Tag Archives: conflict minerals

Responses to Corp Fin’s Updated Statement on Conflict Minerals

by Cydney Posner

A number of NGOs have issued statements emphatically rejecting Corp Fin’s  Updated Statement on the Effect of the Court of Appeals Decision on the Conflict Minerals Rule and the Acting Chair’s separate Statement on conflict minerals (see this PubCo post) and calling for companies to disregard them and file their conflict minerals reports as usual. How will companies respond? Continue reading

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Corp Fin provides relief on conflict minerals in light of final judgment in National Association of Manufacturers v. SEC

by Cydney Posner

Today, in light of the entry of final judgment by the D.C. District Court in National Association of Manufacturers v. SEC, Corp Fin issued an Updated Statement on the Effect of the Court of Appeals Decision on the Conflict Minerals Rule that provides substantial relief to companies subject to the rule. You may recall that, in that case, the Court held that a part of the conflict minerals rule violated the First Amendment. Corp Fin’s Updated Statement advises that companies will not face enforcement if they perform only a reasonable country-of-origin inquiry and file only a Form SD and do not conduct detailed supply-chain due diligence or prepare and file a conflict minerals report (Item 1.01(c) of Form SD) or have an audit performed — even if they would otherwise be required to do so under the rule. In a separate Statement, Acting SEC Chair Michael Piwowar commented that the “primary function of the extensive and costly requirements for due diligence on the source and chain of custody of conflict minerals set forth in paragraph (c) of Item 1.01 of Form SD is to enable companies to make the disclosure found to be unconstitutional. In light of the foregoing regulatory uncertainties, until these issues are resolved, it is difficult to conceive of a circumstance that would counsel in favor of enforcing Item 1.01(c) of Form SD.” Continue reading

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Final judgment entered in conflict minerals case, National Association of Manufacturers v. SEC

by Cydney Posner

Today, the D.C. District Court entered final judgment in National Association of Manufacturers v. SEC, holding that Section 1502 of Dodd-Frank and Rule 13p-1 and Form SD, Conflict Minerals, violate the First Amendment to the extent that the statute and the rule require regulated entities to report to the SEC and to state on their websites that any of their products “have not been found to be ‘DRC conflict free.’”  In addition, pursuant to the APA, the Court held the rule unlawful and set it aside but only to the extent that it requires regulated entities to report to the SEC and to state on their websites that any of their products “have not been found to be ‘DRC conflict free.’” (For background on the case, see this PubCo post.) Continue reading

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State Department ventures into conflict minerals

by Cydney Posner

Bloomberg BNA is reporting that the State Department has launched a new review of  “how best to support responsible sourcing of conflict minerals,” which will continue through April 28. Although it’s not known whether the SEC is involved in the State Department’s efforts, BNA suggests that the review “could help determine the next step in a potential rethink” of the SEC conflict minerals rule. Continue reading

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European Parliament approves conflict minerals rules for the EU

by Cydney Posner

Last week, the  European Parliament approved, by a vote of 558 to 17 with 45 abstentions, new rules on conflict minerals, 3TG—tin, tungsten, tantalum and gold.  Proceeds from the sale of conflict minerals, which are used in the production of products such as mobile phones, cars and jewelry, are sometimes used to finance armed conflict in high-risk areas. The rules are designed to prevent the sale of conflict minerals from continuing to fuel this violence.  According to the press release, the rules impose supply chain due diligence requirements based on the OECD Guidance on companies importing 3TG into the EU. The rules are expected to cover up to 95% of imports as of January 1, 2021.  Following the European Parliament vote, the EU conflict minerals regulation will be finalized when formally approved by EU member countries and published in the EU Official Journal and will go into effect in 2021.

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Just as the U.S. seeks to roll back regulations, the European Parliament adopts new corporate governance rules

by Cydney Posner

Just when the U.S. is looking at how to roll back its regulations on corporations (among others) (see, e.g., this PubCo postthis PubCo post and this PubCo post), the rest of the world seems to be headed in the opposite direction.  On Tuesday, the EU Parliament approved a Shareholder Rights Directive, which introduces, among other things, the concept of binding say-on-pay votes for companies listed in EU markets (over 8,000 of them). The Directive also includes some interesting measures intended to impede short-termism.  According to the press release fact sheet issued by the European Commission, the Directive must still be adopted by the European Council (expected shortly) and, assuming adoption, will become effective two years thereafter. Continue reading

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Say farewell to the conflict minerals case, Nat’l Ass’n of Mfrs. v. SEC

by Cydney Posner

The parties to the conflict minerals case have filed in the D.C. District Court a “Joint Status Report,” which requests that the Court enter a final judgment in accordance with the decision of the Court of Appeals.  As a result, it will be case closed for National Association of Manufacturers v. SEC, which decided that the requirement in the conflict minerals rule to disclose whether companies’ products were “not found to be DRC conflict free” violated companies’ First Amendment rights.    Continue reading

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