New EU Conflict Minerals Regulation: Implications and lessons learned from the US Dodd-Frank Act

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New EU Conflict Minerals Regulation: Implications and lessons learned from the US Dodd-Frank Act

Global Trade News Alert – 02-2018

Adopted new import regulations by the European Commission on “conflict minerals” will have effect on companies importing minerals covered by this regulation, such as manufacturers of mobile phones, automotive products, jewelry and medical devices. The regulations will target minerals originating from conflict affected or high risk areas.

24 January 2018

Introduction

On 17 May 2017, the EU Parliament and EU Council adopted new import regulations on “conflict minerals” under Regulation 2017/821. Companies importing the minerals covered under the regulation (i.e. tin, tantalum and tungsten (referred to as the “3TG”)) to manufacture mobile phones, automotive products or for technology, as well as jewellery and medical devices, will be impacted by the EU Conflict Minerals Regulation.

Building on the successful conflict minerals practice in the US, Deloitte’s EMEA practices in Global Trade Advisory (GTA) and Risk Advisory offer services to support EU-based clients wishing to assess conflict minerals-related risks, and work towards (voluntary) improved and/or (obligatory) fully compliant processes across their supply chains.

Deloitte Global Trade News Alert – number 2-2018

What does the new EU Conflict Minerals Regulation mean for you?

The EU Conflict Minerals regulation, which will apply throughout the EU as from 1 January 2021, will require certain EU importers of the covered minerals to comply with, and report on, supply chain due diligence obligations if the minerals originate (even potentially) from conflict-affected and high-risk areas.

The EU Conflict Minerals Regulation was inspired in large part by the US Dodd-Frank Act (2010) and applies for EU-established importers.
The European Commission will publish guidelines that will help enterprises identify when this applies to them.

The EU regulation will apply to EU-established importers of the targeted minerals. Non-EU companies also will be impacted because EU companies will have to ensure that they source from responsible smelters and refiners. The Commission will publish white-lists of companies that fulfil requirements set out in Regulation 2017/821.

Importers that do not reach the volume thresholds set out in Annex I of the regulation will be exempt from due diligence obligations. Transporters and other intermediaries, investors and end-users in the sector also fall outside the scope of the regulation.

What to do?

Multinational companies established in the EU already comply with the above-mentioned US rules. EU importers and companies exporting to the EU that consider that their supply chain may be at risk or that their company processes may not be compliant should undertake due diligence checks on their supply chains, in line with OECD Guidelines.

The procedures, tools and mechanisms for carrying out supply chain due diligence can be implemented under a conflict minerals “due diligence” scheme. Schemes from both EU importers and third-country exporters can be recognised by the EU Commission.

EMEA

US

• Kristen Sullivan, Partner, Risk and Financial Advisory, ksullivan@deloitte.com
• Ilya Gilman, Advisory Manager, Risk and Financial Advisory, igilman@deloitte.com

Meer weten over Conflict mineralen verordening en de US Dodd-Frank Act?

Do you want to know more on Conflict Minerals Regulation? Please contact Klaas Winters at +31 (0)88 880 2125

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