The EU Conflict Minerals Regulation – will it affect your business?

Overview

Conflict minerals are linked to human rights abuses and armed conflict in some parts of the world. The Organisation for Economic Co-operation and Development (OECD) has long been working to improve sourcing of these materials to ‘help companies respect human rights and avoid contributing to conflict through their mineral sourcing practices’.[1] In support of this work, on Friday 19th May 2017, the long awaited EU Conflict Minerals Regulation[2] was published. The majority of the obligations arising come into force across all EU Member States (MS) in just a few weeks on 9 July 2017, but the key obligations for importers won’t arise until January of 2021, by which time the UK may no longer be part of the EU. Accordingly, this article sets out what you should do now and what you can safely leave until we know more about what our new relationship with Europe is likely to be.

Are you affected?

The first thing to understand is whether or not the Regulation applies to your business at all. Answer the following three questions:

  1. Is your business responsible for importing (tin, tantalum, tungsten (or their ores), or gold into the EU?
  2. Is your business responsible for smelting or refining any of these minerals/metals in the EU?
  3. Does your business run a conflict minerals due diligence scheme in any EU Member State (including the UK)?

If the answer to all of these questions is no, then the Regulation is not going to apply to you. If the answer to questions 2 or 3 is yes, you should begin preparations now. Call 01491 682850 for immediate assistance. If the answer to question 1 is yes, then you should read the information below.

Advice to importers of minerals

If your business imports conflict minerals:

  1. you need to know the quantities (in Kgs) imported each year and the Combined Nomenclature (CN) for each mineral. You should then check Annex 1 of the Regulation. If you import less than the amounts given in Annex 1, you will have no import obligation.[3] Note that for Tin oxides and hydroxides, Tantalum (or Niobium) ores and concentrates, Tantalates, Tantalum Carbides, and Gold ores and concentrates (but not powdered, unwrought or semi-manufactured, non-refined forms) volume thresholds will not be published until 2020;
  2. you need to know whether the minerals/metals are recycled. If so, then provided you can demonstrate this and will publicly declare the materials to be recycled, and provide details of the due diligence measures used in your determination, you have no further obligations under the Regulation in respect of those minerals/metals;[4]
  3. are you holding any of these minerals/metals that were imported prior to 1 February 2013? These stocks will be exempt from obligations arising from the Regulation.[5]

Note that obligations will not arise until 1 January 2021. At the moment, we do not know what the relationship between the UK and the EU will be. Accordingly, you should carry out the steps above and then await further advice. It is hoped that the text of the Great Repeal Bill will be published in the autumn and that there will be some clarification of what the post-exit relationships will be by the end of the year, still leaving plenty of time for you to take action.

If you want further information on the Regulations, please email hlobo@3rdi.co.uk

[1] OECD (2016), OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas: Third Edition, OECD Publishing, Paris.http://dx.doi.org/10.1787/9789264252479-en

[2] Regulation (EU) 2017/821 of the European Parliament and of the Council of 17 May 2017 laying down supply chain due diligence obligations for Union importers of tin, tantalum and tungsten, their ores, and gold originating from conflict-affected and high risk areas. (CMR)

[3] CMR Art 1.3

[4] CRM Art 1.6

[5] CRM Art 1.7

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