The most important feature of the organization is its clear structure of responsibilities. Today, the Company’s compliance officers report in a direct line through the Sector compliance heads and Regional coordinators to the Chief Compliance Officer. Moreover, the Chief Compliance Officer is responsible for the appointment, target agreements and supervision of the compliance officers. The corporate compliance team consists of approximately 70 members working in various departments.

From November 2007 to February 2008, we engaged a personnel consulting firm to assess our compliance officers’ competencies and to make recommendations on how to strengthen the organization. The resulting report has become an important guideline for personnel development within the compliance organization. As a consequence of the findings, we will develop a future-oriented compliance officer profile and the appropriate training programs. In addition, compliance will be established as an important step in management careers.

Our compliance officers are required to participate in a four-day introductory program where they not only gain a working knowledge of Siemens’ compliance policies but also learn how to enforce compliance regulations in difficult situations within their respective operating units.

At two Global Compliance Officer Conferences – one held in October 2007 in Berlin and the other in April 2008 in Mumbai – we encouraged the Company-wide exchange of best practices and stronger global cooperation within our compliance network. Regional compliance conferences were also held in South America, Asia and the Middle East.

As of fiscal 2008, compliance had also become an integral part of the bonus system for top executives and compliance officers. The new compliance component of the bonus is based on the degree of fulfillment of three criteria: implementation of compliance controls; speedy investigation and sanctioning of compliance violations; and the results of an employee compliance perception survey. This new incentive system impressively demonstrates that compliance responsibility rests with management, supported by our compliance organization.

In a first phase, we introduced this system by late March 2008 in designated high-risk units – over 100 companies with large business volumes, public-sector customers and/or locations in countries that Transparency International ranks as particularly susceptible to corruption. We subsequently installed the system in more than 500 less risk-prone units by late September 2008. The system is subject to internal and external audits.

Another preventive measure to avoid corruption risks was to upgrade the IT-based process for approving customer projects (Limits of Authority), in particular for public sector customers, by integrating a compliance module into the process.

We have intensified our compliance controls outside of the company as well. At the end of July 2008, we introduced a new tool to check the integrity of business partners who act as intermediaries between Siemens and end customers (Business Partner Compliance Due Diligence Tool). Our business units use this tool to initially assess the compliance risk of the business partner. Depending on the resulting risk classification, the decision and release process is then pursued at different levels of responsibility in cooperation with the compliance organization.

In fiscal 2008, the Company also initiated a quarterly, independent Compliance Review Process in the various businesses and Regions. A corresponding review is also submitted quarterly to the Managing Board. In the Compliance Review Process, important compliance issues are discussed, compliance risks are identified and assessed, and measures to reduce them are presented.

At the end of October 2007, the Managing Board of Siemens AG launched an amnesty program offering employees a way to voluntarily report violations of laws against corruption in the public sector. The program aimed at supporting the independent investigations by Debevoise & Plimpton LLP and facilitating a complete and timely clarification of suspected violations of anticorruption laws. During the program, which expired at the end of February 2008, a total of 123 employees submitted amnesty requests. To date, 82 requests have been granted.

In May 2008, the compliance organization also took over the processing of fraud cases. The total value of property damage or loss recorded and pursued in fiscal 2008 amounted to over €16 million.

In addition, starting in the second quarter, all employees working in so-called sensitive functions have been receiving multi-hour group training. These are employees who may negotiate contracts with representatives or officials of governments, public authorities and state-owned enterprises, or who might influence such negotiations. The key objective here is to provide employees with a working knowledge of international anticorruption laws and regulations and the related Siemens guidelines. Local laws and regulations in the various Regions are also included in the training. Emphasis is placed on the discussion and solution of case studies. Since the program began in January 2008, over 50,000 employees have attended these training sessions.

In fiscal 2008, members of the Managing Board and the Chief Compliance Officer discussed the importance of compliance and explained Company management’s attitude at various management conferences and employee meetings in more than 50 countries.

Our intranet website also has a compliance section where employees can find current compliance information and contacts. The Help Desk, launched in 2007, provides supportive functions under the categories “Tell us,” “Ask us” and, most recently, “Find it.” The “Tell us” function provides compliance-relevant reports worldwide 24 hours a day, 7 days a week, and in up to 150 languages. Using the “Ask us” function, employees have received answers to approximately 4,000 compliance-related questions. And the “Find it” function accesses a compliance knowledge base that includes all internal compliance guidelines, relevant national laws and regulations, as well as compliance-related training materials and speeches.

In the third quarter, we conducted an anonymous online employee survey of approximately 90,000 employees worldwide to assess employee awareness of compliance issues and receive critical feedback. More than 44 percent of the employees responded. The results will provide the basis for further program improvement and also be included in the assessment of top management’s performance and bonus payouts.

The revision of our Business Conduct Guidelines was completed in the fourth quarter, bringing them up-to-date with amended laws and regulations and with the requirements of the Siemens Compliance Program. The new Guidelines will be published in the first quarter of fiscal 2009 and backed by an online training course to familiarize employees with their contents.

In addition, the Company initiated or strengthened cooperation with numerous international non-governmental organizations (NGOs) during fiscal 2008.