Siemens 2011 Annual Report Download - page 319

153 D. Consolidated Financial Statements 273 E. Additional information
158 D. Consolidated Statements of Changes in Equity
160 D. Notes to Consolidated Financial Statements
266 D. Supervisory Board and Managing Board
154 D. Consolidated Statements of Income
155 D.2 Consolidated Statements of Comprehensive Income
156 D. Consolidated Statements of Financial Position
157 D. Consolidated Statements of Cash Flow

As previously reported, in April , Siemens AG received a
“Notice of Commencement 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 Interna-
tional Development Association, in connection with allega-
tions of sanctionable practices during the period  to 
relating to a World Bank-financed project in Russia. On July ,
, the Company entered into a global settlement agree-
ment with the International Bank for Reconstruction and De-
velopment, the International Development Association, the
International Finance Corporation and the Multilateral Invest-
ment Guarantee Agency (collectively, the World Bank Group)
to resolve World Bank Group investigations involving allega-
tions of corruption by Siemens. In the agreement, Siemens
voluntarily undertook to refrain from bidding in connection
with any project, program, or other investment financed or
guaranteed by the World Bank Group (World Bank Projects) for
a period of two years, commencing on January ,  and
ending on December , . Siemens was not prohibited by
the voluntary restraint from continuing work on existing con-
tracts under World Bank Projects or concluded in connection
with World Bank Group corporate procurement provided such
contracts were signed by Siemens and all other parties there-
to prior to January , . The agreement provided for ex-
emptions to the voluntary restraint in exceptional circum-
stances upon approval of the World Bank Group. In addition,
Siemens had to withdraw all pending bids, including propos-
als for consulting contracts, in connection with World Bank
Projects and World Bank Group corporate procurement where
the World Bank Group had not provided its approval prior to
July , . Furthermore, Siemens is also required to volun-
tarily disclose to the World Bank Group any potential miscon-
duct in connection with any World Bank Projects. Finally,
Siemens has undertaken to pay US$ million to agreed anti-
corruption organizations over a period of not more than 
years. In fiscal , the Company took a charge to Other op-
erating expense to accrue a provision in the amount of €
million relating to the global settlement agreement with the
World Bank Group. In November , OOO Siemens Russia
and all its controlled subsidiaries were, in a separate proceed-
ing before the World Bank Group, debarred for four years from
participating in World Bank Projects. OOO Siemens Russia did
not contest the debarment. As of January , , Siemens AG
and its controlled subsidiaries worldwide (with the exception
of OOO Siemens Russia and its own controlled subsidiaries)
are no longer prohibited from participating in any World Bank
Projects.
As previously reported, Siemens AG had filed a request for ar-
bitration against the Republic of Argentina (Argentina) with
the International Center for Settlement of Investment Dis-
putes (ICSID) of the World Bank. Siemens AG claimed that Ar-
gentina had unlawfully terminated its contract with Siemens
for the development and operation of a system for the produc-
tion of identity cards, border control, collection of data and
voters’ registers (DNI project) and thereby violated the Bilater-
al Investment Protection Treaty between Argentina and Ger-
many (BIT). A unanimous decision on the merits was ren-
dered by the ICSID arbitration tribunal in February ,
awarding Siemens AG, inter alia, compensation in the amount
of US$. million, plus compound interest thereon at a rate
of .% since May , . Argentinia subsequently filed ap-
plications with the ICSID aiming at the annulment and rever-
sal of the decision and a stay of enforcement of the arbitral
award. In August , Argentina and Siemens AG reached an
agreement to mutually settle the case and discontinue any
and all civil proceedings in connection with the case without
acknowledging any legal obligations or claims. No payment
was made by either party. As previously reported, the Argen-
tinean Anti-Corruption Authority is conducting an investiga-
tion into corruption of government officials in connection
with the award of the contract for the DNI project to Siemens
in . Searches were undertaken at the premises of Siemens
Argentina and Siemens IT Services S.A. in Buenos Aires in
August  and in February . The Company is cooperat-
ing with the Argentinean Authorities. The Argentinean inves-
tigative judge also repeatedly requested judicial assistance
from the Munich public prosecutor and the federal court in
New York.
As previously reported, in June , the court of first in-
stance in Kalimantan Province, Indonesia, found the Head of
the Healthcare Division of Siemens PT Indonesia not guilty of
allegations of participation in bribery, fraud, and overcharg-
ing related to the awarding of a contract for the delivery of
medical equipment to a hospital in . In October , the
Indonesian Supreme Court upheld the verdict.
As previously reported, in February  a Greek Parliamenta-
ry Investigation Committee (GPIC) was established to investi-
gate whether any politicians or other state officials in Greece
were involved in alleged wrong-doing of Siemens in Greece.
GPIC’s investigation was focused on possible criminal liability
of politicians and other state officials. Greek public prosecu-
tors are separately investigating certain fraud and bribery
allegations involving – among others – former board members