January 23, 2015 – January 30, 2015
The summaries provided in this Weekly Recap do not necessarily represent the views of Squire Patton Boggs (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.
AICPA Releases New Round of Conflict Minerals Guidance
The American Institute of Certified Public Accountants released its latest round of conflict minerals guidance focusing this time on management representations and practitioner responsibility with respect to gaining an understanding of internal controls in performing an IPSA.
The AICPA guidance, among other things, provides several examples of representations a practitioner might obtain from management.
Comment: We expect that the discussion of management representations will turn up the “ambient stress levels” for companies that are concerned about having to provide an IPSA.
Conflict Minerals Rule: The Disclosure Law of the Land
In the latest entry of Deloitte’s Insights posted on the WSJ’s Risk & Compliance Journal website, Matt Kelly, Editor and Publisher of Compliance Week, provided the following response when asked “[t]he Conflict Minerals Rule continues to be a challenge for many organizations. Where does that stand in your view?”:
Ultimately, the SEC’s conflict minerals rule will become the disclosure law of the land. The rules likely won’t be knocked down anytime soon, particularly when you look at the Federal Appellate Court [D.C. Circuit] ruling that said the SEC did a proper cost-benefit analysis of the rules’ impact on companies. That was the most important part of the ruling. The first amendment issue around the requirement to disclose what products are or are not conflict free is more of a cosmetic issue for companies compared to the bigger compliance issue of effectively examining their supply chains. So the SEC now has a roadmap for the type of due diligence it performs when doing a cost-benefit analysis of similar rules. That could make future challenges to new and existing rules difficult to win. That’s not necessarily a conclusion compliance officers would like to hear, but it’s how I believe it will shake out over the long term.
Global Witness Highlights UN Report About Conflict Gold
Global Witness summarized a UN report which found that gold is being smuggled out of the Democratic Republic of Congo. Global Witness states, “[g]old smuggled out of the Democratic Republic of Congo, some from rebel areas, has been sold on the international market through Uganda and the United Arab Emirates in the past year.”
According to Global Witness, the UN report also found “[s]erious failings in the ITRI supply chain scheme known as iTSCi as investigators were able to obtain the plastic tags used to certify minerals as “conflict free” in Congo and Rwanda, which would allow coltan from unknown sources to enter the supply chain.”
For more on the UN report, please see the Global Witness article.