Starting from 1 January 2021, additional compliance obligations for EU importers will apply under the Conflict Minerals Regulation (EU) 2017/821. This is nothing new for the European companies with customers listed on the US stock exchange, as in the USA, disclosing information on the origin of so-called conflict minerals used in the production process has been part of business practice for some time. 

Now, however, EU importers of tin, tantalum, tungsten (as well as their ores and concentrates) and gold have their own due diligence with regard to the entire procurement process. Along the supply chain, it must be checked where the four materials come from. The EU regulation specifies how the implementation is monitored and stipulates that the results of these checks must be published. The background to these requirements is not environmental, but political: trade is to be curbed, if these four materials originate in conflict and high risk areas.

The EU Regulation affects EU importers of the above minerals and metals, i.e. companies that import into the EU and whose imports exceed certain quantitative thresholds. These companies have due diligence and documentation obligations and need to implement a differentiated management system for information exchange and communication in the supply chain. Such a system should not only support internal processes but also help identify and assess risks. All this is backed up by third-party audits of the system. Last but not least, regular reports and evidence of compliance with due diligence obligations in procurement must be submitted to the competent authorities.

Integrated into all these requirements is the OECD Due Diligence Guidance promoting responsible supply chains for minerals from conflict and high risk areas. These Guidelines provide the framework for the corporate approach. They set out a strategy to ensure transparency in the supply chain down to the origin of the minerals and to take account of risks. Risks specific to trade in these four materials include the financing of armed conflicts, human rights violations through forced labour, corruption and money laundering.