SECSConflictMineralsRule.pptVIP

SEC’S CONFLICT MINERALS RULE As required by Section 1502 of the Dodd Frank Act of 2010 BACKGROUND Rulemaking arises out of concerns that the exploitation and trade of certain minerals (referred to as “conflict minerals”) by armed groups is helping to finance conflict in the Democratic Republic of Congo (DRC) region and is contributing to an emergency humanitarian crisis. Section 1502 of the Dodd-Frank Act amends the Securities and Exchange Act of 1934 to add Section 13(p). The SEC has promulgated Rule 13(p)-1. GENERAL MATTERS Applies to: all Exchange Act filers domestic and foreign issuers Filings made on new Form SD: calendar year reporting for ALL filers, regardless of fiscal year end first Form SD due May 31, 2014 (for YE 2013) due annually on May 31 thereafter deemed filed but not CEO/CFO certified WHAT MINERALS ARE COVERED? Tantalum Tin Tungsten Gold The above are referred to as “3TG.” WHAT COUNTRIES ARE COVERED? Democratic Republic of the Congo Angola Burundi Central African Republic the Republic of the Congo Rwanda South Sudan Tanzania Uganda Zambia STANDARD OF APPLICABILITY Companies must disclose their use of the 3TG minerals if those minerals are: “necessary to the functionality or production” of a product manufactured or contracted to be manufactured by the company. Companies must have actual influence over the manufacturing process for the conflict mineral rules to apply. CONTRACTING TO MANUFACTURE Facts and circumstances analysis—degree of influence over manufactured products Not deemed to have requisite influence if merely: Affixes its brand, marks, logo, or label to a generic product manufactured by a third party Services, maintains, or repairs a product manufactured by a third party Specifies or negotiates contractual terms with a manufacturer that do not directly relate to the manufacturing of the product 3TG ORIGINATED IN THE DRC OR COVERED COUNTRIES? Required to conduct a reasonable “country of origin” inquiry Must be performed in