Contracting Authority Code of Conduct Common Procurement Standards and Guidelines for the Rail Baltica Project April, 2017 RB Rail AS, www.railbaltica.org

Contracting Authority Code of Conduct We, the implementers of the Rail Baltica project, are committed to engaging with our stakeholders with fairness and transparency, and to uphold the importance of maintaining a positive reputation - dealing professionally with issues as they arise, ensuring we make the right choices and incorporating integrity in all aspects of our business.   We are fair. We have an inclusive culture and equal opportunities without discrimination. This includes: all employees and workers; trade contractors and their employees; our suppliers; our clients and their representatives; people in the communities and localities in which we operate; and anyone else with whom we make contact. We are transparent. We believe in the benefits of competition, and we encourage fair and ethical competition among our contractors, sub-contractors and suppliers. We strongly believe that fair and transparent payment is essential in helping us successfully execute this project. We absolutely do not tolerate any form of bribery, fraud, misappropriation or evading payment of taxes.

Introduction Scope of Application Structure of procurement activities The Common Standards and Guidelines for the Rail Baltica Project (Guidelines) give every member of the team a joint vision of our key principles. There are many players involved, many parties to unite. Setting procurement standard practices will ensure quality results from every player. Risk mitigation is key; mitigating risks such as inappropriate tender awards to contractors, conflict of interest or other missteps from fairness and transparency. Common Standards and Guidelines for procurement should guarantee the best results possible in the implementation of Rail Baltica. Understanding our Guidelines is everyone’s responsibility to ensure we have trust, fairness and transparency throughout the Rail Baltica project. These rules are enforced along with all national public procurement rules, and apply to every employee and procurement commission, as well as the Beneficiaries and Implementing Bodies of the Rail Baltica project. Each of us must comply with the laws, rules and regulations applicable in our jurisdiction, in addition to following company policy. Thus, always ask yourself: “Am I acting in a fair and transparent way?” If you’re not sure, check your guidance materials or contact your supervisor. Scope of Application This document establishes the main procurement standards and guidelines according to which Rail Baltica public procurement procedures are organized and carried out. It is a mandatory standard for all individuals and entities involved in the project: Beneficiaries, Implementing Bodies, suppliers and sub-suppliers. The project’s key principles lead to a common approach, and are to be followed together with all applicable laws and regulations. These standards and guidelines are public and freely available. Structure of procurement activities Rail Baltica’s project procurement is based on 3 key approaches: RB Rail AS Procurement: RB Rail AS procures in its own name, communicates directly with the supplier and takes sole responsibility Consolidated Procurement: RB Rail AS organizes public procurement procedures on behalf of Beneficiaries or National Implementing Bodies, communicates directly with the supplier and takes sole responsibility Supervised National Procurement: RB Rail AS fulfills a supervisory role; Beneficiaries or National Implementing Bodies procure on their own behalf, create direct relationship with suppliers and take sole responsibility.

Principles of procurement activities 1. Legality All procurement procedures must be compliant with European Union requirements, national and international laws and regulations not only about procurement, but also employment, health and safety, environment, taxation, etc. Meeting these requirements, as well as best market practices, will allow us to award procurement contracts to the best suppliers. In the cases that are an exception to this rule for Beneficiaries and Implementing Bodies, and procurements are valued at EUR 40,000us it is necessary to form a procurement commission of 3 people with relevant expertise and no conflict of interest to determine justified and objective requirements that do not cause unjustified restrictions for competition, and sets criteria to determine the most economically advantageous tender. Notice of the planned contract is published on the website of the Beneficiary or Implementing Body for an open call, minimum 10 business days before the deadline. The procurement commission then chooses one or more tenderers based on the published requirements, including reasons for rejecting other candidates and tenderers, the contract prices of all tenderers and the comparative advantage of the chosen tenderer. The reasons to be excluded from a tender include, and apply to all members of the group of people applying as a candidate or tenderer: Bribery, fraud, money laundering, evading payment of taxes, terrorism, by any member of the Management Board or Supervisory Board of a candidate or tenderer, or a person having the right to represent the candidate or tenderer in activities related to a subsidiary; Illegal employment; Infringement of competition rights, or horizontal cartel agreement; Insolvency, suspended economic activity, bankruptcy; Tax debts, including debt of State social insurance contributions.

