SEC Adopts Final Rules on Conflict Minerals Reporting (PDF-1010kb)
SEC Adopts Final Rules on Conflict Minerals Reporting Authors: Gabriella A. Lombardi, Gauri Manglik, Brian M. Wong
The Securities and Exchange Commission (SEC) issued final conflict minerals reporting rules on August 22, 2012. These rules have significant implications for public companies across many industries and are likely to result in substantial compliance costs. This advisory summarizes the final rules and suggests actions that reporting companies should take to ensure timely compliance.On August 22, 2012, the SEC released final rules for disclosure and reporting regarding the use of conflict minerals from the Democratic Republic of Congo and adjoining countries, which we refer to collectively as DRC, as mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act. The rules are intended to prompt reporting companies to examine supply chains for conflict minerals and limit use of conflict minerals originating from the DRC.
What are Conflict Minerals?
Conflict minerals include the following and their derivatives:
- cassiterite (metal ore from which tin is extracted),
- columbite-tantalite (metal ore from which tantalum is extracted), and
- any other mineral or its derivatives determined by the Secretary of State to be financing conflicts in the DRC.
Conflict minerals are used in a wide range of products such as mobile phones, computers, digital cameras, video game consoles, jewelry, light bulbs, pipes, electronic circuits and automobiles.
When will a company be required to begin compliance with the rules?
Public companies are required to file a Form SD (Specialized Disclosure) on or before May 31, 2014 covering the calendar year beginning January 1, 2013. Annual filings are required thereafter. All determinations must be made on a calendar year basis. It is important to note that the Forms SD and required exhibits are filed with the SEC as opposed to being furnished.
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