Company Info

CODE OF BUSINESS CONDUCT AND ETHICS AND PROHIBITED BUSINESS PRACTICES POLICY

Revised: February 17, 2025
The Pampered Chef, Ltd. holds itself to high standards of business ethics and compliance with laws and regulations applicable to our operations, and we expect our vendors and suppliers to do the same. As such, our vendors and suppliers must comply with the Code of Business Conduct and Ethics and Prohibited Business Practices Policy found below.
Code of Business Conduct and Ethics
A. Scope.
This Code of Business Conduct and Ethics (“Code”) applies to all vendors and suppliers of The Pampered Chef, Ltd. and its subsidiaries, as well as their directors, officers and employees. Such vendors and suppliers, and their directors, officers and employees, are referred to herein collectively as the “Covered Parties” and The Pampered Chef, Ltd. and its subsidiaries are referred to herein collectively as “Pampered Chef” or the “Company”. Any questions should be directed to the General Counsel of The Pampered Chef, Ltd.
B. Purpose.
The Company is proud of the values with which it conducts business. It has and will continue to uphold the highest levels of business ethics and personal integrity in all types of transactions and interactions. To this end, this Code serves to:
  • • emphasize the Company’s commitment to ethics and compliance with the law;
  • • set forth basic standards of ethical and legal behavior;
  • • provide reporting mechanisms for known or suspected ethical or legal violations; and
  • • help prevent and detect wrongdoing.
We expect all Covered Parties to operate with the same level of commitment and integrity in all its dealings respecting Pampered Chef business.
Given the variety and complexity of ethical questions that may arise in the Company’s course of business, this Code serves only as a broad view of how Covered Parties should direct the work, business relationships, decisions and actions taken on their behalf by their respective directors, officers and employees. When confronted with ethically ambiguous situations, the Covered Parties should remember the Company’s commitment to the highest ethical standards and seek advice from their supervisors, managers or other appropriate personnel responsible for compliance matters (including, if applicable, their legal counsel) to ensure that all actions they take honor this commitment. When in doubt, remember Warren Buffett’s rule of thumb:
‘…I want [people] to ask themselves whether they are willing to have any contemplated act appear the next day on the front page of their local paper – to be read by their spouses, children and friends – with the reporting done by an informed and critical reporter.’
C. Ethical Standards.
1. Conflicts of Interest.
A conflict of interest exists when a Covered Party’s private interest interferes in any way with the interests of the Company. A conflict can arise when a Covered Party takes actions or has interests that may make it difficult to perform their work for the Company objectively and effectively. Conflicts of interest may also arise when a Covered Party, or members of their family, receive improper personal benefits as a result of their interactions with the Company. Loans to Covered Parties and guarantees of obligations of Covered Parties or their family members may create conflicts of interest. It is almost always a conflict of interest for a Covered Party to work simultaneously for a competitor of the Company.
Other examples could include a situation in which an employee of a Covered Party, or a Covered Party employee’s family member, has a business, family or other relationship with Company employee that could influence or affect Company business with such Covered Party, or a situation in which a Company employee has any financial or other interest of any kind in a Covered Party’s business, or vice versa.
Conflicts of interest may not always be clear-cut. A Covered Party with questions regarding a possible conflict of interest should consult their supervisor, manager or other appropriate personnel responsible for compliance matters (including, if applicable, their legal counsel). Any Covered Party who becomes aware of a conflict or potential conflict should bring it to the attention of the General Counsel of The Pampered Chef, Ltd. (via [email protected]) or consult the procedures described in Section E of this Code.
2. Company Opportunities.
Covered Parties are prohibited from taking for themselves opportunities that are discovered through the use of Company property, information or position without the consent of the Company. No Covered Party may use Company property, information or position for improper personal gain.
3. Fair Dealing.
Covered Parties shall behave honestly and ethically at all times and with all people. They shall act in good faith, with due care, and shall engage only in fair and open competition, by treating ethically competitors, suppliers, customers, and colleagues. Stealing proprietary information, possessing trade secret information that was obtained without the owner’s consent, or inducing such disclosures by past or present employees of other companies is prohibited. No Covered Party should take unfair advantage of anyone through manipulation, concealment, abuse of privileged information, misrepresentation of material facts, or any other unfair practice.
4. Gifts and Entertainment.
The purpose of business entertainment and gifts in a commercial setting is to create goodwill and sound working relationships, not to gain unfair advantage with customers. No gift or entertainment should ever be offered or accepted by a Covered Party or any family member of a Covered Party unless it (1) is consistent with customary business practices, (2) is not excessive in value, (3) cannot be construed as a bribe or payoff and (4) does not violate any laws or regulations. The offer or acceptance of cash gifts by any Covered Party is prohibited. Covered Parties should discuss with their supervisor, manager or other appropriate personnel responsible for compliance matters (including, if applicable, their legal counsel) any gifts or proposed gifts which they think may be inappropriate. Any Covered Party who becomes aware of an inappropriate gift should bring it to the attention of the General Counsel of The Pampered Chef, Ltd. (via [email protected]) or consult the procedures described in Section E of this Code.
