UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

_______________________
 
Form SD
_______________________
 

Specialized Disclosure Report

NATIONAL INSTRUMENTS CORPORATION

(Exact name of the registrant as specified in its charter)
 
Delaware
000-25426
74-1871327
(State or other jurisdiction of incorporation or organization)
(Commission File Number)
(I.R.S. Employer Identification No.)

11500 North MoPac Expressway
 
78759
Austin, Texas
(Address of principal executive offices)
 
(Zip Code)
 
R. Eddie Dixon, Jr.
 
(512) 683-0100
(Name and telephone number, including area code, of person to contact in connection with this report)
 
Check the appropriate box to indicate the rule pursuant to which this form is being filed, and provide the period to which the information in this form applies:
 
Rule 13p-1 under the Securities Exchange Act (17 CFR 240.13p-1) for the reporting period from January 1 to December 31, 2018.
 


Section 1 – Conflict Minerals Disclosure
 
Item 1.01
Conflict Minerals Disclosure and Report

GENERAL

National Instruments Corporation (“NI”, “we”, “us” or “our”) designs, manufactures and sells tools to engineers and scientists that accelerate productivity, innovation and discovery. Our graphical system design approach to engineering provides an integrated software and hardware platform that speeds the development of systems needing measurement and control. NI is based in Austin, Texas, was incorporated under the laws of the State of Texas in May 1976 and was reincorporated in Delaware in June 1994.

In 2010 the US Congress enacted the conflict minerals provisions of the Dodd-Frank Financial Reform legislation. The law’s aim is to curb violence and human rights abuses in the Democratic Republic of the Congo (DRC), the Republic of Congo, the Central African Republic, South Sudan, Uganda, Rwanda, Burundi, Tanzania, Zambia and Angola  by requiring disclosure of certain information by public companies that use certain minerals which are necessary to the functionality or production of their products, which minerals include gold, columbite-tantalite (coltan), cassiterite and wolfamite, including their derivatives which are limited to tantalum, tin and tungsten (collectively, the “Conflict Minerals”).

COVERED PRODUCTS

NI offers an extensive line of measurement and control products to work either separately, as stand-alone products, or as an integrated solution. NI’s hardware products include Data Acquisition Hardware, PXI Modular Instruments, Modular Instruments, Machine Vision/Image Acquisition, Motion Control, Reconfigurable I/O (RIO) Hardware, Industrial Communications Interfaces, and GPIB Interface products.

Most NI hardware products contain at least one of the Conflict Minerals and fall into the scope of the law’s requirements; thus, this disclosure includes information on a company level basis that includes general information for all NI products.

Reasonable Country of Origin Inquiry Description

For calendar year 2018, NI has conducted a good faith reasonable country of origin inquiry (“RCOI”) to determine whether the conflict minerals necessary to the functionality or production of NI Products originated in the DRC or an adjoining country or came from scrap or recycled sources.

The Company’s RCOI process included reviewing the products manufactured or contracted to be manufactured during the Reporting Period to identify products that should be deemed in-scope as described by the Adopting Release and conducting an inquiry of our direct suppliers of the in-scope products using the Responsible Minerals Initiative’s (“RMI”) Conflict Minerals Reporting Template (“CMRT”). Based on the results of our RCOI which indicated sourcing from the DRC or an adjoining country, we exercised due diligence on the source and chain of custody of the conflict minerals in accordance with the OECD Due Diligence Guidance.

Conflict Minerals Disclosure

This Form SD of NI is filed pursuant to Rule 13p-1 promulgated under the Securities Exchange Act of 1934, as amended, for the reporting period January 1, 2018 to December 31, 2018.

A copy of NI’s Conflict Minerals Report is provided as Exhibit 1.01 to this Form SD, and is publicly available at http://investor.ni.com/.

Item 1.02
Exhibit

As specified in Section 2, Item 2.01 of this Form SD, NI is hereby filing its Conflict Minerals Report as Exhibit 1.01 to this report.

Section 2 – Exhibits

The following exhibit is filed as part of this report.

Item 2.01
Exhibits
 
Exhibit 1.01


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the duly authorized undersigned.
 
