Cops may open fire in 2 different scenarios:
- The wanted person is firing on them
- The wanted person poses a direct threat to another citizen's life in any way
The latter basically means, if they're shooting at any other cop, or person, it's ok to kill them. It's a logical conclusion to reach as a cop, your job is to protect the populace, so you need to kill the wanted person to defend them.
As for the second one,
I'd say it was allowed, since NLR applies to districts, but the kicker is you shouldn't interact with activities before your death, such as wanted people or bases.