5. Insider Trading.
Covered Parties who have access to confidential information are not permitted to use or share that information for securities trading purposes (“insider trading”) or for any other purpose except the conduct of the Company’s business. All non-public information about the Company should be considered confidential information. It is always illegal to trade in securities of Berkshire Hathaway Inc. (“Berkshire”), the parent company of The Pampered Chef, Ltd., while in possession of material, non-public information, and it is also illegal to communicate or “tip” such information to others.
6. Confidentiality.
Covered Parties must maintain the confidentiality of confidential information entrusted to them, except when disclosure is authorized by an appropriate legal officer of the Company or required by laws or regulations, and then such disclosure must be in compliance with any applicable non-disclosure agreement in effect between Pampered Chef and the Covered Party. Confidential information includes all non-public information that might be of use to competitors or harmful to the Company or its customers if disclosed. The obligation to preserve confidential information continues even after the business relationship with the Company ends. Covered Parties must at all times comply with the terms of the applicable non-disclosure agreement between Pampered Chef and the Covered Party.
7. Protection and Proper Use of Company Assets.
All Covered Parties should endeavor to protect the Company’s assets and ensure their efficient use. Theft, carelessness, and waste have a direct impact on the Company’s profitability. Any suspected incident of fraud or theft should be immediately reported for investigation. The Company’s equipment should not be used for non-Company business.
The obligation of Covered Parties to protect the Company’s assets includes its proprietary information. Proprietary information includes intellectual property such as trade secrets, patents, trademarks, and copyrights, as well as business, marketing and service plans, engineering and manufacturing ideas, designs, databases, records, salary information and any unpublished financial data and reports. Unauthorized use or distribution of this information would violate the applicable non-disclosure agreement between Pampered Chef and the Covered Party. It could also be illegal and result in the imposition of civil or criminal penalties.
8. Compliance with Laws, Rules and Regulations.
Obeying the law, both in letter and in spirit, is the foundation on which the Company’s ethical standards are built. In conducting the business of the Covered Party, including, but not limited, when conducting business with the Company, the Covered Parties shall comply with applicable governmental laws, rules and regulations at all levels of government in the United States and in any non-U.S. jurisdiction in which the Company does business.
The document Prohibited Business Practices Policy sets forth the Company’s policy on compliance with laws, specifically addressing such topics as prohibited offers or payments, gifts and entertainment, transactions with certain countries and persons, export controls, anti-money laundering, accounting controls, and accurate record-keeping. The Prohibited Business Practices Policy is included below and available to all Covered Parties.
D. Violations of Ethical Standards.
1. Reporting Known or Suspected Violations.
The Covered Parties shall promptly report any known or suspected violations of this Code to the General Counsel of The Pampered Chef, Ltd at [email protected].
2. Remediation of Violations.
Covered Parties must take prompt action to remedy any violation of this Code.
3. Accountability for Violations.
We expect Covered Parties to be responsible for their directors’, officers’ and employees’ compliance with this Code. A violation of this Code by a director, officer or employee will be considered a violation by the Covered Party.
If the Company or its designee determines that this Code has been violated, either directly, by failure to report a violation, or by withholding information related to a violation, the conduct by offending Covered Party will be considered a material breach of contract.
A violation of this Code, including a failure to promptly take action to report or remedy a violation will jeopardize the Covered Party’s business relationship with Pampered Chef. Any violations of this Code may result in termination of the business relationship along with any other remedies available under applicable law.
Violations of this Code may also constitute violations of law and may result in criminal penalties and civil liabilities for the offending Covered Party. All Covered Parties are expected to cooperate in investigations of misconduct.
E. Compliance Procedures.
Covered Parties must work to ensure prompt and consistent action against violations of this Code. In some situations, however, it is difficult to know if a violation has occurred. Because it is not possible to anticipate every situation that will arise, it is important that each Covered Party establish a process to identify and escalate questions or problems. These are the steps you should keep in mind as a Covered Party:
  • • Make sure you have all the facts. In order to reach the right solutions, we must be as informed as possible.
  • • Ask yourself: What specifically am I being asked to do? Does it seem unethical or improper? Use your judgment and common sense. If something seems unethical or improper, it probably is.
  • • Clarify your responsibility and role. In most situations, there is shared responsibility. Are your colleagues informed? It may help to get others involved and discuss the problem.
  • • Discuss the problem with your supervisor, manager or other appropriate personnel responsible for compliance matters (including, if applicable, legal counsel). This is the basic guidance for all situations.
  • • Ask first, act later. If you are unsure of what to do in any situation, seek guidance before you act.
PROHIBITED BUSINESS PRACTICES POLICY
It is the policy of The Pampered Chef, Ltd. and its subsidiaries (“Pampered Chef” or the “Company”) to strictly comply with all laws and regulations that apply to any of their activities and operations, or that may give rise to the risk of liability for Pampered Chef, or persons employed by any of them.