 
 
NATIONAL INSTRUMENTS CORPORATION
 
 
 
 
 
 
By:
/s/ R. Eddie Dixon, Jr.
 
 
 
R. Eddie Dixon, Jr.
 
 
 
Vice President, General Counsel, and Secretary
 
 
 
 
 
 
Date:  May 30, 2019
 

EXHIBIT INDEX

Exhibit No.
Description
1.01
2018 Conflict Minerals Report of NI



Exhibit 1.01

CONFLICT MINERALS REPORT OF
NATIONAL INSTRUMENTS CORPORATION
FOR THE REPORTING PERIOD FROM
JANUARY 1 TO DECEMBER 31, 2018

I.
Introduction
This is the Conflict Minerals1 Report of National Instruments Corporation (“we,” “our,” “us,” “NI,” or the “Company”) prepared for calendar year 2018 in accordance with Rule 13p-1 (“Rule 13p-1”) under the Securities Exchange Act of 1934 (the “Act”). Numerous terms in this Report are defined in Rule 13p-1 of the Act and SEC Release No. 34-67716 (August 22, 2012) under the Act (the “Adopting Release”). The reader is referred to these sources for the definitions of defined terms contained herein.
In accordance with Rule 13p-1, we undertook efforts to determine the presence and source of the conflict minerals within our products. The Company designed its efforts in conformity with the internationally recognized due diligence framework set forth in the Organisation for Economic Co-operation and Development (“OECD”) Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas2 (“OECD Due Diligence Guidance”) and related Supplements.
The statements below are based on the activities performed to date in good faith by the Company and are based on the infrastructure and information available at the time of this filing. Factors that could affect the accuracy of these statements include, but are not limited to, incomplete supplier data or available smelter data, errors or omissions by suppliers or smelters, gaps in supplier or smelter education and knowledge, supplier and smelter unfamiliarity with the protocol, evolving identification of smelters, incomplete information from industry or other third-party sources, all instances of Conflict Minerals necessary to the functionality or manufacturing of NI’s products possibly not yet having been identified, timeliness of data, public information not discovered during a reasonable search, errors in public data, language barriers and translation, oversights or errors in conformant smelter audits, Covered Countries sourced materials being declared secondary materials, companies going out of business in 2018, certification programs being not equally advanced for all industry segments and metals, smuggling of Conflict Minerals from the Covered Countries to countries beyond the Covered Countries, continuing guidance regarding the SEC final rules, and other issues.
II.
Overview
Company Profile
NI designs, manufactures and sells tools to engineers and scientists that accelerate productivity, innovation and discovery. Our graphical system design approach to engineering provides an integrated software and hardware platform that speeds the development of systems needing measurement and control. NI is based in Austin, Texas, was incorporated under the laws of the State of Texas in May 1976 and was reincorporated in Delaware in June 1994.
We are subject to this rule as we have determined that, during 2018, conflict minerals were likely necessary to the functionality or production of products we manufactured or contracted to manufacture. The Company, as a purchaser of component parts, is many steps removed from the mining of conflict minerals. We do not purchase raw ore or unrefined conflict minerals and we conduct no purchasing activities directly in the DRC or adjoining countries.
Conflict Minerals Policy
The Company developed a policy statement to support the goals expressed by Congress in enacting Section 1502 of the Dodd-Frank Wall Street Reform and Consumer Protection Act. The policy highlights the Company’s commitment to complying with the reporting and due diligence obligations required by the SEC rule and our expectations from our suppliers. The policy as well as our supplier code of conduct and terms and conditions include language highlighting our expectation for suppliers to source responsibly. The policy resides on our corporate website (http://ni.com/conflictminerals).
Reasonable Country of Origin Inquiry Information
We have conducted a good faith reasonable country of origin inquiry (“RCOI”) to determine whether the necessary conflict minerals originated in the DRC or an adjoining country or came from recycled or scrap sources.
The Company’s RCOI process included reviewing the products manufactured or contracted to be manufactured during the Reporting Period to identify products that should be deemed in-scope as described by the Adopting Release and conducting an inquiry of our direct suppliers of the in-scope products using the Responsible Minerals Initiative’s (“RMI”) Conflict Minerals Reporting Template (“CMRT”). Based on the results of our RCOI which indicated sourcing from the DRC or an adjoining country, we exercised due diligence on the source and chain of custody of the conflict minerals in accordance with the OECD Due Diligence Guidance. Our due diligence efforts are discussed further in this Conflict Minerals Report.
Due Diligence Program Design
The Company designed its conflict minerals program to conform, in all material respects, with the five-step framework of the OECD Due Diligence Guidance, the Supplement on Tin, Tantalum, and Tungsten, and the Supplement on Gold, specifically as they relate to our position in the minerals supply chain as a “downstream” company:
Step 1:          Establish strong company management systems
Step 2:          Identify and assess risks in the supply chain
Step 3:          Design and implement a strategy to respond to identified risks
Step 4:          Carry out independent third-party audit of smelter/refiner's due diligence practices
Step 5:          Report annually on supply chain due diligence
III.
Due Diligence Measures Performed by The Company
The following describes the measures taken to reasonably determine the country of origin and to exercise due diligence in the mineral supply chain in conformance with the OECD Due Diligence Guidance.
Step 1: Establish strong company management systems
a.
Conflict minerals team – The Company established a conflict minerals team that includes individuals from the relevant business units and departments, including trade compliance, procurement, sales, and legal. The team was structured to include the involvement from those in upper management roles, including the VP of Manufacturing, Director of Trade Compliance, and Global Supply Chain Operations Manager, to ensure that critical information, including the Company’s conflict minerals policy, reached relevant employees and suppliers.
