I looked into this extensively.

For the E53 X5, this does not apply to other BMW models, from start of production to October 2003 all rear seat side-impact airbags (option code 261) came DEACTIVATED from the factory. When the car was delivered from the dealer to the customer, the customer would decide whether or not they wanted to have them ACTIVATED or to keep them DEACTIVATED. Whatever choice the customer made, they had to sign a release form that they understood what was being done.

For E53 X5 BMW's made from October 2003 to end of production, BMW changed the policy and X5's now came from the factory with their rear seat side-impact airbags ACTIVATED. If the customer wanted to have those airbags DEACTIVATED, they needed to make this request to the dealer and it would get done.

If you bought your car used, either from a BMW dealer, another dealer, or a private party, and your car has rear seat side-impact airbags installed, it is your responsibility to find out if those airbags are ACTIVATED OR DEACTIVATED. You CANNOT make this determination by visual inspection (stickers, labels, etc). Per the instructions on doing the work to activate or deactivate the service tech is supposed to apply or remove certain door jam stickers, but unfortunately they do not always do this (I have personally seen plenty of examples) so the only way to know for certain is to have the BMW dealer connect the car to the diagnostic computer to make this determination.

Please keep in mind that if you want to have the airbags DEACTIVATED or ACTIVATED, BMW will pay for this service.

PLEASE READ POST # 15 FOR ADDITIONAL INFORMATION AND REFERENCES