BRAZILIAN CLEAN COMPANY ACT Marco A. de Gregorio The materials presented are for general purposes only and do not constitute legal advice. The content and opinions expressed by the presenter do not constitute or imply endorsement by General Motors.

Brazil: 8th World Economy Area : 8,514,877 sq km (5th largest) Population : 203M (2015 est., 5th largest) Total GDP: US$ 2,3 trillions GDP per Capita : $ 11,173 (60th largest) Sales of new cars: 3.4M in 2014 (7th largest) Language : Portuguese Legal System: Civil Law Currency : Brazilian Real (BRL): 3.8 : 1 USD

General Motors in Brazil 90 years in Brazil 3rd global largest market for GM/Chevrolet 20,000 employees 596 GM dealers ~580,000 vehicles sold in 2014 Portfolio: Cars, SUVs and Light Duty Pickups

Transparency International: 69th position at the Corruption Perception Index 2014

1977 - FCPA 1997 - Brazil signed the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions 2010 - First Bill of Law imposing sanctions to Companies due to corruption acts New Bill of Law (n. 39/2013) submitted by the Federal Government to Congress (current Clean Company Act) Law enacted in 1st August 2013 requiring additional regulation

June 2013 Intense public demonstrations in Brazil Social media mobilization Initially against public the conditions of public transportation but moved to protests against public inefficiency and corruption More than 3 million people on streets (several days) in 170 cities

March 2015 Corruption investigations (“Lava Jato”) and Petrobras scandal Almost 2 million people attended the March 15th’s public demonstration in more than 200 cities Social Media mobilization Anti-corruption focus

Compliance Scenario - Brazilian Companies 47% Of the companies do not monitor their budgets compliance framework and 33% reported having only USD 130,000 budget for the execution of compliance functions, while only 2% reported having higher budgets of R$ USD 650,000 in annual basis. 46% of companies rated their compliance structure in the two lower maturity levels. However, when analyzing the answers to each of the elements and principles of compliance contemplated in the survey, it was observed that over 70% of companies do not have reasonable compliance mechanisms properly implemented. 42% said that senior executives do not enforce that compliance is essential for the success of the company and business. 19% do not have a compliance framework implemented to support governance and compliance culture.32% mentioned that the structure and the compliance function is being performed by the company for a maximum of three years. 17% do not have a Code of Ethics implemented or updated in the light of the new Brazilian Anticorruption Law No. 12,846/ 13. While 40% have not implemented any anti-corruption policy and 43% have no ethics and compliance program mechanisms for monitoring compliance with mandatory training to the employees.

GM GLOBAL COMPLIANCE PROGRAM GM Global Ethics & Compliance Center Training tools Code of Conduct Global Policies AwareLine Strict enforcement

Global Policy Mandatory Annual Trainings: - Global Anti-Corruption Compliance - Integrity: Gifts, Hospitality and Anti-Corruption - Reporting Wrongdoing & Business Misconduct

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