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AICPA Conflict Minerals Resources

Inside the provisions of the Dodd-Frank Act are mandated disclosure rules about the usage of “conflict minerals”.

The term is defined as certain minerals (tantalum, tungsten, tin and gold) that are mined in the Democratic Republic of Congo or its surrounding areas. The purpose of those mandated disclosure rules is to publicly pressure US companies from indirectly sourcing conflict minerals, thus cutting off the supply of funds to armed groups in the DRC. For full details on the statement from the American Institute of CPAs, please click here.

Under the rules, if a company determines its conflict minerals originated in the areas defined in the provision, it will have to file a “Conflict Minerals Report” with the SEC© and publish it on its website.

The provision specifically mandates three steps for companies to follow:

  1. Determine if tin, tungsten, tantalum and gold are used to make its products.
  2. Determine if the metals they use originated in the DRC or neighboring countries. If the metals did not originate in affected nations, companies must report how the company determined the metals’ origins.
  3. If the metals were from DRC or adjoining countries—or the source is unknown—companies must trace the supply chain for the source and furnish “Conflict Minerals Report” (CMR) on those due-diligence efforts

Recently, the provision has come under criticism by the US judicial system as an infringement on First Amendment freedoms. In a challenge to the US SEC, two US judges are examining the disclosure requirements of companies that have business in “conflict minerals” in order to determine if the SEC© is overstepping its authority.

To read the details on the pending court case, please click here.

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