Conflict Minerals Regulation Update – Dodd-Frank Act RulingConflict Minerals status in the United States and European Union Categories: Chemical Data Management and Regulatory Compliance Software, Industry News Apr 27, 2017
Dodd-Frank Act Ruling in United States
On April 3, 2017, The United States District Court for the District of Columbia entered final judgement on a case involving the National Association of Manufacturers and the United States Securities and Exchange Commission (SEC) with respect to the Dodd-Frank Act (“the Act”). The Act requires companies report on their websites and to the SEC if any of their products “have not been found to be ‘DRC conflict free.’” This portion of the Act it is considered compelled speech, and is therefore in violation of the First Amendment. All other aspects of the Act and its required tracking and reporting remain in place.
In anticipation of this final judgement, and reflecting the differing priorities of the incoming administration, the Acting Chairman of the SEC, Michael Piwowar, released a statement on January 31, 2017. This statement solicited public comment and indicated that SEC staff has been directed to examine current guidance regarding compliance with the Act to determine whether this guidance is still appropriate or should be revised. In a subsequent statement issued in the days immediately following the District Court’s final judgement (April 7, 2017), Mr. Piwowar further instructed the SEC staff to recommend future actions, and enforcement of Item 1.01(c) of Form SD is unlikely at this time. There has also been a draft memo (of unknown authenticity) reported by Reuters indicating that President Trump’s intention is to revise or suspend the Act in the interests of national security. Meanwhile, a group of Senators has questioned whether Mr. Piwowar’s actions are legally permissible, or whether they exceed his authority.
Despite the indication that enforcement actions may not be taken, the only legal relief for companies at this time is the elimination of the requirement to state that any products have not been found to be DRC conflict free. We, therefore, encourage companies to proceed with their Form SD filing due May 31, 2017.
With thanks to the Stinson Leonard Street law firm, the text of the final judgement can be seen here: http://dodd-frank.com/wp-content/uploads/2017/04/final-judgment.pdf
Michael Piwowar January statement: https://www.sec.gov/corpfin/statement-on-sec-commission-conflict-minerals-rule.html
Michael Piwowar April statement: https://www.sec.gov/news/public-statement/piwowar-statement-court-decision-conflict-minerals-rule
European Council Ruling:
On April 3, 2017, The European Council unanimously adopted a conflict mineral regulation which was overwhelmingly approved by the European Parliament on March 16, 2017. The regulation requires those that import tin, tantalum, tungsten and gold (whether for their own use, for sale, or for smelting/refining) to source their minerals responsibly. Some small volume importers (e.g. dentists) will be exempt, and recycled metals are not covered. Importers are urged to implement the new regulation as soon as possible, but it is not binding until January 1, 2021. Member State authorities are responsible for enforcement.
Learn more on the UL WERCS Conflict Minerals Platform