'Certified Service Advisors'

Module 1: Successful in the role of a service advisor

Subtopic 2: Compliance
What makes Daimler AG so fascinating?
What is the basis of its 125 years of success?

Slide 2
 In the mission statement we combine our traditional values with our ambitious
objectives
We invented the car – and are designing its future
with passion

As a pioneer of automotive engineering, Daimler feels obliged to fulfil its responsibilities towards society and the
environment by putting its designs for the future of mobility on a safe and sustainable basis – with groundbreaking
technologies and high-quality products.

We delight our customers with fascinating brands, first-rate premium cars that set new benchmarks, commercial vehicles
that are the best in their class, and outstanding service provision.

A company that aspires to top performance, Daimler is aiming for sustained growth and profitability at industry-leading
levels. We want to be our business partners’ first choice.

We live up to our responsibilities to society and the environment and maintain the highest ethical standards. Our company
values –‘passion, respect, integrity and discipline’ – are a source of strength for us and our guiding principles. We value
diversity as a means of bringing to bear our full potential as a global team.
Slide 3
Our corporate success is based on four basic values of human interaction

Slide 4
Integrity means:

• We are honest, fair and trustworthy.

• We apply high ethical standards to our conduct –
across the board and at all times.
• We do what we say – and we say what we do;
we value relationships that are based on
mutual trust.
• We accept responsibility and stand by our decisions.
We take pleasure in recognition, but also hold our hands
up when we make mistakes, then work together to find
solutions.
• We commit ourselves to the principle of sustainability,
in the awareness that profit and growth bring with
them a collective social and environmental
responsibility.

Slide 5
Consequences of unethical behavior

• Customers lose faith in the brand and turn to other brands

• Negative headlines in the press have a long-term destructive effect on the image of the
company and the brand that has developed positively over the past 125 years
• Loss of job and criminal investigations

Slide 6
Corruption = dirty hands?!

•Joint success can only be maintained in the long-term if it is achieved by proper and legal
means.

Slide 7
 Definitions of corruption

•“Corruption is defined as the abuse of entrusted power for private gain

or advantage.” – Transparency International

•In particular, corruption means …

… the offer, promise or provision of benefits (e.g. money, gifts, discounts, donations, credit,
payments or rewards) …

... to or by any person (not only public officials)…

… as an incentive to commit a dishonest or illegal act or a breach of trust in managing service

or sales transactions.

Slide 8
 Bribery risks in relation to different types of business partners

Companies

The bestowing of gifts or other benefits

Private persons Sole proprietors Salaried staff Public officials

 Decide on their own  Decide on their own  Decide based on the  Decide based on the
authority authority authority entrusted in authority entrusted in
 Only their own private  Only their own private them by the employer them by the public-sector
property is affected property is affected  Their decisions make employer
 There are no conflicts  There are no conflicts the employer liable  Decide on behalf of
of interest of interest  Consequences affect public-sector
 There is generally no  There is generally no the company assets organizations
risk of bribery risk of bribery  A conflict of interests is  Consequences affect the
possible public purse
 There is a risk of  A conflict of interests is
bribery possible
 There is a risk of bribery

Slide 9
Types
Active of corruption Passive
The focus is on the party that provides the benefit The focus is on the party that receives the benefit

Bribery Passive corruption

In most jurisdictions, bribery is In most jurisdictions, passive
understood to mean the provision or corruption is understood to mean the
promise of tangible or intangible receipt of or request for tangible or
benefits to a public official. intangible benefits by a public
official.

Corruption
Active corruption Passive corruption in business
in business dealings dealings
In most jurisdictions, active corruption In most jurisdictions, passive
in business dealings is understood to corruption in business dealings is
mean the provision or promise of understood to mean the receipt or the
tangible or intangible benefits to an request for tangible or intangible
employee of a private-sector company. benefits by an employee of a private-
sector company.

Slide 10
Consequences of corruption

Consequences for Daimler Consequences for Consequences for society*

employees

‐ Criminal investigations ‐ Criminal investigations ‐ Worldwide damages totaling

‐ Criminal prosecution and ‐ Criminal prosecution and around US$ 4 billion a year
civil liability civil liability ‐ Waste of public resources
‐ Financial penalties and loss ‐ Penalties and fines ‐ Constraints on the development
of profits amounting to of the private sector and
‐ Prison sentence
millions investment
‐ Considerable loss of ‐ Damage to reputation ‐ Risk to democratic structures
reputation ‐ Loss of job ‐ Administrative inefficiency
‐ Interruption to business, ‐ Professional bans ‐ Risk of infringing human rights
possible closures of facilities
and exclusion from public ‐ Civil lawsuit by the
contracts employer
‐ Civil lawsuits by competitors
or shareholders

*Federal Ministry for Economic Cooperation and Development: http://www.bmz.de/de/was_wir_machen/themen/goodgovernance/korruption/hintergrund/

index.html

Slide 11
Corruption recognizes no borders and the battle against it is therefore fought
globally

Corruption ...

