Internal regulations: Business Conduct Guidelines and Code of Ethics

The Business Conduct Guidelines, introduced by the Managing Board in 2001, contain binding standards for law-abiding behavior and precise rules regarding, among other things, compliance with applicable fair competition and anticorruption laws, handling of donations and gifts, avoidance of conflicts of interest, prohibition of insider trading, and protection of Company assets. They also specify procedures for dealing with complaints. The Business Conduct Guidelines are binding on all Company employees and Managing Board members worldwide. The members of our Supervisory Board also comply with these Guidelines where applicable.

Furthermore, in 2003 the Managing Board and the Supervisory Board implemented a Code of Ethics for Financial Matters, as required by the SOA rules. Both the Business Conduct Guidelines and the Code of Ethics for Financial Matters are available on our Internet website.

The Business Conduct Guidelines and the Code of Ethics for Financial Matters are complemented by numerous other regulations that are applicable Company-wide. All regulations are regularly updated.

In response to the allegations of corruption against certain employees of the Company that became known at the end of 2006 (for details, see Management's discussion and Analysis – Legal Proceedings), Siemens has taken a number of important steps over the last twelve months to improve its compliance and internal control system. The Compliance Program was restructured to emphasize the key points Prevent, Detect and Respond.

Among other measures, Siemens introduced a number of new internal regulations:

All corruption-related internal regulations were summarized into an easy-to-read “Siemens Anticorruption Compliance Guide” and distributed to selected employees.

Furthermore, the Company established a Corporate Disciplinary Committee to consider and impose appropriate disciplinary measures in cases where suspicions of violations of law or Company policies or other misconduct have been substantiated..

Structure and functions of the compliance organization

The Supervisory Board formed a Compliance Committee chaired by the Chairman of the Supervisory Board. For further information on the composition and mandate of the Compliance Committee see Management and Control Structure.

At the beginning of fiscal year 2008, the Company established a new Managing Board position for legal and compliance matters. Peter Y. Solmssen was appointed to the Managing Board and named General Counsel, overseeing responsibility for legal and compliance issues.

Effective September 19, 2007, the Managing Board appointed a new Chief Compliance Officer to serve in the legal and compliance unit. In addition, he will report to the CEO and President of the Managing Board as well as to the Compliance Committee and the Audit Committee of the Supervisory Board.

The compliance functions within the Company have been reorganized. Besides being responsible for overseeing compliance investigations, the new Corporate Compliance Organization headed by the Chief Compliance Officer is primarily tasked with the avoidance of violations. The aim is to continually improve the Compliance Program and implement it Company-wide. Implementation of the Compliance Program is handled by compliance officers in each of the Company’s Groups and more than 80 Regional Companies, who are responsible for implementing the Compliance Program in their respective areas, supported by other compliance staff. As of October 1, 2007, the Group Compliance Officers and – subject to local laws – the Regional Compliance Officers are embedded in the Chief Compliance Officer’s personnel organization.

Legal compliance consulting services fall under the responsibility of a department comprising specialized lawyers. These lawyers from Compliance/Legal are responsible worldwide for all significant investigations under criminal and administrative law and safeguard the Company’s interests.

Effective October 1, 2007, all Company audit functions were merged into the Corporate Finance Audit unit headed by the Chief Audit Officer.

In December 2006, the Company – in connection with the allegations of corruption – retained Debevoise & Plimpton LLP (Debevoise & Plimpton), an independent external law firm, to clarify the circumstances relating to the criminal allegations at Com, to analyze the implications of current findings for the efficiency of the Company’s compliance system and its internal control system, and to investigate whether similar situations have arisen at any other Siemens Group. Debevoise & Plimpton, on their part, have commissioned independent auditors to support them in the examination of Siemens’ control systems by providing forensic accounting experts. Debevoise & Plimpton report regularly on the current status and future activities of their investigation directly and exclusively to the Compliance Committee of the Supervisory Board. For further details, see below.

In response to the corruption charges, the Company also engaged an independent compliance advisorin order to consult the Managing Board and the Compliance Committee of the Supervisory Board and provide periodic status reports to them.

In addition to the compliance organization, the Company’s audit department and an internal task force have been instructed to continue their examination of our compliance and internal control system for gaps and any possibilities of circumvention. In the process, they will take measures to correct deficiencies or weaknesses in internal controls in selected local regions.

Complaints, comments and questions

In addition to the existing internal procedures for reporting and handling complaints, an external attorney has been engaged to act as an independent "ombudsman” to provide a new protected communication channel for Siemens employees and third parties.

Since September 2007, our customers, suppliers, business partners and employees worldwide have been offered the opportunity to submit reports on violations to the “Tell Us” Compliance Helpdesk, either by telephone or online 24/7. The external provider specializes in the secure and confidential handling of sensitive information.

In addition, the Company encourages employees to use a centralized question-and-answer platform. The “Ask us” Compliance Helpdesk provides employees with an opportunity to ask questions on compliance-relevant topics. This relates both to the application of compliance-relevant regulations in the day-to-day business and the understanding of requirements for agreements with external partners.

Training

In order to avoid irregular business practices, the Company places great importance on thorough training. During the period from February to October 2007, some 1,400 Siemens executives were trained worldwide as part of a comprehensive training program. The training sessions focused on the fight against corruption and antitrust laws. Other training activities included concrete Company instructions concerning, for example, payment and accounting transactions, the treatment of gifts and hospitality, and the retention of intermediaries and consultants.

Furthermore, the Company introduced a web-based Company-wide training system with comparable training quality that will be used by up to 100,000 employees. To date, some 36,000 employees have participated in this additional training program.

Conferences and other events are organized by the compliance officers in order to help ensure that Company management’s directions are uniformly communicated and implemented worldwide. As part of this approach, all of the nearly 100 Group and Regional Compliance Officers were familiarized with the realigned organization and content of the Siemens Compliance System at several-day conferences in March and October 2007.

www.siemens.com/compliance