INTRODUCTION

The Foreign Corrupt Practices Act of 1977 (FCPA) is a United States federal law known primarily for two of its main provisions, one that concerns bribery of foreign officials, and another that addresses accounting transparency requirements under the Securities Exchange Act of 1934.

It is the requirements of the FCPA and the anti-bribery laws of all jurisdictions in which the Company conducts its business. The Company is committed to the highest possible standards of openness, probity, and accountability in all its affairs through the creation of the appropriate “tone at the top.” It is determined to maintain a culture of honesty and opposition to fraud and corruption, reinforced through the establishment and maintenance of an effective system of internal controls. In line with that commitment, the Company’s FCPA Policy outlines the principles it is committed to in relation to preventing and reporting fraud and corruption.

ANTI-BRIBERY PROVISIONS

Basic Prohibition

The FCPA makes it unlawful to bribe foreign government officials to obtain or retain business. With respect to the basic prohibition, there are five elements which must be met to constitute a violation of the Act:

A. Who –The FCPA applies to any individual, firm, officer, director, employee, or agent of a firm, and any stockholder acting on behalf of a firm. Individuals and firms may also be penalized if they order, authorize, or assist someone else to violate the anti-bribery provisions or if they conspire to violate those provisions.

Under the FCPA, U.S. jurisdiction over corrupt payments to foreign officials depends upon whether the violator is an “issuer,” a “domestic concern,” or a foreign national or business.

An “issuer” is a corporation that has issued securities that have been registered in the United States or who is required to file periodic reports with the SEC. The Company is an issuer under this definition, and therefore, it and its representatives may be held liable under the FCPA for acts taken within the territory of the United States or abroad.

1. B. Corrupt intent — The person making or authorizing the payment must have a corrupt intent, and the payment must be intended to induce the recipient to misuse his official position to direct business wrongfully to the payer or to any other person. You should note that the FCPA does not require that a corrupt act succeed in its purpose. The offer or promise of a corrupt payment can constitute a violation of the statute. The FCPA prohibits any corrupt payment intended to influence any act or decision of a foreign official in his or her official capacity, to induce the official to do or omit to do any act in violation of his or her lawful duty, to obtain any improper advantage, or to induce a foreign official to use his or her influence improperly to affect or influence any act or decision.

1. C. Payment — The FCPA prohibits paying, offering, promising to pay (or authorizing to pay or offer) money or anything of value. U.S. enforcement has taken a broad

interpretation of value. Value is not merely money. It can also constitute per diems; daily allowances; travel; meals; entertainment; gifts; spouse or family travel or entertainment; training opportunities; travel opportunities; concierge type services; conferences and event sponsorship; employment opportunities; consulting opportunities; board opportunities; board positions; product development; intellectual property rights or royalties; training grants; educational grants; fellowships; scholarships; use of third-parties or vendors with familial or other ties to the official; contributions to charities; or medical care. The foregoing list is not exhaustive.

1. D. Recipient — The prohibition extends only to corrupt payments to a foreign official, a foreign political party or party official, or any candidate for foreign political office. A “foreign official” means any officer or employee of a foreign government, a public international organization, or any department or agency thereof, or any person acting in an official capacity. The FCPA applies to payments to any public official, regardless of rank or position. The FCPA focuses on the purpose of the payment instead of the particular duties of the official receiving the payment, offer, or promise of payment and there are exceptions to the anti-bribery provision for “facilitating payments for routine governmental action.”

1. E. Business Purpose Test — The FCPA prohibits payments made in order to assist the Company in obtaining or retaining business for or with, or directing business to, any person. The DOJ interprets “obtaining or retaining business” broadly, such that the term encompasses more than the mere award or renewal of a contract. It should be noted that the business to be obtained or retained does not need to be with a foreign government or foreign government instrumentality.

Third Party Payments

The FCPA prohibits corrupt payments through intermediaries. It is unlawful to make a payment to a third party, while knowing that all or a portion of the payment will go directly or indirectly to a foreign official. The term “knowing” includes conscious disregard and deliberate ignorance. The elements of an offense are essentially the same as described above, except that in this case the “recipient” is the intermediary who is making the payment to the requisite “foreign official.”

