Competition Law Policy

1. Background and purpose

Competition laws intend to promote and preserve competition in the market as the basis of a well- functioning market economy.

This policy outlines Sandvik’s commitment to complying with all applicable competition laws. It serves as a guide for both employees and management to understand their obligations and the procedures established to drive compliance with applicable competition law to minimize the risk of a breach.

The focus of competition law is to prevent anti-competitive agreements, prohibit the abuse of a dominant market position and regulatory matters in keeping control of mergers and acquisitions with the general focus of promoting consumer welfare.

2. Definitions

2.1 Employees

The term “Employee” means a person who is hired to provide services to a company on a regular basis in exchange for compensation and who does not provide these services as an external party. This includes full-time and part-time employees as well as interns and trainees.

2.2 Relevant employees

The term “Relevant Employee” refers to a person working for Sandvik Group companies more than 3 months and are not on long-term-(sick) leave as per classification in the HR-Management System (Workday) or equivalent system for those Sandvik Group companies which are not on Workday and for whom knowledge of competition law is relevant due to the role they perform in Sandvik.

Knowledge of competition law is relevant for all Relevant Employees that:

Are senior executives and managers,
have contact with competitors, customers, distributors, dealers, agents, or suppliers,
attend trade association meetings or trade fairs;
work in sales, business development, pricing, strategy or business intelligence roles; or
work with Sandvik products or services in markets where Sandvik has a significant market share.

3. Scope

This policy sets the rules for Sandvik employee’s responsibilities related to compliance with the primary common competition rules across the world in Sandvik’s countries of operation. However, the relevant national law where Sandvik operates shall prevail over this policy in the event the national law conflicts with this policy and sets a higher standard. In case this policy provides a higher standard for Competition compliance than the national law, then this policy’s provisions shall prevail.

The applicable Global Competition Law Guidelines, process documents, templates and other supporting documents provide more detailed requirements, rules, and guidance for compliance with this Policy and competition law.

4. Audience

This policy applies to the following entities within the Sandvik Group:

All entities

Furthermore, this policy also applies to all Sandvik employees, anyone working for or on behalf of Sandvik and employees of Sandvik controlled joint ventures.

5. Policy statement

In accordance with Sandvik’s Code of Conduct, the entire Sandvik Group is committed to comply with applicable competition laws and regulations in the countries where it is active.

This means:

Sandvik does not restrain competition with competitors through agreements, arrangements or understandings that could restrict competition;
Sandvik is aware of rules relating to holding a dominant position and will, when relevant, act according to such rules;
Sandvik bids for contracts, tenders or other opportunities independently and without any agreement or arrangement with any of our competitors;
Sandvik will not exchange competitively sensitive information or engage in discussions that may lead to the co-ordination of anti-competitive behaviour and, in particular, will not share information about current or future pricing, intentions for tenders, or any element that might affect prices or pricing practices; and
All mandatory competition law trainings are undertaken by Relevant Employees and the appropriate pass rates achieved.
At a minimum, employees must seek legal advice from BA Legal and Compliance or Group Legal and Compliance in the following situations:
When planning to enter into an arrangement with a competitor (except for simple, one-off sales or purchasing agreements where the interaction is kept strictly limited to the transaction at hand);
When considering joining a trade association (a trade association is an organization founded and funded by entities in a particular industry that promotes industry interests and other activities such as conferences and education);
When planning to enter into an arrangement with a distributor, agent or reseller with:
- a duration of more than five years,
- resale restrictions on the distributor, agent or reseller, or
- exclusivity provisions;
In markets in which Sandvik has a market share above 30% (or above 20% in Brazil) and wants to:
- Implement new discounts or rebates structures, or
- Enter into arrangements which include exclusivity obligations, customer purchase requirements, pricing below costs, most favoured nation clauses or other clauses that could restrict competition or amount to an abuse of dominance.

Furthermore, ensure that records are kept of meetings with competitors. Records of such meetings should include names of the participants, the purpose of the meeting and a detailed description of the issues discussed in the meeting. For further information consult the Global Competition Law Guidelines.

When engaging in a merger or acquisition process, all Employees must always:

Be careful not to share competitively sensitive information, especially during the pre-closing phase.
Designate a clean team when needed.
Be aware of applicable competition law (and regulatory requirements) throughout the process.

Breach of competition law can have severe financial and reputational consequences for Sandvik. Employees, who are involved and implicated in the breach, risk imprisonment, personal fines, prohibitions on serving as a director and disciplinary actions, up to and including termination of employment.

All Sandvik companies and all Employees worldwide must observe and adhere to this policy. Any breaches based on claims of ignorance, good intentions, or failure to seek timely legal advice will not be regarded as an excuse.

The Relevant Employee is responsible for ensuring that he or she is familiar with the fundamental principles of competition law and can identify situations where competition law issues may arise.

All Relevant Employees must participate in a competition law training session or complete a relevant e-learning as part of their introduction and afterwards at least every three years to maintain a sufficient level of knowledge.

All Employees are always able to seek advice from the Legal and Compliance function when they have any questions or concerns relating to competition law.

All Employees must comply with the Competition Law Guidelines and other supporting documents, specifically setting the standards for Sandvik to comply with this policy.

