Conflict Minerals Regulation
Regulation (EU) 2017/821 of the European Parliament and of the council of 17 May 2017 laying down supply chain due diligence obligations for Union importers of tin, tantalum and tungsten, their ores, and gold originating from conflict-affected and high-risk (Conflict Minerals Regulation) obliges Union importers to identify risks and mitigating responses in their supply chains.
In this way a considerable contribution to the avoidance and the financing of conflicts by means of profits from the extraction of and the trade with raw materials, and the severe violations of human rights associated with it, is made. The obligations of Union importers have been applicable since from 1 January 2021. Subsequent controls by the competent authorities will start in 2022 and comprise the imports of 2021.
Union importers are enterprises, which import minerals or metals for the first time into the European Union and whose imports exceed a certain threshold value cited in the regulation. This should guarantee that, on the one hand, at least 95% of all EU-wide imports fall within the scope of this Regulation, and on the other hand, that small enterprises are exempted. The Regulation doesn’t apply to scrap and recycling metals.
The European Commission maintains a list of countries considered conflict-affected and high-risk, as determined by experts. It features countries whose natural resources include minerals in high demand, and are either suffering from armed conflicts, such as civil war or have weak governance and systematic violations of international law, including human rights. The list is updated on a quarterly basis.
Within the framework of responsible procurement policy, Union importers have to organise their supply chain according to the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from conflict-affected and high-risk areas. In this context the following measures are to be taken:
- Development of a management system
- Risk assessment in the supply chain
- Introduction of a risk management strategy
- Independent audit for selected points of the supply chain
Due to the great number of certification systems already existing on a voluntary basis, and in order to avoid double charging the Conflict Minerals Regulation provides for the recognition of these, already existing, certification systems under certain conditions. The European Commission will therefore publish a regularly updated lists with all recognized systems and corresponding responsible metallurgical plants and refineries.
The Conflict Minerals Regulation is directly applicable. By means of the amendment to the Austrian Mineral Resources Act (“Mineralrohstoffgesetz”) accompanying provisions to EU Regulation 2017/821 were created. The Federal Minister of Finance entrusted the Directorate of Mineral Resources Policy (Directorate VI/5) with the direct implementation. The amendment provides that Union importers have to notify the initial EU imports in Austria to the competent authority by March 31. Furthermore, it regulates how the authority should act if a notification is missing or inadequate or if the ex-post check demonstrates that the Union importer did not meet all provisions of the Conflict Minerals Regulation.
The Federal Ministry of Finance (BMF) is authorised to communicate the customs and import data falling within the scope of Regulation 2017/821 to the competent authority.
The competent authority is entitled to publish a list of the names and web addresses of the Union importers that are above the thresholds and are therefore subject to the control of the competent authority on the homepage of the BMF.
- Full text of the Conflict Minerals Regulation: www.eur-lex.europe.eu
- Delegated Act on the current thresholds: www.ec.europa.eu
- List of conflict-affected and high-risk areas: www.cahraslist.net
- Due Diligence Ready! - Guidance for SMEs: www.ec.europa.eu
- More information from OECD : www.oecd.org
- Support for entrepreneurs from the European Commission: www.ec.europa.eu
- Information from the European Parliament: www.oeil.secure.europarl.europa.eu
- FAQ How to address bribery and corruption risks in mineral supply chains (OECD): www.mneguidelines.oecd.org