Activation of Withholdings at Sempra Infrastructure (SI)

The activation of withholdings is a fundamental process in supplier management at Sempra Infrastructure (SI). This procedure ensures that SI complies with fiscal and contractual obligations by withholding a portion of payments to suppliers according to established regulations and agreements. Below is an explanation of the process for activating withholdings and the conditions that may lead to its implementation.

Reasons for Activating Withholdings

1. Fiscal Compliance:

   • • Withholding taxes according to local and national tax laws.
     • Compliance with industry or sector-specific tax withholding requirements.

2. Guarantee of Contractual Compliance:

   • • Ensuring compliance with the terms and conditions of the contract by the supplier.
     • Withholding payments until the satisfactory completion of work or services.

3. Protection Against Financial Risks:

   • • Mitigating financial risk from advance payments.
     • Ensuring suppliers meet their financial obligations, such as payment to subcontractors.

4. Dispute Resolution:

   • • Withholding payments in case of contractual disputes until issues are resolved.
     • Protecting SI's interests in cases of non-compliance or quality problems.

Procedure for Activating Withholdings

1. Identification of the Need for Withholding

• • Contract Evaluation: Review of contract terms to determine applicable withholding clauses.
  • Regulatory Compliance: Verification of tax and contractual regulations that require withholding.

2. Implementation of Withholding

• • Calculation of Withholding: Determination of the exact amount to withhold according to the contract and tax regulations.
  • System Update: Recording the withholding in SI's financial management system.

3. Communication to the Supplier

• • Formal Notification: Informing the supplier about the applied withholding, including the amount and the reason for withholding.
  • Supporting Documentation: Providing the supplier with documentation supporting the withholding.

4. Monitoring and Review

• • Compliance Monitoring: Monitoring the supplier’s performance and compliance with contractual terms.
  • Periodic Review: Regularly reviewing the need to continue the withholding or release it if conditions are met.

Workflow

1. Start: Identification of the need for withholding.
2. Implementation of Withholding: Submit the request through Zendesk Platform, Create the request through the Zendesk portal in the section to modify the supplier, the requested drop-down data, including the supplier invoice.
3. Communication to the Supplier: Formal notification and provision of supporting documentation.
4. Monitoring and Review: Compliance monitoring and periodic review of withholding.

Important Considerations

• • Regulatory Compliance: Ensuring that all withholdings comply with applicable tax and contractual regulations.
  • Transparency: Maintaining clear and transparent communication with suppliers about the reasons and details of the withholding.
  • Complete Documentation: Keeping complete and accurate documentation of all withholdings applied and the reasons for them.

The activation of withholdings at SI is a crucial process to ensure fiscal compliance, protection against financial risks, and contractual compliance. By following established procedures and adequately documenting each step, users can ensure that withholdings are carried out fairly and effectively, protecting SI's interests and integrity.

Any questions regarding the process or documents, please let us know at [e-mail] and we will guide you