b.
Conflict minerals policy – The Company adopted and published a policy establishing the expectations of our suppliers. The policy resides on our corporate website (http://ni.com/conflictminerals). The Company’s expectation for the responsible sourcing of minerals is also incorporated into the Company’s terms and conditions with suppliers.
c.
Supplier engagement – The Company communicated its conflict minerals policy and provided educational materials to our in-scope suppliers. Suppliers were informed when the request for information was initiated on the conflict minerals disclosure requirements as well as recommendations for developing, implementing, and documenting a conflict minerals compliance program. NI also communicated its conflict minerals position statement to its suppliers through the NI Supplier Handbook, available online at ni.com/en-us/about-ni/suppliers.html, which is designed to inform potential and existing suppliers about the Company. Finally, NI requires that its suppliers abide by the NI Supplier Code of Conduct and and the labor, health and safety, environmental, and ethics standards of the most current version of the Responsible Business Alliance (RBA) Code of Conduct.
d.
Company level grievance mechanism – As recommended by the OECD Due Diligence Guidance, the Company has a grievance mechanism in place as a risk-awareness system for conflict minerals issues. NI maintains an ethics hotline pursuant to which stakeholders, internal and external, may confidentially report concerns involving conflict minerals, either electronically or by phone.
e.
Records management – The Company will maintain records relating to our conflict minerals program in accordance with the recommended record retention guidelines of five years.
Step 2: Identify and assess risks in the supply chain
We performed the following steps as part of our risk assessment process:
a.
Identified products in scope – Our conflict minerals team conducted a detailed review of the products manufactured or contracted to be manufactured during the Reporting Period to identify products that should be deemed in-scope as described by the Adopting Release. As most NI hardware products contain at least one of the Conflict Minerals this disclosure includes information on a company level basis that includes general information for all NI products.
b.
Conducted RCOI – The Company utilized the industry-developed CMRT to query our suppliers for conflict minerals information. We requested this information from the Tier 1 suppliers who provide materials and components for NI products. We evaluated the responses from the templates submitted by our suppliers to determine our reporting obligation based on this RCOI. See Appendix I for a list of countries of origin identified through the RCOI process.
c.
Completed additional follow-up – The Company contacted direct suppliers that did not respond to our request for conflict minerals information by the requested date. We also worked to clarify and validate the accuracy of information provided by our suppliers.
d.
Identified smelters or refiners (“SORs”) – The Company compiled a list of SORs in our supply chain using our suppliers’ responses in their CMRTs. The Company reconciled this list to the list of smelter facilities designated by the RMI’s Responsible Minerals Assurance Process (“RMAP”). The RMAP completes independent, third-party audits of smelters and refiners to determine which can be validated as having systems in place that ensure the minerals are responsible sourced according to the OECD Due Diligence Guidance. The Company maintains a database of smelter aliases to reconcile suppliers’ smelters lists to the list of RMI SORs. We have provided that list in this report within section IV – Product Description; Processing Facilities.
Step 3: Design and implement a strategy to respond to identified risks
We performed the following steps as part of our risk management plan:
a.
Reporting results to senior management – The Conflict Minerals team reports the results of our RCOI to upper management which included the team’s plan to respond to risks identified in the due diligence processes.
b.
Designed and implemented a plan – The Company used established risk rating criteria to evaluate suppliers based on the responses provided within their CMRT, as well as, any additional documentation furnished to support those responses and the suppliers’ due diligence processes. The resulting risk ratings were used to develop specific supplier outreach to address the identified risks and to take corrective actions with suppliers found not in compliance with the Company’s conflict minerals policy.
c.
Identified SORs – As part of the risk mitigation process, the Company reconciled the list of SORs collected from suppliers to the list of smelter facilities validated by the RMI.  The Company maintains a database of smelter aliases to reconcile suppliers’ smelters lists to the list of RMI SORs.
Step 4: Carry out independent third-party audit of smelter/refiner's due diligence practices
The Company is using information provided by independent third party audit programs, including the RMI, London Bullion Market Association (LBMA), and Responsible Jewelry Council (RJC), to confirm the existence and verify the OECD-conformance status of SORs identified during our due diligence.
For SORs that had not been audited as conformant, the Company sent a communication to encourage participation in the RMAP and requested the SOR to provide the mines and/or locations the SOR sources from to assist in identifying all countries of origin.
The Company is also a member of the RMI {Member Code: NAIN}. As a member, the Company financially supports the development of the RMAP and has relied on the RMI to determine the country of origin of conflict minerals in the Company’s products in addition to the Company’s efforts of reaching out to smelters. The efforts to determine location of origin through the RMI are described on the RMI website at: http://www.responsiblemineralsinitiative.org/.
Step 5: Report annually on supply chain due diligence
Accordingly, this Conflict Minerals Report has been filed with the SEC and is available on our website at http://investor.ni.com/.



