Section 1502 of the United States (U.S.) Dodd-Frank Act requires certain companies to disclose their use of 3TG conflict minerals (tantalum, tin, tungsten, and gold) where any 3TG conflict minerals are considered “necessary to the functionality or production” of their products. Companies must ensure that these minerals are sourced responsibly by tracking smelters of origin in their supply chain and conducting due diligence.

The Dodd-Frank Act was enacted in 2010. Section 1502 was included to oppose the trade of conflict minerals with armed groups in the DRC and surrounding countries, as trade profits contributed to regional conflicts and wars, human rights violations, and instability. Similar laws continue to expand worldwide as more governments realize the importance of sourcing conflict-free minerals.

SEC Conflict Minerals Disclosure

Section 1502 of the Dodd-Frank Act directs the U.S. Securities and Exchange Commission (SEC) to establish conflict minerals disclosure rules. The SEC adopted what is often referred to as the SEC Conflict Minerals Rule in 2012 and began mandating the reporting process in 2014 for the 2013 reporting year.

Companies in Scope of Section 1502 of the Dodd-Frank Act

Public companies that manufacture or contract to manufacture products containing conflict minerals necessary for the product’s production or functionality are within the act's scope.

Most companies must comply with conflict minerals laws in the U.S. and the European Union (EU). Are you aware of the differences between the U.S. Dodd-Frank Act and the EU Conflict Minerals Regulation?

How to Comply with Section 1502 of the Dodd-Frank Act

After collecting supply chain and supplier data via the Conflict Minerals Reporting Template (CMRT) and filing a report with the SEC under the Exchange Act, companies must comply with the SEC Conflict Minerals Rule. The SEC outlines specific reporting requirements for disclosing conflict minerals use information. The compliance process for in-scope companies is as follows:

  1. Conduct a Reasonable Country of Origin Inquiry (RCOI) to determine whether any of the minerals used in products originated in the DRC or any other countries covered under Section 1502 of the Dodd-Frank Act.
  2. Complete a Form SD (special disclosure) and submit it to the SEC.

The Process of Completing Form SD (special disclosure)

The process of completing the second step (Form SD) depends on the RCOI results:

  • If the minerals did not originate from the DRC or any of the covered countries, or are sourced from scrap or recycled materials, companies must:

    • Complete the Form SD, including disclosing the RCOI results and providing a brief description of how the origin of the minerals was determined.
    • Make the description publicly available on the company website.
  • If the minerals did originate, or may have originated, from the DRC or any of the covered countries, or if they are not sourced from scrap or recycled materials, companies must:

    • Conduct due diligence on the source and chain of custody of its conflict minerals using a nationally or internationally recognized due diligence framework, such as the Organization for Economic Co-operation and Development (OECD) Due Diligence Guidance.
    • File a Conflict Minerals Report as an exhibit to the Form SD.
    • Make the Conflict Minerals Report publicly available on the company website.

Filing a Conflict Minerals Report requires companies to determine which of the following three categories their products fall into: DRC Conflict Free, Not Found to Be DRC Conflict Free, and DRC Conflict Undeterminable. Each category has additional reporting requirements, such as audits, certifications, and detailed plans to mitigate risk.

Conflict Minerals Compliance Software and Services

Managing conflict minerals reporting requirements for Section 1502 of the Dodd-Frank Act (and other global conflict minerals laws) in-house, without the proper tools or resources, inevitably burdens internal resources, creates inefficiencies in compliance processes, increases supply risk, and more.

Alleviate your business from the challenges of conflict minerals reporting and effortlessly comply with Section 1502 of the Dodd-Frank Act with conflict minerals compliance software and services from Acquis. We offer the industry’s most comprehensive conflict minerals solution, covering 3TG, extended minerals, and other unregulated minerals of concern.

With powerful compliance software and fully managed service options, our conflict minerals program facilitates supplier engagement, data analysis, and document generation to streamline compliance. From CMRTs to Extended Minerals Reporting Templates (EMRTs) and Pilot Reporting Templates (PRTs), our program offers full coverage and is flexible enough to evolve with ever-changing responsible minerals legislation.

Explore our conflict minerals program to discover how we can help you source minerals responsibly.

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