This Prohibited Business Practices Policy (“Policy”) applies to all vendors and suppliers of Pampered Chef and their directors, officers and employees (the “Covered Parties”). This Policy also applies to any agent, consultant, representative, sales agent, reseller, distributor, joint venture partner, customs/import broker, freight forwarder, contractor or other third party (“Intermediary”) engaged by a Covered Party as they conduct business on behalf of or for the benefit of the Company. We expect Covered Parties to be responsible for their directors’, officers’ and employees’ and their Intermediaries’ compliance with this Policy. A violation of this Policy by a director, officer or employee or Intermediary will be considered a violation by the Covered Party.
Each Covered Party shall develop a procedure to communicate the requirements of this Policy to its officers, directors and employees. Each such Covered Party shall comply with this Policy, abide by all applicable laws and regulations, and exercise great care not to take or authorize any actions that may create even the appearance of illegal conduct or other impropriety. Covered Parties who violate this Policy shall be subject to appropriate legal action, including, but not limited to, termination of the business relationship along with any other remedies available under applicable law. A violation of this Policy will also be considered a material breach of contract.
Pampered Chef will not undertake, authorize or tolerate any business practice that does not comply with this Policy.
I. COMPLIANCE WITH BOTH U.S. AND FOREIGN ANTI-CORRUPTION LAW IS REQUIRED
This Policy sets forth Pampered Chef’s position against bribery and corruption and describes the minimum procedures that must be followed to ensure compliance with this Policy and anti-bribery and anti-corruption laws. This Policy (1) identifies certain specific laws and regulations that may apply to Pampered Chef and the Covered Party, and (2) sets forth the minimum standards that must be followed to ensure compliance with those laws and regulations. The applicable laws and regulations include not only federal, state and local laws and regulations of the U.S., but also laws and regulations of any foreign countries in which Pampered Chef and Covered Party does business, such as the United Kingdom’s Bribery Act of 2010 and the Brazil Clean Company Act of 2014.
Because the U.S. law known as the Foreign Corrupt Practices Act (“FCPA”) is the anti-corruption law that most broadly affects Pampered Chef’s international business, this Policy uses that statute as a framework for setting forth Pampered Chef’s policy. However, the Policy uses the term “government official” in most places, where the FCPA uses the term “foreign official,” to make it clear that this Policy applies to interactions with all government officials worldwide, and that adherence to the principles and procedures set forth within this Policy will ensure compliance with all nations’ anti-bribery and anti-corruption laws.
The Covered Parties shall promptly report any known or suspected violations of this Policy to the General Counsel of The Pampered Chef, Ltd at [email protected].
Any Covered Party who has a question whether particular conduct could be illegal or involve any unethical or improper act should promptly report their concerns. If in doubt as to the lawfulness or propriety of particular conduct, a report of the matter should be made so that the issue can be investigated.
II. PROHIBITED OFFERS OR PAYMENTS
Each Covered Party must comply with the FCPA. In layman’s terms, the FCPA and all other applicable anti-bribery and anti-corruption laws. The FCPA prohibits bribes, kickbacks and favors to government officials to obtain an improper advantage or benefit, such as, among other examples, the awarding or retention of business or a government contract, obtaining a tax benefit or reduction of value-added tax or corporate income taxes or obtaining a permit or license. Other U.S. and foreign laws prohibit bribery of non-governmental personnel (sometimes called “commercial” bribery).
All Improper Payments Prohibited. This Policy expressly prohibits the promise, authorization, offering or payment of bribes or kickbacks to any person, anywhere in the world under any circumstances for the purpose of improperly influencing their actions or gaining any improper business advantage. Covered Parties and their Intermediaries are prohibited from directly or indirectly engaging in commercial bribery. In addition, they must not receive such payments from any person or company in return for providing an improper advantage such as awarding business to such person or company.
Prohibited Purposes.To ensure compliance specifically with the FCPA, no Covered Party or its Intermediaries may improperly provide, authorize, promise or offer to provide anything of value to a government official for any of the following purposes:
  • • improperly influencing the official;
  • • securing any improper advantage;
  • • affecting any official decision; or
  • • helping the Company obtain or retain business or direct business to any other person or company.
Similarly, no Covered Party or its Intermediaries may authorize a third party to improperly offer or promise to provide something of value to a government official for any of the purposes listed above.
“Corrupt” Payments.The FCPA prohibits promising, providing or offering to provide or authorizing the provision of things of value to a government official if done “corruptly.” This means that the giver has an intent or desire to improperly influence the recipient and to get something in return (i.e., a quid pro quo). The word “corruptly” is used in the FCPA to clarify that the offer, payment, promise or gift must be intended to induce the official to misuse an official position to assist the giver in obtaining a business advantage.
Government Officials.Under the FCPA, a government official is:
  • • any officer or employee of a government or any department, agency or instrumentality of a government;
  • • elected officials;
  • • any officer or employee of a public international organization, such as the United Nations or World Bank;
  • • any individual acting in an official capacity for or on behalf of a government agency, department, instrumentality or of a public international organization;
  • • any officer or employee of a company owned or controlled by a government (e.g., a state-owned oil company or state-owned hospital);
  • • political parties outside of the U.S. and their employees;
  • • candidates for political office outside of the U.S.; and
  • • any member of a royal family who may lack formal authority but who may otherwise be influential, including owning or managing state-owned or controlled companies.
