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The Text of the Dodd-Frank Act
International Association of
Risk and Compliance Professionals (IARCP)
Dodd Frank Act Section 1502
SEC. 1502. CONFLICT MINERALS.
(a)
SENSE OF CONGRESS ON EXPLOITATION AND TRADE OF CONFLICT MINERALS
ORIGINATING IN THE DEMOCRATIC REPUBLIC OF THE CONGO.—It is
the sense of Congress that the exploitation and trade of conflict
minerals originating in the Democratic Republic of the Congo is
helping to finance conflict characterized by extreme levels of
violence in the eastern Democratic Republic of the Congo,
particularly sexual- and gender-based violence, and contributing
to an emergency humanitarian situation therein, warranting the
provisions of section 13(p) of the Securities Exchange Act of
1934, as added by subsection (b).
(b)
DISCLOSURE RELATING TO CONFLICT MINERALS ORIGINATING IN THE
DEMOCRATIC REPUBLIC OF THE CONGO.—Section 13 of the
Securities Exchange Act of 1934 (15 U.S.C. 78m), as amended by
this Act, is amended by adding at the end the following new
subsection:
‘‘(p) DISCLOSURES
RELATING TO CONFLICT MINERALS ORIGINATING IN THE DEMOCRATIC
REPUBLIC OF THE CONGO.—
‘‘(1) REGULATIONS.—
‘‘(A) IN
GENERAL.—Not later than 270 days after the date of the
enactment of this subsection, the Commission shall promulgate
regulations requiring any person described in paragraph (2) to
disclose annually, beginning with the person’s first full fiscal
year that begins after the date of promulgation of such
regulations, whether conflict minerals that are necessary as
described in paragraph (2)(B), in the year for which such
reporting is required, did originate in the Democratic Republic of
the Congo or an adjoining country and, in cases in which such
conflict minerals did originate in any such country, submit to the
Commission a report that includes, with respect to the period
covered by the report—
‘‘(i) a description of the measures
taken by the person to exercise due diligence on the source and
chain of custody of such minerals, which measures shall include an
independent private sector audit of such report submitted through
the Commission that is conducted in accordance with standards
established by the Comptroller General of the United States, in
accordance with rules promulgated by the Commission, in
consultation with the Secretary of State; and
‘‘(ii) a
description of the products manufactured or contracted to be
manufactured that are not DRC conflict free (‘DRC conflict free’
is defined to mean the products that do not contain minerals that
directly or indirectly finance or benefit armed groups in the
Democratic Republic of the Congo or an adjoining country), the
entity that conducted the independent private sector audit in
accordance with clause (i), the facilities used to process the
conflict minerals, the country of origin of the conflict minerals,
and the efforts to determine the mine or location of origin with
the greatest possible specificity.
‘‘(B)
CERTIFICATION.—The person submitting
a report under subparagraph (A) shall certify the audit described
in clause (i) of such subparagraph that is included in such
report. Such a certified audit shall constitute a critical
component of due diligence in establishing the source and chain of
custody of such minerals.
‘‘(C)
UNRELIABLE DETERMINATION.—If a report required to be
submitted by a person under subparagraph (A) relies on a
determination of an independent private sector audit, as described
under subparagraph (A)(i), or other due diligence processes
previously determined by the Commission to be unreliable, the
report shall not satisfy the requirements of the regulations
promulgated under subparagraph (A)(i).
‘‘(D)
DRC CONFLICT FREE.—For purposes of
this paragraph, a product may be labeled as ‘DRC conflict free’ if
the product does not contain conflict minerals that directly or
indirectly finance or benefit armed groups in the Democratic
Republic of the Congo or an adjoining country.
‘‘(E)
INFORMATION AVAILABLE TO THE PUBLIC.—Each
person described under paragraph (2) shall make available to the
public on the Internet website of such person the information
disclosed by such person under subparagraph (A).
‘‘(2)
PERSON DESCRIBED.—A person is
described in this paragraph if—
‘‘(A) the person is
required to file reports with the Commission pursuant to paragraph
(1)(A); and
‘‘(B) conflict minerals are necessary to the
functionality or production of a product manufactured by such
person.
‘‘(3) REVISIONS AND WAIVERS.—The
Commission shall revise or temporarily waive the requirements
described in paragraph (1) if the President transmits to the
Commission a determination that—
‘‘(A) such revision or
waiver is in the national security interest of the United States
and the President includes the reasons therefor; and
‘‘(B)
establishes a date, not later than 2 years after the initial
publication of such exemption, on which such exemption shall
expire.
