Ethics and Compliance

ETHOS Line - Make a report

We encourage our employees, stakeholders and the general public to submit suggestions, inquiries and report alleged ethics, compliance or governance violations through ETHOS Line, an open and confidential communication channel.

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ETHOS

Today, as a global company, CEMEX faces greater challenges than ever before. While our stakeholders demand more than simply good financial results, technology and global awareness have resulted in unprecedented scrutiny of our actions. We are expected to adhere to top-tier standards of corporate behavior everywhere we operate.

ETHOS, a worldwide CEMEX initiative supported by employees from diverse areas of the company, seeks to embrace these standards and promote actions that will evolve and strengthen our corporate culture.

ETHOS is designed to help our employees integrate ethics and compliance into their daily work. ETHOS offers our employees the following benefits:

Guidance on ethics, compliance and governance topics
Access to an array of courses related to ethics and compliance
Access to corporate global and local policies
Advice and tools to help employees manage ethical dilemmas
Increased awareness of the business and personal implications of misconduct

Ethics

CEMEX’s culture and values are clearly and rapidly communicated to our employees, stakeholders and the general public through our Code of Ethics. We believe that ethical behavior is a key factor for our success.

Compliance

Compliance means acting in accordance with the letter and the spirit of the law, our Code of Ethics and our corporate policies. At CEMEX, we must comply with all applicable laws and policies, without exception. The importance of this principle cannot be overstated: if we compromise on matters that we perceive as small or unimportant, we cross a threshold that can easily lead us to more serious misconduct, putting the company's and our own personal situation at risk, and causing grave harm to our corporate culture.

What happens if an employee reports a violation of applicable law, our Code of Ethics or our policies?

CEMEX has developed policies and procedures to investigate complaints in a prompt, professional and fair manner. All investigations are confidential and may be anonymous, at the option of the complainant, as permitted by applicable law. ETHOS Line is our institutional tool for submitting questions or complaints.

If an employee believes he/she has been a victim of retaliation for reporting a violation or complaint, he/she should report it immediately through ETHOS Line.

How does CEMEX audit or review compliance with internal policies?

Our operating risks and compliance with our policies are evaluated periodically, mainly by the Process Assessment Department. Compliance with certain policies is also reviewed by our legal, comptrollership, information security and other departments, as needed.

Compliance Topics

Below you’ll find information on compliance regarding nine specific subjects:

Ethics

Governance

Antitrust

Anti-Corruption

Information Retention

Insider Trading

Conflict Minerals

Anti-Money Laundering

Third Parties

Our Code of Ethics and Business Conduct lays the foundation for the behaviors expected from our employees, based on our corporate values.

Read our Code of Ethics; also find relevant aspects of our Code of Ethics and details about our values.

Code of Ethics

The board of directors is responsible for supervising the overall operation of our company. Chaired by Rogelio Zambrano, the board consists of 10 directors.

More information on our corporate governance can be found in the Investor Relations section. Click to access each of the following categories that comprise the Investor Relations section on Governance:

Chairman of the Board statement

The Golden Rule. CEMEX will abide by principles of fair trade and competition, and will not tolerate price-fixing, market allocation, predatory pricing, or other illegal market practices.

What is it? Antitrust laws seek to prevent monopolies, collusions, and other anti-competitive behaviors, based on the principle that competition benefits consumers and promotes economic growth.

Governments across the world are increasingly active in enforcing antitrust and competition laws, and are cooperating with each other to prevent anti-competitive behavior. Furthermore, local laws are converging on basic antitrust principles and concepts.

Why is it important? As our industry consolidates and CEMEX grows and becomes more visible, it is essential that we understand and comply with antitrust laws and principles. The consequences of illegal behavior can be devastating:

Hundreds of millions of dollars in fines
Severe criminal penalties
Payments of up to three times of damages
Loss of markets and mandatory disposals of assets and subsidiaries
Break-ups of companies and business units
Long and expensive litigation

It is also vital for CEMEX's long-term growth that our competitive advantage be based on superior business practices and strategies, with a strong foundation of ethical and lawful practices.

Global Antitrust Compliance Policy

The Golden Rule. CEMEX does not tolerate bribery in any form.

