Last month, I gave a presentation to manufacturers and distributors throughout the United States on Conflict Minerals Laws. The program was sponsored by the United States Department of Commerce. These laws attempt to curb the acquisition of certain minerals from a certain part of Africa that are believed to support regional conflicts.
Here are some the key points from my presentation:
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The Conflict Minerals laws and regulations are some of the most well known, but least understood laws/regulations that face manufacturers/distributors today.
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Although most publicly traded companies have elaborate compliance programs in place, privately held companies must also comply or face commercial pressure from their business partners and potentially sanctions from the U.S. Government.
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There has been litigation that has resulted in a “trap for the unwary” (i.e., whether products need to be described as “conflict free”). I can provide more details for those interested.
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The SEC expected that 6,000 companies would be impacted by the original law, but only 1,281 companies filed the “Form SD” in 2015. The real question is whether the Government is going to do anything about that discrepancy. Some companies are pressuring the Government to punish those that are not complying.
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For those doing business internationally, manufacturers/distributors need to stay apprised of efforts in the European Union to adopt a similar law (although there are some key differences) and potentially in Japan in the future.
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