It is important to note that employees of state-owned or controlled entities (whether partially or completely state-owned or controlled) are considered government officials under the FCPA regardless of their rank, nationality or classification under local law. Some individuals, who may not be considered government officials in their own country, are considered government officials under the FCPA (for example, doctors and nurses employed by a state-run healthcare system, or employees of a state oil company). In addition, a company may be under government control even if it is publicly traded, and even if some of its stock is not owned by the government. For purposes of this Policy, close family members of government officials (i.e., brother, sister, mother, father, husband, wife or child) are treated as government officials. The Policy’s prohibitions also apply with regard to former government officials in cases where the former government official retains some sort of quasi-official status.
Indirect and Direct Payments.The prohibition against improper payments or gifts under the FCPA applies not only to direct payments or offers of payment, but also to indirect offers or payments made through any Intermediaries. Care must be taken to ensure that Intermediaries of the Covered Party do not authorize, promise, offer or provide anything of value to a government official for any of the prohibited purposes described above.
Anything of Value.The term “anything of value” is construed very broadly under the FCPA and includes far more than just monetary gifts. Each of the following, among other things, could constitute a “thing of value”:
  • • money in any form (whether cash, check, wire, vouchers, prepaid cards, etc.);
  • • meals and drinks;
  • • entertainment, such as golf outings or sporting events;
  • • travel, whether domestic or foreign, including flights on private aircrafts;
  • • vacations;
  • • excessive discounts on products or services;
  • • excessive commissions;
  • • sales at less than market value;
  • • purchases at above market rates;
  • • art;
  • • vehicles;
  • • personal gifts;
  • • contractual rights;
  • • donations to charity;
  • • scholarships for family members; and
  • • other types of gifts.
The term also applies to intangible benefits such as contributions to an official’s preferred charity, offers of employment or internships for an official’s friends or family, assisting an official’s family member or friend in gaining admittance to a school, visa sponsorship, or other kinds of help or assistance to officials or their friends and family. This Policy applies equally to offers of payment and things of value to relatives and family members of government officials, as to the government officials themselves.
Nominal Gifts and Entertainment. There are circumstances under which providing inexpensive items to a government official may be permissible under the FCPA. Before providing even nominal gifts or entertainment to a government official, Covered Parties employees or the Covered Party must consult with a local lawyer to confirm that doing so is permitted by local law. Some countries prohibit providing anything of value to government officials, even gifts or entertainment of nominal value; in those countries, this Policy prohibits providing gifts or entertainment of any kind to government officials. Where permitted by local law, gifts or entertainment to government officials may be made under this Policy only when they are:
  • • made to promote general goodwill and not as a quid pro quo for any official action;
  • • of modest value (in determining whether the value is modest, the value of all previous gifts or entertainment for the same official in the same year should be added together);
  • • not in the form of cash;
  • • customary in type and value in the country where made;
  • • given openly and not secretly;
  • • not intended to improperly influence the government official; and
  • • accurately reflected in the Covered Party’s books and records.
Willful Blindness Is Not A Defense.The FCPA imposes liability on companies and individuals even if they have no actual knowledge of an improper payment to a government official, in circumstances where they should have known there was a high probability that an Intermediary intended to make or was likely to make an improper payment. Accordingly, Covered Parties and Covered Party employees must not be willfully blind to facts which suggest improper payments, gifts, promises or offers of payments, gifts or something of value to a government official. Liability for an FCPA violation cannot be avoided by attempting to ignore or “not see” the warning signs or indications of improper conduct. Covered Party employees who suspect or see indications that corrupt payments or offers of payment might be under consideration or might have been made on a Covered Party’s behalf must not “look the other way” or ignore the indications or “red flags.” The lack of actual knowledge of a bribe will not be a defense under the FCPA.
Bona Fide and Reasonable Business Expenses.The FCPA permits paying bona fide and reasonable travel and lodging expenses for government officials if the expenses relate directly to:
  • • the promotion, demonstration or explanation of products or services;
  • • the execution or performance of a contract; and
  • • other legitimate charitable or educational programs.
To ensure compliance with the FCPA, this Policy permits paying such expenses in connection with the conduct of business on behalf of or for the benefit of the Company only upon the advance written approval of the General Counsel of The Pampered Chef, Ltd. and only where to do so would be legal under local law and where the official’s government or government entity is aware of, and approves of in writing, the expenditures contemplated.