What is it? Under applicable laws in the United States, Europe, and other places where CEMEX does business, it is a crime for CEMEX directly, or through an intermediary, to offer, pay, or promise to pay, a bribe or anything of value to a government official (including employees of state-owned enterprises and officers of public international organizations) for the purpose of obtaining or retaining business. The term "anything of value" includes both monetary and non-monetary gifts and bribes, and can include favors and other types of consideration.

Why is it important? Bribery and corruption represent illegal, unethical and socially irresponsible activities that can have harsh implications, such as:

Grave harm to corporate and personal reputations
Substantial civil and criminal penalties
Loss of important market opportunities
Market distortions and perpetuation of improper business practices
Costly and stressful litigation for companies and individuals
Harmful and corrosive impact on societies and communities

Global Anti-Corruption Policy

The Golden Rule. Retain key documents for prescribed periods; discard unnecessary or obsolete documents regularly.

What is it? CEMEX's Document Retention Policy establishes guidelines and retention periods for different types of company documents. Retention periods vary by country, media, and type of information contained. The Policy also identifies the documents that should be periodically destroyed.

The term "documents" refers to all types of media containing a wide array of information. The following are just some of the types of documents subject to retention periods:

Communication and press materials
Contracts and other legal obligations
Engineering and technical matters
Financial and accounting information
Payroll and other HR data
Corporate records
Environmental records and other documents
Tax returns and government correspondence

Why is it important? Our information is a very valuable asset. The Information Retention Policy is designed to protect our information by prescribing consistent practices for identifying and handling different types of documents. Just as importantly, the Information Retention Policy aims to ensure compliance with various laws throughout the world that require the safeguarding of certain information for prescribed periods.

CEMEX Information Retention Policy

The Golden Rule. It is illegal and contrary to CEMEX Policies to use material non-public information to make investment decisions.

What is it? The federal laws of Mexico and the United States prohibit using material nonpublic information concerning CEMEX or another company, in order to make investment decisions on securities of CEMEX or such other company.

Information is deemed "material" if a reasonable person would consider the information relevant in making an investment decision. Material information may include sales and earnings results, major changes in product lines, proposed mergers, acquisitions, divestitures, cash and stock dividends, redemption of securities, stock repurchase plans, recapitalization programs, securities offerings, and litigation and investigations. Employees are precluded from trading in any securities CEMEX may have plans to acquire, both before and after the announcement of the acquisition.

An "investment decision" is a decision to buy or sell a security. In some cases (for example, if instructions have already been given to sell or buy), a decision to hold a security may also be an "investment decision".

A "security" is a publicly traded instrument representing an economic interest in a company or other issuer, and may be in the form of capital or debt. Examples of securities include shares, CPOs, ADSs, bonds, and notes. A security is also a derivative instrument having any such securities underlying.

Why is it important? Insider trading on the basis of material non-public information represents an illegal and unethical activity that undermines investor confidence; can greatly harm corporate and personal reputations; and may result in substantial civil fines, the loss of profits resulting from illegal trading, and criminal penalties of up to 10 years of imprisonment per violation. The same penalties and fines may be imposed upon third-parties who act based on information obtained from CEMEX insiders and employees.

Insider Trading and Transaction with CEMEX Securities Policy

Over the past years, there has been increased awareness regarding human rights violations in the mining of certain minerals from the Democratic Republic of the Congo or an adjoining country (the “Conflict Region”). To that end, the U.S. Securities and Exchange Commission (the "SEC") issued its final conflict minerals rules promulgated under Section 1502 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the "Conflict Minerals Rules"). As per the provisions of the Conflict Minerals Rules, publicly traded companies must report to the SEC the presence of Conflict Minerals (as defined below) in those products that they manufacture or contract to manufacture when Conflict Minerals are necessary to the production or functionality of such products and those Conflict Minerals originate from the Conflict Region. The Conflict Minerals Rules define “Conflict Minerals” as cassiterite, columbite-tantalite, gold, wolframite, or their derivatives, that finance conflict in the Conflict Region. Accordingly, the European Commission has proposed a regulation setting up a self-certification system for any company that wishes to import Conflict Minerals responsibly into the European Union. This regulation applies to Conflict Minerals sourced from conflict-affected and high risk areas, as defined by the Organization for Economic Co-operation and Development (OECD)¹, including but not limited to the Conflict Region.

