and customers.

Prior to contracting with a third party for goods or services, appropriate due diligence must be conducted. If any of the following applies, the third party must complete Entrust’s Due Diligence Questionnaire (DDQ) and the Compliance Director must perform a check of the third party prior to contracting:

• The third party will become a channel partner or a technology alliance partner.
• The third party will serve as a partner with Entrust on a government or state-owned project or tender (e.g., as a systems integrator, consortium member or other partner with whom Entrust has a contract in place).
• The third party scores 5 or higher on the Third Party Risk Matrix. See Appendix 1. A record of the risk score calculation for each third party must be maintained by the relevant business function and available for audit or spot checks by Compliance and/or Internal Audit.

Any issues identified by the Compliance Director during the due diligence process will need to be reviewed by the Chief Legal and Compliance Officer before a formal agreement can be signed. Additional information may be requested from the third party to aid in the Chief Legal and Compliance Officer’s review. The Chief Legal and Compliance Officer’s approval will be required prior to contracting with any third parties scoring 10 or higher on the Third Party Risk Matrix. For third parties scoring 10 or higher, the Chief Legal and Compliance Officer will also determine whether a formal review by outside counsel is needed.

Third parties may be asked to complete an updated Due Diligence Questionnaire at the time of contract renewal or the signing of an Agreement Extension Letter.

4.6.2 CONTRACT LANGUAGE

Contracts to retain third parties must contain a contractual commitment to comply with all applicable laws, rules, and regulations including, but not limited to, anti-corruption laws such as the US FCPA, the Travel Act, the World Bank Guidelines, the UK Bribery Act and Canada’s CFPOA as well as local anti-corruption laws where the third party is located and services will be performed. If the contract does not include this language, use the Anti-Corruption Commitment or contact the Legal Department for standard language. For high risk third parties, including those with a risk score higher than 5, and on government or state-owned projects, both the contractual commitments and the Anti-Corruption Commitment are required.

4.6.3 RED FLAGS

While the following risk factors do not automatically disqualify a third party from working with Entrust, the Company should carefully consider whether to establish a relationship with a third party that exhibits one or more of the following characteristics as these may be indicative of corrupt behavior. This is not an all-inclusive list. Appropriate due diligence should be performed on third parties as required by this policy and prior to contracting regardless of whether these risk factors are present.

• Third party does business in a country listed as high risk in Appendix 1;
• Third party has a reputation for improper, illegal or unethical conduct;
• Third party refuses to provide requested information during the due diligence process;
• Third party refuses to provide assurances that it will comply with applicable anti-corruption laws;
• Third party refuses to execute a written contract;
• Third party charges a rate or fee that is unusually high compared to market rates;
• Third party makes unusual payment requests (e.g., requests for cash payments, advance payments, deposits to multiple accounts or deposits to offshore accounts);
• Third party requests approval or reimbursement of unusual expenditures, amounts significantly above budgeted or projected costs or payments in cash;
• Third party has direct family or business ties to a government official or government agency;
• Third party makes large and/or frequent political contributions;
• Third party uses unnecessary third parties, agents or intermediaries; or
• Third party suggests payments are needed to “get the business.”

4.7 MONEY LAUNDERING AND OTHER ACTIVITIES OFTEN ASSOCIATED WITH IMPROPER PAYMENTS

Requests for improper payments are often accompanied by illegal activities such as tax evasion, money laundering, or anti-competitive behavior including, but not limited to, price-fixing, fraud, embezzlement, and bid-rigging. Entrust strictly prohibits colleagues from knowingly facilitating or assisting any individual or entity in violating the law. “Off-the-books” accounts and false or deceptive entries in the books and records of Entrust are strictly prohibited. All financial transactions must be documented, regularly reviewed, and properly accounted for in the books and records of Entrust.

Money laundering is knowingly engaging in, attempting to engage in, or facilitating a monetary transaction involving property or funds related to a crime. This includes such offenses as tax evasion, bribery, fraud, or any other serious offense, regardless of where the underlying misconduct took place. Entrust prohibits engaging in or facilitating, either directly or with or through others, in money laundering, nor does Entrust conduct business with any person or entity involved in money laundering, terrorism, or criminal activities of any kind. Entrust only engages with clients and partners involved in legitimate business activities and whose funds come from legitimate sources. Cash transactions should be avoided whenever possible.

If a customer, supplier, partner, or third party requests unusual payment arrangements such as cash, payment in an unrelated currency, payment in a country other than where the goods are produced or services are performed, payment through an intermediary, or payments to a different entity, these payments must be approved by the Legal Department in advance of the transaction. Payments to individuals rather than the entity performing the service are prohibited.

Examples of red flags that may indicate money laundering or other financial misconduct is occurring are below. This is not an all-inclusive list. Where such red flags are present, Legal and Finance should be consulted prior to engaging in the transaction.

• Payee/payor or any of its owners, officers, or directors has a history of financial misconduct of any kind;
• Unusual payment arrangements are requested for “tax reasons” or without adequate explanation;
• Payee/payor does not have an account at a major financial institution and/or cannot accept or make payment by wire;
• Payee/payor is located in a country with strict currency regulations or a shell jurisdiction (as noted on the risk matrix);
• Payee/payor involves a third party that is not a financial institution in the transaction;
• Payee/payor asks for payment in a currency that differs from where the service is performed and/or where the goods are manufactured;
• Payee/payor asks for payment in a jurisdiction that differs from where the service is performed and/or where the goods are manufactured;
• Payor has no readily identifiable source of legitimate funds;
• Payee/payor requests payments be broken down into smaller amounts;
• Payee/payor requests that goods be shipped through a third country;
• Obvious over- or under- pricing of goods and services;
• Requests for payments to or from a different entity within a group (such as a parent or subsidiary) rather than the entity that performed the service or manufactured the goods;
• Making or requesting valuation statements on customs/export paperwork that differ from contract value;
• Inconsistencies in goods, locations, or terms with the letter of credit;
• Failure to provide appropriate VAT or tax paperwork; or
• Other red flags for bribery, such as those in 3.6.3 above, are present.

