The 2015 edition of the SEC Reporting Rules include Form SD – for guidance on conflict minerals

Timing is everything. Helping a client yesterday, the discussion of conflict minerals rose – followed by a discussion of needing a Form SD. The good karma of Saul Ewing LLP added a complete new section on Form SD into the 2015 SEC Reporting Rules books. It’s a great resource.

You can request a free set to be mailed to you here.

Certainly, conflict minerals is a messy political, ethical and business arena. The points to share now that were most germane from the conservation yesterday are the following, high-level definitions:

It's a complicated world. These guides can help.

It’s a complicated world. These guides can help.

  • Adjoining country: The term adjoining country means a country that shares an internationally recognized border with the Democratic Republic of the Congo.
  • Armed group: The term armed group means an armed group that is identified as a perpetrator of serious human rights abuses in annual  country Reports on Human Rights Practices under sections 116(d) and 502B(b) of the Foreign Assistance Act of 1961 relating to the Democratic Republic of the Congo or an adjoining country.
  • The term conflict mineral means:
    • Columbite-tantalite (coltan), cassiterite, gold, wolframite, or their derivatives, which are limited to tantalum, tin, and tungsten, unless the Secretary of State determines that additional derivatives are financing conflict in the Democratic Republic of the Congo or an adjoining country; or
    • Any other mineral or its derivatives determined by the Secretary of State to be financing conflict in the Democratic Republic of the Congo or an adjoining country.
  • DRC conflict free. The term DRC conflict free means that a product does not contain conflict minerals necessary to the functionality or production of that product that directly or indirectly finance or benefit armed groups in the Democratic Republic of the Congo or an adjoining country. Conflict minerals that a registrant obtains from recycled or scrap sources are considered DRC conflict free.
  • DRC conflict undeterminable. The term DRC conflict undeterminable means, with respect to any product manufactured or contracted to be manufactured by a registrant, that the registrant is unable to determine, after exercising due diligence, whether or not such product qualifies as DRC conflict free.
  • Conflict Minerals from Recycled or Scrap Sources. Conflict minerals are considered to be from recycled or scrap sources if they are from recycled metals, which are reclaimed end-user or post-consumer products, or scrap processed metals created during product manufacturing. Recycled metal includes excess, obsolete, defective, and scrap metal materials that contain refined or processed metals that are appropriate to recycle in the production of tin, tantalum, tungsten and/or gold. Minerals partially processed, unprocessed, or a bi-product from another ore will not be included in the definition of recycled metal.
  • Outside the Supply Chain. A conflict mineral is considered outside the supply chain after any columbite-tantalite, cassiterite,  and wolframite minerals, or their derivatives, have been smelted; any gold has been fully refined; or any conflict mineral, or its derivatives, that have not been smelted or fully refined are located outside of the Democratic Republic of the Congo or an adjoining country.
  • Nationally or internationally recognized due diligence framework. The term “nationally or internationally recognized due diligence framework” means a nationally or internationally recognized due diligence framework established following due-process procedures, including the broad distribution of the framework for public comment, and is consistent with the criteria standards in the Government Auditing Standards established by the Comptroller General of the United States.

Work with your counsel if this is a topic that affects your organization. The list above is merely the vocabulary you will need to know. 

Have a great day.

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