Risks and Compliance
Sinochem International complies with the Measures for the Compliance Management of Central State-Owned Enterprises, being supported by compliance culture, led by the “key minority”, and safeguarded by effective supervision. We continue to improve the company’s compliance management system, safeguard the bottom line of compliance, and control compliance risks.
Sinochem International executed the relevant requirements of Sinochem Holding’s “Year of Strengthening Compliance Management” implementation plan. To this end, we continuously improved the construction of the compliance management system and incorporated compliance requirements into business processes and key stages. We also strengthened the collaborative work among the “three lines of defense”, promoted compliance culture, strengthened employee compliance awareness, and continuously improved the professional capabilities of the compliance team.
In 2022, the company appointed a Chief Compliance Officer, a position held concurrently by the general counsel. The holder of the position is to lead and be responsible for the overall management of legal affairs, the construction of the compliance management system and the construction of a rule of law culture, as well as to coordinate and handle compliance management matters. Also, the company drafted the Administrative Measures for the Chief Compliance Officer to further promote the construction of the chief compliance officer system and specify the qualifications, performance guarantee and supervision of duty and performance for this position.
In 2022, Sinochem International revised the Risk Management Regulations, Internal Control Management Regulations, Operational Risk Event Reporting Management Measures and other systems. We also continued to improve risk management and internal control tasks, and regularly reported to the Audit and Risk Committee of the Board of Directors on risk response, internal control and internal audit-related matters. In 2022, the company had no events with major business risk.
The company discloses the Internal Controls Evaluation Report signed by the Board of Director on a yearly basis and performs both internal and external control audits, covering the company level, business process and information system. The report focuses on the operation effectiveness of the management system in the high-risk areas of compliance such as strategic research, safety and environmental protection, labor human rights, information security, anti-corruption and anti-unfair competition. In recent years, there have been no major weaknesses in the company’s internal control and the company’s overall internal control operations are effective.
Sinochem International abides by the principle of “complying with laws and regulations, paying all that is due, and enjoying all that should be enjoyed”. According to relevant tax laws and regulations as well as the company’s actual situation, the company has formulated the Tax Management Measures, Related Party Transaction Management Measures and various tax management procedures for the strict management of all tax-related tasks under all categories.
The company has established a working mechanism that closely connects tax consulting with tax operations, integrating tax-related tasks throughout the entire process of business operations. We routinized the use of tax management information systems to realize the automatic collection of tax-related data, automatic rule verification of declaration data, statistics of multi-dimensional data indicators and tax risk management. Tax informatization is employed to improve efficiency and the quality of declaration data while reducing tax risks.
The company regularly summarizes its tax operations and tax payment situation, takes stock of tax resources, and reports these matters to the management. Through regular monthly meetings, tax-related experience sharing and other methods, the company publicizes and implements tax law updates to subsidiary companies in a timely manner.
Sinochem International adheres to business ethics and market rules. To this end, it has published the Integrity and Compliance Manual in 2022, standardized the daily behavior of employees, and established sound business ethics management methods and supervision mechanisms. We have also shared guidelines with partners while striving to form ideal business relationships based on principles of fair competition and integrity.
Anti-corruption and Anti-bribery
Sinochem International has formulated the Anti-Corruption Policy and revised the Anti-Corruption System Management Measures, and identified corruption-related risks. We are clearly against the implementation of any form of corruption and dishonesty, including bribery, conflicts of interest, fraud, money laundering, misappropriation, concealment of the truth, and influencing of transactions involving public officials or business partners for the purpose of influencing decision-making.
The company signed the Supplier Honesty and Integrity Commitment Letter with all suppliers to convey its zero-tolerance policy for any form of corruption and dishonesty. We also avoid business dealings with companies and personnel known for or suspected of engaging in corrupt practices.
Sinochem International complies with relevant regulations stipulated in documents such as Sinochem Holdings’ Internal Control Standards and Sinochem Holdings’ Anti-Monopoly Compliance Manual. These documents ensure standardized operations, respect towards competitors and the promotion of a business environment with fair competition, thereby maintaining orderly market competition and preserving the legitimate rights and interests of market players.
Intellectual Property Protection
The company continued to improve its intellectual property management system, and revised the Intellectual Property Management Regulations, Patent Risk Management Measures and other systems in 2022. We incorporated intellectual property management into the full life cycle management of R&D and industrialization projects, specifying the management requirements of key processes and preventing intellectual property risks. We also standardized the processes pertaining to patent rights protection, material investigation and evidence collection, and infringement risk assessment, thereby protecting ourselves and our partners from the violation of intellectual property rights.