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Conflict Minerals Decision Reaffirmed in US Court of Appeals

by admin on September 10, 2015 No comments

In response to the 2012 U.S. Securities and Exchange Commission’s (SEC) conflict minerals rule, which requires manufacturers to disclose and report whether their products contain tantalum, tin, gold or tungsten from the Democratic Republic of Congo, CSPA joined several trade associations and filed a joint amicus brief that demonstrated for the court the practical implications of failing to adopt a de minimis limit exemption. Such an exemption would remove the reporting obligation triggered by the presence of even minute or trace amounts of conflict minerals that are “contained” in a finished product, even if these substances are only present as unintentional by-products of a catalyst or stabilizer that was used in the manufacturing process.

Although the initial lawsuit was unsuccessful, an appeal was filed with the U.S. Circuit Court of Appeals and the District Court judgment was affirmed in part and reversed in part and the case remanded for further proceedings consistent with the Court of Appeals’ opinion. On Aug. 18, the U.S. Court of Appeals for the D.C. Circuit reaffirmed its April 14, 2014 decision finding the requirement for companies to disclose whether raw materials in their supply chain are “conflict free,” to be a violation of the First Amendment’s guarantee against government-compelled speech. The SEC now has 90 days to appeal to the Supreme Court, or petition for a rehearing in the D.C. Circuit. As always, CSPA will continue to monitor this issue and keep members updated on any further action. For more information, please contact Tim Brown, CSPA Regulatory Counsel at (202) 833-7303.

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