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Compliance

Activities Promoting Compliance

The Risk Management & Compliance Committee, directly reporting to the Board of Directors and headed by the President, supervises compliance matters globally for the entire Fujitsu Group, in accordance with our Basic Policy on Establishment of Internal Control System. The Risk Management & Compliance Committee is responsible for and has appointed a Chief Risk Management & Compliance Officer (CRCO) who executes the committee’s decisions concerning compliance and also works to raise awareness of and compliance with our Fujitsu Way Code of Conduct throughout the Group by establishing the Global Compliance Program and coordinate with the Region Risk Management & Compliance Committee set up in each region as a lower committee.

The Risk Management & Compliance Committee and the Region Risk Management & Compliance Committees monitor the implementation status of the Global Compliance Program on a periodical basis and report to the Board of Directors.

The Fujitsu Way Code of Conduct

The Fujitsu Way includes the following Code of Conduct, with which all Fujitsu Group employees must comply:

Fujitsu Way Code of Conduct

Fujitsu has also rolled out our Global Business Standards (GBS), which provides further guidance on how to apply the Fujitsu Way Code of Conduct and to ensure compliance with laws and regulations. The GBS is available in 20 languages to be applied uniformly across the Fujitsu Group.

Fujitsu Way Code of Conduct Global Business Standards

Initiatives by Top Management

Through messages from top management to employees as well as other regular communication regarding our commitment to compliance, Fujitsu is working to promote our Code of Conduct and GBS across the Fujitsu Group.

In FY2016, Fujitsu’s President sent repeated messages to all employees in Japan after the competition matter in connection with the sale of communication equipment to electric power companies, declaring again our determination to break away from compliance breach, including bid rigging and cartel. Other executives in the executives in the management also worked to embed a culture of compliance by visiting sales offices in Japan and explaining the importance of compliance to employees directly.

In overseas Group companies, the region heads and the top management are continuously sending messages to their employees, explaining our corporate culture of “Zero Tolerance”. For example, on December 9, 2016, four overseas regions coordinated messaging declaring Fujitsu’s support of the United Nation’s “International Anti-corruption Day”.

Promoting the Global Compliance Program

In order to promote and implement the Fujitsu Way Code of Conduct and GBS, Fujitsu has established the Global Compliance Program (GCP) and is working to maintain, review and improve its global structure for legal compliance across the Fujitsu Group.

The GCP systematically organizes our existing activities concerning compliance into five pillars, clarifies items that Fujitsu should continuously work on, and seeks to promote external understanding of our compliance structure and activities.

Various measures and approaches are taken in each region based on the GCP, as well as local laws and government guidelines.

Fujitsu Global Compliance Program

Global Compliance Program

1. Establishment of Rules and Procedures

The Fujitsu Group has established and implemented various internal rules to align globally with the GBS.

In Japan, to enforce compliance and enact sustainable improvement in our corporate value, we established the Compliance Policy with the approval of the Risk Management & Compliance Committee, and have applied the rule throughout domestic group companies. We established more specific and detailed regulations and guidelines based on the Compliance Policy in the areas with significant impact on business: antitrust, anticorruption and anti-social forces.

In our overseas entities, with the approval of the Risk Management & Compliance Committee, we have been establishing basic internal rules that are the minimum requirements to be globally implemented within each entity. These rules are organized in the form of global guidelines, which are in turn adopted by our overseas Group companies, allowing them to take into account the applicable laws, culture, and customs of each country. We issued the General Compliance Guideline, corresponding to the Compliance Policy in Japan above, for overseas Group companies, along with a global guideline on competition law, and other guidelines concerning the prevention of bribery, covering matters including the proper procedures for giving gifts and entertainment to government officials, due diligence on third party suppliers, and facilitation payments. In addition, we have developed an online third party due diligence process that is being used by major overseas Group companies in Europe, Asia, Oceania, and North America.

2. Top-level Commitment and Securing of Resources

As noted above, Fujitsu is working to promote and implement the Fujitsu Way Code of Conduct and GBS across the Fujitsu Group through messages from top management to employees and other regular communication of our commitment to compliance.

We have also assigned compliance officers to each region, Japan, EMEIA, Asia, Americas, and Oceania, and have formed a global network with local risk and compliance representatives, in order to secure a structure to execute our GCP.

