EU Conflict Minerals Regulation

New EU Regulation (EU) 2017/821 on conflict minerals in force from 1st of January 2021.

A new EU regulation on conflict materials will come into force on 01.01.2021. It will help to restrict trade in four minerals (tin, tantalum, tungsten and gold) from conflict or high-risk areas, which sometimes finance armed conflicts or are mined in forced labour. 

Tin, tantalum, tungsten and gold are used in the fabrication of many high-tech devices, in the automotive, electronics, aerospace, packaging, construction and lighting industries as well as in the production of industrial machinery and tools, and in jewelry manufacturing. 

The regulation applies directly only to EU importers of these minerals, regardless of the form in which they are traded. It aims to ensure that importers comply with international procurement standards set by the Organisation for Economic Cooperation and Development (OECD). A key element of this is the fulfilment of the duty of diligence – in the course of a proactive process, importers must, among other things, establish solid management systems and identify and assess risks in the supply chain.  

The exact procedure for entrepreneurs is described in the document “Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas”, published by the OECD. The exact procedure for entrepreneurs is described in the document “Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas”, published by the OECD. According to this document, compliance with the due diligence obligation must be reported annually to the authorities of the member states, revealing a range of more precisely defined information regarding the country of origin and the quantity of imported minerals. In addition, importers are instructed to have audits carried out by independent third parties. If necessary, Member States will be authorised to carry out audits themselves. A list of conflict and high-risk areas will be drawn up by independent experts on behalf of the EU Commission and updated on an ongoing basis. 

Across the EU, 600 to 1.000 Union importers (according to Regulation (EU) 2017/821 any natural or legal person declaring minerals or metals for release for free circulation) of these minerals are directly affected by the Regulation. Indirectly, EU companies in the supply chain are also obliged to ensure that they only purchase these minerals and metals from responsible and non-conflicting sources. In the US, the regulations go even further: the Dodd Frank Act Section 1502 obliges listed companies to conduct due diligence on minerals procured from the DRC and neighboring countries.