'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 Sole Salaried staff Public officials

persons proprietors  Decide based on  Decide based on the
the authority authority entrusted
 Decide on their  Decide on their in them by the
own authority own authority entrusted in them
by the employer public-sector
 Only their own  Only their own employer
private property is private property is
 Their decisions
make the  Decide on behalf of
affected affected public-sector
 There are no  There are no employer liable
 Consequences organizations
conflicts of conflicts of interest  Consequences affect
interest  There is generally affect the
company assets the public purse
 There is generally no risk of bribery  A conflict of
no risk of bribery
 A conflict of
interests is interests is possible
possible  There is a risk of
 There is a risk of bribery Slide 9
 Types of corruption
Active 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 corruption is understood to
provision or promise of tangible mean the receipt of or
or intangible benefits to a public request for tangible or
official. intangible benefits by a public
official.

Corruption
Active corruption Passive corruption in
in business dealings business dealings
In most jurisdictions, active In most jurisdictions, passive
corruption in business dealings corruption in business
is understood to mean the dealings is understood to
provision or promise of tangible mean the receipt or the
or intangible benefits to an request for tangible or
employee of a private-sector intangible benefits by an
company. employee of a private-sector
company.
Slide 10
Consequences of corruption

Consequences for Consequences for Consequences for

Daimler employees society*

‐ Criminal investigations ‐ Criminal investigations ‐ Worldwide damages

totaling around US$ 4
‐ Criminal prosecution ‐ Criminal prosecution billion a year
and civil liability and civil liability
‐ Waste of public resources
‐ Financial penalties and ‐ Penalties and fines
loss of profits ‐ Constraints on the
amounting to millions ‐ Prison sentence development of the
‐ Damage to reputation private sector and
‐ Considerable loss of investment
reputation ‐ Loss of job
‐ Risk to democratic
‐ Interruption to ‐ Professional bans structures
business, possible
closures of facilities and ‐ Civil lawsuit by the ‐ Administrative
exclusion from public employer inefficiency
contracts
‐ Risk of infringing human
‐ Civil lawsuits by rights
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
 Service
benefits provided
without a
 The customer written request
want to involve a or order
third party (e.g. an
intermediary or
 Discrepancy
consultant) between service
provided and
amount
Customer invoiced.
contact Order Delivery
-Vehicle repair Ordering - Repairs /handover
-Parts order Invoice
-Service and
process - Parts - Vehicle
delivery - Parts
maintenance
contract

 Donations or  The actual

similar customer
support invoice price
payments does not
are made 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
Slide 14
Case studies
Invitations to business Arranging an internship Invitation to an Inviting customers to
meals entertainment event celebratory 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 • Integrity is not a process or a

and integrity are our corporate formality but an internal compass.
values. ("We know right from
("We live our values.") 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 contractual
internal 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 • file a criminal complaint and claim for

fulfill 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 -
Contact details BPO - USA
Germany
Tel.:+49 (0)800 289 4643 or +49 711 17 Tel.: +1 248 957 2630 or +1 866 493
96528 5562
Fax:+49 711 17 790 54323 Fax: +1 248 957 2631 or +1 866 493
Email: BPO.Germany@daimler.com 5762
Address: Daimler AG Email: BPO.Americas@daimler.com
Business Practices Office (BPO) Address: Daimler Financial Services USA LLC
HPC: 0655 Business Practices Office (BPO)
70546 Stuttgart, Germany 36455 Corporate Drive
Slide 25
Farmington Hills, MI 48331, USA
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 Languages
Number 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- 800-381-6401 Thai, English
11
Vietnam
•To
1-201-0288 800-381-6401 Vietnamese, English
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