Manufacturers will be affected by new reporting requirements on the origin of minerals from conflict zones

The President signed the Financial Reform Bill (H.R. 4173) into law today. The bill contains a provision requiring manufacturers and their customers to disclose what steps they are taking to ensure that their products do not contain “conflict minerals” from the Democratic Republic of Congo (DRC). The new law will apply to manufactured goods containing tin, tantalum, gold and tungsten.

Sec. 1502 (.pdf) of the financial reform bill requires companies whose manufactured goods contain metals refined from the minerals columbite-tantalite (coltan and tantalum), cassiterite (tin), gold, wolframite (tungsten) or any other mineral or its derivatives determined by the Secretary of State to be financing conflict in the Democratic Republic of the Congo or an adjoining country to:

  • Report annually to the Securities and Exchange Commission (SEC) if the minerals did originate from the Congo or adjoining countries. It is unclear what the obligation will be for companies who cannot determine from where the minerals originated. 
  • Submit a due diligence plan with the company’s annual SEC report that includes:

a.   A description of the measures taken by the company to prevent sourcing from the Congo;

b.   A description of the products manufactured or contracted to be manufactured that are not conflict free, the facilities used to process the conflict minerals, the country of origin of the conflict minerals, and the efforts to determine the mine or location of origin;

c.   An independent third party audit of the company’s due diligence plan; and

d.   A certification by the company of its due diligence report (there is no definition of “certify” included in the language so that obligation is vague).

Although reporting requirements only apply to companies required to report to the SEC, it is expected that these requirements will rapidly be passed through the entire supply chain.

IPC, other industry associations, and a number of affected companies, have been working with Congress for several months to find a solution that will further the goal of limiting violence in the DRC. Thanks to industry efforts, the final bill is less burdensome and more practical than the original draft. 

The SEC is required to issue regulations within 270 days of enactment of the legislation. IPC will work closely with all member companies to shape the regulatory rule making process.

View Section 1502 of the Financial Reform Bill: Conflict Minerals (.pdf)

View the full Financial Reform Bill (H.R. 4173) (.pdf)

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