Compliance with the SEC's Conflict Minerals Rule

Securities and Exchange Commission (SEC) issuers are forming high-level internal compliance teams with representatives from legal, finance, internal audit and purchasing involved to assess the extent, if any, that the company's products contain conflict minerals within the ambit of Rule 13p-1 under the Securities Exchange Act of 1934, adopted last August under Section 1502 of the Dodd-Frank Act. Diligence efforts are not confined to SEC issuers, however, with supply chain participants deeply involved in determining and certifying the original source of supplies of tantalum, tin, tungsten and gold (3TGs), and their numerous derivatives, sold to their customers.

As a result, both reporting and non-reporting companies, such as original equipment manufacturers and electronic manufacturing service providers that supply parts to issuers, are affected by the new rule. Corporate counsel in public companies will need to organize a robust compliance team with representatives from legal, finance, internal audit, purchasing and manufacturing, among others. This team will be responsible for developing and implementing a program to assess application of Rule 13p-1 to the company's products in order to file the required Form SD by May 31, 2014. Corporate counsel will play a key role in interpreting the Rule's broad requirements and impact on the company. The following provides some key background information on the new rule.