Supplier requirements

SUPPLIER will in its manufacturing and supply of Products conduct its business with a minimum consumption of raw materials, energy, and water, the fewest possible undesirable health, safety, and environmental effects, and the most effective utilization of natural resources.

SUPPLIER shall support principles of recycling and work towards reduction of its environmental impact throughout its supply chain. This includes emissions of greenhouse gasses. SUPPLIER shall respect and support the principles of the UN Global Compact and the Global Goals for Sustainable Development (SDGs).

SUPPLIER is expected to have or to work towards having an environmental management system, based on ISO 14001 or equivalent and have or work towards having an occupational health and safety management system, based on ISO45001 or equivalent.

SUPPLIER shall have a documented process for disposition of Defective Products not subject to rework or repair. SUPPLIER shall verify that the Product to be scrapped is rendered unusable prior to disposal.

SUPPLIER shall ensure that the Products, SUPPLIER processes, and SUPPLIER services conform to applicable legal requirements in the country/countries of manufacture, shipment, delivery, and (if provided to SUPPLIER) the country of destination. SUPPLIER shall cascade all applicable requirements down the supply chain to the point of manufacture.

SUPPLIER shall as a minimum fulfill all applicable environmental and safety rules valid in the manufacturing country at the time of manufacturing.

Danfoss Negative List

SUPPLIER shall at all times comply with the most recent version of the Danfoss Negative List. SUPPLIER shall ensure that restricted substances on the Danfoss Negative List are not present in Products or Product packaging or used in SUPPLIER’s or its sub-suppliers’ manufacturing processes. SUPPLIER shall immediately inform Danfoss in writing if Products contain declarable substances.

The Danfoss Negative List in force at any given time is available at: https://www.danfoss.com/en/about-danfoss/company/suppliers/

On the same webpage SUPPLIER shall register as recipient of updates to the Danfoss Negative List and remain registered for the term of this Agreement.

If new restricted substances are added to the Danfoss Negative List, SUPPLIER shall ensure that such substances are removed from Products, Product packaging or SUPPLIER’s or its sub-suppliers’ manufacturing processes within one year from such update.

RoHS – Restrictions of Hazardous Materials

Danfoss products may be directly or indirectly in scope of EU RoHS Directive 2011/65/EU and/or similar regulations in other markets and jurisdictions. SUPPLIER shall therefore:

• follow Danfoss’ RoHS requirements in product specifications and drawings;
• on request fill out and return Danfoss RoHS Declaration Template for the Products;
• deliver any other relevant RoHS information regarding the Products to enable Danfoss to fulfill its RoHS compliance obligations to customers and authorities.

Conflict Minerals

Danfoss or its customers may be subject to due diligence and reporting requirements regarding Conflict Minerals.

If the Products contain tin, tantalum, tungsten, or gold SUPPLIER shall:

• adopt policies and management systems with respect to Conflict Minerals and require its sub-suppliers of tin, tantalum, tungsten, or gold to adopt similar policies and systems;
• On Danfoss's request exercise due diligence and without undue delay upload a populated and validated conflict minerals report (“CMR”) according to the Responsible Minerals Initiative Conflict Minerals Reporting Template (“CMRT”) to a platform designated by Danfoss;
• Request CMR from its sub-suppliers of tin, tantalum, tungsten, or gold as part of SUPPLIER’s due diligence;
• support Danfoss, as reasonably required, to help Danfoss or its customers comply with reporting obligations.

The CMRT-reporting template is available at: http://www.responsiblemineralsinitiative.org/conflict-minerals-reporting-template/

Disclosure and reporting

SUPPLIER shall upon Danfoss’ request deliver the following information with respect to Products:

• written declarations signed by duly authorized manager of SUPPLIER, its sub-suppliers (if applicable), or relevant external bodies certifying that Products conform with applicable law and the Danfoss Negative List;
• Substance information in the form of full material disclosure (“FMD”) or other relevant format describing type. amount, and (as applicable), the percentage weight of all elements, minerals, compounds, substances, and other ingredients that comprise Products or components thereof;
• information concerning any changes in or additions to such ingredients in Products.

SUPPLIER shall provide the abovementioned information to Danfoss without undue delay in accordance with applicable industry standards as amended or customized by Danfoss from time to time to reflect changes in applicable law and Danfoss customer requirements.

To facilitate evolving regulatory and customer requirements regarding transparency, compliance, and information exchange SUPPLIER agrees upon Danfoss’ request and without undue delay to join supplier compliance data exchange platform(s) defined by Danfoss and to deliver aforementioned information via such platform(s). Danfoss will in such case(s) provide SUPPLIER a reasonable notice, and relevant online training and make all reasonable efforts to facilitate a smooth transition.

SUPPLIER has entered into a separate agreement to comply with Danfoss' Code of Conduct for Suppliers. SUPPLIER shall comply with the Danfoss Code of Conduct for Suppliers in force at the time in question. The Danfoss Code of Conduct in force at any given time is available at:

https://www.danfoss.com/en/about-danfoss/company/suppliers/

Danfoss shall notify SUPPLIER of any changes in the Danfoss Code of Conduct for Suppliers with at least one month’s written notice. SUPPLIER's breach of the agreement to comply with Danfoss' Code of Conduct shall be considered a material breach of this Agreement.

