FOREIGN CORRUPT PRACTICES ACT AND ANTI-CORRUPTION COMPLIANCE POLICY

 

1. Purpose

The purpose of this Foreign Corrupt Practices Act and Anti-Corruption Compliance Policy (the “FCPA Policy” or the “Policy”) is to help ensure compliance by AleAnna Resources LLC (the “Company” or “AleAnna”) with the Foreign Corrupt Practices Act of 1977, as amended (the “FCPA”). The FCPA makes it illegal for U.S. persons, including U.S. companies and their subsidiaries, officers, directors, employees and agents, and stockholders acting on their behalf, to bribe foreign officials. The FCPA also requires U.S. publicly traded companies and their subsidiaries to keep accurate and complete books and records and to maintain proper internal accounting controls.

All Company personnel are expected to conduct Company business legally and ethically. The Company will conduct every international business transaction with integrity, regardless of differing local manners and traditions, and will comply with the laws and regulations of the United States, particularly the provisions of the FCPA and the laws and regulations of each foreign country in which the Company operates (except to the extent inconsistent with U.S. law).

 

2. Application

The FCPA applies to U.S. persons or business entities anywhere in the world, to “issuers” of securities regulated by the U.S. Securities and Exchange Commission, and to any person who performs a prohibited act in the U.S. U.S. nationals and residents remain subject to the FCPA regardless of where they are employed or with whom they are working. Such employees associated with non-U.S. companies—either through temporary assignment, secondment, by serving on the boards of directors of such non-U.S. companies, or otherwise—remain individually subject to the FCPA even if the non-U.S. companies are not. In such circumstances, there is a risk that the individual employee, or the U.S. parent company, may be held accountable for actions taken by the non-U.S. company.

 

3. Summary of the FCPA

The FCPA has two primary sections. The first section makes it illegal to bribe foreign officials, and the second section imposes record keeping and internal accounting requirements upon publicly traded U.S. companies and their subsidiaries.

 

1. Anti-Bribery Provisions

1. Prohibited Payments

The FCPA’s anti-bribery provisions make it illegal to bribe foreign officials in order to obtain or retain business or to secure any improper advantage. Specifically, the FCPA prohibits payments, offers or gifts of money or anything of value, with “corrupt intent”, to a “foreign official”.

The term “corrupt intent” or “corruption” is used as a shorthand reference for a large range of illicit or illegal activities, and commonly include acts of: (i) bribery; (ii) extortion or coercion; (iii) fraud; and (iv) collusion, defined as follows:

i. “Bribery” -- the offering or giving of anything of value to influence the actions or decisions of third parties or the receiving or soliciting of any benefit in exchange for actions or omissions related to the performance of duties.

ii. “Extortion” or “Coercion” -- the act of obtaining something, compelling an action or influencing a decision through intimidation, threat or the use of force, where potential or actual injury may fall upon a person, his/her reputation or property.

iii. “Fraud” -- any action or omission intended to misrepresent the truth so as to induce others to act in reliance thereof, with the purpose of obtaining some unjust advantage or causing damage to others.

iii. “Collusion” -- a secret agreement between two or more parties to defraud or cause damage to a person or entity, or to obtain an unlawful purpose.

These definitions set forth some of the most common types of corruption but are not meant to be exhaustive.

For purposes of this FCPA Policy, a “foreign official” means any officer or employee of a foreign government (i.e., other than the United States) or any department, agency, or instrumentality thereof (which includes a government-owned or government-controlled state enterprise) or of a “public international organization”, any person acting in an official capacity for or on behalf of a foreign government or government entity or of a public international organization, any foreign political party or party official, or any candidate for foreign political office. Thus, foreign officials include not only elected officials, but also consultants who hold government positions, employees of companies owned by foreign governments, political party officials and others.

The term “public international organization” includes such organizations as the World Bank, the International Finance Corporation, the International Monetary Fund, and the Inter-American Development Bank. The Company’s Legal Department, which will consult with outside counsel if needed, should be contacted if there is a question as to whether an organization should be treated as a public international organization for the purpose of this Policy.