The compliance representatives from overseas Group companies meet annually at the Global Compliance Forum to share and discuss headquarter’s policies concerning the execution of GCP, as well as share their experiences in risk management and compliance. Also, the risk and compliance representatives in Fujitsu and domestic Group companies meet annually at the Risk and Compliance Seminar to share updates and knowhow related to risk management and compliance.

3. Training and Communication

e-Learning: “Compliance of Fujitsu Group”e-Learning: “Compliance of Fujitsu Group”

To embed and implement the Fujitsu Way and GBS, Fujitsu Group conducts various compliance training and awareness raising activities for executives and employees. The Fujitsu Group has been printing the Code of Conduct of the Fujitsu Way on wallet-size cards and has been distributing these to Group employees. These cards are designed to serve as a quick reference of the Code of Conduct for employees when they are uncertain about a decision in the course of daily operations in dealing with customers and/or business partners.

Fujitsu and domestic Group companies conduct compliance training for executives every year, which is provided by outside lawyers as well as Fujitsu’s legal and compliance function. For new managers, we also regularly hold in-house training where a Fujitsu instructor explains the importance of the Code of Conduct and compliance, while also providing case studies of typical scenarios and situations.

In FY2016, Fujitsu and domestic Group companies provided an e-learning course called "Compliance of Fujitsu Group: Cartels/Bribes" for the employees (Target completion rate is 100 %. Completion rate of Fujitsu is 97% as of March 2017, and the domestic Group companies are still conducting the training.). Aimed to increase the effectiveness of the training by completely renewing the contents from the previous versions to include documentary drama that introduces Fujitsu’s antitrust case referenced above. We also conducted a series of face-to-face training for over 3,700 employees of public sector business and other sales divisions.

For overseas Group companies, we also conduct compliance training based on the laws, custom and realities of business in each country and region. In FY2016, we provided e-learning courses on anti-trust/anti-competition and on the GBS. These courses were provided in 20 languages to 51 overseas Group companies. We also conduct face-to-face trainings for high-risk departments and entities. For example, we conducted anti-bribery training in South Korea following the enactment of a significant anti-bribery law in September 2016.

Going forward, we will continue to engage in these activities and conduct face-to-face training focused on prevention of cartel and bribery.

4. Incident Reporting and Response

(1) Whistleblowing Hotline

Fujitsu Group has been operating the Compliance Line/Fujitsu Alert for both internal and external reports. The Compliance Line/Fujitsu Alert handles reports and provides consultations for all employees in the Fujitsu Group (including retired, seconded, contracted, part-time or other short-term employees as well as temporary staff). Both domestic Group companies and overseas Group companies have established are operating internal reporting system. These reporting lines are made known to the employees via websites, posters and wallet-size cards with contact information. Reports are accepted in 20 languages, at any time, on any day.

Moreover, we opened a Compliance Line for Suppliers in Japan to handle reports and inquiries from the employees of companies that directly supply Fujitsu and domestic Group companies with their products, services or software, etc.

Our Compliance Line/ Fujitsu Alert and Compliance Line for Suppliers system forbids any and all retaliation against any individual or supplier who makes the report, and meticulous care is taken in handling the information so as to preserve their anonymity. If the issue raised is substantiated, the relevant practice is corrected and measures are taken to prevent recurrence.

Whistleblowing Hotline in Japan

(2) Report to the Risk Management & Compliance Committee

Our Risk Management Rule stipulates that the executive or the employee who recognizes a compliance violation or signs of violation must immediately report to compliance team, who will then report to the Risk Management & Compliance Committee and the Board of Directors if necessary, following the reporting structure set by the Head of Business Unit.

The status of key compliance issues is reported regularly to the Risk Management & Compliance Committee and the Board of Directors.

5. Monitoring and Assessment

Through activities such as risk assessments and audits, we periodically check the efficacy of the GCP and work to continually improve it.

Last fiscal year, Fujitsu started the review of audit plan in order to confirm observance of the Antimonopoly ACT, and we will continue to implement as a more effective audit program by incorporating opinions from the external experts going forward.

For overseas, Fujitsu headquarters’ compliance team conducts risk assessments by visiting Group companies in countries and regions with a high risk of corruption, and through the interviews with executives and employees, as well as checks on internal policies and processes, the compliance team analyzes the potential compliance risks in local business and provides proposals and supports to mitigate these risks.

The outcome of all risk assessments and the status of the GCP implementation are reported regularly to the Risk Management & Compliance Committee, the Region Risk Management & Compliance Committees and the Board of Directors.

