This statement was signed by the President and became valid on October 23, 2007

Corporate principles governing internal export control on nonproliferation

NORINCO 2007

NORINCO holds firmly the position that any kind of proliferations，including that of Weapons of Mass Destruction (WMD) and their means of delivery, are conducive neither to world peace and stability nor to China’s security, and is absolutely in contrary to NORINCO’s value of being a responsible corporation for the benefit of international community.

Pursuing sustainable growth, shaping good corporate image and assuming social responsibility are among NORINCO’s core values. NORINCO regards itself as an active force of nonproliferation in the international community.

NORINCO affirms its unequivocal and emphatic support for Chinese government’s non-proliferation and export control policies, which NORINCO commits to abiding by fully and uncompromisingly. NORINCO resolutely supports Chinese government’s international commitments and international obligations, as well as relevant United Nation Security Council’s resolutions.

Effective export control requires a combined effort between governments and companies. In order to ensure effective fulfillment of compliance obligations on nonproliferation, NORINCO established and implemented an Internal Compliance Program (ICP), in an effort to prevent proliferation of WMD and their means of delivery, and to control the proliferation risks of conventional defense products and technologies, dual-use goods and technologies, Intangible Technology Transfers (ITT) and deemed exports, etc.

By taking a catch-all principle for export control, NORINCO puts the goal of nonproliferation over its commercial interests. In practice, this means that even if a particular export transaction is legal according to export control laws and regulations, NORINCO – in accordance with its corporate policy of voluntary self-restraint in export activities – will neither directly nor indirectly supply products, technology or services if NORINCO knows or has reason to believe that such items could be used by its customer or end-user for the development or production of WMD and their means of delivery, or such exports may undermine international, regional or the recipient country’s security and stability, or such exports may pose end-user or end-use risks such as falling in the hands of terrorist organization or terrorists .

In order to ascertain what products, technology and services, as well as which customer and end-user, should be regarded as sensitive, NORINCO will establish and maintain close contact with all responsible Chinese government agencies, relevant NGOs and non-proliferation and export control experts for information, instruction and advice.

To ensure effective implementation of ICP, NORINCO established ICP Council and ICP office, which are authorized to veto any order in question. ICP has been institutionalized by the issuance of nonproliferation and export control guidance and regulations, establishment of order screening standard procedures and record keeping rules, regulations on education, training and internal audit, and signing of nonproliferation and export control letter of responsibility between corporate executives and managers of operational departments and subsidiaries. Based on the existing Enterprise Resource Planning (ERP) computer management system, and according to international norms, NORINCO will further develop databases of sensitive products and entities as well as an ICP module, which will serve as a digital platform for export control.

All NORINCO employees will actively work to achieve the corporate goal of nonproliferation, by participating in training and strictly abiding by corporate policy. NORINCO will issue regulations on incentives and punishments, which will encourage compliance efforts and punish violations or failures. Any violator will face serious consequences, and will be prosecuted according to law if he or she constitute a criminal offenses.

This policy applies to all divisions and subsidiaries of NORINCO worldwide. The principles incorporated herein have been or will be implemented within the framework of NORINCO’s existing internal compliance program. This policy will be reviewed and revised on an annual basis in order to incorporate the latest development of nonproliferation and export control.

President:   Mr. Zhang Guoqing
China North Industries Corporation (NORINCO)