On August 22, 2012, the U.S. Securities and Exchange Commission adopted Rule 13p-1 under the Exchange Act, which is known as the “Conflict Minerals Rule.” The first compliance period under the Rule began on January 1, 2013. Under the Rule, if conflict minerals — tin, tantalum, tungsten and gold — are necessary to the functionality or production of products manufactured or contracted to be manufactured by an SEC reporting company, the company must take steps to determine and make specified disclosures concerning, among other things, the source of the 3TG contained in its in-scope products. The intent of the Rule is to reduce a significant source of funding for armed groups that are committing human rights abuses and contributing to the conflict in the eastern DRC.

Although private companies are not directly subject to the Rule, to the extent that they are part of a public company’s supply chain, they will need to follow many of the same compliance procedures as public companies.