As part of CEMEX, S.A.B. de C.V. and its subsidiaries’ (“CEMEX”) long-standing commitment to corporate responsibility and to the respect of human rights, CEMEX wishes to contribute in ameliorating the emergency humanitarian situation in conflict-affected or high risk areas, including the Conflict Region. Even though CEMEX, during the full year 2013, did not have any Conflict Materials originating from a Conflict Region present in any of the products that CEMEX manufactured or contracted to manufacture, and even though Conflict Minerals originating from the Conflict Region are not necessary to the production or functionality of CEMEX products, CEMEX has launched a program with an aim to continue to ensure compliance with the Conflict Minerals Rules.

For the reasons mentioned above, CEMEX will continue to strive to source products and materials from suppliers that share CEMEX’s values and expects that such suppliers have policies and due diligence measures in place that will enable CEMEX to reasonably assure that supplied products do not contain Conflict Minerals that are necessary to the functionality or production of that product. Tracing materials back to their source is a complex endeavor but an important aspect of responsible sourcing and corporate responsibility. In support of CEMEX’s policy regarding Conflict Minerals, CEMEX will:

Review its supply chain to identify and avoid the use of Conflict Minerals;
Expect our suppliers to cooperate in providing, due diligence information to confirm the presence of Conflict Minerals in our supply chain;
Make this policy publicly available in order to enhance transparency in its implementation;
Comply with the reporting requirements set forth in the applicable Conflict Minerals Rules.

CEMEX believes in building long lasting relationships with its suppliers. However, if CEMEX determines or has reasonable evidence to believe that any of its suppliers is violating or at risk of violating CEMEX’s policy regarding Conflict Minerals, then CEMEX will require the supplier to undertake suitable corrective actions. If suitable corrective action is not taken, CEMEX will look to alternative sources for the product and/or material. In the event that CEMEX determines that products and/or materials supplied to CEMEX contain or are likely to contain Conflict Minerals and such Conflict Minerals are linked to evidenced human rights violations, CEMEX will strive to transition such products and/or materials to those suppliers that do not utilize Conflict Minerals and who support socially responsible sourcing.

¹ For informational purposes, the OECD has established in its Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas the following: “Conflict-affected and high-risk areas are identified by the presence of armed conflict, widespread violence or other risks of harm to people. Armed conflict may take a variety of forms, such as a conflict of international or non-international character, which may involve two or more states, or may consist of wars of liberation, or insurgencies, civil wars, etc. High-risk areas may include areas of political instability or repression, institutional weakness, insecurity, collapse of civil infrastructure and widespread violence. Such areas are often characterized by widespread human rights abuses and violations of national or international law.”

CEMEX Conflict Minerals Policy

The Golden Rule. CEMEX does not tolerate any money laundering activity nor any terrorist financing activity.

What is it? Money laundering is the process of disguising the nature and source of money or other property connected with criminal activity, such as drug trafficking, terrorism, bribery, or corruption, by integrating the illicit money or property into the stream of commerce so that it appears legitimate or its true source or owner cannot be identified. Those involved in the criminal activity attempt to hide the proceeds of their crimes or make them appear legitimate by “laundering” them through legitimate businesses.

Why is it important? Money laundering activities represent illegal, unethical and socially irresponsible activities that can have harsh implications, such as:

Substantial civil and criminal penalties
Grave harm to corporate and personal reputations
Market distortions and perpetuation of improper business practices
Costly and stressful litigation for companies and individuals
Harmful and corrosive impact on societies and communities

Global Anti-Money Laundering Policy

The Golden Rule. CEMEX maintains and conducts its relations with third parties with integrity, honesty, respect and with adherence to applicable laws and regulations.

What is it? Third parties retained by CEMEX shall comply with Our Code of Ethics and other applicable CEMEX policies. Additionally, third parties shall provide the mandatory documentation as part of the due diligence procedure during the onboarding process.

Why is it important? The due diligence procedure ensures that CEMEX only relates with third parties that comply with all applicable laws and regulations and with high ethical standards.

Global Policy for Third Parties