Foreign Corrupt Practices Act
CryoLife Foreign Corrupt Practices Act for Distributors and Representatives
CryoLife, Inc. (“CryoLife”) is committed to the highest ethical standards of business conduct. CryoLife supports full compliance with the U.S. Foreign Corrupt Practices Act (“FCPA”), and with comparable laws in other jurisdictions that prohibit commercial bribery, including the UK Bribery Act (with the FCPA, collectively “Anti-Bribery Laws”). CryoLife expects and requires that all of its business partners, agents, representatives and distributors globally will (i) act in strict compliance with Anti-Bribery Laws and this Policy, and (ii) immediately report any suspected or actual violations to CryoLife’s Compliance Officer at the company’s headquarters in Kennesaw, Georgia, USA or through the confidential reporting mechanism on the CryoLife website. Failure to do so shall result in immediate termination of the business relationship with CryoLife and could lead to civil and criminal penalties.
This Policy confirms and explains our standards of conduct in potentially sensitive situations, and reaffirms our long-standing commitment to a culture of corporate and individual accountability and responsibility for the highest ethical and business practices.
Carefully read this Policy and retain it for future use. All questions regarding this Policy should be directed to CryoLife’s Compliance Officer.
J. Patrick Mackin
Chairman, President, and Chief Executive Officer
Foreign Corrupt Practices Act Policy
Key Policy Points
The Foreign Corrupt Practices Act (“FCPA”) criminalizes bribery of foreign officials by
- prohibiting any payment or promise of anything of value;
- given to influence any business decision;
- if any of the payment or promise is delivered, directly or indirectly, to any foreign official, which includes all representatives and employees of foreign governments (which often includes foreign doctors); and
- requiring companies to maintain books and records that accurately reflect transactions with foreign officials.
There are some exceptions.
Given the breadth and complexities of the FCPA, you must contact a member of the legal department before providing anything of value to a foreign individual or if you have questions or concerns about a situation.
The U.S. Foreign Corrupt Practices Act (“FCPA”) prohibits the bribery of foreign officials and requires U.S. companies to maintain internal accounting controls and keep books and records that accurately reflect all of their transactions, including with foreign officials.
In general, the FCPA prohibits any payments, defined broadly, as anything of value, given to influence a business decision if any part of that payment will be offered, given, or promised, directly or indirectly, to a Foreign Official. This is a broad statute, and it captures almost any effort to provide a benefit to a person who is associated with a foreign government in order to gain a business advantage. Local anti-corruption laws in other countries may be even more restrictive.
All Company officers, directors, employees, and agents (including our distributors), including those of our subsidiaries, must comply with the FCPA, as well as with all local anti-bribery and anti-corruption laws. It is not permissible to use personal funds to do what is otherwise prohibited by the FCPA.
Every employee and agent of the Company whose duties are likely to lead to exposure to international business activities is required to read, understand, and comply with this FCPA Policy (this “Policy”).
Sanctions for violations of the FCPA can be quite severe and such sanctions are not covered by the Company’s Directors and Officers Insurance, and employees and agents typically will not be indemnified by the Company for such violations.
The Company takes its obligations to comply with the FCPA seriously. Accordingly, employees who fail to follow the Company’s Policy and FCPA procedures, whether expressly stated in this Policy or otherwise, may be subject to adverse employment action, including, where warranted, termination.
The operative prohibition of the FCPA is to prohibit the corrupt payment of money or “anything of value” “directly or indirectly” to a “foreign official” in order to “obtain or retain business”.
In applying the FCPA, the following terms mean:
- “payments, including things of value” – paying, offering or promising to pay, or authorizing the payment of money or anything of value. For example, giving cash in an envelope, a contribution to a customer’s charity, a modest meal, event tickets, or reimbursement of travel expenses can all constitute a violation. The FCPA does not have a minimum value; instead it applies to payments of any size and things of any value, however small.
- “for a business purpose” – the payment is intended to help the Company in its business pursuits
– to help make a sale, obtain a discount, or win a new account, for example.
- “if you know that any part of the payment will be offered, given, or promised” – the mere offer or promise of a payment can constitute a violation of the FCPA.
- “directly or indirectly” – to the benefit of a Foreign Official (as defined below) indirectly, such as a donation to a charity of which the Foreign Official is connected or a gift to a member of the family of a Foreign Official. Importantly, it also means that the Company may be held liable under the FCPA for the actions of distributors acting on the Company’s behalf, even if the Company only suspects that the distributor is violating the FCPA.
- “Foreign Official” – officers, employees, and representatives of government departments or agencies or of any business that is government-owned or government-controlled, including many hospitals. Many of the Company’s customers are hospitals that are either government- owned or government-managed; therefore, their doctors, nurses, procurement officers, lab technicians, and other employees and agents are all Foreign Officials for the purposes of the FCPA. Foreign Official also includes any person acting in any official capacity for a foreign political party, foreign political candidate, or a public international agency. It can also include consultants for any of the above-listed entities.
There are three very specific exceptions to the FCPA under which a Company will not be held liable under the FPCA for a payment to a Foreign Official.
- Facilitating and Expediting Payments – payments to Foreign Officials to expedite or obtain routine government service that they already perform in the normal course of their duties;
- Payments that are legal in that country, although they must be properly recorded in financial records; and
- Payment of bona fide expenditures, such as travel and lodging, incurred by or on behalf of a foreign official and directly related to the promotion, demonstration, or explanation of products or services, or the execution or performance of a contract with a foreign government or agency.
The FCPA is very complex. In every instance in which you want to provide anything of value to a Foreign Office, you must pre-clear that activity with the Company’s Chief Compliance Officer.
You should also know that
- The FCPA is enforceable for violations committed anywhere in the world.
- The Company can be held liable for the behavior of its agents (including employees, distributors, etc.) if they violate the FCPA.
- Violations of the FCPA can result in civil and criminal penalties for both the individual and the Company.
Lastly, employees who have knowledge or a good faith suspicion of a violation of this Policy are required to report that information to the Company’s Chief Compliance Officer, someone in the Company’s Legal Department, or through the Company’s compliance hotline. Reporting in good faith means that you believe there may be a suspected violation of this Policy or law and you fully share with the Company information you believe to be true about the situation.
Failure to report your knowledge or good faith suspicion of an FCPA violation is a violation of the Company’s Code of Conduct. The Company will not retaliate against a person for reporting in good faith an actual or suspected FCPA violation, even if the report cannot be substantiated or turns out to be wrong. Any person who retaliates against an employee who makes a good faith report may be subject to adverse employment action, up to and including, where warranted, termination. Only allegations made maliciously or in bad faith can subject a reporter to disciplinary action.
Compliance with the FCPA is both complex and not intuitive. Please review this Policy carefully, and, if you have any questions after doing so, contact the Chief Compliance Officer or a member of the legal department for further guidance.