ORY SLONIM LAW OFFICE 2008

1. Risk Management - preventative medicine in the legal world ORY SLONIM LAW OFFICE 2008 C

2. During their usual course of business, company officers are exposed to a wide range of criminal events The above risks are not insured in any insurance policy Strong linkage between criminal risks and its results to the financial aspects Accurate and detailed preparation can minimize the risks and the exposure to criminal proceedings ORY SLONIM LAW OFFICE 2008 C

3. Criminal risk The risk of a person or an organization facing criminal trial as a result of breach of statutory duty/ failure/ accident that caused a damage to a human being, property or environment ORY SLONIM LAW OFFICE 2008 C

4. Operational risk The risk of loss resulting from inadequate or failed internal processes, people and systems, or from external events ORY SLONIM LAW OFFICE 2008 C

5. Criminal and operational risks Conflict of interests Breach of statutory duty Failure to report to authorities/ inspectors/ management Lack of internal control Breach of secrecy Industrial accidents, environmental pollution Money laundering Breach of trust Frauds and embezzlements ORY SLONIM LAW OFFICE 2008 C

6. Legal expenses Loss of reputation Loss of clients The implications of the criminal and the operational risk Financial collapse Criminal sanction – imprisonment and fines Health damages and loss of human life Financial claims ORY SLONIM LAW OFFICE 2008 C

7. Directors and management responsibility to risk management Policy Internal control Risk management procedure Organizational structure Prevent of failures ORY SLONIM LAW OFFICE 2008 C

8. The prosecution has to prove its case beyond a reasonable doubt The burden of proof Taxation/securities Safety and ecology Regular criminal trial Some articles of the law require officers to implement all the reasonable means in order to prevent a crime The burden of proof is shifted to the defendant to show that he implemented all the reasonable means in order to prevent a crime ORY SLONIM LAW OFFICE 2008 C

9. The burden of proof Implement all the reasonable means Implementation of internal enforcement program Risk management Supervision, control, instruction and assimilation ORY SLONIM LAW OFFICE 2008 C

10. Methodical event analysis – The 5 ‘m’ model Management aspects related to the event . E.G: procedures, instruction, supervision and control Human factors that contribute to the occurrence of the event Mission המשימה Management Medium Men Medium גורמי סביבה Mission Machine Technological aspects including equipment failure Factors that help define the mission and adjust it to the capabilities of the executing team Environmental aspects that contribute to the event ORY SLONIM LAW OFFICE 2008 C

11. Studying the company's plants and factories Mapping the main risk factors in each factory Mapping the company’s factories Studying the main producing procedures in each factory Environmental hazards Safety hazards * Dangerous sites. * Inappropriate equipment. * Risky machines. * Sites where accidents occurred before. (the ‘m’ model) * Waste dump sites. * Air/land pollution. * Water contamination. * Leakage of hazardous materials. ORY SLONIM LAW OFFICE 2008 C

12. Officers and workers Examination of the organizational and the administrative structure, in order to reveal risks to officers – directors, managers and workers ORY SLONIM LAW OFFICE 2008 C

13. Activities of officers and workers in the company and the supervision and control of their activities ORY SLONIM LAW OFFICE 2008 C

14. Confrontation of the company with potential risks as a result of breach of statutory duties, Including exposure to criminal procedures in the country and abroad Laws related to ecology and environment Companies laws The penal law Laws related to business licensing Laws related to safety ORY SLONIM LAW OFFICE 2008 C

15. OUTSOURCING Exposure to criminal risks due to contacts with external organizations ORY SLONIM LAW OFFICE 2008 C

16. Risk management is better than criminal indictment ORY SLONIM LAW OFFICE 2008 C