On Thursday 16 March, at its plenary meeting, the European Parliament (“EP”) voted on the proposed Regulation setting up a Union system for supply chain due diligence self-certification of responsible importers of tin, tantalum and tungsten, their ores, and gold originating in conflict affected and high-risk areas (“Conflict Minerals Regulation”). The draft Regulation was approved by 558 votes to 17 with 45 abstentions.

The parliamentary vote constituted an important step after a long legislative process started in March 2014 with the presentation of the Commission’s proposal (here) and marked by harsh interinstitutional negotiations. Those came to an end on 22 November 2016, when the EP and the Slovak Presidency of the Council of the EU (“Council”) reached an informal agreement, which has just been ratified by the EP.

Once adopted by the Council, the deal will introduce for all, except smallest, European importers of raw conflict minerals mandatory due diligence checks on their suppliers. Importers of tin, tungsten, tantalum and gold and their ores from conflict-affected areas will need to abide by obligations concerning the management system, risk management, third-party verification and communication in accordance with the Organization for Economic Cooperation and Development’s guidelines (here).

Companies not importing directly from conflict and high-risk areas, but using minerals in their manufacturing processes will be asked to report annually, on a voluntary basis, on the due diligence measures they have adopted and on their sourcing practices.

Due diligence obligations will apply from 1 January 2021 in order to allow Member States to put in place the necessary structures to ensure a smooth and EU wide implementation of the Regulation and companies to familiarize with the new obligations.

In parallel, on the other side of the Atlantic, the EU conflict minerals rules’ counterpart, the so-called “Dodd-Frank Act” (“Act”), which was part of the Obama’s 2010 financial reform package, has been questioned by Trump’s administration and may be suspended.

In particular, section 1502 of the Act imposes on U.S. companies the obligation to track their supply chain to determine whether their minerals come from the Democratic Republic of Congo and surrounding countries and, if so, companies are required to perform due diligence reviews of their supply chain.

After the introduction of the Act in the U.S. legislation, big industrial groups lobbied to see section 1502 repealed or drastically revised. However, recently a coalition of 127 investors and investor groups representing over USD 4.8 trillion in assets under management have expressed their support for continuing the implementation of section 1502.

It now remains to be seen who President Trump will listen to.