Preamble

The Government of the Kingdom of Denmark

The Government of the Republic of Finland

The Government of the Kingdom of Norway and

The Government of the Kingdom of Sweden,

(hereinafter referred to as the « Parties »)

Recalling the Nordic Framework Agreement, signed 7 November 2000 stating that the Parties will strive for increased cooperation within the field of defence equipment, to gain economic, technological and/or industrial advantages for the participating nations,

Recalling that Ministers of Defence of the Parties have expressed their wish to see further development of a Nordic defence industry, improving its competitiveness in the Nordic market and in the international market, and recognising that, where possible, a restructuring of production activities should be based on the concept of industrial Centres of Excellence and mutual interdependence;

Acknowledging that any activity undertaken under this Agreement shall be compatible with the EU membership of Denmark, Finland and Sweden as well as with Norway's membership of the EEA and the membership of Denmark and Norway of NATO, and the obligations and commitments resulting from such membership;

Taking into account that interdependence within the field of defence materiel is growing as a consequence of mergers in the defence industry; and that various arrangements to this effect have been concluded regionally and globally, also between defence industry entities in the Nordic countries;

Wishing to create the political and legal framework necessary to facilitate industrial operations in order to promote more competitive and robust Nordic defence industries;

Acknowledging the advantages of maintaining a strong Nordic defence industry, and the importance, from a security of supply perspective, of supporting a sufficient level of purchases for national defence forces of the Parties from these industries as home market suppliers;

Wishing to apply procedures relating to security clearances, transmission of classified information and visits, as laid out in existing security arrangements, with a view to facilitating industrial cooperation without undermining the security of classified information;

Desiring to simplify Transfers of Defence Materiel and related Services between them and wishing to ensure that exports of equipment produced in cooperation between them will be managed responsibly in accordance with Parties' international obligations and commitments in the export control area, especially the criteria of the European Union Code of Conduct on Arms Exports adopted by the EU Council of Ministers on June 8, 1998 and also adhered to by Norway which should be regarded as the minimum for the management of, and restraint in, conventional arms transfers;

Emphasizing that restructuring in the field of defence production must take account of the imperative of ensuring the Parties' security of supply, and a fair and efficient distribution and maintenance of strategically important assets;

Recalling the Parties' need to safeguard the supply of defence materiel to national defence forces in times of peace, crisis or war and taking into account each Party's other international commitments;

Recognizing that a closer industrial cooperation in the defence materiel area should be supported by a more flexible approach to applying national industrial compensation requirements;

Taking into account the relevant bilateral agreements concluded between the Parties concerning the security of supply;

Have agreed as follows:

Section 1. Definitions

1. For the purpose of this Agreement:

a.) « Defence industrial entity » means all corporate, industrial or other legal entities having assets located within the territories of two or more of the Parties, producing or supplying defence materiel and related services and identified in an Annex to this Agreement;

b.) « Products covered by this Agreement » means all defence materiel subject to export controls by any of the Parties and manufactured within the territories of the Parties by an industrial entity identified in an Annex to this Agreement.

c.) « Annex Participants » means those Parties that have concluded an Annex.

Section 2. Security of supply

2.1. The Parties undertake to ensure the supply of the products covered by this Agreement in times of peace, crisis and war for use by national military forces. To this end Annex Participants commit themselves to the supply of defence materiel to the other participants of that Annex, as specified in this section.

2.2. In order to implement paragraph 2.1, each Annex Participant will take measures as defined in paragraphs 2.3 - 2.7 to promote cooperation amongst the participants of that Annex on supply of the products covered by that Annex, with the aim of ensuring the adequacy of national military preparedness in this respect.

2.3. The Parties may wish that certain defence industrial entities retain an emergency and/or surge capacity for increased supply of products covered by this Agreement in times of crisis or war. The Parties concerned will meet the extra cost of maintaining this capacity. The arrangements for this will be set out in the contracts between the relevant defence industrial entities and the Party (ies) involved.

2.4. The Parties recognise that prioritisation of supplies of the products covered by this Agreement will normally take place according to schedules negotiated under standard commercial practices. In the case of a crisis or war involving one or more of the Annex Participants, the other Annex Participants will actively facilitate timely delivery according to the schedules concluded with relevant defence industrial entities located in their own national territory. With due regard to international commitments or comparable national considerations, Annex Participants undertake to provide for or assist in transportation.

2.5. If an Annex Participant or Participants request(s) products covered by that Annex in the event of a crisis or war, the Annex Participants will immediately, in a spirit of cooperation, consult with each other at the appropriate level, as further described in section 2.8 - 2.9, in order to ensure that the requesting Annex Participant or Participants shall:

2.5.1. Receive priority in the ordering, or reallocation of supply, of products covered by that Annex. This may entail amending existing contracts. To the extent that such amendments give rise to additional costs for other Annex Participants or the relevant defence industrial entities, fair and reasonable costs must be met by the requesting Annex Participant or Participants.

2.5.2. Acquire products covered by that Annex from another Annex Participant's own stocks, based on reimbursement and/or replacement in kind, with due regard to that Party's international commitments or comparable national considerations.

