Legal Services, UK and Ireland

1. Legal Services, UK and Ireland The Bribery Act 2010 and Implications for DHL Steven FinkVP, Commercial & Company Law, UK & IrelandHayes, Monday 27th June 2011

2. Contents • 1. The Bribery Act 2010 • Background & Timing • Offences • Sanctions • 2. Implications for DHL • Corporate Hospitality • Facilitation Payments • 3. What have we done in DPDHL? • Existing framework • UK Compliance Training • Global Compliance Office • 4. Recommended Actions and Next Steps • 5. DHL UK & Ireland Legal Department

3. The Bribery Act 2010 Background • Existing law not consistent with OECD Convention (ratified by UK in 1998) • Belief UK law not fit for purpose • Poor perception and criticism from abroad • Transparency International Index • Introduction as ‘Gold Standard’ • Higher than US FCPA (Foreign Corrupt Practices Act) Timing • Royal Assent 1 April 2010 • UK Ministry of Justice Guidance 1 April 2011 • Comes into force 1 July 2011

4. Offences Covered • Bribing or Receiving a Bribe • Where a person offers, promises, or gives or requests, agrees to receive or accepts, an advantage in the belief that its acceptance will lead to the improper performance of a function or activity. • Function can relate to the public or private sector • There must be a “relevant expectation” relating to the performance of the function or activity. • Performed improperly if in breach of a relevant expectation. • Clear implication on Corporate Hospitality.

5. Offences Covered • Bribing of Foreign Public Officials (FPO) • Intend to influence the FPO in his capacity as FPO • Must intend to benefit from it by obtaining/retaining business or an advantage in the conduct of business. • Offers, promises or gives to FPO or a third party a financial or other advantage. • FPO neither permitted nor required by written law to be influenced • Clear implication on Facilitation Payments, which are expressly not permitted. • Territorial Jurisdiction of the above offences: • Offence committed if any act or omission takes place in the UK • Offence committed if the person has a “close connection” with the UK • Defined as a UK citizen, resident, company or Scottish Partnership • Consequence: offence could be committed outside the UK.

6. Offences Covered • Corporate Offence of Failing to Prevent Bribery • A relevant commercial organisation (C) is guilty of an offence if a person (A) associated with C bribes another person intending to obtain or retain: • business for C • an advantage in the conduct of business for C. • Relevant commercial organisation : • UK company doing business here or elsewhere • Overseas company carrying on business or part of business here • Can be an agent, subsidiary or parent company but will depend on all the relevant circumstances • An employee of C is presumed to be providing services for C

7. Offences Covered • Defence for the Corporate Offence: Adequate Procedures • C has defence that it had in place adequate procedures designed to prevent persons associated with C from undertaking such conduct. • 6 principles which underpin Bribery Prevention: • Risk Assessment is first then: • Top Level Commitment ) • Due Diligence ) • Policies and Procedures ) Risk Mitigation • Effective Implementation ) • Monitoring and Review )

8. Sanctions • 10 years imprisonment for an individual convicted of an offence (senior officer liability where corporate offence committed). • Unlimited fine for company. • Potential exclusion on company tendering for EU public procurement contracts. • At the discretion of the contracting authority. • Potential Breach of customer contracts, and consequential liability for damages. • Practical Issues: • Likelihood of enforcement by Serious Fraud Office? • Public interest test • Self-Reporting/ whistleblowing.

9. Implications for DPDHL • Corporate Hospitality • Perceived as part of ‘day to day’ business. • Concern over ability to develop and maintain customer/ supplier relationships. • Existing high profile activities: F1, Man United, Rugby World Cup, Olympics 2012 • Clarified by Guidance: • No intent to prevent • Considered ‘established and important’ part of doing business • Must be ‘reasonable & proportionate’ • The higher and more lavish the expenditure, the greater the risk

10. Facilitation Payments • Possible wide-scale application • No exceptions (c.f. FCPA) • Concern at activities in Africa/ Emerging Markets/ Russia • Unfair advantage to FedEx and UPS? • Not addressed in Guidance. • Scope • Wide-reaching outside UK • Effect on expatriates • Control over employees in other jurisdictions. • Extension to agents, suppliers and sub-contractors.

11. What have we done in DPDHL? • Existing Framework • Global Compliance Office • Anti-Corruption and Business Ethics Policy; Codes of Conduct • Online e-learning modules • UK Compliance Training • 10 sessions held October 2010 – March 2011 across 5 locations. • Attended by over 300 people across all DHL business units. • Senior level sponsorship. • Small groups of 20 – 30 people. • Mix of internal and external presenters. • Raised awareness of implication of new legislation as well as existing policies and procedures. • Also dealt with directors’ duties, health and safety and competition law. • Very interactive, prompting much discussion (some heated); often divergent views.