Such expenses must be reasonable (modest and not lavish) and limited to travel and accommodation expenses that are incurred for a government official’s direct travel to and from the location of the Company event or location. The expenses paid must not include expenses for any “side trip” taken to other cities or countries nor for extra days for tourism or sightseeing. Lodging expenses should include only reasonable accommodation costs, including reasonable expenditures for meals actually incurred in or incidental to lodging in business-class hotels, and only during the period of the particular meeting, facility visit, seminar or event, or en route to such activities. Where such expenses are approved for payment, any payment should be made directly to the service provider (e.g., an airline or hotel) rather than to the government official whenever practicable, and any such payments must be paid or reimbursed only when adequately supported by documentation and receipts and then properly recorded in the Company’s books and records. Under no circumstances shall per diem payments or allowances be provided to a government official. A Covered Party must never pay for any portion of expenses incurred by any spouse or other family member of a government official.
III. PROHIBITED TRANSACTIONS WITH CERTAIN COUNTRIES AND PERSONS
Pampered Chef must comply with all applicable economic and trade sanctions and embargo programs under U.S. law, United Nations resolutions and the laws and regulations of other countries to which it is subject. Compliance requires careful monitoring of, and sometimes prohibition of, transactions involving sanctioned countries and regimes and sanctioned individuals, entities, vessels, aircraft, and cryptocurrency wallets (e.g., terrorists, proliferators of weapons of mass destruction and narcotics traffickers). In most cases, violations can result in criminal penalties of up to 20 years in jail, a $1 million fine, or both, and civil penalties per violation in an amount up to the greater of $368,136 or twice the value of the transaction involved. However, depending on the type of violation and the statutory regime implicated, the applicable penalties can be higher.
Most of the trade restrictions described in Section III of this Policy apply to “U.S. persons,” which include all (i) companies organized in the U.S. and their foreign branches, (ii) companies and persons located in the U.S. or otherwise subject to U.S. jurisdiction (e.g., through utilization of the U.S. banking system, including all U.S. Dollar-denominated transactions occurring anywhere in the world) and (iii) U.S. citizens and permanent resident aliens wherever located (including U.S. persons acting on behalf of foreign persons). For purposes of the U.S. embargo of Cuba and the sanctions applicable to Iran, as described below, foreign entities owned or controlled by U.S. persons are also subject to these sanctions programs.
Any potential conflict between local law and the trade restrictions described below should be referred to the General Counsel of The Pampered Chef, Ltd.
Transactions with Cuba, Iran, North Korea, Syria, and certain occupied or annexed regions of Ukraine. The U.S. has instituted comprehensive embargoes against the following countries/geographical regions:
  • • Cuba
  • • Iran
  • • North Korea
  • • Syria
  • • The “Donetsk People’s Republic,” “Luhansk People’s Republic” and Crimea Region (Russian-occupied territories in Ukraine)
These sanctions programs include an embargo or prohibition (with certain exceptions) barring U.S. persons from engaging in trade, commercial, or financial transactions involving the individuals and entities located in the above countries/regions. Some non-exhaustive examples of dealings that may be restricted include:
  • • imports into the U.S., and, in some cases, into other countries, of goods, technology, software or services from, or originating in, the embargoed country/region;
  • • exports from the U.S. or, in some cases, from foreign countries, of goods, technology, software or services, either directly or through Intermediaries, to the embargoed country/region;
  • • investments in the embargoed country/region;
  • • brokering the sale of goods, technology or services to or from the embargoed country/region, even if the transaction is done entirely outside of the U.S.;
  • • providing insurance or reinsurance to businesses or property of the embargoed country/region or its nationals, or for imports from, or exports to, the embargoed country/region or its nationals; and
  • • other transactions in which a financial institution or other person acting on behalf of the embargoed country/region has any interest.
The embargo programs are subject to frequent changes. Detailed information regarding these embargoes, including “FAQs” and other guidance, can be obtained from the Office of Foreign Assets Control (“OFAC”) website at https://home.treasury.gov/policy-issues/financial-sanctions/sanctions-programs-and-country-information.
In light of the complexity of the laws and sanction programs described in this section, no Covered Party may engage in any transactions or conduct of the type described above and below that is known to, directly or indirectly, involve, Cuba, Iran, North Korea, Russia, Syria, Venezuela or the above-referenced occupied regions in Ukraine.
Transactions with Venezuela. Due to ongoing and increasing concerns of the U.S. Government regarding political and social developments in Venezuela, OFAC and other federal agencies have developed and implemented sanction programs relative to a variety of specific industries, government agencies, individuals and entities. The various sanction programs, when considered together in light of their breadth and complexity, make this a de facto embargo on dealings with Venezuela. As a consequence, the Company has a policy of not doing business with or in Venezuela, or with individuals or entities that constitute the government of Venezuela, and Covered Parties must not do business with or in Venezuela, or with individuals or entities that constitute the government of Venezuela.
