Controls on exports and Sensitive countries

Leonardo has established an overall program for the Group – the Trade Compliance Program – in order to ensure full compliance with the applicable laws and regulations laid down by the competent authorities in the field of Trade Compliance. The Program ensures also timely identification and fulfilment of requirements prescribed by applicable national, EU and international legislation, in particular, regarding the export and import of  defence and dual use products and services, of commercial products and services subject to regulations as well as obligations related to embargoes, sanctions or other trade restrictions.

Main  national and international regulations on Trade Compliance:

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Regulations
Subject
Law n. 185/1990, as amended by Legislative Decree n. 105/2012
Licensing and controls for export of military goods and technologies (Italy)
International Traffic in Arms Regulations (ITAR)
Defence articles, services and brokering (US)
Export Administration Regulations (EAR)
Dual-use items, goods and technologies (US)
Office or Foreign Assets Control (OFAC)
Programs of sanctions and embargos (US)
Foreign Corrupt Practices ACR (FCPA)
Prohibits improper payments to foreign officials (US)
Directive 43/2009/EC
Transfer of defence-related products within the Community (EU)
Council of the European Union, 5 June 1998
Code of conduct on arms exports (EU)
Council Common Position 2008/944/CFSP
Common rules governing control of exports of military technology and equipment (EU)
Council of the European Union, 15 February 2010
Common list of military equipment (EU)
Regulation (EC) 428/2009
Community regime for the control of exports, transfer, brokering and transit of dual-use items (EU)
Export Control Act 2002
Control for export of goods to overseas destination, (UK)
The UK Anti-Bribery Act 2010
Active and passive bribery, bribery of foreign officials, corporate bribery (UK)
Missile Technology Control Regime (MTCR)
Rules and controls on the export of missile technology
Nuclear Suppliers Group (NSG) Guidelines
Rules and controls on the export of nuclear technology
The Wassenaar Arrangement (WA)
Export Controls for Conventional Arms and Dual-Use Goods and Technologies
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2018 Report on export, import and transit of defence products (Italian version only)

The Program is defined in Guidelines No. 16 dated  September 20, 2016 “Trade Compliance”  for the One Company and in Directive No. 5  dated  December 19, 2016 “Trade Compliance” (replacing the Directive no. 21/2012 (“Trade Compliance Program”) for  all the Subsidiaries.

The Guidelines and the Directive as above rules to the following activities:

a) Governance and implementation of the Trade Compliance Program;

b) Trade Control (export, import, transit, brokering, re-export, transfer or use of defence products, dual-use or certain  types of commercial  products subject to restrictions);

c) Import/Export.

 

Elements of the trade compliance program
Risk analysis
The risk analysis, expected by the Guidelines and Directive is performed and repeated on a regular basis with reference to the company transactions involving defence materials, goods and services, technical data and applications for dual use and, within the sensitive countries, with reference also to commercial products. This analysis takes into account the laws of the jurisdictions in which Leonardo and the respective subsidiaries are incorporated and operate (including the countries in which supplies are performed), as well as EU and US laws that define and control the export and marketing of such goods and services. The risk analysis process is subject to review on a regular basis and also on the occasion of special events that may expose to Trade Compliance risks (for example mergers, acquisitions, development of new products or services).
Know your customer
Verification of new customers/end users, shall be carried out prior to any sale (for example type of entity, ownership structure and any other information on the customer’s reputation and integrity). Based on the analysis of this information, the company is capable of assessing whether there are potential risks ("red flags").
Screening systems
This screening system aims to carry out appropriate verifications on the customers and on the relevant parties to a transaction, including end users, in order to verify and identify if they are included in lists as proscribed persons, are subject to trade restrictions or prohibitions.
Monitoring politically sensitive transaction
Some transactions, even non-related to export or re-export of materials subject to restriction and directed towards countries concerned with embargoes, sanctions or other restrictive measures ("Sensitive Countries"), are subject to prior notification and periodic reporting.

The list of Sensitive Countries for the Leonardo Group, subject to periodical review by the Head of TCO, is currently the following:

  • Afghanistan
  • Belarus
  • Burma
  • Central African Republic
  • Cyprus
  • Cuba
  • Democratic Republic of Congo
  • Eritrea
  • Fiji
  • Haiti
  • Iran
  • Iraq
  • Ivory Coast
  • Lebanon
  • Liberia
  • Libya
  • Moldova
  • North Korea
  • People's Republic of China, excluding Hong Kong and Macau
  • Russia
  • Sierra Leone
  • Somalia
  • Sri Lanka
  • South Sudan
  • Sudan
  • Syria
  • Ukraine
  • Venezuela 
  • Vietnam
  • Yemen
  • Zimbabwe

 

 

Training
The Program provides for constant training of employees on laws applicable in the field of Trade Compliance and advanced training sessions for people more involved in related processes.
Immediate notification of critical issues
The Program provides for the immediate reporting, decision-making and corrective measures to be carried out in the event of potential violations of the applicable laws. The Head of TCO shall be notified of the potential violations and shall be kept informed of the corrective measures taken and provide information to the SCO.
Assessment of the Program
A periodic assessment of the Trade Compliance Program shall be carried out according to Guideline 16/2016 and Directive 5/2016.
Archiving
Leonardo and its subsidiaries shall retain relevant documentation for a minimum time period of five years or for any longer period provided for by local laws.
Council
The Council, chaired by the SCO, promotes the cooperation, exchange of information, training and development and maintenance of best practices in the field of Trade Compliance.
Management of whistleblowing
In regards to reporting potential violations (whistleblowing) refer to Leonardo's “Whistleblowing Management Guidelines” of March 18, 2015.