PRO-6 Issue Date December 17, 2001 Offering of Business Courtesies Purpose/Summary Offering business courtesies is appropriate in some situations. This procedure provides guidelines on offering business courtesies to commercial business clients and to federal, state, local or foreign government employees. Supersedes August 21, 1998 Applies to All Boeing Maintained by Vice President of Ethics and Business Conduct Authority Reference(s) Policy POL-2, "Ethical Business Conduct" Approved by Gale C. Andrews Vice President, Ethics and Business Conduct Summary of Changes to the Title Page The Issue Date, Supersedes date, Applies to, and Approved by have been changed. Other minor formatting changes have been made. Page 1 of 8
1. Definitions A. A commercial customer is any business client (company or individual) other than a federal, state, local, or foreign government customer. B. A government employee is any individual employed by a federal, state, local, or foreign government entity, including consultants acting on behalf of the entity. C. A federal executive branch employee is any individual employed by any U.S. Government executive branch agency or department, such as DOD (civilian and military), NASA, Commerce, Labor, FAA, and DOT. D. A business courtesy is a present, gift, gratuity, hospitality, or favor for which fair market value is not paid by the recipient. A business courtesy may be a tangible or intangible benefit, including, but not limited to, such items as gifts, meals, drinks, entertainment (including tickets and passes), recreation (including golf course and tennis court fees), door prizes, honoraria, transportation, discounts, promotional items, or use of a donor's time, materials, facilities, or equipment. 2. Requirements It is the policy of The Boeing Company to deal with its suppliers and customers in a fair and impartial manner; business should be won or lost on the merits of Boeing products and services. A business courtesy may never be offered under circumstances that might create the appearance of impropriety or cause embarrassment to Boeing or the recipient. An employee may never use personal funds or resources to do something that cannot be done with Boeing resources. Accounting for business courtesies must be in accordance with approved company procedures and practices. Complex rules and regulations apply to the offering of business courtesies to government employees. For this reason, situations not specifically addressed by this procedure should be addressed on a case-by-case basis in consultation with management and the appropriate business ethics advisor. Boeing business ethics advisors and the Law Department are available to assist in understanding the special requirements applicable to government employees. Guidance on offering business courtesies may also be obtained from the Vice President of Ethics and Business Conduct. This procedure describes the circumstances under which business courtesies may or may not be offered. It does not cover every possible situation involving the offering of a business courtesy. Each situation must be evaluated carefully on the basis of its own facts and circumstances. Page 2 of 8
3. Responsibilities A. Management has the ultimate responsibility for determining whether a business courtesy should be offered. This determination must ensure that a proposed business courtesy is permitted by law and regulation, is consistent with the reasonable customs of the marketplace, and conforms with Boeing policy and practice as determined by an appropriate level of management. In addition, consideration must be given to the circumstances surrounding the offer, the nature of the business courtesy, the appearance such an offer may project, and the value of the business courtesy. If any doubt exists as to the impact an offer of a business courtesy could have on the reputation of the company or of those involved, the business courtesy should not be offered. B. Any employee who offers or approves the offer of a business courtesy must ensure that it is ethical and proper in all respects to offer the business courtesy, that the business courtesy cannot reasonably be interpreted as an attempt to gain an unfair business advantage or otherwise reflect negatively on the reputation of Boeing or the recipient, and that the business courtesy does not violate the company's antikickback policy. (See Boeing Procedure PRO-9, Proper Relationships With Suppliers. ) C. Company funds associated with the offer of a business courtesy must be properly recorded on the company books and records in accordance with Boeing accounting procedures. 1. An approved business expense report must be used to request funds or to request reimbursement for business courtesy expenses. The report must include the recipient's name, title, and organization. Travel expense reports, check requests, or the like may not be used to seek reimbursement for business courtesy expenses. 2. Any employee who approves business courtesy expenses must be familiar with the circumstances under which the business courtesy is offered, have knowledge of and agree with the justification for the expenditure, and be aware of the purposes of the expenditures and business relationships of those who receive the benefit of the business courtesy. D. Entertainment or an exchange of gifts purchased at employee expense under circumstances which make it clear that the entertainment or gift is based solely on a family relationship or personal friendship is not considered a business courtesy and is, therefore, not governed by this procedure. However, when both a business and personal relationship exist, the circumstances should be reviewed by management and the appropriate business ethics advisor. In such cases, all those involved must be sensitive to and avoid any activity or situation that could create an actual or apparent conflict of interest. (See Boeing Procedure PRO-7, Conflict of Interest. ) Page 3 of 8