Russian Sanctions and Export Restrictions. In response to hostile actions in Ukraine in early 2022, the U.S., and other countries where the Company operates, imposed a number of sanctions on Russia. As a consequence, the Company has a policy of not doing business in or with Russia, and Covered Parties must not do business in or with Russia, including engaging in any of the other activities described herein. This applies to revenue derived from Russia as well as supply chain and service provider relationships (e.g., software development and coding). These Russian sanctions have been expanded and updated frequently during 2022 to present and likely will continue to evolve until the Ukraine conflict ends. Under the U.S. sanctions, for example, hundreds of Russian companies, most banks, dozens of high-net worth Russians and the companies they own or control are the subject of complete prohibitions on business with the U.S. Also notable is a complete prohibition on “new investment” in Russia by U.S. persons. As a consequence of this prohibition, U.S. persons may not buy equity securities or debt from, or otherwise lend to, any Russian-domiciled entity. They similarly may not engage in such business with non-Russian entities that have more than half of their revenue or assets in Russia, or where the purpose of the investment is to support activities in Russia. U.S. persons are also prohibited from making new capital expenditures to build new facilities or factories or to engage in new business operations in Russia. Russian subsidiaries of U.S. companies may continue to maintain (but not grow) pre-existing operations, subject to a number of other sanctions restrictions about who they sell to, bank with, and interact with in the government.
The U.S. also prohibits U.S. persons from providing a number of services to the Russian economy, regardless of whether the recipient is the target of list-based sanctions. The services bans include: accounting, trust, and corporate formation services; management consulting services; architecture and engineering services; quantum computing services; and information technology (“IT”) and software services. Similar sanctions target involvement in the production and transport of Russian oil and gas, including a prohibition on providing nearly any services (including insurance) with respect to the maritime transport of Russian oil unless within certain price caps. Russian companies that operate in the above sectors or in finance, metals/mining, and aviation are at increased risk for being targeted by list-based sanctions.
Transactions with China. China is the recent target of significant U.S. economic sanctions and export control measures that restrict dealings with Chinese companies or individuals and prohibit or place license requirements on certain U.S. exports and re-exports to China. Multiple U.S. Government agencies have updated their various lists to include Chinese Government entities and officials, as well as numerous private entities and individuals. Under the U.S. Export Administration Regulations (“EAR”) discussed in this Policy, the U.S. Commerce Department’s Bureau of Industry and Security (“BIS”) Entity List identifies numerous well-known Chinese companies and their worldwide affiliates (such as Huawei) to whom exports and re-exports of items that are “subject to the EAR” are not permitted without a BIS license. In addition, the EAR applies end-use controls and an export and re-export license requirement (with a policy of denial) for certain commercial items when shipped to companies in China that also manufacture and support defense articles for use by the Chinese military or companies in China who support military intelligence. To assist exporters in applying these controls, BIS introduced the Military End-Users List (found in Supplement 7 to Part 744 of the EAR) (and the Military-Intelligence End-Users List (found in Section 744.22 of the EAR). The U.S. Government also changed its approach with regard to treatment of Hong Kong, removing separate export licensing rules and permissions and requiring imported goods to reflect Chinese, rather than Hong Kong, origin. Recent human rights laws are also focused on forced labor in China, resulting in an import ban into the U.S. of several products produced in the Xinjiang Uyghur Autonomous Region, including agricultural products, automobiles and electronics (see OFAC’s 2021 Xinjiang Supply Chain Business Advisory). These and other restrictions are developing quickly. Covered Entities that do business with and in China must make sure that their policies and procedures align with current economic sanction, export and import requirements.
Transactions with Certain Blocked Individuals, Entities and Groups. The U.S. has also instituted economic and trade sanctions programs prohibiting U.S. persons, including companies located outside the U.S. who are owned by a U.S. parent, from engaging in unlicensed transactions of almost any nature with designated individuals, entities, vessels, aircraft, and cryptocurrency wallets. The U.S. Government identifies such individuals, entities, vessels, aircraft, and cryptocurrency wallets by putting their names on the list of Specially Designated Nationals and Blocked Persons (the “SDN List”) maintained by OFAC. Other lists of parties with which various transactions are restricted or off-limits include the Foreign Sanctions Evaders List, the Sectoral Sanctions Identification List (the “SSI List”), and the Non-SDN Chinese Military-Industrial Complex Companies List, each as maintained by OFAC the Entity List, the Denied Persons List and the Unverified List, each as maintained by BIS; and the Debarred Parties List, as maintained by the U.S. Department of State’s Directorate of Defense Trade Controls.
The SDN List includes individuals, entities, etc. that have engaged in conduct that is inimical to U.S. national security and foreign policy interests, such as “Transnational Criminal Organizations,” “Narcotics Traffickers,” “Terrorist Organizations,” “Proliferators of Weapons of Mass Destruction” and other conduct such as cyber-related crime, election interference, corruption and human rights violations. Others on the list include persons and entities from the embargoed countries and regions described above (i.e., Cuba, Iran, North Korea, Syria and the Crimea, Luhansk and Donetsk Regions of Ukraine), as well as others who have engaged in conduct related to certain specified countries or regions, including, but not limited to, Afghanistan, the Balkans, Belarus, Burma (Myanmar), Central African Republic, the Democratic Republic of the Congo, Ethiopia, Hong Kong, Iraq, Lebanon, Libya, Mali, Nicaragua, Russia, Somalia, South Sudan, Sudan, Ukraine, Venezuela, Yemen, the West Bank, and Zimbabwe.