2.6. Conditions for transfer or loan of products covered by an Annex between Annex Participants from their own stocks, will be the subject of governmental arrangement. For this purpose, the Annex Participants will as far as possible utilize existing bilateral and multilateral arrangements. In using such instruments the providing Annex Participants will deploy their best efforts to

2.6.1. Ensure that the products covered by the Annex are made available in time to enable the requesting Annex Participant to deal with situations relating to national security.

2.6.2. Supply the products covered by the Annex on fair and reasonable terms.

2.6.3. Ensure that the products covered by the Annex are in a serviceable condition. However, the providing Annex Participants will make no warranty or guarantee regarding performance for a particular purpose or use.

2.7. In a situation which requires increased military preparedness, the Annex Participants will consult with each other at the appropriate level in order to reach an agreement on how to manage priorities of supply for the products covered by the Annex.

2.8. In times of crisis or war affecting one or more of the Parties, Annex Participants will immediately consult together to solve potential problems regarding the supply of products covered by that Annex for their own military forces. Any necessary arrangements concerning for instance transportation or financial compensation necessary to fulfil commitments undertaken under section 2.4 - 2.6 should be agreed expeditiously.

2.9. In all other circumstances, the Parties as well as the relevant defence industrial entities within the Parties' territories will follow standard commercial procedures and practices, as well as abiding by any regulations pertaining thereto.

Section 3. Export control

3.1. Export control legislation and regulations of the Parties are not amended by the present Agreement. Exports to a non-party of products covered by this Agreement, shall be governed by the laws and regulations of the Party issuing the export license.

3.2. The Parties will seek to harmonize, to the extent possible, relevant national classifications of defence equipment for export control purposes, and licensing practices.

3.3.1. In granting export licenses to non-parties, Parties will observe their international obligations and commitments, i.a. restrictions on arms exports imposed by the UN Security Council, the European Union or the OSCE.

3.3.2. The industrial entities shall be provided with a list of destinations not eligible for exports due to Parties' international obligations, updated when necessary.

3.4.1. The defence industrial entities involved in a particular collaboration identifed by an Annex, shall submit to the pertinent authority information from their export marketing plans regarding products covered by this Agreement and their possible non-party final destinations. These plans shall be examined in coordination between the respective administrations of the relevant Annex Participants, in accordance with existing legislation and procedures. The consensus thus achieved shall serve as guidance for the defence industrial entities in their marketing activities.

3.4.2. The addition of a non-party destination desired by industry requires consensus between the relevant Annex Participants.

3.4.3. Deletions of non-party final destinations, will be considered by the relevant Annex Participants upon request from any of these. The request to delete a final destination must be based upon a significant negative change in the internal or external situation of the recipient state with respect to the criteria in the EU Code of Conduct for Arms Exports or other national commitments or obligations. Requests shall lead to consultations between the relevant Annex Participants at the appropriate level in order to achieve consensus without delay. The destination in question shall be removed unless consensus is reached on its retention. A moratorium will apply on exports of the product in question to the destination in question for the duration of the consultation process, if any relevant Annex Participant so requests.

3.4.4. All Parties agree not to issue export licenses for export of a product covered by this Agreement to a non-party unless that destination has been agreed by consensus by the relevant Annex Participants.

3.5. All Parties shall undertake to obtain end-user assurances for exports of products covered by this Agreement to permitted non-party destinations, and to exchange views with the relevant Annex Participants if a re-export request is received. If the envisaged re-export destination is not among permitted export destinations, the procedures defined in paragraph 3.4 shall apply to such consultations.

3.6. The transfer between the Parties' territories of parts and technology for uses defined in the annexes, as well as the transfer of complete products covered by this Agreement, shall be simplified by use of a Project Licence which shall have the effect of eliminating the necessity for a separate export licence for each occasion. For transfers under a Project Licence documentation of end user will not be required, in the light of the Parties' undertakings in section 3.3 - 3.5.

The conditions for granting, withdrawing and cancelling a Project Licence shall be determined by each Party, taking into consideration their obligations under this Agreement.

Section 4. Industrial compensation

4.1. The Parties shall seek measures to replace the present compensation requirements with the intention to achieve a long-term balance in defence related supplies between the Parties. These measures shall be agreed separately, and be based on the following principles:

4.1.1. Subject to national or international rules on public procurement, competition, or fair treatment each Party shall refrain from requiring industrial compensation for the procurement of products from another Party, covered by this Agreement.

4.1.2. Each Party shall keep account of supplies from the other Parties, covered by this Agreement, on an annual basis. These accounts shall be gathered into an Annual Compensation Account.

4.1.3. An Evaluation Report on the Compensation balance shall be drawn up every five years.

Section 5. Disclosure of information

5.1. Any product and related technology covered by this Agreement, determined by one Party to require protection from unauthorised disclosure, and so designated by means of a security classification, shall be considered as classified and be handled in accordance with the national laws and regulations of the Parties.

Section 6. Liabilities

6.1. The Parties shall not be held liable for any eventual financial claims as a result of the guidance referred to in Art 3.4.1 or measures referred to in Art 3.4.3 of this Agreement.