4. Offering of Business Courtesies to Commercial Customers PROCEDURE PRO-6 Employees may offer business courtesies to commercial customers, provided the following four conditions are met: A. The business courtesy does not violate any law or regulation or known policy of the customer. B. The business courtesy is customary and consistent with the reasonable and ethical business practices of the marketplace in which it is offered. C. Management approval at an appropriate level is obtained. D. The business courtesy is properly reflected on the books and records of The Boeing Company and is reimbursable under applicable Boeing reimbursement policies. 5. Offering of Business Courtesies to Government Employees A. Requirements Applicable to All Government Employees 1. It is against Boeing policy to offer or give a business courtesy to a government employee unless the regulations applicable to that government employee permit acceptance of the business courtesy. 2. Unless expressly authorized in this procedure, a business courtesy may be offered or given to a government employee only if all of the following six conditions are met: a. The business courtesy does not violate any law, regulation, standard of conduct, or policy of the government applicable to its employees. b. The government employee is permitted under applicable regulation, standard of conduct, or policy to accept the business courtesy. c. The business courtesy could not reasonably be interpreted or perceived as an attempt to gain an unfair business advantage. d. The business courtesy could not cause embarrassment to or reflect negatively on the reputation of the company, the recipient, or the government. e. The business courtesy is authorized by Boeing policy, and Boeing management approval at an appropriate level is obtained. Page 4 of 8
f. The business courtesy is properly reflected on the books and records of The Boeing Company and is reimbursable under applicable Boeing reimbursement policies. B. Additional Requirements Applicable to Federal Executive Branch Employees Boeing policy may prohibit the offering of some business courtesies to federal executive branch employees, even though the applicable federal regulations would permit a government employee to accept the business courtesy. Employees should obtain guidance from the appropriate business ethics advisor or the Law Department before offering any business courtesy to a federal executive branch employee, unless the business courtesy is expressly authorized in this section. 1. Coffee and Doughnuts 2. Meals Modest items of food and refreshments, such as coffee and doughnuts, may be offered to federal executive branch employees in connection with business activities, provided such refreshments are not part of a meal. Soft drinks and cookies can replace coffee and doughnuts, but other light refreshments, such as sandwiches, may not be offered to federal executive branch employees. As a general rule, The Boeing Company or an individual employee may not offer or provide a meal to a federal executive branch employee, unless the federal executive branch employee pays the actual cost of the meal. This prohibition applies to all meals, including working lunches on company premises. Arrangements must be made with the federal executive branch employee to pay for the meal either before or at the time the meal is consumed. a. The Vice President of Ethics and Business Conduct may establish limited exceptions to the general prohibition against offering meals to a federal executive branch employee. b. Before offering any meal to a federal executive branch employee at Boeing expense, an employee must contact the appropriate business ethics advisor, the Vice President of Ethics and Business Conduct, or the Law Department to confirm that the proposed meal falls within an established exception to the general policy set forth in section B.2, and that the laws and regulations applicable to the federal employee permit the federal employee to accept a meal paid for by Boeing. 3. Transportation Page 5 of 8
