Companies listed in the U.S. are required by Section 1502 of the Dodd-Frank Act to report whether they manufacture products that incorporate socalled conflict minerals (defined as gold, tin, tungsten and tantalum coming from the Democratic Republic of Congo and its neighboring countries). The first part of this article reviews the conflict minerals rules of Dodd-Frank, and assesses their impact. In the authors' view, Dodd-Frank has failed to achieve its objective to reduce the financing of armed conflicts in Eastern Congo through the illegal trade in minerals, and has created a de facto embargo against minerals mined responsibly in the region.
The European Commission proposed in March 2014 conflict minerals rules for the EU. The second part of this article summarizes the proposed Regulation (and the impact assessment report and studies underpinning it), compares the EU proposal with the U.S.'s Dodd-Frank, and critically reviews it in view of its stated objective. In the authors' opinion, the EU proposal helps improve the ability of operators to perform due diligence of their supply chain. But it does not contain any meaningful incentive meant to foster the responsible sourcing of minerals from conflict areas. If adopted as such, the proposed EU rules are likely to result in the same embargo as the one Dodd-Frank created, but for the EU this time, and for potentially a lot more countries than the African countries targeted by Dodd-Frank.Global Trade and Customs Journal