Compliance and verification of compliance with all the laws and regulations of the countries where the Group does business is a must at EADS. Rapid changes in the industry and the overall global environment constantly present new legal or regulatory requirements and ethical standards which call for robust internal controls in the field of legal compliance.

Against this background, the Group monitors overall compliance with all laws relating to its business activities in addition to having a special focus on compliance with export control regulations.

• “EADS is committed to complying with antitrust and competition as well as humanitarian law, when applicable, in all of its activities and throughout the Group.
• EADS is also committed to complying with all applicable legislation relating to foreign trade. EADS Group companies comply with all import and export control regulations that govern the exports and imports of commodities, technical data and technical support.
• EADS always obtains export licenses and other government approvals prior to exporting products and technology controlled by governments or the EU.
• EADS screens new customers and suppliers to ensure that they do not do banned business. ”

Amongst the various areas of the law which require constant monitoring, it is worth mentioning a few examples that are of particular importance to EADS although the list is only indicative. Examples of this permanent monitoring process are: compliance with the laws and regulations governing competition, protection of the environment, public sector procurement and accounting and financial reporting.

Compliance with Corporate Governance standards is another area of focus. Governance practices are developed and monitored to fulfil the Board’s responsibility towards customers, shareholders and employees to oversee the work of the management in the conduct of the Company’s business, and to serve the long-term interest of stakeholders.

Because of the particular nature of the industries that it is active in, EADS has put a special focus on the overall area of compliance with export controls regulations both in its commercial aviation businesses and as a company dealing with defence and dual-use products as well. Being a high-technology company both in the civil and in the defence environment means, for example, that EADS’ know-how in the form of products or services and all relating technical data is subject to a wide range of export controls laws and regulations. Keeping the Company’s status of “reliable importer/exporter” is the constant ambition of Company’s export control specialists and employees; thus EADS strictly follows highly regulated processes to control the final destination of its products and technologies.

As each of the countries from which EADS exports defence products has specific laws and regulations on arms export control, the organisation of compliance is tailored to the related countries within EADS. BUs have appointed Export control officers and allowed dedicated resources to implement export control compliance procedures as close as possible to people working with export controlled products (commodities, software, technical data).

National Export control officers were appointed at EADS Group level. Depending on the country from which exports take place, either the country Export control officer is legally responsible for compliance and thus has a strong centralisation and decisional role or the final responsibility lies in the hand of each of the legal entities and its local Export control officer. In this later case, the national Export control officer ensures coordination and provides the Headquarters and the BUs with expertise and advice.

The national Export control officers organise regularly within their respective countries meetings and conferences with their export control officers’ national network, to share knowledge and expertise on compliance requirements and procedures. Training is also provided to export control staff as well as to other relevant functions as marketing and procurement, creating awareness for the importance of export control issues. The EADS’ national export officers decided in January 2006 to go further in strengthening the Group compliance processes by proposing a detailed EADS Group export control policy.

The same applies to import regulations as EADS is a major importer as well and has a continued globalization approach.

In parallel to import/export aspects, there are also specific requirements dealing with access to and dissemination of restricted or classified information whether it is for national security reasons or other customer driven requirements especially in the field of defence, which are strictly followed by EADS, based on Group specific policies.

Separate policies are enacted in order to protect EADS data and overall Company proprietary and confidential information.

From an organisational standpoint, EADS Legal Affairs, in coordination with the Divisions’ and BUs’ legal departments, is responsible for designing, implementing and overseeing the policies and processes aimed at ensuring that EADS’ activities comply with all applicable laws and regulations. Teamwork amongst all the legal players and export control professionals in the Company is aimed at ensuring consistent and comprehensive legal processes in compliance with national requirements. Corporate Legal Affairs is also responsible for overseeing all litigation affecting the Group, as well as for the legal safeguarding of the Group’s assets, including intellectual property.

Extended networks of professionals (export control, intellectual property) located close to operational players drives the export control activities. These professionals are capable of handling the requirements of the many jurisdictions that are relevant to EADS, not only in its “home countries” but abroad as well.

The Corporate Secretary with the support of Legal Affairs departments also play an essential role in the setting up and administration of (i) EADS Corporate Governance procedures and (ii) legal documentation underlying delegation of powers and responsibilities and defining the EADS management and the internal control environment.

Finally, all those activities are audited by the Internal Audit department which consists of a team of dedicated professionals who are familiar with the requirements and challenges of the Company’s international business.

Although each EADS BU and location faces different compliance challenges, they are extremely vigilant in monitoring legal risks. They constantly ensure that regulations are applied and track any infringement risks so as to prevent them. This is based on three basic processes:

• Preventing compliance risk is key to the overall EADS approach. Such a preventive approach is based on the addition of Company policies and deep cultural values supported by solid infrastructure for compliance, training initiatives and general employee awareness actions as well.
• Identification of compliance risks results from systematic monitoring of key compliance risks in each of the BUs.
• Whatever the source of the compliance risk may be, EADS takes responsibility for finding the facts and analyzing the applicable laws; measures are then taken to deal with the situation in a proactive manner.

Sharing of information, especially within the CSR network and the community of legal professionals is designed to help the Company learn from mistakes, if any, thus using its experience to continue raising the bar in its compliance processes.