All Danfoss employees are bound by a corporate standard governing ethics for all employees with contact with suppliers.

SUPPLIER will not make any secret payment of commissions of money, substantial gifts, services, dining, entertainment travels, or other similar gratuities or benefits to any employee of Danfoss or such employee’s family directly or through a third party for the purpose of inducing the employee to do or omit any action or simply to look favorably on SUPPLIER.

SUPPLIER acknowledges that a breach of this provision is considered a material breach of this Agreement and Danfoss shall be entitled to terminate this Agreement with immediate effect.

Export Control Regulations

SUPPLIER shall inform Danfoss about any applicable (re-) export license requirements for the Products under local (the country from which SUPPLIER will export the Products), European, or US export control law and customs regulations as well as the export control law and customs regulations of the country of origin of the Products. Therefore, at least in its offers, order confirmations and invoices SUPPLIER shall provide the following information with respect to the Products:

• ECCN (Export Control Classification Number) for European and/or US goods (including technology and software) pursuant to the European Export Control regulations and/or US Export Administration Regulations (EAR);
• country of origin of the Products and of the components thereof, including technology and software;
• any transport of the Products through the USA, manufacture or stocking of the Products in the USA and whether the Products have been manufactured by using US technology; and
• a contact person in SUPPLIER's organization to provide further information to Danfoss upon request.

Upon Danfoss' request SUPPLIER shall provide any other foreign trade data with respect to the Products and their components in written form and shall inform Danfoss on all changes to such data without undue delay and prior to supply to Danfoss.

Customs

SUPPLIER must satisfy all requirements of the applicable national and international customs and foreign trade legislation (“Foreign trade legislation”). SUPPLIER must notify Danfoss in writing of all data and information that the ordering party needs in order to comply with the Foreign trade legislation in exports, imports, and re-exports, in particular, but not limited to:

• the commodity code according to the current commodity classification for trade statistics and customs purposes based upon the Harmonized System (HS); and
• the country of origin (non-preferential origin).

If requested by Danfoss the following must also be supplied:

• a certificate proving the non-preferential origin; and
• supplier declarations of preferential origin or preferential certificates (in the case of suppliers from countries where electronic origin statements do not apply).

Upon Danfoss' request SUPPLIER must provide any other foreign trade data with respect to the Products and their components in written form and must inform Danfoss of all changes to such data without undue delay and prior to supply to Danfoss.

Neither Party will allow the processing of Personal Data without signing a data process agreement (“DPA”) that complies with the requirements of the Danish Data Protection Agency. If processing of Personal Data takes place without a DPA being signed, each Party must as soon as it becomes or should have become aware of it, without undue delay notify the other Party hereof. Processing must be temporarily suspended until alignment between the Parties on how to remedy is reached. “Personal Data” means any information relating to an identified or identifiable natural person unless defined otherwise in applicable law.

Data Breach

Each Party shall implement the necessary technical mechanisms/measures as required under the GDPR to protect the other Party's Data that it has received. In the event of a Data Breach, the other Party shall:

1. immediately inform the other Party in writing and/or by telephone and provide a detailed description of the Data Breach, the Personal Data affected, and any other information reasonably requested by the other Party, furthermore;
2. promptly take security measures, including investigating, identifying, preventing, and minimizing the impact of such Data Breach, at its own expense and;
3. report it to the supervisory authority, which is the Danish Data Protection Agency, and answer any questions that may arise.

All announcements or press releases must be pre-approved by both Parties and cannot be disclosed to third parties without mutual agreement, which agreement cannot be unreasonably withheld or delayed.

For the purposes of this paragraph “Data Breach” shall mean any event involving an actual or potential compromise of the security, confidentiality, or integrity of data, such as any unauthorized access or use

Changes

In the event of changes or impacts that may affect the aforementioned requirements under the GDPR, each Party is required to notify the other Party without undue delay.

Deletion upon Termination

Upon expiration or termination of this Agreement, each Party must make sure to delete any Personal Data that it has obtained in connection with this Agreement without undue delay. Written confirmation of the deletion signed by a senior officer of the Party is to be sent to the other Party.

Each Party will use adequate contractual and technical mechanisms to protect any Data of the other Party received by it. If a Security Breach of the other Party’s Data happens, a Party shall: i) immediately inform the other Party in writing and by telephone together with a detailed description of the Security Breach, the affected Data and any other information as the other Party may request; ii) take action immediately, including investigating, identifying, preventing and mitigating the effects of any such Security Breach, at its own expense. Any filings, communications, or press releases shall be pre-approved by both Parties.

SUPPLIER shall sign and adhere to the Security Declaration for Authorized Economic Operators (“AEO”). SUPPLIER shall further provide the necessary organizational instructions and take measures, particularly with regard to the following types of security: premises security, packaging, handling, and transport, business partner, personnel, and information - in order to guarantee the security in the supply chain according to the requirements of respective internationally recognized initiatives based on the WCO SAFE Framework of Standards (e.g. AEO, CTPAT). SUPPLIER shall protect Products against unauthorized access and manipulation. SUPPLIER shall only deploy reliable personnel for the manufacture, packaging, handling, and transport of Products and shall obligate its sub-suppliers to take equivalent security measures.