EU Conflict Minerals: Due Diligence to be Mandatory for Importers

EU Conflict Minerals: Due Diligence to be Mandatory for Importers

Members of the European Parliament (MEPs) have announced a victory in the development of the EU’s conflict mineral regulation.

On November 22, the European Parliament announced under the new regulation, due diligence would be mandatory for importers of conflict minerals to the European Union.

“We have laid the groundwork for an effective tool to break the link between conflicts, human rights abuses and our consumption of everyday goods,” International Trade Committee Chair Bern Lange said in the release.

The due diligence requirements will align with the Organisation for Economic Co-Operation and Development’s (OECD) guidelines and be required for any importers of tin, tungsten, tantalum and gold (3TGs), and their ores, from conflict and high-risk areas.

Unlike its United States counterpart, Section 1502 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, the EU conflict mineral regulation will apply to all conflict-affected and high-risk areas in the world. While this includes the Democratic Republic of Congo and the Great Lakes Region, the EU will provide a handbook identifying other affected regions.

 

What About Downstream Companies?

Downstream companies who use 3TGs will not have a mandatory reporting requirement but tools and guidance will be created for the many companies who will voluntarily report their due diligence practices.

In addition, manufacturers and sellers subject to the EU law (2014/95/EU) on non-financial reporting (more than 500 employees) that purchase 3TGs for use in their products will be strongly encouraged to report their sourcing practices based on new performance indicators. They will have the option to join an EU registry and voluntarily report on their due diligence practices.

Reporting under 2014/95/EU starts after January 1st, 2017.

 

Looking Forward

Prior to this announcement, the European Commission and Council had been proposing voluntary checks. However, MEPs have long been calling for mandatory due diligence.

The Group of the Progressive Alliance of Socialists and Democrats in the European Parliament (S&D) have been leading the push for mandatory due diligence for importers. While hailing this announcement as a win, they said it is only the beginning.

“We may have won this battle but there is still a long way to go to fully clean up global supply chains,” said Marie Arena, MEP and S&D spokesperson on conflict minerals. “…we, as a political group, will also push for further legislation in the coming years. As a result of pressure from our group we obtained a commitment from the Commission to implement voluntary due diligence measures for downstream companies and to propose further legislation if there is no meaningful uptake.”

The next step for the EU conflict mineral regulation will be a full House vote on the final agreement early in 2017. However, concrete dates and timelines have yet to be released. While there will be a three or four-year implementation timeline, companies are expected to start implementing their conflict mineral programs in 2017 due to the direct and indirect supply chain communication requirements stemming from the EU non-financial reporting directive’s specific reporting requirement on human rights.

For more information on the EU conflict mineral regulation, contact Assent’s regulatory experts at info@assentcompliance.com.


To read more about the U.S. conflict minerals rule, Section 1502 of the Dodd-Frank Act, click here to read our eBook The Conflict Mineral Compliance Toolkit.

Click here to watch a webinar on conflict mineral laws in the U.S. and abroad, including updates on the European Union’s regulation.

 

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