INTERNATIONAL PAPER CO /NEW/

GOVERNMENTAL REGULATION

The Company’s policy is to operate its mills and plants in compliance with all applicable laws and regulations such

that it protects the environment and the health and safety of its employees. We operate our businesses and sell

products globally. In each of the jurisdictions in which we operate, we are subject to a variety of laws and

regulations governing various aspects of our business, including general business regulations as well as those

governing the manufacturing, production, content, handling, storage, transport, marketing and sale of our products.

Our operations are also subject to forestry reserve requirements, other environmental regulations and occupational

health and safety laws. Violations can result in substantial fines, administrative sanctions, criminal penalties,

revocations of operating permits and/or shutdowns of our facilities, litigation, other liabilities, as well as damage to

our reputation. We incur costs to comply with these requirements. For additional information regarding risks

associated with environmental matters, see Item 1A. Risk Factors –We are subject to a wide variety of laws,

regulations and other governmental requirements that may change in significant ways, and the cost of

compliance, or the failure to comply with such requirements, could impact our business and results of

operations.