Nokia 2010 Annual Report Download - page 40

and payments involving Siemens’ former Com business and other Siemens’ business groups which
were and are still under investigation.
The internal review by Nokia Siemens Networks and Nokia is complete. Siemens has informed us that
its own investigation is also complete. Although the government investigations of Siemens by
German and United States authorities have been concluded and resolved, investigations in other
countries continue, as well as investigations of Siemens employees and other individuals. Accordingly,
until these investigations are complete and the matter is resolved, it is not possible to ensure that
Siemens employees who may have been involved in the alleged violations of law were not
transferred to Nokia Siemens Networks. Nor is it possible to predict the extent to which there may be
undetected additional violations of law that may have occurred prior to the transfer that could result
in additional investigations or actions by government authorities. Such actions have, and could
include criminal and civil fines, tax liability, as well as other penalties and sanctions. To date, none of
the substantial fines imposed on Siemens by regulators in Germany and the United States has applied
to Nokia Siemens Networks or Nokia. It is also not possible to predict whether there have been any
ongoing violations of law after the formation of Nokia Siemens Networks involving the assets and
employees of the Siemens carrierrelated operations that could result in additional actions by
government authorities. The development of any of these situations could have a material adverse
effect on Nokia Siemens Networks and our reputation, business, results of operations and financial
condition. In addition, detecting, investigating and resolving such situations have been, and might
continue to be, expensive and consume significant time, attention and resources of Nokia Siemens
Networks’ and our management, which could harm our business and that of Nokia Siemens
Networks.
The government investigations may also harm Nokia Siemens Networks’ relationships with existing
customers, impair its ability to obtain new customers, business partners and public procurement
contracts, affect its ability to pursue strategic projects and transactions or result in the cancellation or
renegotiation of existing contracts on terms less favorable than those currently existing or affecting
its reputation. Nokia Siemens Networks has terminated relationships, originated in the Siemens
carrierrelated operations, with certain business consultants and other thirdparty intermediaries in
some countries as their business terms and practices were contrary to Nokia Siemens Networks’ Code
of Conduct, thus foregoing business opportunities. It is not possible to predict the extent to which
other customer relationships and potential business may be affected by Nokia Siemens Networks
legally compliant business terms and practices. Thirdparty civil litigation may also be instigated
against the Siemens carrierrelated operations and/or employees transferred to Nokia Siemens
Networks.
Siemens has agreed to indemnify Nokia and Nokia Siemens Networks for any government fines or
penalties and damages from civil law suits incurred by either, as well as in certain instances for loss
of business through terminated or renegotiated contracts, based on violations of law in the Siemens
carrierrelated operations that occurred prior to the transfer to Nokia Siemens Networks.
We cannot predict with any certainty the final outcome of the ongoing investigations related to this
matter, when and the terms upon which such investigations will be resolved, which could be a
number of years, or the consequences of the actual or alleged violations of law on our or Nokia
Siemens Networks’ business, including its relationships with customers.
ITEM 4. INFORMATION ON THE COMPANY
4A. History and Development of the Company
Nokia is committed to connecting people to what matters to them by combining advanced mobile
technology with personalized services. More than 1.3 billion people connect to one another with a
Nokia, from our most affordable voiceoptimized mobile phones to advanced Internetconnected
smartphones sold in virtually every market in the world. Through Ovi, people also enjoy access to
maps and navigation on mobile, a rapidly expanding applications store, a growing catalog of digital
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