SEC Adopts Conflict Minerals Rules

On August 22, 2012, the SEC adopted final rules to implement the conflict minerals provisions in Section 1502 of the Dodd-Frank Act, which require companies to make disclosures concerning their use of conflict minerals originating in the Democratic Republic of the Congo (the “DRC”) and adjoining countries.

Key Points:

• The SEC’s conflict mineral rules apply only to public companies that manufacture products or, depending on the facts and circumstances, contract for products to be manufactured.

• Those companies must determine whether conflict minerals are “necessary to the functionality or production” of any of their products. If they are, then additional work is required to determine the source of the conflict minerals.

• Conflict minerals are used in a wide array of products.

• Compliance with these new rules is expected to impose significant costs on

companies.

• Although the first disclosures are not due until May 31, 2014 (with respect to products manufactured between January 1, 2013 and December 31, 2013, regardless of a company’s fiscal year), companies should begin to analyze whether they are subject to the rules and determine the procedures necessary to perform the required supply chain due diligence.

Please see full memorandum below for more information.

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Published In: Administrative Agency Updates, Business Organization Updates, General Business Updates, International Trade Updates, Securities Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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