1 The term “conflict mineral” is defined in Section 1502(e)(4) of the Dodd-Frank Wall Street Reform and Consumer Protection Act as (A) columbite-tantalite, also known as coltan (the metal ore from which tantalum is extracted); cassiterite (the metal ore from which tin is extracted); gold; wolframite (the metal ore from which tungsten is extracted); or their derivatives; or (B) any other mineral or its derivatives determined by the Secretary of State to be financing conflict in the Democratic Republic of the Congo (“DRC”) or an adjoining country.
2 OECD (2016), OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas: Third Edition, OECD Publishing, Paris. http://dx.doi.org/10.1787/9789264252479-en

IV.
Product Description; Processing Facilities
Product Description NI offers an extensive line of measurement and control products to work either separately, as stand-alone products, or as an integrated solution. NI’s hardware products include Data Acquisition Hardware, PXI Modular Instruments, Modular Instruments, Machine Vision/Image Acquisition, Motion Control, Reconfigurable I/O (RIO) Hardware, Industrial Communications Interfaces, and GPIB Interface products.
Processing FacilitiesBased on our due diligence process and the information received from our suppliers, the following facilities were identified by the Company’s suppliers as the smelters and refiners of the tin, tantalum, tungsten and/or gold present in and necessary to the functionality of products manufactured by the Company in the calendar year ended December 31, 2018. The information from our suppliers is still evolving and may contain company-level declarations. As such, this smelter list is presented in good faith as the best information we have to date. This list may contain smelters that are not in our supply chain and/or there may be other smelters not yet identified in our due diligence process. We will continue to update the list as our information and the relevant third-party data from RMI, LBMA, and RJC improves.
Metal
Standard Smelter Name
Smelter Country
Entity ID
Gold
Aida Chemical Industries Co., Ltd.
JAPAN
CID000019
Gold
Allgemeine Gold-und Silberscheideanstalt A.G.
GERMANY
CID000035
Gold
Argor-Heraeus S.A.
SWITZERLAND
CID000077
Gold
Asahi Pretec Corp.
JAPAN
CID000082
Gold
Asahi Refining Canada Ltd.
CANADA
CID000924
Gold
Asahi Refining USA Inc.
UNITED STATES OF AMERICA
CID000920
Gold
Caridad
MEXICO
CID000180
Gold
CCR Refinery - Glencore Canada Corporation
CANADA
CID000185
Gold
Dowa
JAPAN
CID000401
Gold
Guoda Safina High-Tech Environmental Refinery Co., Ltd.
CHINA
CID000651
Gold
Heraeus Metals Hong Kong Ltd.
CHINA
CID000707
Gold
Ishifuku Metal Industry Co., Ltd.
JAPAN
CID000807
Gold
JX Nippon Mining & Metals Co., Ltd.
JAPAN
CID000937
Gold
Kennecott Utah Copper LLC
UNITED STATES OF AMERICA
CID000969
Gold
Kojima Chemicals Co., Ltd.
JAPAN
CID000981
Gold
Matsuda Sangyo Co., Ltd.
JAPAN
CID001119
Gold
Metalor Technologies S.A.
SWITZERLAND
CID001153
Gold
Metalor USA Refining Corporation
UNITED STATES OF AMERICA
CID001157
Gold
Mitsubishi Materials Corporation
JAPAN
CID001188
Gold
Mitsui Mining and Smelting Co., Ltd.