‘‘(4) TERMINATION OF
DISCLOSURE REQUIREMENTS.—The requirements of paragraph (1)
shall terminate on the date on which the President determines and
certifies to the appropriate congressional committees, but in no
case earlier than the date that is one day after the end of the
5-year period beginning on the date of the enactment of this
subsection, that no armed groups continue to be directly involved
and benefitting from commercial activity involving conflict
minerals.
‘‘(5) DEFINITIONS.—For
purposes of this subsection, the terms ‘adjoining country’,
‘appropriate congressional committees’, ‘armed group’, and
‘conflict mineral’ have the meaning given those terms under
section 1502 of the Dodd-Frank Wall Street Reform and Consumer
Protection Act.’’.
(c) STRATEGY AND
MAP TO ADDRESS LINKAGES BETWEEN CONFLICT MINERALS AND ARMED
GROUPS.—
(1) STRATEGY.—
(A) IN GENERAL.—Not
later than 180 days after the date of the enactment of this Act,
the Secretary of State, in consultation with the Administrator of
the United States Agency for International Development, shall
submit to the appropriate congressional committees a strategy to
address the linkages between human rights abuses, armed groups,
mining of conflict minerals, and commercial products.
(B)
CONTENTS.—The strategy required by
subparagraph
(A) shall include the following:
(i) A
plan to promote peace and security in the Democratic Republic of
the Congo by supporting efforts of the Government of the
Democratic Republic of the Congo, including the Ministry of Mines
and other relevant agencies, adjoining countries, and the
international community, in particular the United Nations Group of
Experts on the Democratic Republic of Congo, to—
(I)
monitor and stop commercial activities involving the natural
resources of the Democratic Republic of the Congo that contribute
to the activities of armed groups and human rights violations
in the Democratic Republic of the Congo; and
(II) develop
stronger governance and economic institutions that can facilitate
and improve transparency in the cross-border trade involving the
natural resources of the Democratic Republic of the Congo to
reduce exploitation by armed groups and promote local and regional
development.
(ii) A plan to provide guidance to commercial
entities seeking to exercise due diligence on and formalize the
origin and chain of custody of conflict minerals used in their
products and on their suppliers to ensure that conflict minerals
used in the products of such suppliers do not directly or
indirectly finance armed conflict or result in labor or human
rights violations.
(iii) A description of punitive measures
that could be taken against individuals or entities whose
commercial activities are supporting armed groups and human rights
violations in the Democratic Republic of the Congo.
(2)
MAP.—
(A) IN GENERAL.—Not later than 180 days after
the date of the enactment of this Act, the Secretary of State
shall, in accordance with the recommendation of the United Nations
Group of Experts on the Democratic Republic of the Congo in their
December 2008 report—
(i) produce a map of mineral-rich
zones, trade routes, and areas under the control of armed groups
in the Democratic Republic of the Congo and adjoining countries
based on data from multiple sources, including—
(I) the
United Nations Group of Experts on the Democratic Republic of the
Congo;
(II) the Government of the Democratic Republic of
the Congo, the governments of adjoining countries, and the
governments of other Member States of the United Nations; and
(III) local and international nongovernmental organizations;
(ii) make such map available to the public; and
(iii)
provide to the appropriate congressional committees an explanatory
note describing the sources of information from which such map is
based and the identification, where possible, of the armed groups
or other forces in control of the mines depicted.
(B)
DESIGNATION.—The map required under
subparagraph (A) shall be known as the ‘‘Conflict Minerals Map’’,
and mines located in areas under the control of armed groups in
the Democratic Republic of the Congo and adjoining countries, as
depicted on such Conflict Minerals Map, shall be known as
‘‘Conflict Zone Mines’’.
(C)
UPDATES.—The Secretary of State shall update the map
required under subparagraph (A) not less frequently than once
every 180 days until the date on which the disclosure requirements
under paragraph (1) of section 13(p) of the Securities Exchange
Act of 1934, as added by subsection (b), terminate in accordance
with the provisions of paragraph (4) of such section 13(p).
(D) PUBLICATION IN FEDERAL REGISTER.—The
Secretary of State shall add minerals to the list of minerals in
the definition of conflict minerals under section 1502, as
appropriate.