6.2. Other rules concerning liabilities on the supply of products covered by this Agreement shall be agreed separately in the Annexes.

Section 7. Consultation procedures

7.1. For the purposes of this Agreement, a Governmental Consultation Group (GCG) will be established.

7.2. It shall be the general responsibility of the GCG to ensure the efficient operation of this Agreement and promote its aims, bearing in mind the long-term viability and interests of the defence industrial entities.

National participation in the work of the GCG may vary as appropriate depending on the reasons for consultation.

Each Party shall appoint a representative as a national Point of Contact. The Points of Contact shall coordinate the day-to-day functioning of the GCG, and assure an expeditious resolution of any issue arising from the operation of this Agreement.

7.3. There will be consultations in the GCG whenever a Party so requests, with reference to any of the purposes for consultation or coordination specified in other sections of this Agreement.

Section 8. Annexes

8.1. Annexes may be agreed between two or more Parties having corporate, industrial or other legal entities with assets located within their territories that engage in a merger or collaborative venture. These Parties may invite other Parties to participate in the negotiation and conclusion of an Annex. Further Parties may, on conditions to be agreed by consensus, be included among the participants of an Annex.

8.2. Annexes shall as a minimum identify Annex Participants, as well as Defence industrial entities and products covered.

8.3. The annexes shall form an integral part of the Agreement in relation to the Annex Participants.

Section 9. Amendments

9.1. The Parties may, by common consent, amend this Agreement. Amendments shall be submitted to all Parties for approval and enter into force on the thirtieth day following the date of receipt by the Depository of the last instrument of ratification, acceptance or approval.

9.2. Annexes may be amended by common consent among the Annex Participants. Amendments shall be submitted to all Annex Participants for approval and shall enter into force on the thirtieth day following the date of receipt by the Depositary of the last instrument of ratification, acceptance or approval.

Section 10. Disputes

Any disputes regarding the interpretation and implementation this Agreement will be resolved through consultation in the GCG, and will not be referred to any national or international tribunal or third party for settlement.

Section 11. Termination

In the event of a joint decision by the Parties to terminate this Agreement, they shall immediately consult and agree amongst themselves the arrangements required to manage the consequences of the termination in the most economical and equitable way. This Agreement shall then terminate on a date to be mutually agreed by the Parties.

The same procedures shall apply for the termination of an Annex.

Section 12. Final provisions

12.1. This Agreement and subsequent Annexes shall be subject to ratification, approval or acceptance as may be required by national legislation.

12.2. Instruments of ratification, approval or acceptance shall be deposited with the Government of Norway, which is hereby designated as the Depositary.

12.3. This Agreement and subsequent Annexes shall enter into force for a Party on the thirtieth day following the date of receipt by the Depositary of the last instrument of ratification, approval or acceptance.

12.4. The Depository shall transmit a certified copy of the Agreement and subsequent Annexes to each Party.

12.5. The Depositary shall notify each Party of, in particular:

(a) the date of receipt of each instrument of ratification, approval or acceptance referred to in paragraph 2 above;

(b) the date of entry into force of this Agreement and subsequent Annexes for each Party.

IN WITNESS WHEREOF, the undersigned, being duly authorized by their respective Governments, have signed the present Agreement.

Done in Turku this 9 of June 2001 in a single original in the English language.

ANNEX I

to the

Agreement between THE KINGDOM OF DENMARK, THE REPUBLIC OF FINLAND, THE KINGDOM OF NORWAY and THE KINGDOM OF SWEDEN Concerning Support for Industry Cooperation in the Defence Materiel Area relating to

NAMMO AS - NORDIC AMMUNITION COMPANY

1. Annex participants

Parties to the above mentioned Agreement which participate in the cooperation under this Annex are

the Republic of Finland

the Kingdom of Norway

the Kingdom of Sweden

2. Defence industrial entities

Defence industrial entities covered by this Annex are, by location:

In Norway:

• Nammo AS, Raufoss
• Nammo Raufoss AS, Raufoss

In Sweden:

• Nammo Sweden AB, Lindesberg
• Nammo LIAB AB, Lindesberg
• Nammo LIAB AB, Björkborn, Karlskoga
• Nammo LIAB AB, Vingåkersverken, Vingåker
• Vanäsverken AB, Karlsborg
• Hansson Pyrotech AB, Billdal

In Finland:

• Nammo Lapua Oy, Lapua
• Nammo Lapua Oy, Lapua Plants, Lapua
• Nammo Lapua Oy, Vihtavuori Plants, Vihtavuori
• Nammo Lapua Oy, Leppävirta Plants, Leppävirta

3. Products

Products covered by this Annex are:

• small arms ammunition
• medium caliber ammunition
• hand-grenades and pyrotechnical products
• artillery ammunition
• anti armour weapon systems and ammunition
• demilitarization
• rocket motors

4. Special provisions

No special provisions apply in this Annex.

All Annex Participants participate on an equal basis, being host nations to defence industrial entities covered by this Annex.

Signing of agreement

Date: Jun 09, 2001

Location: Åbo