Due Diligence Procedure (“Know Your Partner”) for Agents

Darren England – Subcontract AdministratorHouston, TX 2015

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Table of contents

1. What is an Agent?

2. Relevant Procedures

3. Compiling a “Know Your Partner” file

4. Red Flags

5. Agency Services Agreement and approvals

6. Summary

1. What is an Agent?

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An agent is a business or person that assists Technip in acting as liaison between Technip and a governmental or regulatory office or official for the purpose of tracking and following-up on routine governmental services customarily necessary for project execution (“Governmental Agency Services”).

What is an Agent?

Due Diligence Procedure (“Know Your Partner”) for Agents

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The term “governmental authority” is construed broadly and can include:

• Officials and representatives of any government, • candidates for a government office, • members of political parties, • international organizations • officials of government-owned corporations • public administration officials • employees of non-governmental organizations consultants.

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Any interaction between an agent and a governmental or regulatory authority is a Governmental Agency Service, some examples of which can include, but are not limited to:

1) Meet and greet services2) Customs clearances and bonding services 3) Permit acquisitions and maintenance4) Union interaction5) Visa related services6) Arrangement of government inspection services 7) Vessel pilotage

Due Diligence Procedure (“Know Your Partner”) for Agents

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Agents also provide Non-governmental Agency Services, some examples of which can include, but are not limited to:

1) Pass through purchasing of materials and equipment 2) Coordination of personnel accommodations4) Transportation Services5) Bunkering (fuel) and associated vessel services6) Warehousing of goods7) Shipment of goods8) Office Services

Due Diligence Procedure (“Know Your Partner”) for Agents

2. Relevant Procedures

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TPUSA-REG-PR-LG-0002-0 (Specific Procedure Relating to Know Your PartnerDue Diligence of Processing Agents)

-To be completed by the Agent:

TPUSA-REG-FM-LG-0002A (Processing Agent Questionnaire)TPUSA-REG-FM-LG-0002B (Declaration of Compliance)

-To be completed by the appropriate Technip employee:

TPUSA-REG-FM-LG-0002C (Assessment of Processing Agent) – Subcontract AdministratorTPUSA-REG-FM-LG-0002D (Business Justification) – Business Unit RequestorTPUSA-REG-FM-LG-0002E (Duties) – Business Unit RequestorTPUSA-REG-FM-LG-0002F (Red Flags) – Subcontract AdministratorTPUSA-REG-FM-LG-0002I (Due Diligence Acknowledgement Letter) – Subcontract Administrator and signed off by legal counsel (this is only necessary if legal has not yet completed a full review of the KYP file)Agent Interview – Subcontract Administrator and Legal Counsel

Controlling Procedure

3. “Know Your Partner” file

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The law of agency is an area of commercial law dealing with a set of contractual, quasi-contractual and non-contractual relationships that involve a person, called the agent, that is authorized to act on behalf of another (called the principal) to create a legal relationship with a third party.

Relationship between Technip and an Agent

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Relationship between Technip and an Agent

For the Agency to exist the principal, expressly or implicitly, authorizes the agent to work under his control and on his behalf. This branch of law separates and regulates the relationships between:

1) Agents and principals;

2) Agents and the third parties with whom they deal on their principals' behalf; and

3) Principals and the third parties when the agents purport to deal on their behalf.

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Why do we have Agents:• Technip’s global operations• They are necessary to conduct our business and for the successful

completion of our projects. • Agents are even compulsory in certain areas.

Why do we have to do a KYP for Agents:• Agents have heightened risk because the nature of their activities.

To avoid potential liability, Technip must:1) Carefully review potential service providers2) Reasonably monitor their activities (especially when they act directly

on behalf of Technip (e.g. interact with governmental authority)

Know Your Partner for Agencies

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A risk profile assessment is designed to be conducted in conjunction with the unique circumstances of each individual relationship.

Color codes are assigned through geographic areas of operation according to the Transparency International Corruption Index (http://www.transparency.org/country).

RED (countries with a score of 50 and lower)

ORANGE (countries with a score higher than 50 but lower than 70)

GREEN (countries with a score of 70 and higher)

Note: However, the overall risk created by the potential relationship must be considered independently of any color code designation (additionally, agents often work in many geographic areas with varying levels of corruption and risk), therefore the due diligence analysis should be performed based on the actual compliance risk created by the relationship.

Risk Assessment

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Contents of the due diligence file

1. Approval Memorandum and Risk Assessment Categorization Procedures

2. Assessment of Agent3. Red Flags Analysis4. Agent Questionnaire5. Declaration of Compliance6. Business Justification7. Duties of Agent8. Company Information (General and Financial Statements)9. Correspondence10. Current Agreement (ASA) and any Prior Agreements11. Third Party Background Report (outside entity report requested

by legal)12. Interview (Minutes of Meeting)

4. Red Flags

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The Red Flags analysis performed is based upon:

1) The Agent Questionnaire (completed by agent)2) Declaration of Compliance (completed by agent)3) Risk Assessment Categorization (completed by SC

Admin.)4) Assessment of the Agent (completed by SC Admin.)5) Any and all research gathered related to business

activities

The red flag analysis is therefore similar to the one performed on all subcontractors, however, the due diligence file should be extensive due to the heightened risk exposure.

Red Flags Analysis

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Red Flags Analysis example:

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Red Flags Analysis example continued:

5. Agency Services Agreement and Approvals

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T&Cs & Pricing

Due diligence

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Agency Services Agreement

Your agreement is part of the due diligence file and should be negotiated in parallel with the compilation of the “Know Your Partner” process.

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1) Requisitioner 2) Subcontracts Administrator3) Manager of Subcontracts4) VP Procurement5) Legal

Approvals (SCAR)

6. Summary

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Technip can be held liable for the actions of its agents as if they are the actions of Technip,

The nature of the relationship with an agent authorized to perform work for us is different to that of a general subcontractor.

Our standard terms and conditions make this distinction:

“Contractor is an independent contractor and neither Contractor nor any member of Contractor Group is a servant, agent, or employee of Company…”

The agent’s actions are our actions.

Technip/Agent Relationship

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Thank you