The Secretary shall publish in the Federal
Register notice of intent to declare a mineral as a conflict
mineral included in such definition not later than one year before
such declaration.
(d) REPORTS.—
(1) BASELINE REPORT.—Not later than 1 year after the
date of the enactment of this Act and annually thereafter until
the termination of the disclosure requirements under section 13(p)
of the Securities Exchange Act of 1934, the Comptroller General of
the United States shall submit to appropriate congressional
committees a report that includes an assessment of the rate of
sexual- and gender-based violence in war-torn areas of the
Democratic Republic of the Congo and adjoining countries.
(2) REGULAR REPORT ON EFFECTIVENESS.—Not
later than 2 years after the date of the enactment of this Act and
annually thereafter, the Comptroller General of the United States
shall submit to the appropriate congressional committees a report
that includes the following:
(A) An assessment of the
effectiveness of section 13(p) of the Securities Exchange Act of
1934, as added by subsection (b), in promoting peace and security
in the Democratic Republic of the Congo and adjoining countries.
(B) A description of issues encountered by the Securities
and Exchange Commission in carrying out the provisions of such
section 13(p).
(C)(i) A general review of persons described
in clause (ii) and whether information is publicly available
about—
(I) the use of conflict minerals by such persons;
and
(II) whether such conflict minerals originate from the
Democratic Republic of the Congo or an adjoining country.
(ii) A person is described in this clause if—
(I) the
person is not required to file reports with the Securities and
Exchange Commission pursuant to section 13(p)(1)(A) of the
Securities Exchange Act of 1934, as added by subsection (b); and
(II) conflict minerals are necessary to the functionality or
production of a product manufactured by such person.
(3)
REPORT ON PRIVATE SECTOR AUDITING.—Not
later than 30 months after the date of the enactment of this Act,
and annually thereafter, the Secretary of Commerce shall submit to
the appropriate congressional committees a report that includes
the following:
(A) An assessment of the accuracy of the
independent private sector audits and other due diligence
processes described under section 13(p) of the Securities Exchange
Act of 1934.
(B) Recommendations for the processes used to
carry out such audits, including ways to—
(i) improve the
accuracy of such audits; and
(ii) establish standards of
best practices.
(C) A listing of all known conflict mineral
processing facilities worldwide.
(e)
DEFINITIONS.—For purposes of this section:
(1)
ADJOINING COUNTRY.—The term
‘‘adjoining country’’, with respect to the Democratic Republic of
the Congo, means a country that shares an internationally
recognized border with the Democratic Republic of the Congo.
(2) APPROPRIATE CONGRESSIONAL
COMMITTEES.—The term ‘‘appropriate congressional
committees’’ means—
(A) the Committee on Appropriations,
the Committee on Foreign Affairs, the Committee on Ways and Means,
and the Committee on Financial Services of the House of
Representatives; and
(B) the Committee on Appropriations,
the Committee on Foreign Relations, the Committee on Finance, and
the Committee on Banking, Housing, and Urban Affairs of the
Senate.
(3) ARMED GROUP.—The
term ‘‘armed group’’ means an armed group that is identified as
perpetrators of serious human rights abuses in the annual Country
Reports on Human Rights Practices under sections 116(d) and
502B(b) of the Foreign Assistance Act of 1961 (22 U.S.C. 2151n(d)
and 2304(b)) relating to the Democratic Republic of the Congo or
an adjoining country.
(4) CONFLICT
MINERAL.—The term ‘‘conflict mineral’’ means—
(A)
columbite-tantalite (coltan), cassiterite, gold, wolframite, or
their derivatives; or
(B) any other mineral or its
derivatives determined by the Secretary of State to be financing
conflict in the Democratic Republic of the Congo or an adjoining
country.
(5) UNDER THE CONTROL OF
ARMED GROUPS.—The term ‘‘under the control of armed
groups’’ means areas within the Democratic Republic of the Congo
or adjoining countries in which armed groups—
(A)
physically control mines or force labor of civilians to mine,
transport, or sell conflict minerals;
(B) tax, extort, or
control any part of trade routes for conflict minerals, including
the entire trade route from a Conflict Zone Mine to the point of
export from the Democratic Republic of the Congo or an adjoining
country; or
(C) tax, extort, or control trading facilities,
in whole or in part, including the point of export from the
Democratic Republic of the Congo or an adjoining country.
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