Compliance

The Company defines criteria for specific actions of directors, executive officers, and other employees by stipulating rules in its Mission Statement, Employee Handbook, Compliance Handbook, Export Control Program, Information Security Policy, and management systems for environment, labor safety and health and quality. By putting these rules into practice, the Company aims to achieve legal and regulatory compliance.
The Company has rolled out multiple compliance trainings for new employees and other staff, depending on their managerial level, as well as other learning opportunities. In addition, the Company has established an international whistleblowing service in accordance with the compliance hotline rules. In case of sexual harassment and other problems where special considerations to the privacy of employees are needed, employees can report the matter to a hotline that is operated by a third-party.
We have strengthened our global compliance system, which includes overseas group companies, by establishing an additional multilingual hotlines for internal and external reporting in Japanese, English, Chinese, and eight other languages.

DMG MORI's basic approach is to follow Foreign Exchange and Foreign Trade Act (hereinafter referred to as “Foreign Exchange Act”) when exporting goods, supplying technologies, and conducting agency transactions. Our Export Control Committee consists of all the board members and is chaired by President & Representative Director. The Committee stipulates and amends internal rules, such as the “DMG MORI Export Control Program”, and appoints persons in charge of operation. Export Control Department is responsible for operation of the program. It evaluates customers and makes applications for export licenses to the Ministry of Economy, Trade and Industry (hereinafter referred to as “METI”). In DMG MORI's export control system, for every item to be exported or technology to be supplied overseas an approval by Export Control Department must be obtained. In addition, Human Resources Department makes training plans on export control and the Internal Audit Department audits the operation.

1. Pre-export assessment
Prior to export, we need to confirm whether the companies or organizations that are going to purchase our products and services plan to utilize DMG MORI's machines only for civil purposes and not for military purpose that will pose a threat to international peace and stability. We first check the content of business of those customers and whether the desired products are subject to the Foreign Exchange Act or other export control regulations. After receiving orders, we perform thorough background investigations based on documents and visits. Thereafter, we apply for export license to METI. After receiving the license, we conduct a final check before shipment of the ordered machines. Recently, we started applying the same procedures to machines produced in the United States, Europe (Germany, etc.), China and India as well, in addition to those produced in Japan, to ensure compliance with both local and Japanese laws. If we have any doubt during the above-mentioned process that our products may be used for military purposes, the head of the Export Control Department will be informed and the Export Control Committee will make the final decision.

2. Post-export procedures
Continuous monitoring and control after export is important to guarantee proper usage of our machines. DMG MORI equips all of its machines with GPS-based devices for detection of machine relocation to prevent military usage by third parties through unauthorized sale or after bankruptcy. To unlock the machines, authorized employees responsible for export control must register GPS information of the expected installation location and the name of an employee who will visit the site. When our employees visits the location, they must obtain the GPS information once again on-site and confirm that both data are identical. In case of unauthorized relocation, the machine remains deactivated.

The Companyʼs internal control is based on the “Internal Control Guidelines” resolved by its board of directors.

1. Audit by Corporate Auditors
Corporate Auditors attend regularly held important meetings such as the board of directorsʼ meetings, Executive Officers Meetings and Management Meetings to hear matters to be resolved and reported, and request directors, executive officers, and managers to report as necessary.

2. Internal Audit
The internal audit department, which is an independent dedicated organization with three members and reports directly to the president, audits whether the business of the entire group is executed in an optimized and efficient manner. In addition, the internal audit department evaluates the effectiveness of internal controls of financial reporting (J-SOX) based on the Financial Instruments and Exchange Act. Furthermore, the internal audit department monitors the risk management of subsidiaries and shares it findings upon subsidiary audits by Corporate Auditors and liaison meetings with internal audit departments of subsidiaries. The results of audit carried out by the internal audit department is reported to the president and periodically to the Corporate Auditors, sharing information. The internal audit department has a close cooperation with accounting auditors, exchanging information such as audit schedules and audit procedures as needed.

3. Management of Subsidiaries
With one or more of the Companyʼs directors appointed as directors or corporate auditors of subsidiaries, the directors or auditors attend the board of directorsʼ meeting and other important meetings to receive updates on matters related to business execution from directors of subsidiaries or responsible employees, leading to strengthening the governance of subsidiaries.