Compliance

The Compliance function of Telefónica Group, which reports to the Board of Directors through the Audit and Control Committee, is aimed at managing preventive and reactive environments related to compliance with (a) law (b) Telefónica’s internal rules, both in the Corporation and in the operating businesses (Countries and Businesses), in general and with focus in specific sensitive matters depending on the circumstances.

Thus, the Compliance function extends to the management of questions that may arise regarding certain matters identified as sensitive from a compliance point of view.

The main subject supervised by the Compliance area and on which most of its policies, procedures and controls are concentrated in is the integrity, a cross-cutting concept that captures the fight against corruption and bribery.

Telefónica’s commitment to our stakeholders is zero tolerance for fraud and corruption as we understand that they have a negative impact on business and society.

Additionally, the Compliance function is responsible for coordinating the International Sanctions Program for the entire Group.

Telefónica’s Compliance Program is reinforced by its Corporate Policy on the Comprehensive Disciplinary Program, which is applicable to all employees

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Regarding Telefónica’s Global Compliance Model for the Prevention, Reaction and Response of potential breaches, it is worth highlighting:

INTEGRITY. The fight against corruption

Our Política Anticorrupción prohibits any type of corruption, public or private, active or passive, and regulates the acceptance and offering of gifts and invitations. To strengthen and expand it, we have the Rule on the Relationships with Public Entities, related to how the relationships of Telefónica Group with public entities and officials/employees should be managed from the diverse perspectives, and in particular, related to the internal rules to be complied with in connection to hospitality events with public officials.

Integrity means honesty and acting in accordance with non-negotiable ethical standards

Criminal Prevention

We have rules, policies and criminal or administrative prevention models in those countries in which local legislation contemplates the criminal or administrative responsibility of the legal entity for the commission of certain crimes or, in some cases, administrative offenses. In the case of Spain, we have a Penal Prevention Policy.

The crime prevention program of Telefónica, S.A. has obtained the UNE 19601 certificate from AENOR, which establishes the requirements that a Criminal Compliance Management System must have, to meet the objective of preventing the commission of crimes, reducing criminal risk in organizations and, thereby, promoting a culture Ethics and Compliance.

Conflict of interest

Telefónica has a Conflict of Interest Regulation that regulates those situations in which a Personal Interest, direct or indirect, of an employee, influences, could influence or generates the perception of being able to influence, in the professional decisions to be adopted by that employee, and this personal interest or benefit may collide with the interests of any company of the Telefónica Group. Our regulation requires doing right at all times, and especially in the event of a conflict of interest, respecting the corporate principles of Loyalty, Confidentiality and Transparency.

Third party Due Diligence

The Telefónica Group has defined a third-party due diligence model from a Compliance point of view; such control is on a continuous improvement. As part of such model, certain transactions (among others, M&A and joint venture transactions, donations, agency agreements, etc.) require individualized assessments.

Training and Awareness

At Telefónica we consider that training and awareness are key to preventing irregular behavior. For this reason, we train our employees from the moment they join the company on their obligations in terms of Compliance. In addition, employees must periodically complete training on the Principles of Responsible Business, the Telefónica Code of Ethics, which dedicates part of its content to the fight against corruption.

Additionally, we have specific training on the risks of international public corruption (based on the Foreign Corrupt Practices Act of the United States), aimed at those areas of the organization with a greater exposure to this risk and, also, training in matters of criminal prevention in those countries where there is a specific regime on this matter, as well as on other relevant matters.

We also promote communication actions and specific awareness-raising initiatives to reinforce the Group’s culture of Compliance.

Corporate Tools

To facilitate compliance with our commitments in terms of integrity and Compliance, at Telefónica we have the following tools:

• Compliance Inbox.
• Intranet Compliance (only employees).
• Conflict of Interest Tool * (only employees).
• Tool to declare gifts & invitations to Public Servants/employees * (only employees).

* The data of third data subjects provided through these tools are the responsibility of the Telefónica Group entity to which the communication is addressed. Such data will be processed in the legitimate interest of assessing compliance with processes related to corporate rules and policies, as well as for the purpose of managing your request and/or query. Third data subjects may contact the controller and exercise their rights by writing to [email protected]. Such third parties may consult additional information on the processing of their data in the Privacy Policy.