Siemens 2007 Annual Report Download - page 42

42 Fit42010
For us, compliance
means adherence to
the law as well as to
the Company’s binding
regulations and guide-
lines, which are the
basis of our business
activities. We expect
our managers and
employees to behave
ethically and in full
compliance with the
law. Misconduct will
not be tolerated under
any circumstances.
We provided comprehensive information about compliance-related violations at the Company in
our Annual Report 2006 and in subsequent interim reports. Public prosecutors in several coun-
tries, the U.S. Department of Justice (DOJ), the U.S. Securities and Exchange Commissison (SEC)
and other authorities are now investigating allegations of wrongdoing by Siemens and Siemens
employees. Our compliance organization is intent on clarifying all related matters and penaliz-
ing all misconduct, and we’re cooperating fully with the authorities.
We consider it our duty to ensure that these issues are completely cleared up. For this reason,
we’ve retained the U.S. law fi rm Debevoise & Plimpton LLP as an independent agent to conduct
comprehensive independent investigations into alleged violations of anticorruption regulations.
The fi rm reports at regular intervals to the DOJ and the SEC. In addition, we’re continuing the
internal investigations begun in November 2006. On October 4, 2007, Munich District Court I
imposed a fi ne of €201 million on the Company, concluding part of the investigations into irreg-
ularities at Siemens AG. At the same time, the German tax authorities determined that pay-
ments of approximately €450 million at the former Com Group were non-deductible, resulting
in a tax charge of €179 million. Of this total, €168 million had already been recorded in the
Company’s fi nancial statements for fi scal 2006. These actions mark the end of the investigation
of the former Communications Group by the public prosecutors and tax authorities in Germany
insofar as it relates to Siemens AG. The comprehensive independent investigations being
conducted by
Debevoise & Plimpton are continuing. For more information, see the Compliance
Report (pages 88 ff.)
and Management’s discussion and analysis (MD&A, pages 108 ff.).
Ensuring ethical conduct
We’ve launched a new program to systematically anchor our compliance regulations throughout
the Company. While we already had strict guidelines which were being continuously optimized,
they were not always adhered to. Our new Compliance Program is an effective system based on
three pillars – Prevent, Detect and Respond – for ensuring that all business at Siemens is con-
ducted in compliance with the law and our internal regulations. The majority of the new mea-
sures are designed to prevent compliance-related violations. That’s why it’s been essential to
establish clear regulations defi ning what is and is not allowed, and to communicate these regula-
tions throughout the Company. We’ve also spelled out the penalties for misconduct. Our second
focus is the detection of unethical practices. This will allow us to intervene at an early stage while
making it clear that misconduct will always come to light. We provide employees, customers and
business partners with easily accessible channels for reporting irregularities. In addition, we
Fit42010: Corporate Responsibility
Compliance is the cornerstone of corporate responsibility at Siemens.
In fi scal 2007, we worked intensively to raise employee awareness of
compliance-related issues and anchor this awareness even more fi rmly
in our management culture and Company values. But as the current
investigations show, we didn’t succeed in making the importance of our
compliance rules clear to all our employees. Now, we’re doing everything
in our power to uncover any irregularities. By rigorously implementing
our Compliance Program, we’re ensuring that all our business practices
fully adhere to the law.