Compliance

Business Ethics and Compliance

SMX® promotes an organizational culture that encourages ethical conduct and a commitment to compliance with the law through its ongoing business ethics awareness and compliance program. This program includes reasonable steps to periodically communicate our standards and procedures by conducting effective training programs and otherwise disseminating appropriate information regarding employee roles and responsibilities. Our internal control system establishes standards and procedures to facilitate timely discovery of improper conduct in connection with Government contracts, and ensures corrective measures are promptly instituted and carried out. This includes the assignment of responsibility at the senior level to ensure effectiveness of the program and internal control system, the implementation of vetting of new principals, periodic reviews of company business practices, procedures, policies, and internal controls for monitoring and auditing to detect criminal conduct, periodic evaluation of the effectiveness of the program and internal control system, and periodic assessment of the risk of criminal conduct. SMX maintains an internal hotline for anonymous reporting that encourages employees to report suspected instances of improper conduct. Or program provides for disciplinary action for improper conduct or for failing to take reasonable steps to prevent or detect improper conduct.

SMX shall also ensure the timely written disclosure of any credible evidence that a principal, employee, agent, or subcontractor of the Contractor has committed a violation of Federal criminal law involving fraud, conflict of interest, bribery, or gratuity violations found in Title 18 U.S.C. or a violation of the civil False Claims Act (31 U.S.C. 3729-3733) in connection with the award, performance, or closeout of any Government contract for a period of at least 3 years following final payment on the contract. Such disclosure will be to the agency OIG and Contracting Officer. If the violation relates to an order against a Government-wide acquisition contract, a multi-agency contract, a multiple-award schedule contract such as the Federal Supply Schedule, or any other procurement instrument intended for use by multiple agencies, SMX shall notify the OIG of the ordering agency and the IG of the agency responsible for the basic contract, and the respective agencies’ contracting officers. SMX shall always fully cooperate with any Government agencies responsible for audits, investigations, or corrective actions.

SMX ensures that all subcontracts that have a value in excess of $5,000,000 and a performance period of more than 120 days include a requirement for the subcontractor to have a Business Ethics and Compliance program.

Global Trade Compliance

As a leading U.S. exporter of controlled products, defense services, and sensitive technologies—serving the U.S. Department of Defense, allied national defense establishments, and a range of domestic and international customers—SMX, LLC is deeply committed to upholding the highest standards of legal and regulatory compliance in all aspects of our operations. Our export compliance program reflects a strong corporate culture of integrity, accountability, and risk management aligned with current U.S. and international export control requirements.

SMX conducts its business in full compliance with all applicable U.S. export control and sanctions laws, including but not limited to:

• The International Traffic in Arms Regulations (ITAR), 22 CFR §§ 120–130, administered by the U.S. Department of State, Directorate of Defense Trade Controls (DDTC);
• The Arms Export Control Act (AECA), 22 U.S.C. 2751 et seq., which provides the statutory authority for ITAR;
• The Export Administration Regulations (EAR), 15 CFR §§ 730–774, administered by the U.S. Department of Commerce, Bureau of Industry and Security (BIS);
• The Foreign Assets Control Regulations, including sanctions and embargoes administered by the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC);
• Applicable anti-boycott, end-use, end-user, and destination-based restrictions.

SMX maintains strict controls to ensure that no physical item, technical data, defense article, software, or defense service is exported, re-exported, transferred, or disclosed—whether directly, indirectly, orally, electronically, or visually—without proper authorization and only in accordance with the limitations imposed by governing authorities. This includes compliance with deemed export rules, which regulate the release of controlled technical data or software to foreign nationals, regardless of their physical location.

In particular, SMX takes proactive measures to ensure that no controlled products, technologies, or related information are provided—either directly or indirectly—to any prohibited or sanctioned country, person, or entity. This includes preventing unauthorized access by foreign nationals from sanctioned countries, as specified in the U.S. International Emergency Economic Powers Act (IEEPA), the Trading with the Enemy Act (TWEA), and other statutory frameworks implemented through OFAC, BIS, and DDTC regulations.

To ensure full compliance, SMX has implemented a robust Export Compliance Program (ECP), which includes:

• Comprehensive jurisdiction and classification analysis of products and technologies;
• Restricted party screening of all customers, vendors, subcontractors, freight forwarders, and other third-party partners against U.S. and international watchlists;
• End-use and end-user due diligence, including end-use statements and certifications;
• Licensing and authorization tracking for ITAR-controlled defense articles, EAR dual-use items, and OFAC-restricted transactions;
• Employee training and awareness campaigns tailored to business functions and roles;
• Technology Control Plans (TCPs), visitor controls, and access restrictions to safeguard controlled data;
• Recordkeeping protocols aligned with 22 CFR §122.5 and 15 CFR §762, ensuring that all relevant export records are maintained for the required duration.

As global security dynamics evolve and enforcement agencies increase scrutiny on export compliance, SMX remains vigilant in adapting our policies, training, and internal controls to ensure continuous compliance with the law and to protect U.S. national security interests. Our commitment to responsible exporting is unwavering, and we expect the same from our employees, partners, and suppliers.

SMX recognizes that export compliance is not simply a legal obligation, but a core element of our corporate responsibility and global credibility. We are proud to contribute to the secure and lawful transfer of technologies that support defense, innovation, and allied cooperation around the world.

Human Trafficking

SMX, LLC is firmly committed to ethical sourcing and the prevention of human trafficking, forced labor, and all forms of modern slavery in our operations and supply chains. We fully comply with the Federal Acquisition Regulation (FAR) 52.222-50, Combating Trafficking in Persons, and align our practices with applicable U.S. and international laws, including the Trafficking Victims Protection Act (TVPA), the U.S. Customs and Border Protection’s Withhold Release Orders (WROs), and relevant executive orders and Department of Labor guidance.

In recognition of the global challenges associated with human trafficking and forced labor—particularly in complex supply chains—SMX maintains a comprehensive compliance framework designed to promote transparency, accountability, and continuous improvement. This framework includes the following core elements:

• Supply Chain Risk Assessment and Verification: SMX actively verifies the integrity of its product supply chains by identifying, assessing, and addressing risks of human trafficking and forced labor. This includes high-risk industry and country risk mapping, vendor profiling, and due diligence reviews to ensure suppliers are operating in compliance with legal and ethical standards.
• Supplier Audits and Monitoring: SMX conducts audits of its suppliers—both scheduled and unannounced—based on risk factors such as geographic location, labor-intensive operations, or prior non-compliance. These audits evaluate supplier adherence to company standards on labor rights, working conditions, and trafficking prevention.
• Internal Accountability Measures: SMX maintains clear internal accountability standards and disciplinary procedures for employees, agents, and contractors who fail to meet our ethical sourcing expectations. Any violations of company policies related to trafficking in persons are thoroughly investigated and may result in corrective action, termination, or referral to law enforcement, as appropriate.
• Commitment to Ongoing Improvement: Recognizing that combating human trafficking is an ongoing global challenge, SMX regularly reviews and updates its policies and procedures to align with evolving laws, international frameworks such as the UN Guiding Principles on Business and Human Rights, and stakeholder expectations. We continuously seek to improve transparency and strengthen due diligence in partnership with our suppliers and customers.

Through these efforts, SMX underscores its unwavering commitment to upholding human dignity and ensuring that our business practices reflect the highest standards of ethical conduct and legal compliance.