4.8 RECORDKEEPING AND REPORTING

Applicable anti-corruption laws require Entrust to maintain accurate books and records that fairly reflect the Company’s transactions and disposition of corporate assets and to maintain a system of internal accounting controls sufficient to ensure management’s control, authority and responsibility over the Company’s assets.

4.8.1 ACCOUNTING

All transactions must be documented in accordance with Entrust’s accounting requirements as set forth in Policy 103 – Accounting Records. All transactions must be accurately recorded even if the transaction may have violated laws or regulations. Transactions must never be accompanied, in whole or in part, by false or fictitious records. This requirement applies to all transactions regardless of whether they are financially material to Entrust.

4.8.2 AUDITS

Entrust should subject its system of internal controls, in particular accounting and recordkeeping practices, to regular review and audit to evaluate its design and effectiveness.

Compliance

Entrust colleagues must report any anti-corruption concerns directly to their manager, the Compliance Director, the Chief Legal and Compliance Officer, [email protected] or through the Ethics Hotline, which allows for 24/7 confidential, anonymous reporting. Circumstances that amount to a reportable anti-corruption concern include, but are not limited to, the following:

• Request for a bribe, kickback or other improper transfer of value;
• Request for payment above the official fee usually required for the applicable service or action;
• Request for an unusual method of payment (e.g., cash, payments to a private or offshore bank account, payments to an unrelated third party);
• Request for a donation to a preferred charity;
• Request from a government official or customer that Entrust hire a specific third party to assist with a transaction;
• Request for a donation of free products or services;
• Request for a personal favor;
• Submission of invoices to Entrust that lack the normal level of detail, appear unofficial or otherwise seem false or altered.

Colleagues should also report any of the following activities or situations involving a government official, customer, Entrust colleague or third party with whom Entrust does business:

• The individual or entity has engaged in conduct the colleague believes would be perceived as corrupt or unlawful if it became known to government authorities or was reported to the media;
• The individual or entity is or becomes the subject of a government investigation; or
• The individual or entity is rumored to have engaged in suspicious, unethical or unlawful conduct.

Entrust does not allow any form of retaliation against individuals who report a concern, make a complaint in good faith or cooperate in an investigation.

Any colleague who violates this policy may be subject to disciplinary action, up to and including, termination and or legal action, if applicable. In addition to corrective action by Entrust for noncompliance with this policy, Entrust colleagues may be subject to criminal prosecution or civil enforcement by government authorities. Criminal prosecution can result in significant fines and penalties, including imprisonment.

This policy may be updated or amended at any time.

Exceptions

There are no exceptions to this policy.

Ownership and Reviews

This policy is owned by the Chief Legal and Compliance Officer. This policy shall be reviewed on an annual basis.

Contact Information

Questions about this policy should be directed to the VP of Compliance, Jenny Carmichael, by phone at +1-952-988-1516 or by email at [email protected].

FAQ

Question: I am negotiating a substantial contract. To assist in the decision-making process, I want a government official to visit our US facilities. I would like to offer first-class tickets to the government official and her spouse, a generous per diem, hotel, and meal costs. Is this appropriate under Entrust policy and applicable anti-corruption laws?

Answer: It is acceptable to have the government official visit our US facilities for this purpose, but an economy class ticket should be purchased, and only reasonable hotel and meal costs reimbursed. No per diem is allowed and no expenses may be paid for the government official’s spouse.

Question: The government official would like to stop in New York City for a day on the way back from visiting our US facilities. Can Entrust pay for her hotel in New York?

Answer: No. The side trip does not appear to be related to a legitimate business purpose. Question: If I suspect, but don’t have proof or evidence that an Entrust distributor or systems integrator is going to pay a bribe in connection with a bid it has submitted, do I need to take any action?

Answer: Yes. Willful ignorance and failure to investigate the possibility that a bribe will be paid results in imputed knowledge to Entrust and makes the Company liable for the act of the third party.

Question: I am a citizen of a country that does not have anti-corruption legislation in place. I have been recording small gifts to government officials on my expense reports as taxi fares. That way, my manager is removed from this activity. This is acceptable since my manager does not know and I am not subject to anti-corruption laws, correct?

Answer: Wrong. Your country of residency does not matter. You are an employee of Entrust and Entrust is subject to anti-corruption laws. Keeping your manager in the dark does not necessarily absolve them or the Company from responsibility for your actions. These payments may also create serious liability for you personally. You are subject to these laws just like the Company by virtue of your employment at Entrust.

Question: We have heard a rumor that other companies may be paying for lavish trips and entertainment for government officials and customers. If we don’t do the same, our competitors will have an unfair advantage over us in the bidding process. Why do we have to abide by anticorruption laws while our competitors do not?

Answer: Regardless of their compliance or non-compliance, most of our competitors are subject to the same anti-corruption laws as Entrust. More than 100 countries have adopted anticorruption legislation. Our actions will never be dictated by what our competitors are doing. We achieve outstanding financial results and enjoy an excellent reputation with our customers and the public by strictly adhering to our values, our Code of Ethics, and all applicable laws. Doing the right thing is always good for business.

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