On April 29, 2014, the SEC Division of Corporation Finance (the “Division”) issued a statement on the effect of a recent decision by the US Court of Appeals for the District of Columbia Circuit (the “Court”) on the SEC’s reporting requirements regarding conflict minerals originating in the Democratic Republic of the Congo (the “DRC”) and adjoining countries (the “Conflict Minerals Rule”). The Division expects companies to file all reports required under the Conflict Minerals Rule by the June 2, 2014 due date and to comply with all portions of the Conflict Minerals Rule that the Court upheld.
On April 14, 2014, the Court issued a decision in a case involving a challenge to the Conflict Minerals Rule by the National Association of Manufacturers, the Chamber of Commerce and Business Roundtable, in which it rejected all of the challenges based on the Administrative Procedure Act and the Securities Exchange Act of 1934 (the “Exchange Act”). The Court concluded, however, that Section 13(p)(1) of the Exchange Act, adopted pursuant to Section 1502 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and the Conflict Minerals Rule “violate the First Amendment to the extent the statute and rule require regulated entities to report to the Commission and to state on their website that any of their products have ‘not been found to be ‘DRC conflict free.’’” In an order issued concurrently with the decision, the Court withheld the issuance of its mandate until seven days after disposition of any timely petition for rehearing or petition for rehearing en banc. As a result, the earliest date on which the Court’s mandate is likely to be issued is June 5, 2014, which is after the June 2, 2014 due date for the first reports under the Conflict Minerals Rule.
Please see full memo below for more information.
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