The SDN List is updated frequently (sometimes, as often as several times a week) and is available on the Internet at https://home.treasury.gov/policy-issues/financial-sanctions/specially-designated-nationals-and-blocked-persons-list-sdn-human-readable-lists.
Persons subject to OFAC sanctions include not only persons named on the SDN List but also entities that are directly or indirectly 50% or more owned in the aggregate by one or more entity on the SDN List. Such entities must be treated as blocked or designated parties. Thus, it is important to know the ownership structure of companies with which transactions are conducted to determine whether the company, though perhaps itself not an SDN, is an SDN by application of OFAC’s 50 Percent Rule. This analysis often includes an understanding of the companies’ owners’ owners. In addition to all persons and entities explicitly named on the SDN List or that are SDNs by application of OFAC’s 50 Percent Rule, blocking requirements apply to the Governments of Cuba, Iran, North Korea and Syria and all Iranian financial institutions.
In addition to being prohibited from engaging in transactions with SDNs, U.S. persons who come into possession or control of any property in which an SDN has any interest, must “block” or “freeze” such property (e.g., by placing blocked funds in a blocked account) and report the blocking to OFAC within 10 business days. This is most often relevant in a banking context but may be a reason why a seller (located anywhere in the world) is unable to be paid for services previously rendered or goods already delivered.
Before entering into any transaction and shipping goods, each Covered Party must conduct applicable screening of parties (including vendors and customers) and, when applicable, their owners against the SDN and other restricted/denied party lists, including the SSI List, to identify any applicable restrictions that may prohibit or restrict the transaction, and must comply with any such restrictions.
No Covered Party may engage in any transactions, or conduct any activities with, any person, entity, vessel, aircraft, or cryptocurrency wallet on the SDN List (or any person who is otherwise blocked), whether directly, or indirectly, and any prospective dealings with persons on, or suspected to be on, the SDN List must be immediately reported to the General Counsel of The Pampered Chef, Ltd.
Ransomware Payments. OFAC issued an advisory regarding the payment of ransom in connection with malware attacks. Persons associated with several types of malware have been added to the SDN List, including persons associated with Triton, Cryptolocker, SamSam, WannaCry 2.0 and Dridex, as well as companies that facilitate financial transactions for ransomware actors, including SUEX.
As discussed above, U.S. persons are prohibited from dealing with persons on the SDN List and entities directly or indirectly 50% or more owned in the aggregate by one or more SDNs. OFAC has stated that applications for licenses allowing ransomware payments to SDNs are subject to a presumption of denial. Covered Parties who face ransomware demands from malicious cyber actors, or who provide insurance or reinsurance covering cyber ransomware demands or payments, must undertake due diligence to ensure that the party demanding a ransom payment is not an SDN or otherwise subject to trade sanctions. Ransomware payments, where Pampered Chef is the victim, should be communicated to the General Counsel of The Pampered Chef, Ltd. and must only be made by the Covered Party advance written approval of the General Counsel of The Pampered Chef, Ltd.
Facilitation. No Covered Party or employee of a Covered Party, wherever located, may facilitate any transaction with any embargoed country, entity, or individual, etc. that is the subject of sanctions, including any SDN, without appropriate license or other authorization having been issued. “Facilitation” is “any unlicensed action by a U.S. person that assists or supports trading activity with [a sanctions target] by any person,” with certain narrow exceptions (e.g., activities of a “purely clerical” nature, or of a “reporting nature that does not further trade or financial transactions”).
Disclosure of Iran-Related Activities. Section 13 of the U.S. Securities Exchange Act of 1934 requires that certain issuers registered with the Securities and Exchange Commission (“SEC”) disclose in their public filings and in separate reports to the SEC if the issuer or any of its affiliates has knowingly engaged in certain specified activities related to Iran and transactions or dealing with certain “blocked persons.” For these issuers, quarterly and annual reports must include disclosure on all of the reportable activities that occurred during the period covered by the report (e.g., for an annual report, during the fiscal year). Disclosure is required regarding the activities of Pampered Chef.
A broad range of activities are reportable, including those relating to Iran’s energy sector, military capabilities, suppression of human rights or involving certain financial transactions; or Iranian SDNs. Reportable activities include, among others:
  • • Certain activities relating to Iran’s petroleum industry, such as providing insurance or reinsurance contributing to Iran’s ability to import refined petroleum products.
  • • Certain activities contributing materially to Iran’s ability to acquire or develop destabilizing numbers and types of advanced conventional weapons or weapons of mass destruction.
  • • Certain activities related to business with the Government of Iran.
  • • Certain activities supporting Iran’s acquisition or use of goods or technologies that are likely to be used to commit human rights abuses against the people of Iran.
If employees of a Covered Entity have reason to believe that any potentially reportable activity has occurred, they must promptly report the matter to the General Counsel of The Pampered Chef, Ltd. (via [email protected]), so that a determination may be made as to whether the activity is of the type required to be disclosed under U.S. law. Because there is no materiality threshold for transactions subject to the disclosure requirement, it is important that the Company be made aware of any and all such activities, even those that may seem minor or incidental.