3. Social and environmentally sustainable procurement 2. Best value for money We must demonstrate efficient, effective and responsible use of resources. For the implementation of this project we will use the most economically advantageous tender, which does not always mean lowest price, but best value for money considering qualitative criteria. Suppliers and sub-contractors are evaluated beyond the basis of economic criteria. The most economically advantageous tender is sustainable, adds the most value, and complies with social and environmental protection criteria. Price will only be an award criterion in the case when technical specifications are clear and other criteria are of no significance. 3. Social and environmentally sustainable procurement We are committed to the environment as we work to complete this project in a way that is environmentally friendly and socially responsible, and this will be considered during awarding tenders, contract performance conditions and exclusion.   4. Free competition We believe in the benefits of competition, and we encourage fair, equal, and ethical competition among our contractors, sub-contractors and suppliers. Calls for tenders will make no preference to brand or trademarks, and there will be no discrimination by nationality or country of origin between international suppliers. However, preference may be given to tenderers with specific local knowledge and experience when necessary.   5. Transparency The best way to achieve desirable results is to work together and this means having access to the same information, and publishing the same information in each State. Beneficiaries and Implementing Bodies will ensure that information about every procurement within the Rail Baltica project is publicized and shared with colleagues and partners on a shared platform, in the local language.

6. Absence of conflicts of interest This means that information is available at least in English and in the language of the State where services, works, or goods will be provided or delivered. Rail Baltica’s annual procurement plan will be published and made publicly available no later than one month after its approval, though it is subject to change. Also, tender requirements for each tender regulation will be published and openly available. 6. Absence of conflicts of interest Conflict of interest can occur when employee’s personal interests are different from company interests, and this can interfere with his ability to make the best decision for the company. Anyone who has gained undue competitive advantage must be excluded from the procurement process. Beneficiaries and Implementing Bodies will take all necessary action to ensure impartial and objective conduct during procurement, specifically focusing on economic interest, political or national affinity, family or emotional ties, or conflicting shared interest.   The authority will exclude from a procurement commission anyone who has or has had in the past 24 months, or is a close relative of someone who has economic ties to a candidate, tenderer or sub-contractor. The authority will exclude from a procurement commission anyone who has direct or indirect financial, economic or other interest that may compromise their impartiality. The authority will not procure goods, works or services from a supplier who has an economic, financial or family conflict of interest unless that supplier has legal exclusive rights, or the contract is related to immovable property, or it is a public contract between entities within the public sector, contracting authorities or a joint venture. The authority will exclude any supplier who has gained undue competitive advantage by prior involvement in preliminary market consultations or in the preparation of the procurement procedure together with a Beneficiary or Implementing Body. Beneficiaries and Implementing Bodies will not accept any gift or offer of hospitality; no invitations to sporting or cultural events, offer of holidays or recreational trips, transportation or invitations to meals at the cost of the supplier. Each member of the procurement commission and any invited expert will sign a declaration on the absence of conflict of interest twice: first when accepting responsibilities related to procurement and when all tenderers become known. Each person involved in a procurement procedure is obligated to declare a conflict of interest, should it arise. Beneficiaries and Implementing Bodies will terminate any procurement procedure upon learning of conflict of interest, illegal activity, corruption or doubts about objectivity of the tender documentation.

Monitoring and enforcement 7. Use of experts We will use experts as needed. It is possible to conduct market consultations, keeping a record of the interaction with the economic operator, which will also be made public. We will keep an archive of who has been contacted and the information exchange between potential suppliers, and all aspects of the procurement procedure. Proper documentation will ensure traceability throughout the procurement process and conformity with legislation and principles, which is a necessary part of achieving transparency. The best way to avoid conflict of interest is to not get in a compromising position. For example, do not work with family members or current or former employers or companies where you had ownership, for example. Of course, there are exceptions, but if in doubt it is best to err on the side of caution. . Monitoring and enforcement If any illegal activity will be noticed (bribery, corruption, cartels), the implementing bodies of the Rail Baltica project will notify the authorities without hesitation, and cooperate with them to resolve the situation and protect Rail Baltica project investments. Any person, who wishes to share information about suspicions of illegal activity, even if it proves to be unfounded, should do so immediately, and they will remain anonymous. The implementers of the Rail Baltica project will adhere to all applicable laws and regulations, internal policies and procedures, and international agreements. RB Rail is the central coordinator of the CEF financing flow and the mediator between INEA and Beneficiaries. As the coordinator, it is responsible for information exchange, dispersing INEA payments to Beneficiaries and monitoring interim and pre-financing payments. RB Rail has the right to withhold financing payments in the case of ineligible costs. RB Rail prepares and submits the Action Status Report to INEA containing the proposals from the Beneficiaries. Suppliers can expect to have audits and visits as part of consistent monitoring and enforcement, and are expected to be completely cooperative. RB Rail reserves the right to perform audits at any time.

Contracting Authority Code of Conduct RB RAIL AS www.railbaltica.org © RB RAIL AS