EU importers of tin, tantalum, tungsten and gold (3TG) and of metals containing 3TG should be taking actions now to supplement their compliance programs to address the requirements of the EU conflict minerals regulation. Starting on 1 January 2021, EU importers will be subject to the regulation, which has specific mandatory requirements and consequences.
The EU regulation will impact tens of thousands of European companies many more than are covered by the US rule. The EU regulation covers many more minerals and metals and has a much wider geographic focus than the US rule. So, what steps should a company take to develop its initial conflict minerals compliance program? Or what steps should a company take to expand its existing compliance program to fulfill the requirements of the EU regulation?
You should consider some best practices in building your own compliance program.
a. Designate your conflict minerals team and confirm one point person with overall project management responsibility.
a.Determine which minerals and metals you import into the EU annually and in what amounts.
b. Develop or revise your conflict minerals policy. c.Gather purchasing and logistics information. d.Obtain supplier names, addresses and key contacts.
Identify Conflict-Affected and High-Risk Areas
a. Identify "conflict-affected and high-risk areas." b. Identification will apply going forward and retroactively.
IT System Solutions
a. Inventory existing IT systems. b. Develop or enhance capabilities to accommodate the
additional data requirements of the EU conflict minerals regulation. c.Determine how to digitize supply chain data.
a. Policy roll-out. b. Announce supply chain transparency expectations. c. Develop supplier qualification and onboarding procedure.
b. Develop overall schedule with key deadlines.
d. Internal training sessions.
c. Consider outside advisors. d. Develop company management systems.
a. Name conflict minerals core team: Legal Compliance Supply Chain/Purchasing IT Internal Audit
b. Assure senior management support and responsibility.
Initial letters and follow-up Conflict minerals template responses b. Suppliers
c. Include relevant employees and departments.
Risk Assessment and Mitigation
a. Identify and assess supply chain risks. b.Develop risk management plan. c.Implement risk management and corrective action. d.Analyze supplier responses. e.Follow up for corrections and completions of supplier
responses. f. Score and reward supplier compliance. g.Obtain third-party audits. h.Engage in consultations, if required.
a. Review key supply contracts. b. Add data and transparency requirements to new and
renewed supply contracts. c. Revise terms and conditions/purchase order terms. d. Update supplier qualification requirements and corrective
action. e. Address conflict minerals in acquisitions.
a. Conflict Minerals Policy. b. Annual public disclosures. c. Website posting. d. Disclosures to immediate customers.
Dynda A. Thomas Partner T +1 216 479 8583 E [email protected]
Scan this code to go to the source for legal insights and analysis on conflict minerals compliance: www.conflictmineralslaw.com
The contents of this update are not intended to serve as legal advice related to individual situations or as legal opinions concerning such situations, nor should they be considered a substitute for taking legal advice. Squire Patton Boggs. All Rights Reserved 2020