EU Parliament Votes in Favor of Mandatory EU Conflict Minerals Regime
Client Alert | 3 min read | 06.29.15
On May 20, the European Parliament voted in favor of an EU conflict minerals regime that, if approved by the European Council of Ministers, would require importers and down-stream companies using certain minerals to publicly disclose their due diligence practices for their supply chain. The Parliament's version of the regulation casts a far wider net than the voluntary regulation originally proposed by the Commission, which would have only covered importers of tin, tungsten, tantalum and gold (3TG).
The Parliament is now in talks with EU member states to negotiate a final version of the regulation. EU deliberations on conflict minerals have lasted several years, and the process of Parliament and the EU Council of Ministers reaching consensus on this controversial topic will likely take months.
The United States acted on the conflict minerals issue in 2012 through a U.S. Securities and Exchange Commission (SEC) rule implementing the 2010 Dodd-Frank Act. The Act requires companies to disclose their use of conflict minerals if they are "necessary to the functionality or production of a product" manufactured by those companies [See our previous Client Alert]. For U.S. companies with reporting requirements, the Conflict Minerals Reports and Form SD filings for 2014 were due to the SEC on June 1.
The European Commission's initial 2014 draft conflict minerals proposal was considered "business friendly": it included a voluntary regime that focused on importers, smelters, and refiners of 3TG (upstream companies). The proposal was intended to complement the existing U.S. rule, under which the primary burden rests with downstream companies that use 3TG in their products.
The European Parliament's proposal, in contrast, reflects the advocacy of NGOs such as Amnesty International and Global Witness, which pushed for a mandatory scheme that included all companies in the chain: "all companies who first place covered resources, including products that contain those resources on the Union market," must conduct supply chain due diligence and submit a public report. Those companies also must "take all responsible steps to identify and address any risks arising in their supply chains for minerals and metals." This proposal, if adopted, would require 800,000-plus companies to file annual reports.
The key differences between the European Parliament's proposal and the U.S. Dodd-Frank Act's Conflict Minerals Rule are that Parliament's proposal imposes additional requirements on "upstream companies" and requires the European Commission to provide a list of "responsible importers" to the public. If such a list is issued, it would be the first government-issued list of its kind.
Companies should determine whether they would fall within the scope of the Parliament's proposal and, if so, analyze the proposal's potential impact on their operations and consider developing an advocacy strategy for expressing their views to key European decision-makers.
Other Articles in this Month's Edition:
- Drinking and Droning: Safety, Privacy, and Security Take Center Stage as the Legal Landscape Evolves
- CPSC's $3.4M Office Depot Penalty Settlement Highlights Enforcement Trends
- Business Transitions and Personal Information: Managing Privacy Risks
- Proposed Legislation to Create a Uniform Standard for 'Made in America' Labeling
- EU Court Finds That Food Label May Be Misleading Even If List of Ingredients Is Not
- Advertisers in the Ring – A Roundup of This Month's Competitor Advertising Challenges: Broad Performance Claims and Narrow Support
Insights
Client Alert | 3 min read | 05.23.25
Executive Order Seeks Most-Favored-Nation Drug Pricing and HHS Announces Price Targets
On May 12, 2025, President Trump issued an Executive Order titled "Delivering Most-Favored-Nation Prescription Drug Pricing to American Patients," which aims to reduce the costs of prescription drugs and biologics for American consumers and other payers. This Order revives a plan from President Trump’s first term and follows his April Executive Order, “Lowering Drug Prices by Once Again Putting Americans First,” which also sought to reduce drug prices. With drug prices in the United States nearly three times higher than many other countries, this second Order asks drug manufacturers to adopt Most-Favored-Nation (MFN) pricing for drugs sold in the United States or face potential regulation. MFN pricing would tether drug prices offered in the United States to the lower-cost prices offered in other comparably developed nations, such as Canada, Germany, or the United Kingdom.
Client Alert | 4 min read | 05.22.25
Opportunities for Procurement on the Horizon as UK Concludes Free Trade Agreement With India
Client Alert | 2 min read | 05.22.25
What Trump’s Nominee for IRS Commissioner Could Mean for Employee Retention Tax Credit Enforcement
Client Alert | 3 min read | 05.20.25