Intermediaries may include joint venture partners, agents, brokers, or consultants. To avoid being held liable for corrupt third party payments, the Company is encouraged to exercise due diligence and to take all necessary precautions to ensure that they have formed a business relationship with reputable and qualified partners and representatives. Such due diligence may include investigating potential foreign joint venture partners, agents, brokers, or consultants to determine if they are in fact qualified for the position, whether they have personal or professional ties to the government, the number and reputation of their clientele, and their reputation within the U.S. Embassy or Consulate and with local bankers, clients, and other business associates.

Facilitating Payments for Routine Governmental Actions

There is an exception to the anti-bribery prohibition for payments to minor or low-level employees of a governmental entity to facilitate or expedite performance of a nondiscretionary, “routine governmental action” that these individuals ordinarily and commonly perform and that the Company is clearly entitled to under local law, but that they refuse to perform at all or in a timely manner unless compensated.

Affirmative Defenses

A person charged with a violation of the FCPA’s anti-bribery provisions may assert as a defense that the payment was lawful under the written laws of the foreign country or that the money was spent as part of demonstrating a product or performing a contractual obligation.

RECORD-KEEPING, ACCOUNTING & PAYMENT PRACTICES

In addition to prohibiting bribery, the FCPA requires the Company, its subsidiaries, and its majority-owned affiliates to maintain adequate internal controls and to keep accurate and complete records of the transactions in which the Company, its subsidiaries, and its majority-owned affiliates engage. The FPCA also requires the Company, its subsidiaries, and its majority-owned affiliates to make good-faith efforts to cause the ventures in which they own minority interests to keep such records and proper internal controls.

SANCTIONS AGAINST BRIBERY

Criminal

The following criminal penalties may be imposed for violations of the FCPA’s anti-bribery provisions: the Company is subject to a fine of up to two million dollars; officers, directors, stockholders, employees, and agents are subject to a fine of up to one hundred thousand dollars and imprisonment for up to five years. Moreover, under the Alternative Fines Act, these fines may be actually quite higher – the actual fine may be up to twice the benefit that the defendant sought to obtain by making the corrupt payment. You should also be aware that fines imposed on individuals may not be paid by their employer or principal.

Civil

The Attorney General or the SEC, as appropriate, may bring a civil action for a fine of up to ten thousand dollars against any the Company as well as any officer, director, employee, or agent of the Company, or stockholder acting on behalf of the Company, who violates the anti-bribery provisions. In addition, in an SEC enforcement action, the court may impose an additional fine not to exceed the greater of (i) the gross amount of the pecuniary gain to the defendant as a result of the violation, or (ii) a specified dollar limitation. The specified dollar limitations are based on the egregiousness of the violation, ranging from five thousand dollars to one hundred thousand for a natural person and fifty thousand to five hundred thousand dollars for any other person.

The Attorney General or the SEC, as appropriate, may also bring a civil action to enjoin any act or practice of the Company whenever it appears that the Company (or an officer, director, employee, agent, or stockholder acting on behalf of the Company) is in violation (or about to be in) of the anti-bribery provisions.

Other Governmental Action

Under the guidelines issued by the Office of Management and Budget, if the Company is found to be in violation of the FCPA, it may be barred from doing business with the Federal government. Indictment alone can lead to suspension of the right to do business with the government. The President has directed that no executive agency shall allow any party to participate in any procurement or nonprocurement activity if any agency has debarred, suspended, or otherwise excluded that party from participation in a procurement or non-procurement activity. In addition, if the Company is found guilty of violating the FCPA, it may be ruled ineligible to receive export licenses; the SEC may suspend or bar persons from the securities business and impose civil penalties on persons in the securities business for violations of the FCPA; the Commodity Futures Trading Commission and the Overseas Private Investment Corporation both provide for possible suspension or debarment from agency programs for violation of the FCPA; and a payment made to a foreign government official that is unlawful under the FCPA cannot be deducted under the tax laws as a business expense.

Private Cause of Action

Conduct that violates the anti-bribery provisions of the FCPA may also give rise to a private cause of action for treble damages under the Racketeer Influences and Corrupt Organizations Act (RICO), or to actions under other federal or state laws. For example, an action might be brought under RICO by a competitor who alleges that the bribery caused the defendant to win a foreign contract.

This Policy was adopted by the Company and applies to all employees, directors, officers, agents and crew on board vessels, of Safe Bulkers Inc., its subsidiaries and to all employees, directors, officers, agents of Safe Bulkers Management Ltd., Safe Bulkers Management Monaco Inc., and of Safety Management Overseas S.A.