To define guidelines and obligations in order to combat corruption and ensure compliance with the law and with Gerdau's Code of Ethics and Conduct. To regulate Gerdau's conduct before public agents and its relationship with suppliers, customers, employees, investors and the community.
To reinforce the importance of complying with all applicable laws where Gerdau operates, with an emphasis on anti-corruption and anti-money laundering laws. To meet the best governance practices and the principles and objectives of the UN Global Compact, to which Gerdau is a signatory: "work against corruption in any form, including bribery and extortion, towards Peace, Justice and Effective Institutions".
This Policy applies to all Gerdau Business Divisions, to its employees, directors, board and third parties with representation from Gerdau and its Subsidiaries.
Public Agent:employee or representative of a national or foreign public agency or entity; employee or representative of companies controlled, directly or indirectly, by national or foreign public entities. For the purposes of this Policy, candidates for political office or representatives/leaders of political parties will also be considered public agents, as well as any employee or union representative.
Politically Exposed Person (PEP):person who holds or has held (in the previous five years) a relevant public position, job or function (with decision-making power or influence over government decisions) in the country or abroad, and their representatives, family members (spouse, partner, children, stepchildren) , father, mother, siblings, in-laws and grandchildren) and others that they hold close relationships with.
Related Parties:Meaning: (i) Affiliates; (ii) Managers and Controlling Shareholders of the Company; (iii) their close family members; and (iv) any Entities that the Company's Management or Controlling Shareholders exercise Control over, whether Subsidiaries, Affiliated Companies or which are under their common Control.
Any actions by Gerdau employees must conform to the behavioral standards described in the Code of Ethics and Conduct, and in the practice of Gerdau's "Do What is Right" principle, basing relations on ethics and legality.
This Policy is divided into internal Guidelines, available to all employees, detailing responsibilities and procedures that must be followed for management of processes and activities.
Employees and third parties representing Gerdau are prohibited from offering or granting, directly or indirectly, any advantage, whether monetary or not, to Public Agents or PEPs.
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Donations or political contributions on behalf of Gerdau are strictly prohibited, under the terms of the Code of Ethics and Conduct, as well as our Corporate Guidelines.
Any type of activity with suppliers, customers, employees, competitors, community, public agents or PEPs which represents or may represent improper practices is prohibited, including but not limited to those listed below:
Offering, granting or receiving benefits amounting to personal gain or advantages, directly or indirectly;
Practicing illegal influence peddling;
Committing illegal acts;
Obtaining information improperly or leak confidential business data;
Committing fraud in public bidding;
Noncompliance with or circumventing practices and laws that protect free and fair competition;
Corruption, extortion, fraud or bribery;
Providing information known to be incorrect in public communications or inspections;
Conducting financial or commercial operations aimed at supporting or operating money laundering or encouraging criminal practices;
Falsifying accounting records or documents.
4.6. Gerdau requires that all employees and third parties who represent it before Public Agents fully comply with its Code of Ethics and Conduct, as well as the Corporate Guidelines of Relationship with Public Agents, which strictly prohibits:
Promising, offering, giving or receiving, directly or indirectly, improper advantage or benefits, to public agents or PEPs;
Counterfeiting, altering or defrauding bids or public contracts;
Practicing influence peddling or any act related to bribery or corruption, or that could be understood as giving rise toa conflict of interest, with any public agents, whether national or foreign;
Making a donation, sponsorship, remuneration, award or benefit, direct or indirect, granted, offered or promised, to candidates in an election campaign or to a political party, on behalf of Gerdau;
Receiving or offering to public agent gifts or presents contrary to the provisions of the "Corporate Guidelines of Courtesies".
4.7. All employees, in the exercise of their functions, must take business decisions based on legitimate commercial factors, which include price, integrity of companies and their managers, quality, structure and presence in the market, among other factors. Hiring must be based on real needs and in accordance with all Guidelines and internal controls.
