Siemens 2009 Annual Report Download - page 267


 Managing Board statements, Independent auditors’ report, Additional information
 Notes to Consolidated Financial Statements
(in millions of €, except where otherwise
stated and per share amounts)
Without admitting or denying the allegations of the SEC com-
plaint, Siemens agreed to the entry of a court judgment per-
manently restraining and enjoining Siemens from violations of
the FCPA and to the disgorgement of profits in the amount of
US$350 million.
The agreement reflects the U.S. prosecutors’ express recogni-
tion of Siemens’ extraordinary cooperation as well as Siemens’
new and comprehensive compliance program and extensive
remediation efforts. Based on these facts, the lead agency for
U.S. federal government contracts, the Defense Logistics
Agency (DLA), issued a formal determination that Siemens re-
mains a responsible contractor for U.S. government business.
Under the terms of the plea and settlement agreements
reached in the United States, Siemens has engaged Dr. Theo
Waigel, former German federal minister of finance, as compli-
ance monitor to evaluate and report, for a period of up to four
years, on the Company ’s progress in implementing and oper-
ating its new compliance program.
In the fourth quarter of fiscal 2008, the Company accrued a
provision in the amount of approximately €1 billion in connec-
tion with the discussions with the Munich public prosecutor,
the SEC and DOJ for the purpose of resolving their respective
investigations. Cash outflows relating to the fines and dis-
gorgements referred to above during the first quarter of fiscal
2009 amounted to €1.008 billion.
As previously reported, in October 2007, the Munich public
prosecutor terminated a similar investigation relating to
Siemens’ former Communications Group. Siemens paid €201
in connection with the termination of this investigation. This
brings the total amount paid to authorities in Germany in con-
nection with these legal proceedings to €596.
As previously reported, the public prosecutor in Wuppertal,
Germany is conducting an investigation against Siemens em-
ployees regarding allegations that they participated in bribery
related to the awarding of an EU contract for the refurbish-
ment of a power plant in Serbia in 2002.
 LEGAL PROCEEDINGS
Public corruption proceedings
Governmental and related proceedings
Public prosecutors and other government authorities in juris-
dictions around the world are conducting investigations of
Siemens and certain of our current and former employees re-
garding allegations of public corruption, including criminal
breaches of fiduciary duty including embezzlement, as well as
bribery, money laundering and tax evasion, among others.
These investigations involve allegations of corruption at a
number of Siemens’ business units.
On December 15, 2008, Siemens announced that legal pro-
ceedings against it arising from allegations of bribing public
officials were concluded on the same day in Munich, Germany,
and in Washington, DC.
The Munich public prosecutor announced the termination of
legal proceedings alleging the failure of the former Managing
Board of Siemens AG to fulfill its supervisory duties. Siemens
agreed to pay a fine of €395. The payment of the fine marks the
conclusion of this legal proceeding against the Company by
the Munich public prosecutor. The investigations of former
members of the Managing Board, employees of the Company
and other individuals remain unaffected by this resolution.
In Washington, DC, Siemens pleaded guilty in federal court to
criminal charges of knowingly circumventing and failing to
maintain adequate internal controls and failing to comply with
the books and records provisions of the U.S. Foreign Corrupt
Practices Act (FCPA). In related cases, three Siemens foreign
subsidiaries, Siemens S.A. (Argentina), Siemens Bangladesh
Ltd. and Siemens S.A. (Venezuela), pleaded guilty to individual
counts of conspiracy to violate the FCPA. In connection with
these pleas, Siemens and the three subsidiaries agreed to pay
a fine of US$450 million to resolve the charges of the United
States Department of Justice (DOJ). At the same time, Siemens
settled a civil action against it brought by the U.S. Securities
and Exchange Commission (SEC) for violations of the FCPA.