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European Commission Releases Draft Conflict Minerals Regulation

On March 5, 2014, the European Commission released its long-awaited draft conflict minerals regulation (the “draft Regulation”). The draft Regulation would establish an approach that is fundamentally different than the U.S. Dodd-Frank Act and Securities and Exchange Commission (“SEC”) rule, i.e., a voluntary system of self-certification for importers of tin, tantalum, tungsten and gold into the European Union (“EU”). The draft Regulation is accompanied by a Joint Communication by the Commission and High Representative of the EU for Foreign Affairs and Security Policy (the “Communication”) that outlines a number of initiatives to encourage responsible sourcing by EU companies. 

Unlike the U.S. scheme, self-certification under the EU draft Regulation would not extend to downstream users of the metals, including importers of products containing those metals, and would instead focus entirely on importers of the minerals, metals and their ores. However, downstream users may be impacted by procurement measures envisioned in the Communication for products containing these metals. The geographic scope of the draft Regulation is also global, extending far beyond the Democratic Republic of the Congo (“DRC”) and adjoining countries covered by Dodd-Frank.

The draft Regulation is available here, and links to the Communication and other related materials are available here.

Importer Self-Certification

Under the draft Regulation, importers choosing to participate in self-certification would be required to exercise due diligence in line with the five steps set out in the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas (“OECD Due Diligence Guidance”) and obtain a third party audit. In addition, such importers would be required to disclose information relating to supply chain due diligence with immediate downstream purchasers, publicly report “as widely as possible” on due diligence practices and audit results, and provide certain additional information including the names and addresses of smelters and refiners in their supply chains to the relevant Member State competent authorities.

Due diligence as part of voluntary importer self-certification would have a global scope extending to tin, tantalum, tungsten and gold originating in all conflict-affected and high-risk areas. The draft Regulation does not provide a list or otherwise specify covered countries or geographic areas, and instead defines conflict-affected and high-risk areas to include areas in a state of armed conflict, fragile post-conflict as well as areas witnessing weak or non-existent governance and security, such as failed states, and widespread and systematic violations of international law, including human rights abuses.

Supporting Initiatives and Policy Measures

The Commission has proposed a number of complementary initiatives in the Communication including financial support for implementation of the OECD Due Diligence Guidance, funding for small and medium enterprises to participate in self-certification, and public procurement measures. With respect to procurement, the Communication indicates that the Commission will include performance clauses in its public procurement contracts requiring due diligence for products containing tin, tantalum, tungsten or gold consistent with the OECD Due Diligence Guidance or an equivalent scheme. The Communication also sets out several policy measures to address the link between conflict and minerals trade including facilitation of regional dialogues and outreach to countries where smelters and refiners are located.

Relationship to Dodd-Frank Act Reporting Requirements

The EU draft Regulation differs from the U.S. Dodd-Frank Act and SEC rule in several important ways. For example, the geographic scope of the draft Regulation is much broader than that of the U.S. scheme in that it is not limited to minerals from the Democratic Republic of Congo or adjoining countries; due diligence pursuant to self-certification under the draft Regulation could extend to minerals originating in any conflict area worldwide. Also, as noted above, the draft Regulation would cover importers of tin, tantalum, tungsten (and their ores) and gold; the U.S. scheme applies to downstream entities that manufacture or contract to manufacture products containing these metals.

Information generated under the draft Regulation, however, could be useful to companies with Dodd-Frank reporting obligations. Both Dodd-Frank and the draft Regulation build their due diligence requirements around the OECD Due Diligence Guidance, and compliance programs for each should have key similarities. Further, under the draft Regulation, participating importers would be required to report to their immediate downstream customers. Companies with Dodd-Frank obligations may be able to use information reported through the self-certification program to build and improve their own disclosures.

Next Steps

The draft Regulation will proceed through the European co-decision process and will be reviewed by the Council and the European Parliament. If these institutions take favorable action on the draft Regulation later this year, it would likely take effect in 2015.

© 2020 Beveridge & Diamond PC National Law Review, Volume IV, Number 71



About this Author

Paul E. Hagen Environmental Attorney Beveridge & Diamond Washington, DC

Paul helps clients navigate increasingly complex environmental requirements governing global supply chains and products across their life-cycle.

He works with leading companies to anticipate and comply with product-related environmental requirements in the U.S. and in key markets worldwide. He has represented U.S. business interests in the negotiation and implementation of regional and global environmental agreements that drive national legislation and the circular economy.

Extended Producer Responsibility (EPR) 

Paul advises companies on compliance...

K. Russell LaMotte Environmental Attorney Beveridge & Diamond Washington, DC

Russ helps global companies navigate international environmental regulatory regimes and develop product compliance and market-access strategies.

He served for over ten years as an international lawyer at the United States Department of State, representing the U.S. Government in designing, negotiating, or implementing most of the major multilateral environmental and oceans agreements. His experience and representative matters include: 

Chemicals, Substances in Articles, and Product-Related Environmental Compliance

  • Advising chemicals, pesticides, toy, and electronics companies on compliance with chemicals-related market access regulations, including Registration, Evaluation, Authorisation and Restriction of Chemicals (REACH); Restriction of Hazardous Substances (RoHS); and other national-level chemical and article import notification schemes as well as working extensively on multijurisdictional projects involving complex market access and compliance challenges for chemical products overseas.
  • Advising companies and trade associations on regulatory requirements relating to the Stockholm Convention on Persistent Organic Pollutants (POPs), the Rotterdam Convention on Prior Informed Consent (PIC) for trade in hazardous chemicals, and the Basel Convention on trade in hazardous waste and conducting advocacy in these unique forums.
  • Representing companies on compliance and advocacy relating to regulatory requirements applicable to products containing or made with ozone-depleting substances under the Montreal Protocol and U.S. Clean Air Act.
  • Counseling and representing electronics importers on the U.S. excise tax on goods manufactured with ozone-depleting substances.
  • Advising on supply chain risk management relating to conflict minerals, raw materials, ethical sourcing, and human rights due diligence.
  • Counseling consumer product and manufacturing companies on the implementation of U.S. Securities and Exchange Commission’s conflict minerals rule and related supply chain management issues.
  • Advising global clients on risk management relating to corporate due diligence, supply chain, and human rights, including United Nations Guiding Principles and disclosure requirements regarding forced labor in complex supply chains.



Lauren A. Hopkins Consumer Products Attorney Beveridge & Diamond San Francisco, CA
Office Managing Principal

Lauren’s practice focuses primarily on global product stewardship, responsible sourcing, and corporate sustainability.

She advises clients across a range of industry sectors on environmental, social and governance (ESG) disclosures, responsible sourcing of raw materials including “conflict minerals” and forest products, as well as human rights and labor issues in corporate operations and supply chains. She advises on issues including interpretation and implementation of the U.S. Securities and Exchange Commission’s conflict minerals rule, supply chain due diligence, and the...