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SEC Rules on Conflict Minerals August 22nd

Posted by peacedevelopmentnetwork on August 23, 2012

The Securities Exchange Commission published rules yesterday to regulate conflict minerals used to finance conflict in the Democratic Republic of Congo. Section 1502 of the Dodd-Frank Wall Street Reform and Consumer Protection Act requires any US company to register with the Securities and Exchange Commission if there’s a possibility that its products contain conflict minerals.

The law will not need to be fully implemented until 2014. The rules were to be published in April 2011 but have been postponed due to business lobbying. BBC World Affairs correspondent Humphrey Hawskley wrote about his experience in eastern DRC (here).

CONFLICT MINERALS (Link for whole document)

AGENCY: Securities and Exchange Commission.

ACTION: Final rule.

SUMMARY: We are adopting a new form and rule pursuant to Section 1502 of the Dodd-Frank Wall Street Reform and Consumer Protection Act relating to the use of conflict minerals. Section 1502 added Section 13(p) to the Securities Exchange Act of 1934, which requires the Commission to promulgate rules requiring issuers with conflict minerals that are necessary to the functionality or production of a product manufactured by such person to disclose annually whether any of those minerals originated in the Democratic Republic of the Congo or an adjoining country. If an issuer’s conflict minerals originated in those countries, Section 13(p) requires the issuer to submit a report to the Commission that includes a description of the measures it took to exercise due diligence on the conflict minerals’ source and chain of custody. The measures taken to exercise due diligence must include an independent private sector audit of the report that is conducted in accordance with standards established by the Comptroller General of the United States. Section 13(p) also requires the issuer submitting the report to identify the auditor and to certify the audit. In addition, Section 13(p) requires the report to include a description of the products manufactured or contracted to be manufactured that are not “DRC 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. Section 13(p) requires the information disclosed by the issuer to be available to the public on its Internet website.


Effective Date: [60 days after publication in the Federal Register]

Compliance Date: Issuers must comply with the final rule for the calendar year beginning January 1, 2013 with the first reports due May 31, 2014.


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