JAPAN
CID001193
Gold
Nihon Material Co., Ltd.
JAPAN
CID001259
Gold
Royal Canadian Mint
CANADA
CID001534
Gold
Shandong Zhaojin Gold & Silver Refinery Co., Ltd.
CHINA
CID001622
Gold
Sumitomo Metal Mining Co., Ltd.
JAPAN
CID001798
Gold
Tanaka Kikinzoku Kogyo K.K.
JAPAN
CID001875
Gold
The Refinery of Shandong Gold Mining Co., Ltd.
CHINA
CID001916
Gold
Tokuriki Honten Co., Ltd.
JAPAN
CID001938
Gold
Western Australian Mint (T/a The Perth Mint)
AUSTRALIA
CID002030
Gold
Zhongyuan Gold Smelter of Zhongjin Gold Corporation
CHINA
CID002224
Tantalum
Global Advanced Metals Aizu
JAPAN
CID002558
Tantalum
Global Advanced Metals Boyertown
UNITED STATES OF AMERICA
CID002557
Tantalum
H.C. Starck Co., Ltd.
THAILAND
CID002544
Tantalum
H.C. Starck Hermsdorf GmbH
GERMANY
CID002547
Tantalum
H.C. Starck Inc.
UNITED STATES OF AMERICA
CID002548
Tantalum
H.C. Starck Ltd.
JAPAN
CID002549
Tantalum
H.C. Starck Smelting GmbH & Co. KG
GERMANY
CID002550
Tantalum
H.C. Starck Tantalum and Niobium GmbH
GERMANY
CID002545
Tantalum
Ningxia Orient Tantalum Industry Co., Ltd.
CHINA
CID001277
Tantalum
Ulba Metallurgical Plant JSC
KAZAKHSTAN
CID001969
Tantalum
XinXing HaoRong Electronic Material Co., Ltd.
CHINA
CID002508
Tin
Alpha
UNITED STATES OF AMERICA
CID000292
Tin
China Tin Group Co., Ltd.
CHINA
CID001070
Tin
CV United Smelting
INDONESIA
CID000315
Tin
EM Vinto
BOLIVIA (PLURINATIONAL STATE OF)
CID000438
Tin
Fenix Metals
POLAND
CID000468
Tin
Gejiu Non-Ferrous Metal Processing Co., Ltd.
CHINA
CID000538
Tin
Guanyang Guida Nonferrous Metal Smelting Plant
CHINA
CID002849
Tin
Malaysia Smelting Corporation (MSC)
MALAYSIA
CID001105
Tin
Metallo Belgium N.V.
BELGIUM
CID002773
Tin
Mineracao Taboca S.A.
BRAZIL
CID001173
Tin
Minsur
PERU
CID001182
Tin
Mitsubishi Materials Corporation
JAPAN
CID001191
Tin
O.M. Manufacturing Philippines, Inc.
PHILIPPINES
CID002517
Tin
Operaciones Metalurgicas S.A.
BOLIVIA (PLURINATIONAL STATE OF)
CID001337
Tin
PT Aries Kencana Sejahtera
INDONESIA
CID000309
Tin
PT ATD Makmur Mandiri Jaya
INDONESIA
CID002503
Tin
PT Babel Inti Perkasa
INDONESIA
CID001402
Tin
PT Bangka Tin Industry
INDONESIA
CID001419
Tin
PT Belitung Industri Sejahtera
INDONESIA
CID001421
Tin
PT Bukit Timah
INDONESIA
CID001428
Tin
PT DS Jaya Abadi
INDONESIA
CID001434
Tin
PT Premium Tin Indonesia
INDONESIA
CID000313
Tin
PT Refined Bangka Tin
INDONESIA
CID001460
Tin
PT Sariwiguna Binasentosa
INDONESIA
CID001463
Tin
PT Stanindo Inti Perkasa
INDONESIA
CID001468
Tin
PT Timah Tbk Kundur
INDONESIA
CID001477
Tin
PT Timah Tbk Mentok
INDONESIA
CID001482
Tin
PT Tinindo Inter Nusa
INDONESIA
CID001490
Tin
Thaisarco
THAILAND
CID001898
Tin
White Solder Metalurgia e Mineracao Ltda.
BRAZIL
CID002036
Tin
Yunnan Chengfeng Non-ferrous Metals Co., Ltd.
CHINA
CID002158
Tin
Yunnan Tin Company Limited
CHINA
CID002180
Tungsten
Ganzhou Huaxing Tungsten Products Co., Ltd.
CHINA
CID000875
Tungsten
Ganzhou Seadragon W & Mo Co., Ltd.
CHINA
CID002494
Tungsten
Global Tungsten & Powders Corp.
UNITED STATES OF AMERICA
CID000568
Tungsten
Hunan Chunchang Nonferrous Metals Co., Ltd.
CHINA
CID000769
Tungsten
Xiamen Tungsten Co., Ltd.
CHINA
CID002082