The FCPA prohibits both direct and indirect payments to foreign officials. Thus, a U.S. company can face FCPA liability based upon improper payments made by its agents or other business partners. Accordingly, except as set forth in this FCPA Policy, neither the Company nor any of its employees, agents, or business partners shall make, promise or authorize any gift, payment, or offer anything of value on behalf of AleAnna to a foreign official or to any third person (such as a consultant) who, in turn, is likely to make a gift, payment, or offer anything of value to a foreign official. The FCPA bars such payments even if:

• The benefit is for someone other than the person making the payment;

• The business sought is not with the government;

• The payment does not actually result in business being awarded or an advantage being obtained; or

• The foreign official initially suggests the payment.

A candidate for political office, political parties and party officials outside the U.S. are covered by the provisions of the FCPA. Officers and employees are prohibited from making payments, whether in cash or in-kind, to political parties, party officials or political candidates for the purpose of obtaining, retaining, or directing business to a specific entity. In-kind contributions include participation in political campaigns during paid working hours and use of administrative support, company facilities, equipment, and supplies. Be aware that such activities may also be prohibited under local law. In Italy, for example, political campaign donations are permitting as long as they are declared and registered. As several limitations apply, donations shall be assessed by Italian legal counsel on a case-by-case basis.

Even when an employee intends for a payment to be a legitimate lobbying transaction, the appearance of impropriety makes it very difficult to prove the absence of corrupt intent. As a result, no decision regarding political contributions shall be made without the approval of the Company’s managers.

Compliance with the FCPA must be undertaken on a case-by-case basis and often raises difficult issues. When a question arises, the Company’s Legal Department, which will consult with outside counsel if needed, should be contacted for advice.

 

2. Limited Exceptions and Affirmative Defenses

The FCPA contains certain limited exceptions and affirmative defenses to the prohibitions set forth above. These limited exceptions and affirmative defenses may not be utilized or relied upon except in accordance with this FCPA Policy.

1. Facilitating Payments

The FCPA does allow certain types of payments to foreign officials under very limited circumstances. For example, the FCPA allows certain “facilitating” or “expediting” payments to foreign officials in order to expedite or secure non-discretionary, “routine governmental action.” Such facilitating payments include, for example, payments made to expedite or facilitate:

• Obtaining routine, nondiscretionary business permits;

• Processing nondiscretionary governmental papers such as visas;

• Obtaining police protection or mail service;

• Obtaining inspections associated with contract performance of the shipment of goods;

• Obtaining telephone, power, or water service;

• Loading and unloading cargo; or

• Similar activities that are ordinarily and commonly performed by an official.

 

The term “routine governmental action” does not include any decision by a foreign official on whether, or on what terms, to award new business to or continue business with a particular party, or any action taken by a foreign official involved in the decision-making process to encourage a decision to award new business or to continue business with a particular party. Employees or agents may make facilitating payments only in accordance with this FCPA Policy and only after consultation with the Company’s Legal Department.

2. Promotional Expenses

Various types of “promotional or marketing payments” may also be permissible under the FCPA in certain circumstances. For example, certain reasonable, bona fide expenses incurred while promoting the Company to foreign officials, hosting a tour of foreign public officials at a Company facility or entertaining employees of a foreign state-owned firm (such as a state-owned oil company) may also be permissible expenses under the FCPA, so long as they are directly related to the promotion of products or execution of a contract. Once again, AleAnna employees and agents should not provide gifts and entertainment to foreign officials or authorize a promotional expense or event for a foreign official except as authorized in this Policy. Moreover, these expenses must be fully and accurately described in the Company’s books and records.