a. As a general rule, The Boeing Company or an employee may not offer or provide transportation to a federal executive branch employee unless the federal executive branch employee pays Boeing the market value of the transportation. b. Certain transportation of federal government employees in a travel status is permitted when several conditions are met and advance approval of the authorized U.S. Government agency ethics official is obtained. Before offering Boeing paid transportation to a federal government employee, an employee should contact the appropriate business ethics advisor or the Law Department. c. A limited exception exists that allows transportation of a federal executive branch employee on official business at Boeing between or among Boeing buildings on a single Boeing site, such as between Boeing buildings at the Everett plant site. Guidance concerning this intraplant exception can be obtained from a business ethics advisor or the Law Department. d. Except as authorized in accordance with section 5.B.3.b, federal executive branch employees may not be transported by Boeing between an airport or a hotel and a Boeing location. 4. Plaques, Certificates, and Trophies Greeting cards and items of little intrinsic value, such as plaques, certificates, and trophies that are intended solely for presentation, may be offered to federal executive branch employees. Boeing airplane or other product models or custom-made plaques do not fall within this category because such items have an intrinsic value, even if made into a trophy or an award. 5. Boeing Promotional or Advertising Items Boeing advertising or promotional items may be offered to a federal executive branch employee on an infrequent basis if the item has a retail value of less than $10. Such items may include a coffee mug, pen, pencil, photograph, or similar item that features a Boeing logo. 6. Boeing Product Models Boeing product models may be offered to federal executive branch agency organizations only if one of the following conditions is met: a. The model is provided to a federal executive branch agency organization or office, specifically at the request of the federal executive branch agency, and with the advance Page 6 of 8
approval of a Boeing vice president and the appropriate business ethics advisor. b. The model is provided to a federal executive branch agency under a contract between the federal executive branch agency and Boeing. c. The recipient of the model pays Boeing the retail cost of the item. 7. Rollout Ceremonies, Widely Attended Gatherings, and Meals in Foreign Areas Special and specific rules apply to these situations. Before federal executive branch employees are invited to these events, the employee should seek guidance from the appropriate business ethics advisor or the Law Department. C. Additional Requirements Applicable to Legislative Branch Federal Government Employees 1. All business courtesies to members of the U.S. Congress or their staffs or employees must be approved in advance by the vice president of Legislative Affairs. The laws and regulations concerning the offer of business courtesies to legislative branch federal government employees are complex and vary between the U.S. Senate and U.S. House of Representatives. It is, therefore, imperative for employees to know and understand the rules applicable to the individuals with whom they intend to interface. 2. All business contact with members of the U.S. Congress or their staffs must be coordinated with and approved in advance by the Boeing Washington, D.C., office. Employees in this office are available to provide guidance on all matters relating to the offer of business courtesies to legislative branch federal government employees. D. Additional Requirements Applicable to State and Local Government Employees 1. The laws and regulations concerning the offer of business courtesies to state and local government employees and elected and appointed officials, vary greatly from state to state and locality to locality. It is, therefore, imperative for employees to know and understand the rules applicable to the individuals with whom they intend to interface. 2. All business courtesies to state or local government employees, or elected or appointed officials, must be approved in advance by the appropriate Government Relations manager. Page 7 of 8
3. In addition, all business contact with members of a state legislature or their staffs must be coordinated with and approved in advance by Boeing Government and Community Relations. (See Boeing Procedure SC-ACG-300, Employee Involvement in Political Activities. ) E. Additional Requirements Applicable to Foreign Government Employees, Officials, and Representatives 1. The U.S. Foreign Corrupt Practices Act makes it illegal for a U.S. citizen or company to corruptly offer or give directly or indirectly to a foreign government official anything of value in return for that official's action or nonaction resulting in the U.S. citizen's or company's obtaining or retaining business. The fact that a foreign official requested an item of value does not justify such practice under the act. All employees must strictly adhere to the requirements of the act. 2. Before offering a business courtesy to a foreign government employee, official, or representative, guidance should be obtained from operating group procedures on the topic of offering entertainment, travel, gifts, or other business courtesies to foreign government officials or foreign customer representatives or from the appropriate business ethics advisor or the Law Department. 6. Additional Guidance Business ethics advisors are available to assist in properly resolving issues concerning business courtesies. Guidance on business courtesies may also be obtained from the Vice President of Ethics and Business Conduct and the Law Department. Page 8 of 8