Ongoing Compliance. As anti-terrorism and foreign policy programs evolve and related rules change, the nature and extent of permitted and prohibited activities could change; for instance, additional countries or persons could become subject to embargoes or sanctions programs, or existing embargoes could be lifted, or sanctions programs relaxed. Also, additional or different requirements may be applicable to Pampered Chef companies that are not U.S. persons or that are doing business outside of the U.S. Covered Parties employees should consult with the appropriate personnel responsible for compliance matters (including, if applicable, their legal counsel) to confirm compliance with applicable requirements before entering into any contractual or business relationship with persons or involving countries implicating potential embargoes or sanctions programs.
IV. OTHER RESTRICTED TRANSACTIONS
Export and Import Compliance. Through various statutes and regulations including, but not limited to, the International Traffic in Arms Regulations (“ITAR”), the EAR, the Importation of Arms, Ammunition and Implements of War regulations and U.S. Customs laws and regulations (collectively “U.S. Import and Export Control Laws”), the U.S. Government controls the import (permanent and temporary) into and the export (temporary and permanent) directly from the U.S., or indirectly from or through a foreign country, of products, software and technology/technical data; and the provision of related defense services to foreign persons/nationals. In addition, the ITAR includes registration requirements for U.S. manufacturers (including processors) and brokers of defense articles subject to the ITAR, even if those companies do not export from the U.S. These regulations also prohibit any unlicensed release of controlled technical information to certain foreign nationals within the U.S., which are “deemed” to be exports.
The agencies responsible for administering the EAR and the ITAR have also published lists of parties with which various export or re-export transactions are restricted or off-limits (referenced above in the Transactions with Certain Blocked Individuals, Entities and Groups section).
Covered Parties must comply fully with U.S. Import and Export Control Laws, as well as applicable local export and import laws.
U.S. Anti-Boycott Laws.U.S. anti-boycott laws prohibit U.S. companies and their “controlled in fact” foreign affiliates, to the extent U.S. commerce is involved, from participating in foreign boycotts that the U.S. does not sanction. Moreover, if a boycott-related request is received, it must be reported to the Commerce Department within 30 days of the end of the calendar quarter in which it was received. Participating in an unsanctioned foreign boycott can also have negative tax consequences.
Although the anti-boycott laws apply to all non-U.S. sanctioned boycotts imposed by foreign countries, the Arab League’s boycott of Israel is the principal foreign economic boycott covered. While the Treasury Department has identified Iraq, Kuwait, Lebanon, Libya, Qatar, Saudi Arabia, Syria and Yemen as boycotting countries, other countries may be sources of boycott requests, as well.
Covered Parties must comply fully with all applicable U.S. anti-boycott laws. No Covered Party or its employees may take any action that, directly or indirectly, supports the boycott of Israel or any other foreign boycott not sanctioned by the U.S. Any Covered Party with concerns as to whether a transaction implicates U.S. anti-boycott rules, or the boycott or anti-boycott laws of any other country, should consult with the appropriate personnel responsible for compliance matters (including, if applicable, their legal counsel) and not proceed with the transaction until advised. Moreover, if employees receive a boycott-related request, they must promptly notify the appropriate personnel responsible for compliance matters (including, if applicable, their legal counsel).
V. RETENTION OF INTERMEDIARY SERVICES
No Covered Party shall engage Intermediaries who will represent the Company in financial transactions or in interactions of any kind with government officials without the prior advance written approval of the General Counsel of The Pampered Chef, Ltd.
Prior to engaging Intermediaries who will represent the Company in financial transactions or in interactions of any kind with government officials, the Covered Party shall conduct appropriate and thorough due diligence documented in writing concerning Intermediaries. Each Covered Party employing the services of such Intermediaries shall develop and maintain documented due diligence procedures appropriate to the risks presented that allow the Covered Party’s compliance personnel to evaluate and consider the business rationale for needing the Intermediary’s assistance as well as the compliance risks posed by the Intermediary partners, including the Intermediary’s and partners’ reputations and relationships, if any, with foreign officials or the family members of foreign officials and any compliance risk “red flags.” Each Covered Party shall engage in monitoring, assessing and managing the compliance risks associated with the use of Intermediaries throughout the lifetime of the relationship, and not just during the onboarding process, by periodically updating the due diligence on Intermediaries.
Due diligence performed on Intermediaries shall include, at a minimum, a documented evaluation of the Intermediary’s owners and management to determine if any are affected by a listing on any U.S. prohibited parties lists, such as the SDN List, as well as whether any qualify as foreign officials under the FCPA, and an evaluation of the Intermediary’s character, qualifications, experience, reputation for integrity and proven ability to provide the service for which it is being retained. Factors against retention of an Intermediary include, but are not limited to, any unusual requests for compensation and any unusual payment, shipment or destination terms as well as the discovery of any facts, circumstances or “red flags” that might suggest that use of the Intermediary might create an increased FCPA, sanctions, or trade compliance risk.