To fight against corruption and money laundering, Gerdau, through its employees and its Policies and business practices, pays special attention to its suppliers and customers towards compliance with the Code of Ethics and Conduct for Third Parties, ensuring that:
a) Commercial conditions are in accordance with market practices;
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All transactions entered into have due formalization and records of agreed-upon terms and conditions;
Any business partner has structure and recognition in the market in which it operates;
There is proof of delivery/receipt and/or provision of services;
Billing is in accordance with the formalized arrangement, either through orders or through a contractual instrument;
Transactions entered into are in accordance with all applicable laws;
Atypical situations such as the use of tax havens, subcontracting, economic dependence or negotiations with Related Parties are evaluated for risk prevention, and are in compliance with internal Policies and Guidelines
Any commercial or financial discounts, commissions, bonuses and awards are justified, with traceability and calculation report, and in compliance with all approval and monitoring controls by the areas.
Within the company's business and strategy practices, some situations may involve some risks, with rules and restrictions formalized in the following internal Guidelines:
Donations: must have a legitimate reason, and in line with our social responsibility standards, limited to the beneficiaries defined in the "Corporate Guideline for Donations and Sponsorships", subject to rules for transaction approval, restrictions, formalizations and monitoring;
Sponsorships:must be aligned with business activities conducted by Gerdau and/or with cases of proven benefit to the community and in accordance with our social strategy, such as actions carried out with approved non-governmental organizations;
Courtesies:must meet all provisions of the "Corporate Guideline Gift and Entertainment", which lists all restrictions of types and beneficiaries, limiting them to monetary values of low materiality that do not generate any expectation of reciprocity, and that may not be understood as meant to influence in any decision- making process.
Information records at Gerdau, such as accounting or financial data and internal and external reports, must comply with all laws, regulations, internal controls and accounting practices, ensuring completeness, timeliness, accuracy and any prior approvals when required.
All employees and third parties who represent Gerdau in a public bidding process must fully comply with the law and ensure integrity and transparency in related processes. Any kind of manipulation of the process, fraudulent agreements with third parties, rotation practices or document fraud are strictly prohibited.
Processes in which Gerdau seeks merger or acquisitions of assets with other companies must contain the reputational assessments of these companies and their controllers.
GOVERNANCE AND CONTROL
5.1. Gerdau maintains its lines of defense structured in its governance, for risk assessment and mitigation, including fraud and corruption.
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The first line of defense consists of management of areas, in which responsibilities for execution of controls, monitoring of transactions, approvals, accountability process and analysis of risks that may impact our business are defined.
The second line of defense include the Internal Control and Compliance areas. These areas are dedicated to evaluation of processes, tests of controls or transactions, adherence and sufficiency of Guidelines and Procedures, alignment with Governance and improvements in processes.
Internal Controls area is responsible for the company's control environment to meet SOX certification. Through its tests and evaluations, this area guarantees adherence to SOX requirements and the coverage of risks through appropriate controls.
The Compliance area must ensure the Gerdau Integrity Program, which includes dissemination of ethics, risk assessment and fight against corruption, as well as the Ethics Helpline ("whistleblower"), monitoring of transactions, reputational assessment and due diligence of third parties.
The third line of defense includes Internal Audit, meaning independent assessment of processes and their risks and transactions, and also acts in any investigation arising from complaints related to ethics.
In accordance with the established governance, these control areas report and advise the Committees and the Executive Board with their analyses, with emphasis on the Fiscal Council, the Company Board, the Risk Committee and the Business Divisions Committees.
6.1. Employees who become aware or suspect a violation of this policy are obliged to report to their line manager, and/or the Ethics Helpline, and/or the Compliance area. Gerdau is committed to preventing retaliation against a person who makes such a report.
6.1.1. The Ethics Helpline, available on the Intranet and Internet, for the internal and external public, guarantees confidentiality of the information reported, investigation of all incidents, and anonymity of the people who access it.
6.2. Gerdau will never tolerate any act of retaliation or penalty against a person who refuses to practice corrupt or illegal acts. There is no business condition that may be required to commit illegal acts.
7. FINAL PROVISIONS
This Policy is not exhaustive in relation to applicable laws and aims to raise awareness about anti-corruption practices and to describe non-permitted conduct.
This Anti-Corruption Policy was approved at a meeting of the company's Board on October 27th, 2020.
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