Impact of “Conflict Minerals” on Regulatory Compliance
Concern was raised some years ago in the USA regarding the ethics of using materials sourced from the Democratic Republic of the Congo (DRC) in the USA, particularly in the electronics manufacturing sector. The reason behind the concern was that the sale of this material by armed militias was funding the civil war in the region, leading to exploitation of, and the use of violence against the local population. In April 2009, a Congo Conflict Minerals Act was introduced in the USA, to require electronics companies to verify and disclose their sources, but this legislation died in committee.
In the aftermath of the Enron and other financial scandals in the USA, a major amendment to the Securities Exchange act of 1934 was formulated. This new law, the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, was passed by the US Senate on 20 May 2010. Section 1502, generally referred to as the “Conflict Mineral Law”, requires US companies to disclose the source of certain minerals in their product. The original 1934 act has been amended to include this text.
So how will these impact US businesses and those in Europe?
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