Update: European Regulation on conflict minerals
Update: Agreement reached on a European Regulation on conflict minerals
The European Commission had already presented a draft Regulation on conflict minerals on 5 March 2014 (COM/2014/111/FINAL), in order to work towards responsible procurement in the EU of tin, tantalum and tungsten (ores and metals) and gold in conflict-hit regions such as the Democratic Republic of Congo. The specific objective is to reduce the financing of armed groups and security forces through mineral proceeds in conflict-hit and high-risk areas. These conflict minerals are used in the manufacture of electronic devices, machines, cars and jewellery, among other things. The Commission, however, did not initially want to set any obligatory due diligence standards across the entire mineral supply chain, but instead proposed an EU-wide system of voluntary self-certification. This approach was subsequently the subject of heated debate among the European institutions, which is why the legislative procedure stagnated for some time.
The Commission, the Parliament and the Council recently reached a political compromise on the fundamental regulatory approach of the planned Regulation. To effectively reduce trading in raw materials from conflict regions, a mandatory regulatory regime is to be introduced after all, similar to the regulations of the Dodd-Frank Act. The aim is to create an obligatory certification system (exclusively) for smelters, refiners and EU importers of conflict minerals (upstream sector). Processing industries, on the other hand, are not intended to fall within the scope of the planned Regulation (downstream sector) and would therefore be exempt from the specific due diligence obligations with respect to the origin of the raw materials used.
Ultimately, no detailed implementation proposals have been presented for the compromise reached, which is why the final draft of the Regulation still has to be awaited.
Any questions? Dr. Simon Menz
Practice Group: Litigation, Arbitration & ADR