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in tax havens

Repsol does not operate in territories included in the list of uncooperative tax havens prepared by the OECD.

In our business dealings, Repsol does not use special purpose vehicles or any other kind of structures to hide, cover up, or reduce the transparency of its activities before the tax authorities or any other stakeholder.

In particular, by signing up to the Code of Best Tax Practices, Repsol has expressly committed itself not to use opaque structures for tax purposes. Opaque structures are anything designed to prevent the tax administration from identifying liable parties or owners of goods or rights, through the use of special purpose entities in tax havens or territories that do not cooperate with the tax authorities.

In support of this commitment, Repsol has been working actively over recent years to reduce its already limited presence in territories classified as tax havens or territories that do not cooperate with tax authorities. The Repsol Board of Directors, via the Audit and Control Committee, must be notified in the event of our creating or acquiring stakes in entities domiciled in countries or territories considered to be tax havens.

Therefore, Repsol is currently not present in any of the territories included in the OECD list of non-cooperative tax havens(82).

Spanish legislation, however, provides a broader definition of tax havens. By this definition, we have 10 active companies constituted in such countries, specifically Bermuda and the Cayman Islands. Out of these companies, only three are controlled by Repsol. Their purposes are insurance activities (Bermuda), industrial share holdings (Bermuda) and financial activities (Cayman Islands). In the Cayman Islands case, the particular company through which we undertake financial activities is Repsol International Capital. This entity has(83) two preference share issues admitted to trading in Spain and is subject to the supervision of the Spanish securities market regulating authority, the Spanish National Securities Commission, to which it sends periodic reports of its activities and financial statements.

Additionally, one Repsol company is established in Liberia, not considered a tax haven, but with similar characteristics. This company carries out hydrocarbon exploration activities.

(82) Progress report of September 14, 2011.
(83) On the AIAF fixed income market.