Watch For These Exemptions in Conflict Minerals Compliance

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While conflict minerals compliance issues and related problems are on manufacturers’ minds, experts have come up with certain methods that can help businesses prepare for the Conflict Minerals Law.

Here’s a look at Nos. 2 through 4 of the 7 Things You Gotta Know to Comply With the SEC’s Conflict Minerals Rule:

(Read our intro and The No. 1 Thing here.)

2. Exemption of Minerals

Do not blindly make changes to your logistics framework before you have all facts at hand.

You may have been sourcing the conflict minerals listed, but if your source country does not fall under the covered names then you will be exempt from the audits and regulations.

The countries under the scanner are the Democratic Republic of the Congo (DRC), Tanzania, Republic of Congo, Zambia, Central African Republic, Uganda, Angola, Rwanda, Burundi and South Sudan.

You can also be exempt from this rule if the tin, tungsten, tantalum or gold have been smelted or refined by January 31, even if they have been sourced from these countries.

3. Careful Acquisition Rules

The problem does not end with just the existing companies.

Businesses that have acquired or are on the verge of acquiring new companies have to be very careful about their mineral source locations as well. If the acquired company is not listed with the SEC, the audit can be delayed for a time, but in the long run it makes best sense to scrutinize all sources and produce the specialized disclosure report required by the SEC revealing all conflict minerals presence.

However, if the company is into servicing, maintenance or repairs, then it can be exempt from this rule.

4. Application and Preparation

Once the scrutiny phase is over, companies should prepare for the compliance laws and be ready to face the post-audit interrogations as a part of their larger planning.

A robust plan and assessment of the objectives will stand in good stead when it comes to following the rule closely. There is a need for thorough due diligence to determine the proper application of the products to rule once the Reasonable Country of Origin Inquiry (RCOI) has been established.

Next up: Timing, Liability and Framework. (If you missed it, read our intro and The No. 1 Thing here.)

FREE Download: MetalMiner’s Definitive Guide to Conflict Minerals Compliance for Manufacturers

MetalMiner welcomes Patrick Hunter as a guest contributor from MFG.com, which offers LiveSource – a cloud-based eSourcing tool that combines the power of advanced supplier management with the global reach of the world’s largest manufacturing marketplace. LiveSource helps companies discover, collaborate and work with qualified global suppliers, resulting in smarter spending, reduced product costs, shorter delivery times, and a more flexible supply chain, all without adding IT infrastructure costs.

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