•… leads to criminal and civil-law prosecutions

•… damages the reputation of the company and its business partners

•… destroys trust

•… funds organized crime

•… is illegal, unfair, immoral and damages everyone!

That is why all forms of corruption, bribery and embezzlement are prohibited

Daimler is committed to the worldwide fight against corruption, for example, as a member of
the anti-corruption organization Transparency International.

Slide 12
Various warning signals can arise within the course of a business process (After-
Sales)
 The customer is an
employee of a public
authority
 The customer asks for
gifts/additional benefits
 Service provided
without a written
 The customer want to request or order
involve a third party
(e.g. an intermediary or
 Discrepancy
consultant) between service
provided and
amount invoiced.

Customer
contact Delivery
Ordering Order
-Vehicle repair - Repairs /handover Invoice
-Parts order process - Parts delivery - Vehicle
-Service and - Parts
maintenance contract

 Donations or  The actual

similar support customer
payments are invoice price
made does not match
what was
agreed

Slide 13
 Look out for the warning signs!

• Especially strict rules apply to business dealings (whether directly or indirectly) with public officials
• The business partner has relationships with public officials
• The country or sector has a reputation of being corrupt
• Consultants are involved in the deal
• The deal includes complex sales or holding structures (tax havens, etc.)
• The business partner was recommended by a public official
• The business partner insists on anonymity
• The business partner does not possess the necessary resources to carry out the contracted activities
• Excessive payments to business partners or use of unusual methods of payment
• The business partner demands money in order to 'make the necessary arrangements'
• The business partner refuses to confirm compliance or behaves uncooperatively during an audit
• There are press reports about the bad reputation or criminal sentencing of the business partner

If you have questions about the legality of particular commercial activities, please contact your sales
manager or, if necessary, your company's legal counsel.
Slide 14
Case studies
Invitations to business meals Arranging an internship Invitation to an Inviting customers to celebratory
entertainment event events

Use of intermediaries

Slide 15
Case study 1: A risky invitation

You are responsible for conducting negotiations with the person

responsible for managing the vehicle fleet of a large corporate
customer in the private sector.
You decide to invite your business partner to a
business meal.

How would you judge this situation?

Slide 16
Case study 2: The internship

You have a meeting with representatives of a planning authority

to discuss their planned purchase of vehicles.
While conducting small talk after the meeting, one of the
officials asks you whether you could help his nephew gain an
internship placement at your company.

How would you judge this situation?

Slide 17
Case study 3: The sports event

Your management team has made tickets available to you for

admission to the hospitality suite at a sports event

You would like to invite two representatives of your largest

customer to the hospitality suite in order to cement the business
relationship.

The seats are worth €200 each.

What do you think about this?

Slide 18
Case study 4: Handover of vehicles to a public-sector customer
The municipal transport authorities have ordered a large number
of vehicles. A celebratory handover of the vehicles is planned
with about 75 invited guests. The associated catering costs
amounting to €200 per person and will be borne by your
company.

What is your opinion of this?

Slide 19
Antitrust law

Antitrust law is an area of commercial law. It protects free competition from restriction and
distortion by companies.
Antitrust law lays down the rules for
• joint actions, i.e. agreements or coordinated actions by two or more companies;
• unilateral action by dominant companies or those with a strong market position.
In regard to joint action, antitrust law prohibits agreements and coordinated action that has the
aim or effect of restricting, distorting or preventing competition (this regulation is known as
the 'ban on cartels').

The ban on cartels applies both to horizontal relationships (e.g. agreements between partners)
and vertical relationships (e.g. agreements between Daimler AG and its partners).

Slide 20
Case study 5: Price erosion

Your sales have come under considerable pressure due to other

Daimler dealerships who seem to be selling Daimler products
with ever-increasing discounts.

How would you respond?

Slide 21
Solution to case study 5

1. Why not ask the Daimler sales manager to introduce maximum price discounts, financial incentives for the dealer or
a suggested minimum price?

•For antitrust law reasons, Daimler AG and its partners (at least in the case of the authorized dealers) are not allowed
to agree the following:
• maximum price discounts

• minimum prices

• fixed package prices

• incentives for adhering to a recommended retail price

(i.e. 'vertical restrictions on competition' are prohibited).

2. Why not ask other Daimler dealers to re-establish a situation where there is 'fair competition'?

•For antitrust law reasons, competitors such as dealerships are not allowed to:
• coordinate competition between them by coordinating prices;

• coordinate other competitive parameters.

(i.e. 'horizontal restrictions on competition' are prohibited).

Slide 22
Daimler and its business partners – a joint approach to integrity and compliance

Daimler Business partners

• Passion, respect, discipline and integrity • Integrity is not a process or a formality but
are our corporate values. an internal compass.
("We live our values.") ("We know right from wrong.")

• Compliance means: • Business partners

- Compliance in all - must comply with the
activities with all rules
laws, rules and and laws that apply in all
regulations relevant their activities
to the business transaction - must fulfill their
- Compliance with associated internal contractual
guidelines and directives. compliance obligations
and should use the
Daimler guidelines as a
basis for their rule-compliant
behavior.

Slide 23
Clear expectations and long-term consequences

Daimler expects its business partners and their employees ...

