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New SEC Rule Requires Disclosure of the Use of Conflict Minerals

New SEC Rule Requires Disclosure of the Use of Conflict Minerals

SEPTEMBER 6, 2012

As required by the Dodd-Frank Wall Street Reform and Consumer Protection Act, the SEC recently finalized a new rule requiring publicly traded companies that are required to file with the SEC to disclose the use of “conflict minerals” in their products. As an article on Law.com describes, the rule applies to companies that use certain metals — tantalum, tin, gold, or tungsten — that are “necessary to the functionality or production” of a product. If these minerals originated in the Democratic Republic of Congo or adjacent countries, then a conflict minerals report must be added to the company’s financial disclosure. A link to that report would also need to be added to the company’s website to provide even more transparency.

Most experts agree that even though some concessions were made to the business community – such as a 2-year “grace period” (4 years for small companies) where corporations may declare that the source of minerals is undeterminable – the new rule will still require significant effort by covered companies to ensure compliance.

Guidepost Solutions has the expertise necessary to assist companies in the undertakings that will be required under the new SEC rule. First, Guidepost is well positioned to assist companies in creating and implementing the due diligence procedures that will be required to meet the mandates of the SEC rule. Second, Guidepost has the expertise (including in-country resources in the conflicts minerals region) to conduct the independent private sector audits that will be required where companies report that their products are “conflict minerals” free.


About the authors

McShane_T200THOMAS A. MCSHANE
PRESIDENT, INVESTIGATIONS AND MONITORING
tmcshane@guidepostsolutions.com

Thomas A. McShane is the president of investigations and monitoring at Guidepost Solutions.  He plays a key supervisory role in many of the company’s complex and high-profile cases involving organizations in various industries and sectors.  Mr. McShane spearheaded the development of the company’s Independent Monitoring Program and works with numerous governmental and quasi-governmental authorities. He has served as Counsel to the New York State Commission on Government Integrity and Chief Counsel to a successor commission, the New York State Temporary Commission on Local Government Ethics. Thomas can be reached at tmcshane@guidepostsolutions.com.

jaffe_jJOSEPH JAFFE, ESQ.
CHIEF COMPLIANCE OFFICER, DEPUTY GENERAL COUNSEL, SENIOR MANAGING DIRECTOR
jjaffe@guidepostsolutions.com

As Chief Compliance Officer and Deputy General Counsel, Joseph Jaffe oversees regulatory compliance issues and assists with legal matters for all of Guidepost Solutions’ offices. In addition, he leads the company’s Europe, Middle East and Africa practice. Joseph can be reached at jjaffe@guidepostsolutions.com.

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