Those hoping for updated SEC guidance that would relieve or reduce companies’ conflict minerals diligence and disclosure obligations for calendar year 2016 got only a fraction of what they wanted. Last Friday, April 7, 2017, the SECs Acting Chair Michael Piwowar issued a statement that said “it is difficult to conceive of a circumstance that would counsel in favor of enforcing” the requirements that companies file a Conflict Minerals Report or (if required) provide an independent private sector audit (IPSA) relating to its due diligence.
Final EU Conflict Minerals Regulation – Only the Publication Step Remains
Today, April 3, 2017, the European Council took the last procedural step and approved the EU conflict minerals regulation. Publication in the Official Journal of the European Union will be the next and final step of the process. The publication could occur in 3 to 6 weeks. Here is the text of the official EU Conflict Minerals Regulation.
European Conflict Minerals Regulation — Details On What EU Importers Must Do
The proposed EU conflict minerals regulation has almost reached the last step before becoming an official EU regulation. On March 16, 2017, the European Parliament voted to approve the regulation, and the Council of the EU is expected to formally approve it in the weeks to come. The Council’s vote will be the last step before the regulation is published and goes into effect. The proposed regulation includes many of the same basic provisions as the US rule, but several reporting obligations and the coverage of the regulation are broader than those of the US rule.
Some are disappointed with the final EU regulation, saying that it is not strong enough. But, those EU importers that are covered by it will certainly bear a significant burden to comply with its requirements.
Conflict Minerals Rule Legal Challenge — Done and Done
“Hear ye, Hear ye.” The parties to the legal challenge of the SECs conflict minerals rule have agreed that no further court proceedings are necessary and have requested that the US District Court enter a judgment in accordance with the decisions of the Court of Appeals — that is, that certain elements of the rule violated reporting entities’ First Amendment rights. So, the legal challenge of the rule is over — all but the final judgment to be entered by the US District Court. A proposed final judgment is to be proposed by the parties no later than March 20, 2017.
Executive Order on Conflict Minerals? Not Yet
You may have read that President Trump signed an executive order repealing or waiving the SEC conflict minerals rule. Not true — at least not yet. As of February 14th, no executive order relating to the conflict minerals rule had been signed. But, a leaked draft of an executive order and rumors about a plan to waive the conflict minerals rule seem to be enough for people to talk as if it has already occurred. Check out the link below for some thoughts about what might follow an executive order and what to do in the meantime. We also walk through what Section 1502 of the Dodd-Frank Act actually says about revisions or waivers to the rule and give a status update on the legal challenge of the rule. Executive Order on Conflict Minerals? Not Yet
Piwowar’s Statement on SECs Conflict Minerals Rule – We Could Have Seen It Coming
In a move that has already been widely reported, on January 31, 2017, the SEC’s Acting Chairman Michael Piwowar issued a statement on the SECs conflict minerals rule, in which he directed the SEC staff to “consider whether the [April] 2014 guidance is still appropriate and whether any additional relief is appropriate in the interim.” Interestingly, he called for comments only about whether additional relief from requirements should be given, and not about whether any elements of the rule should be strengthened. He called for a 45 day comment period.
EU Conflict Minerals Regulation – Where do things stand?
Almost two months after the negotiations of the EU conflict minerals regulation were concluded, there has been some movement towards the end of the European legislative cycle. On January 24, 2017, the European Parliament’s International Trade Committee approved the text of the conflict minerals regulation submitted following the three-way trilogue negotiations that were completed on November 22, 2016. Now, the International Trade Committee is expected to refer the legislation to the European Parliament’s plenary for a formal adoption. That formal adoption is likely to occur at the mid-February plenary session.
The European Council approved the legislative text, as agreed in the trilogue negotiations, in December 2016. After both the European Parliament and Council have formally approved the legislative text, the file will be sent for publication at the Official Journal of the EU and will enter into force 20 days after its publication.
Conflict Minerals in 2017 – What’s New?
It’s January 2017, and some believe it will be the last year for the SECs conflict minerals rule.
Political and Legislative Environment
President Trump’s inclination to roll back regulation reduces or even eliminates the likelihood of a Presidential veto of any Congressional action to repeal Section 1502 of the Dodd-Frank Act and the SECs conflict minerals rule.
The New EU Conflict Minerals Regulation — Is It Something To Be Thankful For?
Since the US Presidential Election 2 weeks ago, some have been looking forward to a possible repeal of the US conflict minerals rule by a newly-elected Trump Administration. But, the completion of the negotiations on the new EU conflict minerals regulation makes it clear that companies should not slow their due diligence efforts on the source and chain of custody of the tin, tantalum, tungsten and gold in their products.
The negotiations of the EU conflict minerals regulation concluded yesterday (November 22, 2016) through the so-called “trilogue negotiations.” This is another major step toward the final adoption of the legislation and the establishment of an EU legislative framework for conflict minerals.
UK Modern Slavery Act — Let The Posting Begin
Many organizations started voluntarily posting their modern slavery and human trafficking statements months ago. But now, the Modern Slavery Act’s transition period is over, and there are real deadlines to meet. Covered companies with financial years ending 31 March 2016 must post statements as soon as reasonably practicable but within six months of their financial year end. For those companies, their deadline for posting a statement was 30 September 2016. Non-governmental organizations have already started reviewing, scoring and rating posted modern slavery statements. So, in addition to focusing on the content of the statement, it is important to attend to the Modern Slavery Act’s technical requirements so that the statement is viewed as being compliant.