November 2013

Background

As a public company, AAR CORP. (“AAR”) is subject to rules  issued by the U.S. Securities and Exchange Commission (“SEC”) implementing the conflict minerals disclosure provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act.  These rules require publicly traded companies in the U.S. to report annually on the extent to which products manufactured by or for the companies and their subsidiaries contain “Conflict Minerals” that are (i) necessary to the functionality or productions of those products, and (ii) derived from sources that are believed to, directly or indirectly, finance armed conflict or benefit armed groups within The Democratic Republic of the Congo (“DRC”) or certain adjoining countries.  

The “Conflict Minerals” of concern are cassiterite (used to produce tin), wolframite (used to produce tungsten), columbite-tantalite (used to produce tantalum), and gold.  These Conflict Minerals are also commonly referred to as “3TGs.”

Commitment

AAR is committed to complying fully with the SEC’s Conflict Minerals reporting requirements. To that end, AAR and its manufacturing subsidiaries are working with applicable suppliers to perform the necessary due diligence in determining the potential for Conflict Minerals in their supply chain and products. AAR and its manufacturing subsidiaries are designing their due diligence program in accordance with the Organization for Economic Cooperation and Development Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas (available at: http://www.oecd.org/dataoecd/62/30/46740847.pdf).

Expectations of Suppliers

AAR expects that applicable suppliers will cooperate with its due diligence efforts in support of its Conflict Minerals commitment and otherwise assist AAR in complying with the Conflict Minerals rules established by the SEC.  If a supplier to one of AAR’s manufacturing subsidiaries is unwilling to support AAR in its Conflict Mineral program efforts, AAR and its subsidiaries may take remediation steps, up to and including alternative sourcing arrangements.  AAR and its subsidiaries also may take remediation steps if a supplier cannot determine whether its materials or products contain Conflict Minerals.

In support of its Conflict Minerals commitment, AAR expects that suppliers to its AAR manufacturing subsidiaries will:

  • Establish a supplier Conflict Minerals policy in accordance with SEC rules (except with respect to SEC reporting requirements), implement management systems to support compliance with their policy, and require their suppliers of any tier to take the same steps;
  • Identify, in the manner and form specified by AAR and its manufacturing subsidiaries, materials or products they sell to the applicable AAR manufacturing subsidiary and the smelter that provided the original Conflict Minerals.  Direct suppliers to AAR manufacturing subsidiaries may have to require successive upstream suppliers to complete AAR’s Conflict Minerals survey until the smelter is identified;
  • Provide reports to support AAR’s SEC reporting requirements; and
  • Upon request, permit auditing of their Conflict Minerals policies and procedures.

If you have any questions or would like additional information about this policy, please email: conflict_minerals@aarcorp.com.