3. Actions in Accordance with Local Law

The FCPA also contains an affirmative defense for payments to foreign officials that are lawful under the laws and regulations of the foreign official’s country. That being said, most countries have laws prohibiting the payment of bribes to government officials. Further, no country has written laws permitting bribery. Thus, no payment shall be made by any AleAnna employee, officer or agent to a foreign official in reliance upon the written laws of the local country without the prior written approval of the Legal Department.

 

2. Record-Keeping, Accounting & Payment Practices

Approximately 93% of all FCPA violations involve books and records violations. The record-keeping provisions of the FCPA require publicly held U.S. companies and their subsidiaries to keep their books, records, and accounts in reasonable detail, accurately, and such that they fairly reflect all transactions and dispositions of assets. Thus, the FCPA prohibits the mischaracterization or omission of any transaction on a company’s books or any failure to maintain proper accounting controls that result in such a mischaracterization or omission. Keeping detailed, accurate descriptions of all payments and expenses is crucial for this component of the FCPA.

Accordingly, Company employees must follow applicable standards, principles, laws and Company practices for accounting and financial reporting. In particular, employees must be timely and complete when preparing all reports and records required by management. In connection with dealings with public officials and with other international transactions explained in this Policy, employees must obtain all required approvals from the Legal Department and, when appropriate, from foreign governmental entities. Prior to paying or authorizing a payment to a foreign official, Company employees or agents should be sure that no part of such payment is to be made for any purpose other than that to be fully and accurately described in the Company's books and records. No undisclosed or unrecorded accounts of AleAnna are to be established for any purpose. False or artificial entries are not to be made in the books and records of the Company for any reason. Finally, personal funds must not be used to accomplish what is otherwise prohibited by Company policy.

 

3. Penalties

The FCPA is a criminal statute. The penalties are severe. A single violation of the anti-bribery section of the FCPA may cost a company up to U.S. $2 million in fines. Individuals may be sent to prison for up to five years and are subject to civil fines up to U.S. $100,000 per violation. AleAnna cannot pay criminal fines imposed on individuals. The violation of the anti-bribery provisions also carries the potential for civil penalties by the SEC.

The penalties for violations of the record-keeping and accounting sections are the normal SEC penalties that apply to most other violations of the securities laws. The penalties for willful violations of the record-keeping provisions of the FCPA provide for up to 20 years in prison and U.S. $5 million in fines for individuals and fines of up to U.S. $25 million for companies. In recent years, enforcement actions have resulted in increasingly severe penalties for both companies and individuals.

 

In addition to civil and criminal penalties, a person or company found in violation of the

FCPA may be precluded from doing business with the U.S. government. Other penalties include denial of export licenses and debarment from programs under the Commodity Futures Trading Commission and the Overseas Private Investment Corporation. Violating the FCPA will also result in discipline by the Company, up to and including termination of employment.

 

International law enforcement cooperation and the ability of U.S. prosecutors to obtain documents, bank records, and testimony from companies and individuals outside the U.S. have increased dramatically in recent years. This makes it easier for the U.S. government to successfully bring and prosecute cases for violations of the FCPA.

 

 

4. Due Diligence and Selection of Representatives and Business Partners

In many instances, the use of a local sales agent, consultant, distributor, or joint venture partner is an essential element of doing business in a foreign country. Generally speaking, an agent is a person engaged specifically for the purpose of securing or retaining business.

 

As discussed above, the prohibitions of the FCPA include payments to foreign officials made by agents or intermediaries on a company’s behalf. Local agents are retained and local partners are selected in part for their knowledge of and access to persons in the relevant market and their ability to contribute to the success of development efforts. For this reason and because payments made to a local agent can be significant, there is a need to be sensitive to potential abuses. The Company should be careful to avoid situations involving third parties that might lead to a violation of the FCPA. It is much better not to hire an agent or consultant, for example, than to conduct business through the use of a third party's questionable payments.