5.1. Compliance Program

Sandvik has established a Competition Law Compliance Program to ensure compliance with the key elements and principles of competition law outlined in this policy and related documents. The program contains the following core elements:

TONE FROM THE TOP AND THE CODE OF CONDUCT: All leaders are expected to create a culture of compliance and support their teams in doing the right thing in line with the Code of Conduct.
RISK ASSESSMENT: Risk identification and assessment memorialized, reported internally to appropriate stakeholders, and used to proportionally tailor program upgrades and enhancements.
POLICIES, PROCEDURES AND CONTROLS: Policies, procedures, and guidelines, and record keeping, advisory, and support.
TRAINING AND COMMUNICATION: Training, based on the minimum requirements for trainings as set out in the Training Procedure, shall be conducted and completed for all Relevant Employees. Periodic and consistent communication as well as leadership communication on the importance of compliance through meetings, periodic reports, newsletters, employee gatherings, and intranet
TECHNICAL ADVICE AND IMPLEMENTATION: The responsibility for implementing this policy into the business, lies with Sandvik’s individual business areas. Technical advice is available to the business through each individual business area’s legal and compliance as well as Group legal and compliance wherever necessary.
MONITORING AND ASSURANCE: day-to-day monitoring in the form of spot checks performed by the Business Area Compliance teams and proactive follow-up of identified issues. the formal Internal Audit program as determined by the Group Head of Internal Audit from time to time; and any external audits carried out by Sandvik AB’s appointed external auditors.
BREACH REPORTING AND REMEDIATION: It is expected that all breaches of this policy are reported to the relevant Business Area Compliance Officer and Business Area General Counsel or through the Speak Up system.
REWARD AND DISCIPLINE: any methods by which employees are rewarded for behaving in line with the Sandvik Code of Conduct and this policy, and or any methods by which employees are disciplined (up to and including dismissal) for behaviour which does not meet the standards required by this policy.

6. Exceptions

There are no exceptions to this policy.

7. Roles and responsibilities

At Sandvik all individuals are responsible for complying with competition law. To enable the Relevant employees to comply with this Policy and related documents, specific responsibilities lay with certain groups within Sandvik.

7.1 Group Compliance

Group Compliance as part of Group Legal shall be responsible for:

Ensuring/Maintaining a proportionate Competition Law Program within Sandvik;
Ensuring that this policy and related documents are communicated and kept up-to-date;
Ensures that this Competition Law Policy is specifically communicated to BA General Counsels and BA Compliance officers.
Preparing relevant Group common procedures, work instructions, guidelines, templates and training materials;
Coordinates a Competition Law network to communicate, monitor, find synergies and share information about best practices.
Providing tools, subject matter advice and support to the Group and Business Areas (“BAs") to support their implementation;
Implementing and overseeing, in collaboration with the BAs, Group common systems and internal processes necessary to implement this policy;
Provides requirements and content for the self-assessment tool Compliance House within the customs and export control areas.
Provides professional advice as an industry representative to relevant and appropriate agencies of state in respect of the drafting and legislation of trade compliance laws and regulations and their implementation.
Monitoring of implementation this policy and related Group Procedures, by Group and BAs, and reporting through the Group Head of Compliance on adherence to the Group Executive Management and the Audit Committee.

7.2 Business Areas shall be responsible for:

Implementing this policy and the supporting documents throughout their respective organizations;
Communicating this policy to BA Management and to Relevant Employees in the BA and divisions;
Ensuring that the BA and divisions follow the Group common processes and systems to facilitate Group wide compliance with this policy;
Implementing localized procedures and work instructions as required to meet the requirements of this policy and the supporting documents with the support of the subject matter experts;
Ensuring that an unannounced inspection (dawn raid) guideline is in place and implemented at all relevant commercial sites or office locations globally;
Informing Group Head of Competition Law of any planned merger filings as soon as the filings are expected to take place, to ensure such filings are properly coordinated within the Group;
Encouraging employees to seek timely legal advice whenever they are considering an arrangement that gives any doubt as to whether it would achieve business objectives in a legitimate way;
Reporting any known or suspected breaches of competition law to the BA Compliance Officer, BA General Counsel, the VP, Head of Group Compliance, and Group Head of Competition Law;
Investigating alleged or suspected breaches of this policy or competition law under the oversight of the BA General Counsel and taking required remedial actions;
Reports Competition compliance risks, policy implementation status, and maturity on an entity level using the Sandvik Compliance House tool. It provides an action plan to mitigate risks, and progress is visually reflected in Red, Amber, or Green.
Monitoring the implementation of this Policy and related procedures throughout the BA and divisions and regularly report on the status of implementation to the Group Head of Competition Law;
Demonstrating leadership and setting the tone that Sandvik does not tolerate anti- competitive behaviour and will exercise consequential remediation in the event of a breach.

7.3 Relevant Employees shall be responsible for:

Understanding how this Policy relates to their daily work and complying with it.
Adhere to the Competition law requirements described in the Sandvik Code of Conduct;
Completing the mandatory e-learning on competition law as outlined in the Training Procedure;
Speaking up (according to the Speak Up Policy) and reporting any concerns of irregularities and or improper actions not complying with competition law, this policy, and the supporting documents.

8. Monitoring of compliance

Compliance with this policy will be monitored through:

The Compliance House;
Internal control;
Annual target setting and follow-up in the Compliance Functional Council; and
Internal Audit

Compliance status will be reported to the Audit Committee every quarter.

9. References to associated policies and procedures

Competition Law intranet site
Global Competition Law Guideline
Unannounced inspection (Dawn Raid) Manual
Speak Up Policy
Training Procedure