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Corporate Citizenship Guideline # 3
Business Ethics – Bribes, Gifts & Entertainment
This guideline is intended to give guidance with respect to certain aspects of business ethics in accordance with the Policy on Corporate Citizenship (CC) and
rules stipulated in Article 6 of the Novartis Code of Conduct (CoC).
Additional aspects of business ethics, including conflicts of interest, or insider trading, are regulated separately.
2. Basic principles
Novartis will not engage in any form of bribery. In plain language bribery means money or favor given or promised in order to influence the judgment or conduct of
a private person or public official in a position of trust.
All associates and managers of Novartis and its affiliates (“Novartis”) shall at all times comply with the law. They have the duty to inform themselves about the national and international laws relating to their business activities. Activities that would violate local or international criminal law may under no circumstances be carried out even if they may seem permissible under this policy.
3. Scope and
This guideline applies to all associates and managers of Novartis.
It is the responsibility of each associate and manager to follow the principles, rules
and procedure of this guideline. It is the responsibility of each manager to implement the guideline within his/her function, lead by example, and to provide guidance to the associates reporting to them.
Furthermore, they must structure incentives, and conduct performance assessments accordingly.
Off-the-books accounts and false or deceptive booking entries are strictly
All gifts, payments or any other contribution made under this Guideline,
whether in cash or in kind, shall be documented, regularly reviewed, and properly
accounted for on the books of the relevant Novartis company. Record retention and archival policy must be consistent with Novartis' accounting standards, tax and other applicable laws and regulations.
5. No direct
Novartis will neither engage in the bribery of public officials, political candidates,
parties or party officials, nor of private individuals or private sector employees.
6. No indirect
Novartis will not engage in indirect bribery. Novartis may be held responsible for
acts of bribery by its intermediaries such as distributors, agents, advisors, consultants or other third parties. The use of intermediaries for the purpose of
committing acts of bribery is prohibited.
6. No indirect
The conduct of business through intermediaries is a common business practice
and, as such, not objectionable. However, all agreements and contracts with
intermediaries must be concluded under terms that are in line with generally accepted and lawful business practices. Intermediaries with a doubtful reputation
are not acceptable as partners to Novartis. All agents, advisors, consultants and other third parties shall be selected with particular care and shall be contractually obliged to adhere to the principles of the Code of Conduct, the Novartis Conflict of Interest Policy, this Corporate Citizenship Guideline # 3 and Divisional Guidelines.
The appropriateness of existing relations and the adherence of the intermediaries to the contractual principles relating to business practices shall be reassessed periodically by the responsible manager. In the case of negative evidence or material doubt regarding the business ethics of the intermediary, existing business relations shall be terminated even if this may result in a loss of business.
Lawful reimbursement of good faith expenditures, fees and other considerations
for goods and services, which are actually received, are permitted if they meet a
genuine business need, their receipt is documented, they are priced at market value and are based on a written contract. Any contract that serves as a conduit
for grafts or kickbacks is strictly prohibited.
Promotional gifts, hospitality and other contributions related to the promotion of
Novartis products, and payments in connection with the education of healthcare
professionals may only be provided according to the rules set forth in the divisional policies in line with the law and industry codes.
Grants provided with the genuine intention to enhance the reputation of Novartis, the practice of healthcare or medical research are permissible only if given to reputable institutions or associations, and if given openly and unconditionally, i.e. without the expectation of any direct or immediate business return.
Charitable donations and cultural contributions shall not be used as a subterfuge
for bribery. They shall not be provided to any organization upon the suggestion of
a public official or for the purpose of influencing a public official. They must be
justified by a legitimate charitable or cultural purpose.
Contributions to election campaigns or legislative campaigns shall be the
exception. If given, they have to be given openly and in strict compliance with the
Facilitation payments are small payments made to secure or expedite the
performance of a routine action by a government official or agency (e.g. issuing licenses or permits, installation of a telephone line, processing goods through
customs, etc.) to which the payer (or the company) has legal or other entitlement. Commonly, facilitation payments are extorted by underpaid officials.
Facilitation payments shall not be given by any Novartis associate in any country.
12. Gifts and
Courtesy gifts and hospitality shall not be given in cash. They do not constitute a
bribe if made openly and unconditionally as a gesture of esteem and goodwill, provided that they are not made as a “quid pro quo”, or to obtain or retain
business, and provided they are not prohibited by law. They shall be of modest value and shall not exceed the limits established by law and policy.
The Divisional Compliance Committees may grant exceptions to this CCGL#3. For all activities not relating to a Divisional business, exceptions may be granted by
Corporate Integrity & Compliance together with Commercial Legal.
Exceptions will be reported annually to the Audit and Compliance Committee by Corporate Integrity & Compliance and Commercial Legal.
14. Entry into force
This guideline enters into force as of January 1, 2008 replacing the version of
July 3, 2002. It shall be implemented by all Novartis affiliates subject to local legal
The owner of this guideline is Commercial Legal.
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