IX. THE FOREIGN CORRUPT PRACTICES ACT ("FCPA")

The Foreign Corrupt Practices Act makes it unlawful for U.S. companies operating in the United States or abroad and their employees to make direct or indirect payments to foreign government officials or political parties or candidates for the purpose of obtaining or retaining business or securing any improper advantage.

It is illegal to offer, pay, promise or authorize the payment of money or anything of value to: (1) foreign government officials; (2) foreign political parties, party officials or political candidates; or (3) any person, if you know or believe that the money or thing of value will be given or promised to a person described in (1) or (2) above, in order to obtain or retain business or secure any improper advantage.

In addition, no payments may be made to these individuals for the purpose of influencing the action or decision of the recipient, inducing the recipient to do or refrain from doing any act in violation of his or her lawful duty or inducing the recipient to exert influence on any foreign government, or any department, agency or instrumentality of a foreign government.

The FCPA applies to individuals as well as to corporations and provides for penalties of imprisonment and substantial fines, which a corporation is prohibited from paying or reimbursing to individuals who violate the law. Violation of this law will subject employees to dismissal as well as to extremely serious legal sanctions.

The one significant exception to the FCPA is for facilitating payments, but these are narrowly, and not entirely clearly, defined. For the purpose of the Code of Conduct, employees should assume that "facilitating payment" means only a payment (1) in the nature of "grease," baksheesh, or mordida (i.e., a gratuity or tip paid to expedite service), (2) to a low-level foreign governmental employee (including an employee of a government "instrumentality," a term which may include government monopolies, etc.) whose duties are essentially ministerial or clerical and who does not make policy or rules or award contracts and (3) given only for the purpose of assuring that the recipient does what he is obliged to do in any event in the normal pursuit of his duties.

In view of the substantial penalties and related consequences (both to the Company and involved individuals) and in order to avoid any misunderstanding, it is the Company's policy that no payments or offers to make payments whatsoever, regardless of amount or purpose, including facilitating payments permitted by the FCPA, shall be made either directly or through third parties to officials or employees of government agencies or instrumentalities (including government monopolies) without the prior receipt of a written opinion from the General Counsel of RAI or his designee that the payment would not violate the FCPA.

Employees should not go forward if they are uncertain of the consequences of a given act and should consult their management regarding any questions they may have about particular transactions.