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• To ensure compliance with the legislation and national standards for fair and ethical practices in our business operations
• To comply with regulations for intellectual property rights

Huawei has established ethical compliance organizations to strengthen employees' legal awareness, integrity, and moral character. Wehave created a good environment for ethical compliance, which helps our employees consciously comply with laws and regulationsas well as the company's ethical guidelines. We have put in place a supervisory mechanism that features “points, lines, and sites” toensure that fairness and ethical behavior are incorporated into our business operations. During the process of producing and utilizingproducts and services, we ensure that we comply with intellectual property laws and regulations, grow together with our peers, andcreate a favorable environment for development.

Huawei firmly believes that operations should be based on business ethics. Huawei defines bribery, corruption, intellectual propertyviolations, and other similar behavior as major risks in business. Any behavior that violates the rules for fair play will have a negativeimpact on the company. Therefore, Huawei has introduced procedures to incorporate anti-bribery and anti-corruption principlesinto its operations. The IPR risks Huawei is exposed to include protection of its own IPR and respecting other companies' IPR.Huawei will continue to adopt similar initiatives to ensure that the company complies with international intellectual property lawsand regulations.

Huawei's Business Conduct Guidelines

Huawei's Business Conduct Guidelines (BCG) provides the foundational principles forour general business conduct, which we expect all employees to follow. The BCGwas developed by analyzing situations that occurred in our company and the globalenvironment in which we operate, as well as the regulations with which our employeesmust comply while conducting business activities. The BCG provides guidance andassistance for Huawei to comply with laws and ethical standards.

New Huawei employees are required to learn and sign the BCG. Each year, all employeesare required to learn the BCG based on their specific positions, take online examinations,and sign a letter of commitment.

The business environment and the outside world are constantly changing, and newproblems related to ethics and laws emerge every minute. We will constantly build uponour BCG as new issues emerge so that our BCG and specific business guidelines canaddress any new situation.

Huawei expects that its employees work with integrity and comply with the BCG. AtHuawei, no fraud is tolerated. Every Huawei employee is required to:

• Have integrity when dealing with Huawei business activities and businessrelationships
• Comply with laws and regulations that apply to Huawei's business operations
• Protect and properly use Huawei's assets and respect others' intellectual property rights
• Safeguard the company's interests and properly handle the relationship betweencompany interests and individual interests
• Respect differences and treat customers, suppliers, business partners, andemployees from different cultures and religious beliefs fairly

Anti-corruption and Anti-bribery

Huawei believes that corrupt activities like bribery severelyundermine the legal system, harm free and fair competition,and have negative effects on the development of society, theeconomy, and enterprises. Huawei believes that by employingan efficient and transparent anti-corruption and anti-briberycontrol system, it can win trust from its partners and customers toguarantee its sustainable development. Huawei strongly prohibitsbribery in business situations. Huawei will abide by businessethics, perform all operations with integrity, adopt active andeffective systems and measures, and oppose and prevent briberyand other corrupt activities. Huawei stresses that employees shallabide by all laws, and conduct themselves ethically at all times inbusiness situations. The BCG and legal documents state that:

• Employees must not give or accept gifts or business amenities that exceed normal value.
• Employees are strongly forbidden to perform illegal actions, such as bribery, in business situations.
• Employees must comply with all government laws and regulations when conducting business.

Anti-monopoly

Huawei always adheres to business ethics, complies with international guidelines, and promotes fair play. We request that all our employees comply with our BCG while competing in the market.

Child Labor

Huawei abides by all applicable laws and regulations and prohibits child labor. Acomprehensive system is in place to ensurethat no child is employedduring important processes such as recruitment and deployment. There has never been an instance of child labor in any of Huawei's operations.

Forced Labor

Huawei abides by all applicable laws and regulations and prohibits the use of forced labor. Huawei has instituted a detailed and reasonable systemto ensure that no forced labor is used during operations such as recruitment, deployment, and termination of employment. There has never been an instance of forced labor in any of Huawei's operations.

Intellectual Property Rights

Huawei respects its own intellectual property and actively accumulates IPR in its core businesses. Huawei invests at least 10% of its sales revenue in R&D, of which 10% is invested inresearch, standards, patents, and new technologies. We adopt a standards patent strategy and actively take part in the development of international standards.

Huawei respects the IPR of other organizations,complies with international intellectual property rules, and resolves IPR issues through consultations, cross-licensing, and product cooperation. Huawei protects its own rightsagainstmalicious IPR violations by legal means. By the end of 2011, Huawei had:

• Participated in123 international standards organizations, including ITU, 3GPP, IEEE, IETF, ETSI, and OMA
• Held 180positions in international standards organizations
• Submitted 23,000 qualified papers to international standards organizations

By the end of 2011, Huawei had filed for 47,322 patent applications worldwide, 23,522 of which were granted, with 10,978 being from overseas. Huawei also had 5,415 granted patents in the US, Europe, and other countries and regions, and had filed for 10,650 patent applications under the PCT.