Response to Compliance Matters

In July 2016, Fujitsu Limited was found to have violated the Antimonopoly ACT concerning order coordination for equipment for electric power security communication for Tokyo Electric Power Co., Ltd.(TEPCO) and Fujitsu received an cease and desist order and a surcharge payment order. Subsequently, in February 2017, Fujitsu was found to have violated the Antimonopoly Act concerning transactions of hybrid optical communication equipment and transmission-path equipment for Chubu Electric Power Co., Inc.

Fujitsu’s sales personnel in charge of Chubu Electric Power had already stopped engaging in order adjustment with other companies before the TEPCO case was detected. Following the detection of TEPCO case, Fujitsu swiftly conducted an internal investigation based on the resolution by the Board of Directors and found that similar order adjustment had been conducted with Chubu Eletric Power. Subsequently, having received approval by the Board of Directors, Fujitsu swiftly applied for immunity from or reduction of surcharge and received the above finding in February 2017.

Because of the timely application for immunity from or reduction of surcharge, Fujitsu was fully exempted from payment of the surcharge and was also not subject to a cease and desist order. Fujitsu deeply apologize for all the concerns that we have caused by letting this regretful incident occur.

Fujitsu has taken disciplinary action against the employees who took part in the violation, and given salary reduction to 7 executives including the Chairman and the President based on the resolution of the Board of Directors (10-30% of the monthly salary was reduced for 3 months).

Immediately following the detection of TEPCO case, the President swiftly declared that all bid rigging and cartel behavior will not be tolerated, and has sent repeated messages to all executives and employees. The executives in charge of business has also reminded employees of the intention to compliant. Additionally, Fujitsu has conducted compliance training as mentioned above to all executives, employees, and the entire Group.

Furthermore, in Japan, Fujitsu has established a domestic compliance program based on the Japan Fair Trade Commission’s “Compliance Program for Companies to Comply with The Antimonopoly Act”, in order to secure effectiveness of the GCP. Based on this program, Fujitsu consider “training”, “audit” and ”emergency response” as focused measures, and is working on creating an environment that fosters “zero tolerance” for bid rigging.

Going forward, Fujitsu will continue to strengthen the compliance activities based on this program and strive to prevent reoccurrence in order to win back the trust quickly.

Initiatives for Security Export Controls

For the purpose of maintaining global peace and security, the export of goods and the transfer of technology that could be utilized for the development or production of weapons of mass destruction, conventional weapons, etc. are strictly controlled under an international framework for security export controls (“International Export Control Regimes”). Japan is also implementing security export controls consistent with the same framework under the “Foreign Exchange and Foreign Trade Act”.

Following the stipulation to "comply with all laws and regulations" in the Fujitsu Way Code of Conduct, we are thoroughly working to implement our Security Export Control policy in line with not only Japan's “Foreign Exchange and Foreign Trade Act”, but also the U.S.'s extraterritorial “Export Administration Regulations” (EAR).

Fujitsu has established a system by which our President is the designated Chief Export Control Officer for the company and the “Security Export Control Office” in the “Legal, Compliance and Intellectual Property Unit” is the designated organization in charge. Product classification and transaction screening (of end use and end users) is performed by this office for all export of goods and overseas transfer of technology, so that the export of goods or transfer of technology will not happen without export licenses required by governments. Furthermore, the above Security Export Control policy requires us to issue a prompt report in the event of a legal violation. In terms of business execution, we strive for strict management to prevent any acts that could lead to non-compliance with export control laws, keeping close touch with the Ministry of Economy, Trade and Industry as the competent authorities for security export control in Japan. In order to maintain an appropriate level of export controls, we conduct annual export control audits and provide export controls training for executives and employees. In FY2016, we conducted regular internal audits of 30 in-house departments, assessed the appropriateness of internal operations, and provided guidance for making improvements.

Fujitsu also offers guidance to Group companies inside and outside Japan for developing frameworks for security export controls and tailoring in-house rules, provides in-house export control training and audits, and annually organizes the gathering of Group companies to exchange mutually beneficial information. In FY2016, we offered an e-learning course to all employees of the Group’s 64 companies in Japan, and a total of approximately 44,000 employees took the course. The Security Export Control Office also visited 7 Group companies in East Asia and Southeast Asia for the purpose of audits, training, and strengthening of frameworks for security export controls. Since FY2013, the Office has also been developing an e-learning training course covering security export controls in 20 languages for Group companies located across the globe.