 

Therefore, prior to retaining any agent, representative, consultant, or other third party contractor, (collectively “third-party contractors”) who act on behalf of the Company with regard to foreign governments or international business development or retention, the Company will perform proper and appropriate FCPA-related due diligence and obtain from the third party certain assurances of compliance. Such due diligence should include where available:

 

• Checking public sources of information, including any published press reports concerning the agent, the commercial attaché at the foreign embassy in the relevant foreign countryand/or relevant country desk officers at the U.S. Department of State and U.S.Department of Commerce;

• Checking with business references provided by the potential third-party contractors;

• Interviewing the third-party contractor;

• Obtaining information from institutions (banks, accounting firms, lawyers) in the third-party contractor’s country of operations.

 

A file should be maintained documenting the due diligence efforts undertaken in relation to the retention of each and every third-party contractor.

 

All third-party contractors must be identified and selected on the basis of objective and written evaluation criteria, e.g., a partner should be selected on the basis of identifiable commercial and technical competence and not because he is the relative of an important government official.

 

A written agreement must be entered into prior to doing business with any third-party contractor, the form of which must receive the written approval of the Company’s Legal Department. Although the terms of such agreements may vary based upon the relationshipbetween the parties, the transaction at hand, and the local jurisdiction, each written agreementshall attach and incorporate the FCPA Representations and Warranties contained in Appendix A hereto and each third-party contractor must agree in writing to abide by same.

 

Attached here as Appendix B is a list of Due Diligence Red Flags to be reviewed when hiring a new employee, retaining and doing business with third-party contractors, or entering into any new business relationship. The presence of any of the Red Flags listed in Appendix B should be brought to the attention of the Legal Department.

 

5. Compliance with Local and International Laws

In addition to complying with the FCPA, AleAnna must abide by local laws of the countries where AleAnna operates. Almost all countries, including the U.S., have some form of domestic anti-corruption and anti-bribery law. The laws in most countries strictly prohibit payments to government officials, irrespective of the amount. Additionally, local law may affect the types of business relationships AleAnna is permitted to have with government-controlled entities and government officials. It is important that all employees comply with applicable laws in the countries where AleAnna operates, including domestic anti-bribery laws.

 

6. On-line Training Program

In addition to reading and understanding this Policy, AleAnna requires its employees and selected business agents to complete, on an annual basis, the Company’s designated Global Anti-Corruption and Anti-Bribery training program. For the Company’s non-native English speaking partners and employees, the program is available in Italian and a variety of other languages. Information on how to access and complete the on-line training program can be obtained from your supervisor and the Company’s legal counsel.

 

7. Enforcement of this Policy

Every Company employee, agent or representative whose duties are likely to lead to involvement in or exposure to any of the areas covered by the FCPA is expected to become familiar with and comply with this Policy. Annual certifications of compliance with the Company's FCPA and Anti-Corruption Policy will be required, as will participation in training sessions as instructed by management. Finally, all AleAnna employees, as well as contractors, consultants, and agents, acting on the Company’s behalf are required to sign an acknowledgment that they have read, understood, and agree to conduct themselves on behalf of the Company in accordance with this Policy.

It is the individual responsibility of each officer, employee, and agent of the Company, whose duties are likely to lead to involvement in or exposure to any of the areas covered by the FCPA, by action and supervision as well as continuous review, to ensure strict compliance with this FCPA Policy. The Company may take severe disciplinary action, up to and including dismissal, against any officer, employee or consultant who violates this FCPA Policy.

Any officer or employee who suspects or becomes aware of any violation of the FCPA

Policy shall report the violation to his or her supervisor, who will immediately advise the Legal

Department, who shall cause an investigation of the reported matter to be conducted. In the alternative, the Company’s Legal Department can be contacted directly to report suspected violations.

