SEC Conflict Minerals Filing Deadline Fast Approaching


Credits: Missionary Oblates of Mary Immaculate

On August 22, 2012, the Securities and Exchange Commission (SEC) issued a final rule on Section 1502 of the Dodd-Frank Act relating to the use of  conflict minerals (defined as tin, tantalum, tungsten or gold from the Democratic Republic of the Congo (DRC) or an adjoining country).  The provision requires U.S. – publicly traded companies to disclose annually if an issuer’s conflict minerals originated in these areas and, if so, to submit a report to the SEC that includes a description of the measures it took to exercise due  diligence on the conflict minerals’ source and chain of custody.  Companies have until June 2nd, 2014 to submit their initial filings to the SEC.

To accomplish the goal of  helping end the human rights abuses in the DRC caused by the conflict, Section 1502  uses the securities laws disclosure requirements to bring greater public awareness of the  source of issuers’ conflict minerals and to promote the exercise of due diligence on  conflict mineral supply chains. In the final rule the SEC determined that Congress’s main purpose for Section 1502 is “to attempt to inhibit the ability of armed groups in the Covered Countries to  fund their activities by exploiting the trade in conflict minerals. Reducing the use of such conflict minerals is intended to help reduce funding for the armed groups contributing to the conflict and thereby put pressure on such groups to end the conflict.”

On May 14th, 2014, the U.S. Court of Appeals for the District of Columbia Circuit refused to block a June 2 deadline for issuer’s filings to the SEC.  According to the Wall Street Journal, “the SEC said companies still had to determine whether any conflict minerals are necessary for their products and then investigate the origin of those minerals. Certain details about investigative efforts by companies are still due to be reported to the SEC.”