• to be aware of national and international anti-corruption law

• to comply with all laws
• to help Daimler work in a legally compliant way
• to alert Daimler to signs of corruption
• to disclose all accounts and records to an auditor on request.

In the event of failure to fulfill • file a criminal complaint and claim for damages
the compliance obligations • refuse further deliveries or services
Daimler can ... • immediately annul business contracts.

Slide 24
Daimler Business Practices Office (BPO)
• Daimler set up the Business Practices Office (BPO) for reporting cases of
possible misconduct.
• The BPO is the central reporting office for cases of suspected misconduct
• The BPO is open to employees and externals
• The BPO does not provide advice on legal and compliance issues
• The BPO treats all information with confidentiality
• The BPO also accepts reports from anonymous whistleblowers*
• The BPO ensures that cases of misconduct are followed up and put right
for the future
• Whistleblowers will be protected against discrimination
* depending on the national data protection obligations

Contact details BPO - Germany Contact details BPO - USA

Tel.:+49 (0)800 289 4643 or +49 711 17 96528 Tel.: +1 248 957 2630 or +1 866 493 5562
Fax:+49 711 17 790 54323 Fax: +1 248 957 2631 or +1 866 493 5762
Email: BPO.Germany@daimler.com Email: BPO.Americas@daimler.com
Address: Daimler AG Address: Daimler Financial Services USA LLC
Business Practices Office (BPO) Business Practices Office (BPO)
HPC: 0655 36455 Corporate Drive
70546 Stuttgart, Germany Farmington Hills, MI 48331, USA
Slide 25
Contact Business Practices Office (BPO)
Asia, Australia, Pacific

Tell us - For Reports

•Daimler asks employees as well as third parties to address reports of suspected irregular
conduct to the Daimler Business Practices Office (BPO).

•The BPO will maintain strict confidentiality. Upon request, the BPO can also ensure
anonymous treatment of any information received.

•To file a report from Asia or Australia-Pacific (APAC region, except Japan*), please
proceed as follows:

Slide 26
Instructions for China, Malaysia and Australia:

Toll Free Numbers (Direct Dialing)

Country Direct Access Languages Available

China 400 881 1272 Mandarin, Cantonese, English

Malaysia 1-800-81-5543 Malay, English

Australia 1-800-64-9664 English

• (1) Place your call from a landline with international reach.

• (2) Dial the direct access number to be connected with the Daimler service provider (Global
Compliance).
• (3) Choose your preferred language.
• (4) If your preferred language is not English, an interpreter will join the call. Please be patient, as the
process can take several minutes.
• (5) A specialist from the service provider will answer your call and gather your information. 

Slide 27
Instructions for India, Indonesia, South Korea, Thailand and Vietnam

Toll Free Numbers (Direct Access Dialing - two step dialing)

Country Direct Access Hotline Number Languages Available
India 000-117 800-381-6401 Hindi, English
Indonesia 001-801-10 800-381-6401 Indonesian, English
South Korea 1 0030-911 (Dacom) 800-381-6401 Korean, English
South Korea 2 0072-911 (Korea-Telecom) 800-381-6402 Korean, English
South Korea 3 0036-911 (ONSE) 800-381-6403 Korean, English
Thailand 1-800-0001-33 or 001-999-111-11 800-381-6401 Thai, English
Vietnam 1-201-0288 800-381-6401 Vietnamese, English
•To use this service, first dial the AT&T** direct access number that is specific to the country from which you are calling. After that, dial the hotline number to be connected to the Daimler service provider
(Global Compliance).
•(1) Place your call from a landline with international reach.
•(2) Dial the country-specific AT&T direct access number.
•(3) You will hear a musical tone and an AT&T branding statement: “(bing) AT&T.” Now, dial the 10-digit hotline number (800-381-6401 or -6402 or -6403).
•(4) Choose your preferred language. If your preferred language is not English, an interpreter will join the call. Please be patient, as the process can take several minutes.
•(5) A specialist from our service provider (Global Compliance) will answer your call and gather your information.

•*ForJapan:
•Email:mftbc_fuso_shainsoudan@daimler.com
•Phone: 044-330-7262 or 03-3517-6777, Fax: 03-3517-6776
•** Note: In some countries or with some phone systems, an AT&T operator may answer in Step 3. The operator should not request a calling card or credit card number.

Slide 28
Compliance is an integral part of the Daimler culture

'Compliance is not an option for Daimler. It is an

integral and permanent element of our corporate
culture."

Dr. Dieter Zetsche, video statement, April 2009

• Integrity is one of our four corporate values. It forms the basis of all our actions and of
our success as a global corporation.

• Ethical behavior is essential for a partnership built on trust and collaboration.

• Compliance is something that concerns everyone. Every employee and business partner is
responsible for his or her own ethically sound conduct.

Slide 29
Legal note:

Please note that the information provided as part of this training package does not constitute legally
binding advice or offer directives for action but is merely intended for clarification purposes. Please
also note that the course content can change at time due to new developments and documents in
different languages may differ from each other in some cases.

Slide 30