V.
Future Due Diligence
We will continue to communicate our expectations and information requirements to our direct suppliers. Over time, we anticipate that the amount of information available globally on the traceability and sourcing of these ores will increase and improve our knowledge. We will continue to make inquiries to our direct suppliers and undertake additional risk assessments when potentially relevant changes in facts or circumstances are identified. If we become aware of a supplier whose due diligence needs improvement, we may continue the trade relationship while that supplier improves its compliance program. We expect our suppliers to take similar measures with their suppliers to ensure alignment throughout the supply chain.
In addition to those above, the Company will undertake the following steps during the next compliance period:
·
Review the conflict minerals policy statement and update if necessary.
·
Continue to collect responses from suppliers using the most recent revision of the CMRT.
·
Engage with suppliers that did not provide a response in 2018 or provided incomplete responses to enhance our data collection for 2019.
·
Monitor and track performance of risk mitigation efforts.
·
Continue engagement with smelters by sending letters to those that have not been audited as conformant.
·
Send messages to our suppliers to engage with these smelters.
·
Compare and validate RCOI results to information collected via independent third-party audit programs, such as the RMI, and through our Company’s own coordinated outreach to smelters.
·
Encourage responsible sourcing from the DRC and adjoining countries.



APPENDIX I – Countries of Origin

The potential country of origin information provided in this Appendix is based on the information collected from the Company’s suppliers. It is important to note that this is based, in part, on company level responses and therefore, it is not certain that these countries of origin can be linked to our products.

Mineral Country of Origin
Australia
Mali
Austria
Mauritania
Benin
Mongolia
Bolivia
Mozambique
Brazil
Myanmar
Burundi*
Nicaragua
Chile
Niger
China
Nigeria
Colombia
Peru
Congo, Democratic Republic of the*
Portugal
Ecuador
Russian Federation
Eritrea
Rwanda*
Ethiopia
Sierra Leone
Ghana
Swaziland
Guinea
Taiwan
Guyana
Thailand
India
Togo
Indonesia
Uganda*
Laos
United Kingdom
Madagascar
United States of America
Malaysia
 
* The DRC or adjoining countries