New Draft EU Conflict Mineral and Metals Laws – How Will the Due Diligence and Transparency Rules Impact Your Industry?

by Pillsbury - Global Trade & Sanctions Law

On 16 March 2017, the European Parliament approved a draft EU regulation intended to ensure that trade in certain minerals and metals from high-risk or warn-torn areas does not fund conflict and human rights abuses. The regulation would apply to trade in tin, tantalum, tungsten and gold which are used in a variety of industries ranging from electronics, automotive, jewelry, aerospace, packaging, construction, lighting, industrial machinery and tooling.

The regulation is expected to come into effect as of 1 January 2021, at which time it would apply to up to 95% of EU imports.  Although this presents a substantial delay in implementation, the scope of impact means that this regulation bears watching and merits advance compliance consideration.

New due diligence obligations

Under the regulation, EU importers of minerals or metals will have to undertake a thorough due diligence of their supply chains to ensure that supplies of tin, tantalum, tungsten and gold from conflict-affected or high-risk areas do not provide opportunities for armed groups to engage in and profit from the trade in these metals and minerals. An adequate due diligence plan will need to incorporate due diligence standards set out in either the Organization for Economic Co-operation and Development’s Due Diligence Guideline or from a due diligence scheme otherwise recognized by the European Commission.

The regulations further provide that –

  • Senior management of companies will be required oversee the due diligence process as well as maintain records for 5 years;
  • Due diligence policies must be shared with the public;
  • Companies will be required to inform and strengthen their engagement with suppliers by incorporating their supply chain policy into contracts and agreements; and
  • Grievance redressal mechanisms are required, which can allow for whistle-blowers to identify risk prone contracts.

New traceability systems

As part of the process, companies will also be required establish supply chain traceability systems.

Operationalizing a traceability system for mineral and metals will require companies to document such information as country of origin and date of extraction of the mineral, the name of the supplier of the metal or mineral, information on refiners and smelters of the metal and available third-party audit reports of smelters and refiners that are in the chain of supply for the importer.

Where minerals originate from conflict areas, importers also will have to document the name of the mine, location where the minerals were consolidated, traded or processed and information on taxes, fee and royalties that were paid.

Importantly, any information gained from the supply chain due diligence will have to be shared with the importer’s immediate downstream purchaser.

New third party audit rights and risk mitigation

EU importers also will have to open their risk management processes to audits by an independent third party.

The scope of the audit will be broad ranging covering importer’s activities, processes, supply-chain due diligence systems, risk management and information disclosure protocols with a view to determining whether the importer’s supply chain due diligence conforms with the regulatory requirements. The regulation places a special emphasis on the role of smelters and refiners and provides for certain audit exemptions for responsible smelters and refiners appearing on a planned list to be drawn up by the Commission in consultation with Member States.

When supply chain due diligence identifies risk in the supply chain, importers will also need to have a strategy which responds to those risks, or under some circumstances may have to disengage with such suppliers.

Oversight by Member State competent authorities

Importers will have to make available third-party audits that have been conducted to respective Member State competent authorities. Supply-chain due diligence systems will be subject to ex-post checks by Member State authorities who can also conduct on–site inspections and issue penalties for non-compliance.


The regulation is expected to become law in the coming weeks once the draft is voted on by the Council of the European Union. It will then come into effect from January 1, 2021, when the due diligence, risk management, disclosure and other reporting obligations become operational.


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.

© Pillsbury - Global Trade & Sanctions Law | Attorney Advertising

Written by:

Pillsbury - Global Trade & Sanctions Law

Pillsbury - Global Trade & Sanctions Law on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.


JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at:

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.