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732019 ANNUAL AND CORPORATE RESPONSIBILITY REPORT

Our Compliance Management System is intended to help establish internal mecha- nisms to prevent, manage, control and react to potential compliance risks, in- appropriate behaviour or non-compliance.

In order to meet these objectives, it is essential to involve and communicate our Code of Ethics and Conduct and the corporate policies that implement it to our employees and to all third parties with whom we establish relationships as we carry on our activities. Thanks to the training and communication actions that we carry out, as well as initiatives such as the celebration of Ethics Day, we promote the knowledge and commitment with compliance and the ethical behaviour along our entire value chain. Moreover, and in order to verify the effectiveness of our management and prevention models, we have submitted our Crime Prevention Model to an external audit based on its design and effectiveness, and obtained a favourable report in this respect.

In 2019 no significant penalties or fines for breaches of environmental legisla- tion were reported1, and neither is there any evidence of any significant breaches of legislation of a social or economic na- ture1. At 2019 year-end the environmen- tal lawsuit of June 2011 remained open, in which a group of fishermen in Thailand filed a complaint against a subsidiary of Cepsa due to the impacts derived from

the subsidiary's activities. Also, in the area of competition, we are still awaiting the date to be set for the vote and ru- ling on the two appeals we filed in 2015 against the resolutions of the Spanish National Markets and Competition Co- mmission (CNMC), where two penalties of EUR 10 million and EUR 2.5 million were imposed on Cepsa.

In addition, Cepsa is also the subject of an oversight proceeding relating to compliance with a ruling issued by the CNMC in 2013 for fixing the RRP of fuels to distributors who were not agents but rather independent businessmen for assu- ming significant risks linked to the sale of products to third parties. The Oversight Sub-Directorate proposed to the Compe- tition Court of the Council of the CNMC that it rule that Cepsa had complied with the notifications contained in the afore- mentioned ruling of December 2013. However, the aforementioned Council ruled in August 2017 that "it was not possible to consider compliance with the CNMC Ruling of July 2009 to be held to have been proved, in the terms proposed by the Competition Directorate". After having worked closely with the Oversight Sub-Directorate, we found a satisfactory solution and the aforementioned Sub-Di- rectorate issued a Partial Oversight Report to the Council in June 2019, urg- ing it to declare our compliance.

1 Penalties or fines for breach of environmental, social or economic legislation are considered significant when they exceed EUR 2 million.

COMPLIANCE MANAGEMENT SYSTEM