March 29, 2013 – April 5, 2013
The summaries provided in this Weekly Recap do not necessarily represent the views of Squire Sanders (US) LLP and should not be deemed to be endorsements of them. The Recap is intended to be a compilation of articles and events to encourage discussion within the conflict minerals community and to keep our readers updated on the most recent developments.
Environmental Leader Provides 15 Tips for Complying with the Conflict Minerals Rule
Environmental Leader, a daily trade publication keeping corporate executives informed about recent developments concerning the environment and sustainability, recently released, with the help of Kirsten Wallerstedt, a senior regulatory analyst, global supply chain, for 3E Company, 15 tips for complying with the conflict minerals rule. The compliance tips include:
- No de minimis. “Even if only trace amounts of a conflict mineral are in your products, you are still subject to [the conflict minerals rule].”
- Repairing is not manufacturing. “The SEC clarifies in its final rule that the law does include an issuer that only services, maintains or repairs a product.”
- Acquisitions. “If you acquire a company that must comply with this law, and that company had not previously been obligated to provide a specialized disclosure report for its conflict minerals, then you may be able to delay reporting on the acquired company’s products until a following reporting period.”
For the complete list of tips, please see 15 Tips for Complying with Conflict Minerals Rule.
Gary Emmanuel: Conflict Minerals Rule and its “Name and Shame” Punishment
Gary Emmanuel, a securities attorney, recently published a blog post on the Huffington Post business blog titled, “Would You Invest in a Company that Contributes to Iran’s Quest for a Nuclear Bomb?” Mr. Emmanuel is mainly concerned with the Iran Threat Reduction and Syria Human Rights Act of 2012 (ITAR) and the “IRANNOTICE’s” that public companies have to file with the SEC if they deal with Iran. Mr. Emmanuel, however, goes on to compare ITAR to the conflict minerals rule and the intended consequences of both rules.
Mr. Emmanuel states, “From a purely financial perspective, it’s difficult to see how disclosure of whether a company’s use of conflict minerals is relevant to the making of an investment decision. In fact, the real goal of conflict mineral disclosure is to “name and shame” companies that procure conflict minerals in order to discourage future procurement and eliminate their indirect contribution to the humanitarian crisis in the DRC region. Like the conflict minerals rule, the Iran-related disclosure has a “name and shame” component to it.”
Complying with New Disclosures for Manufactured Products
Dale Jensen, CPA, CFE and partner-in-charge of Weaver’s SEC practice, recently sat down with Smart Business to discuss complying with the conflict minerals rule. Mr. Jensen stresses the importance of complying with the conflict minerals rule now, even though the initial filing is not due until May 31, 2014. To read the entire discussion between Mr. Jensen and Smart Business, please see How to Comply with New Disclosures for Manufactured Products.
Leader of Squire Sanders’ Conflict Minerals Team Featured in April 2013 Issue of Materials World
In its April 2013 issue, Materials World, a member magazine of the Institute of Materials, Minerals and Mining, features our very own Dynda A. Thomas, leader of the Squire Sanders’ conflict minerals team. In the article, Ms. Thomas summarizes the three-step analysis reporting companies must undertake to determine their use and origin of their conflict minerals. Ms. Thomas then discusses the long-term consequences of the Rule, which she notes, “still remain to be seen.” When adopting the conflict minerals rule in August of 2012, the SEC desired to cut off financing of armed groups in the central-African region. Ms. Thomas asserts that it is possible this purpose may be limited, however, as not all companies are subject to the conflict minerals rule and SEC rules. In addition, Ms. Thomas points out that currently, many U.S. reporting companies are beginning to refrain from purchasing conflict minerals in the central-African region all-together in order to ensure that the minerals in its supply chain are conflict-free. With that being said, Ms. Thomas recognizes that there is a large, concerted effort in the region to certify smelters and refiners as conflict-free. As more suppliers and refiners become conflict-free, reporting companies may feel more comfortable in purchasing minerals from the region.