Siemens 2009 Annual Report Download - page 268

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 Reports Supervisory Board /
Managing Board  Corporate Governance  Management’s discussion and analysis  Consolidated Financial Statements
 Consolidated Statements of Income  Consolidated Statements of Income
and Expense Recognized in Equity
 Consolidated Balance Sheets  Consolidated Statements of Cash Flow
pension applies to contracts with the UN Secretariat and stems
from Siemens’ guilty plea in December 2008 to violations of
the U.S. FCPA. Siemens does not expect a significant impact on
its business, results of operations or financial condition from
this decision. The review of the decision by the UNPD is pend-
ing. In the meantime, the suspension remains effective.
In April 2009, the Company received a “Notice of Commence-
ment of Administrative Proceedings and Recommendations of
the Evaluation and Suspension Officer” from the World Bank,
which comprises the International Bank for Reconstruction
and Development as well as the International Development
Association, in connection with allegations of sanctionable
practices during the period 2004 – 2006 relating to a World
Bank-financed project in Russia. On July 2, 2009, the Company
entered into a global settlement agreement with the Interna-
tional Bank for Reconstruction and Development, the Interna-
tional Development Association, the International Finance
Corporation and the Multilateral Investment Guarantee
Agency (collectively, the “World Bank Group”) to resolve World
Bank Group investigations involving allegations of corruption
by Siemens. In the agreement, Siemens voluntarily undertakes
to refrain from bidding in connection with any project, pro-
gram, or other investment financed or guaranteed by the
World Bank Group (“Bank Group Projects”) for a period of two
years, commencing on January 1, 2009 and ending on Decem-
ber 31, 2010. Siemens is not prohibited by the voluntary re-
straint from continuing work on existing contracts under Bank
Group Projects or concluded in connection with World Bank
Group corporate procurement provided such contracts were
signed by Siemens and all other parties thereto prior to Janu-
ary 1, 2009. The agreement provides for exemptions to the vol-
untary restraint in exceptional circumstances upon approval
of the World Bank Group. Siemens must also withdraw all
pending bids, including proposals for consulting contracts in
connection with Bank Group Projects and World Bank Group
corporate procurement where the World Bank Group has not
provided its approval prior to July 2, 2009. Furthermore,
Siemens is also required to voluntarily disclose to the World
Bank Group any potential misconduct in connection with any
Bank Group Projects. Finally, Siemens will pay US$100 million
to agreed anti-corruption organizations over a period of not
As previously reported, Siemens Zrt. Hungary and certain of its
employees are being investigated by Hungarian authorities in
connection with allegations concerning suspicious payments
in connection with consulting agreements with a variety of
shell corporations and bribery relating to the awarding of a
contract for the delivery of communication equipment to the
Hungarian Armed Forces.
As previously reported, the Vienna, Austria public prosecutor
is conducting an investigation into payments between 1999
and 2006 relating to Siemens AG Austria and its subsidiary
Siemens VAI Metal Technologies GmbH & Co. for which valid
consideration could not be identified.
As previously reported, authorities in Russia are conducting an
investigation into alleged misappropriation of public funds in
connection with the award of contracts to Siemens for the de-
livery of medical equipment to public authorities in Yekaterin-
burg in the years 2003 to 2005.
As previously reported, in August 2007, the Nuremberg-Fuerth
prosecutor began an investigation into possible violations of
law in connection with the United Nations Oil-for-Food Pro-
gramme. In December 2008, the prosecutor discontinued the
investigation with respect to all persons accused.
As previously reported, the São Paulo, Brazil, Public Prosecu-
tor’s Office is conducting an investigation against Siemens re-
lating to the use of business consultants and suspicious pay-
ments in connection with the former Transportation Systems
Group in or after 2000.
As previously reported, in October 2008, U.S. authorities con-
ducted a search at the premises of Siemens Building Technolo-
gies Inc. in Cleveland, Ohio in connection with a previously
ongoing investigation into activities with Cuyahoga County
government agencies.
On March 9, 2009, Siemens received a decision by the Vendor
Review Committee of the United Nations Secretariat Procure-
ment Division (UNPD) suspending Siemens from the UNPD
vendor database for a minimum period of six months. The sus-