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the Issuer otherwise than in accordance with the provisions of § 10 (5a) sentence 6 of the German Banking Act (Gesetz
über das Kreditwesen), the amounts repaid or paid must be returned to the Issuer irrespective of any agreement to the
contrary unless the amounts paid have been replaced by other liable capital (haftendes Eigenkapital) of at least equal
status within the meaning of the German Banking Act, or the Federal Financial Supervisory Authority (Bundesanstalt
für Finanzdienstleistungsaufsicht) has consented to such redemption or repurchase.
Risks Related to Instruments Generally
Set out below is a brief description of certain risks relating to the Instruments generally:
EU Savings Directive
Under EC Council Directive 2003/48/EC (the Directive) on the taxation of savings income, member states are required,
from 1st July, 2005, to provide to the tax authorities of another member state details of payments of interest (or similar
income) paid by a person within its jurisdiction to an individual resident in that other member state. However, for a
transitional period, Belgium, Luxembourg and Austria are instead required (unless during that period they elect
otherwise) to operate a withholding system in relation to such payments (the ending of such transitional period being
dependent upon the conclusion of certain other agreements relating to information exchange with certain other
countries). A number of non-EU countries and territories including Switzerland have agreed to adopt similar measures
(a withholding system in the case of Switzerland) with effect from the same date.
By legislative regulations dated 26th January, 2004 the Federal Government of Germany enacted provisions
implementing the Directive into German law. These provisions apply from 1st July, 2005.
If a payment were to be made or collected through a member state which has opted for a withholding system and an
amount of, or in respect of tax were to be withheld from that payment, neither the Issuer nor any Paying Agent nor any
other person would be obliged to pay additional amounts with respect to any Note as a result of the imposition of such
withholding tax. If a withholding tax is imposed on a payment made by a Paying Agent following implementation of
the Directive, the Issuer will be required to maintain a Paying Agent in a member state that will not be obliged to
withhold or deduct tax pursuant to the Directive.
A Paying Agent in a member state that is not obliged to withhold or deduct pursuant to the Directive will have to
provide details of payments of interest (or similar income) to the member state in which the receiving individual is
resident. The reporting obligation relates to, inter alia, information on the amount of interest paid as well as name,
address and account details of the receiving individual in accordance with Article 8 of the Directive.
For additional information in relation to the taxation of Instruments to be issued under the Programme see the section
entitled "Taxation – The Federal Republic of Germany" and commencing on page 254.
Credit Ratings May Not Reflect All Risks
Instruments issued under the Programme may be rated or unrated. Where a Tranche of Instruments is rated, such rating
will not necessarily be the same as the rating assigned to the Unsubordinated Notes and the Subordinated Notes to be
issued under the Programme. In addition, the rating may not reflect the potential impact of all risks related to structure,
market and other factors that may affect the value of the Instruments. A security rating is not a recommendation to buy,
sell or hold securities and may be subject to suspension, reduction or withdrawal at any time by the assigning rating
agency. Any ratings assigned to the Unsubordinated Notes and the Subordinated Notes as at the date of this DIP
Prospectus are not indicative of future performance of the Issuer's business or its future creditworthiness.
Change of Law
The terms and conditions of the Instruments (other than Credit Linked Instruments) are based on German law in effect
as at the date of this DIP Prospectus. The terms and conditions of the Credit Linked Instruments are based on English
law in effect as at the date of this DIP Prospectus. No assurance can be given as to the impact of any possible judicial
decision or change to German (or English) law or administrative practice after the date of this DIP Prospectus.
Risks Related to the Market Generally
Set out below is a brief description of the principal market risks, including liquidity risk, exchange rate risk, interest rate
risk and credit risk:
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