Annual Report 2016

Compliance programs

We aim to act in accordance with ethical principles and to comply with all applicable laws, internal regulations and voluntary commitments. We pay particular attention to complying with all applicable anti-corruption regulations and to ensuring the maintenance and promotion of fair competition, as set out in binding form in our Integrity Code.

Effective Compliance and Legal department structures

Our effective Compliance and Legal department structures play a key role in ensuring that all rules and regulations are adhered to throughout the Group. Our Compliance organization is structured in a divisional and regional way, while our Legal department is organized along the value chain and regionally. This structure enables us to offer optimal support and advice to our divisions. For this purpose, a contact person is assigned to each function, division and region. In addition, local contact persons around the world make sure that our standards are observed. The divisional compliance officers and the regional compliance officer report directly to the Chief Compliance Officer. This ensures the divisional and regional compliance officers’ independence from the divisions. The Chief Compliance Officer and the Group General Counsel report directly to the member of the Board of Management responsible for Integrity and Legal Affairs. The Chief Compliance Officer also reports to the Audit Committee of the Supervisory Board.

We offer target-group-specific qualification courses within our integrated training program in order to make sure our employees in the Compliance organization and Legal department are up to date on changes made to laws and regulations. All new Compliance and Legal department employees also receive a comprehensive introduction to their functions in a special practice-oriented seminar.

Compliance Management System

Our compliance management system is based on national and international standards and supports us in ensuring compliant behavior in daily operations at all of our business units. We regularly review the effectiveness of the system and adjust it to worldwide developments, changed risks and new legal requirements. Thus, we continuously improve its effectiveness and efficiency, also with regard to compliance with technical regulations relating to our products. In particular, this is a matter of identifying regulatory risks in the product-creation process, in order to protect the Daimler Group, its employees and its brands. Our various compliance programs are based on our compliance management system (CMS). We would like to present the following areas by way of example:

Whistleblower system BPO (Business Practices Office)

The whistleblower system BPO enables Daimler employees and external whistleblowers to report misconduct anywhere in the world. The office is available to receive information around the clock. This information can be sent by e-mail or normal mail, and it can also be provided by calling an external toll-free hotline or by filling out a reporting form. The information can be submitted anonymously if local law permits. In Germany, reports to the BPO can also be submitted via a neutral intermediary — in this case, an independent external attorney. The BPO system enables us to learn about potential risks and specific violations, thus preventing damage to the company and its reputation. Our globally valid corporate policy ensures a fair and transparent approach that takes into consideration the principle of proportionality for affected parties, while also giving protection to whistleblowers.

Sharing experience of compliance in practice

Sharing experience in the area of compliance policies and measures is very important to us, and we have therefore created the Daimler Compliance Academy in order to establish a platform for such sharing. The academy’s annual practical seminar is designed for compliance experts from all business sectors, managing directors, and other individuals who are interested in compliance issues. The seminar focuses on a discussion of compliance trends and challenges. The Daimler Compliance Academy was held for the third time in 2016. During the reporting year, we also held our first conference on combating money laundering in the trade with goods.

Systematic minimization of compliance risks

We systematically minimize compliance risks. We analyze and assess the compliance risks of all our business units every year. The results of this analysis form the basis of our risk management. One focus of our risk minimization activities is on sales companies in high-risk countries. The responsibility for implementing and monitoring the associated measures lies with each company’s management, which cooperates closely with the relevant departments within Integrity and Legal Affairs.

Compliance at our business partners

We also require our business partners to adhere to clear compliance stipulations, because we regard our business partners’ integrity and behavior in conformity with regulations as an indispensable precondition for cooperation based on trust. In the selection of our direct business partners, we therefore make sure that they comply with the law and observe ethical principles. Within the framework of our integrated training program, we also offer our business partners special training courses on integrity and compliance in line with the specific risks they face. In 2016, we published a “Compliance Awareness Module” that can be made available to our business partners on request and is designed to increase awareness of the latest compliance requirements. We also reserve the right to terminate our cooperation with business partners who fail to conform to our standards. For the expectations we place on our business partners.
(See daimler.com/sus/obr)

Anti-corruption compliance

Anti-corruption compliance is ensured with a system applied worldwide that primarily comprises integrated risk assessment, risk-based measures for the avoidance of corruption in all business activities (such as reviews of business partners and transactions) and special care in contacts with public officials. We have achieved a recognized high standard in the avoidance of corruption and place the same strict requirements on all of our activities around the world. We are continually further developing our methods and processes.

Antitrust compliance

Our Group-wide antitrust compliance program is oriented to national and international standards. The program establishes a binding, globally valid Daimler standard that defines how matters of competition law are to be assessed. The Daimler standard is based on the strict standards of the European antitrust authorities and courts. Its existence ensures a uniform level of compliance and advice in all countries.

By means of training courses, an advisory hotline specially set up by our Legal department, guidelines and practical support, we help our employees to recognize situations that might be critical from an antitrust perspective and to act in compliance with regulations in their daily work.

The results of our compliance risk analysis form the basis of our risk management and of the definition of measures to be taken to counteract any risks related to antitrust law. We also carry out monitoring activities in our corporate units. They help us to continually improve the effectiveness of our antitrust compliance program and to adjust it to worldwide developments and new legal requirements.

In order to ensure an independent external assessment of our antitrust compliance program, the KPMG Wirtschaftsprüfungsgesellschaft audited the compliance management system for antitrust law in accordance with the 980 standard of the Institute of Public Auditors in Germany. This audit, which was based on the principles of appropriateness and effective implementation, was successfully completed at the end of 2016.

Data protection compliance

The Corporate Data Protection department provides worldwide support to all Group companies and helps to ensure compliance with data protection requirements. The Chief Officer Corporate Data Protection is independent und reports directly to the Board of Management Member for Integrity and Legal Affairs. The annual data protection report is submitted to the Supervisory Board. Our Data Protection Policy creates a uniform standard applicable worldwide for handling data of employees, customers and business partners, and meets the requirements of the European Data Protection Directive. The Corporate Data Protection Department is the contact point for data protection complaints, carries out checks and audits, ensures employees’ awareness of data protection and advises the relevant departments. The focus of product-related advice is data protection for connected vehicles and autonomous driving functions, as well as mobility services.

Anti-money laundering compliance

Our anti-money laundering policy is designed to prevent money laundering and the financing of terrorism in the trade with goods. It forms the basis for ensuring that legislation in various countries is complied with throughout the Group. The Chief Compliance Officer serves as the anti-money laundering officer of Daimler AG. A center of competence supports the Chief Compliance Officer in the management and coordination of money laundering prevention measures in the goods trade.

Sanction lists compliance

We consistently comply with sanction lists and thus ensure that the legal sanctions specified by legislation are observed. We have introduced a risk-focused, system-based global process in order to ensure that this compliance is effective and efficient.

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