If you have questions or problems concerning this FCPA Policy, foreign officials or payment practices you should contact the Company's Legal Department at:

AleAnna Resources LLC

Attn: Andrew C. Wright

General Counsel

1777 NE Loop 410, Suite 930

San Antonio, Texas 78217

Office: +1 210-829-7881 x 118

Mobile: +1 281-460-5564

Email: awright@aleannaresources.com

 

 

Appendix A – FCPA Representations and Warranties Clause¹

Sample 1

 

1. Contractor warrants and represents to the Company it understands the United States Foreign Corrupt Practices Act of 1977 (FCPA) (15 U.S.C. §§ 78dd-1, et seq.), that neither Contractor nor any of its officers, directors, employees, agents or other representatives has performed or will perform any of the following acts in connection with this Agreement, any sale made or to be made hereunder, any compensation paid or to be paid hereunder, or any other transactions involving the business interests of the Company: pay, offer, or promise to pay, or authorize the payment of, any money, or give or promise to give, or authorize the giving of, any services or anything else of value, either directly or indirectly, to any official or employee of any governmental authority or instrumentality, or of a public international organization, or of any agency or subdivision thereof, or to any political party or official thereof or to any candidate for political office for the purpose of: (i) influencing any act or decision of that person in his official capacity, including a decision to fail to perform his official functions with such governmental agency or instrumentality or such public international organization or such political party; (ii) inducing such person to use his influence with such governmental agency or instrumentality or such public international organization or such political party to affect or influence any act or decision thereof or (iii) securing any improper advantage.

 

2. If Contractor breaches any of the covenants set forth in clause (a) above: (i) this Agreement shall become void; (ii) the Company shall have a right of action against Contractor for the amount of any monetary payment or thing of value made or given by Contractor in breach of any such covenants; (iii) all obligations by the Company to pay any compensation to Contractor shall cease immediately; and (iv) the Company may at its sole discretion, rescind this Agreement and Contractor shall immediately return to the Company and compensation paid to Contractor in violation of clause (a) above.

Appendix B – FCPA Due Diligence Red Flags

Red Flags

The circumstances that, in the view of the U.S. Department of Justice, may suggest a reason to know of an illegal payment by an intermediary (and therefore a potential FCPA violation), are commonly referred to as “red flags.” Red flags in a transaction suggest a need for greater scrutiny and implementation of specific safeguards against a potential violation. An I-don’t-want-to-know attitude can be the basis of liability for the Company and for the individual concerned.

The presence of any of the Red Flags listed should be brought to the attention of the Legal Department:

• The transaction involves a country known for corrupt payments;

• A reference check reveals the third party’s flawed background or reputation;

• The third party is suggested or recommended by a non-U.S. official, particularly one with discretionary authority over the business at issue;

• The third party objects to FCPA representations and warranties in agreements with the Company;

• The third party has a close personal or family relationship with, or a business relationship, with a non-U.S. official or relative of an official;

• The third party requests unusual contract terms or payments arrangements, such as payments in cash, payments in another country’s currency, or payments in a third country;

• Due diligence reveals that the third party is a shell company or has some other unorthodox corporate structure;

• The only qualification the third party brings to the venture is real or apparent influence over non-U.S. officials;

• The third party requires that his or her identity or, if the third party is a company, the identity of the company’s owners, principals, or employees, not be disclosed; or

• The third party’s commission or fee exceeds the going rate.

 

Appendix C – AleAnna Resources LLC Foreign Corrupt Practices Act and Anti-Corruption

Company Policy Statement and Acknowledgment

 

Name: ______________________________

Title: ______________________________

 

I have received and read the AleAnna Resources LLC Foreign Corrupt Practices Act and Anti-Corruption Company Policy and am familiar with it and the related procedures contained therein. I have also read and understand the “question and answer” portions of the Baker Hughes FCPA Compliance Guide and understand that I am required to complete the Company’s online training program.²

I understand the provisions of the FCPA and the consequences of its violation. I also understand the Company FCPA and Anti-Corruption Policy that prohibits activity in violation of the FCPA, and I agree to abide by such Policy and the provisions and procedures contained therein. I know where a copy of the Company Policy is located and to whom I should refer questions should issues or questions arise.

 

_____________________________

Signature/Date

Notes: