Congress approved the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) in 2010. Section 1502 of the Dodd-Frank Act amends the Securities Exchange Act of 1934 to add Section 13(p). Section 13(p) directs the Securities and Exchange Commission (SEC) to issue rules requiring certain companies to disclose their use of conflict minerals if those minerals are necessary to the functionality or production of a product manufactured by those companies or contracted by those companies to be manufactured. Under Section 1502, the term “conflict minerals” includes tin, tantalum, tungsten, and gold (“3TGs”).
Congress enacted Section 1502 because of concerns that the exploitation and trade of conflict minerals by armed groups is helping to finance conflict in the DRC region and is contributing to an emergency humanitarian crisis.
On August 22, 2012, the Securities and Exchange Commission (SEC) adopted a final rule as mandated by Section 1502 of the Dodd-Frank Act, to require publicly-held companies, or issuers, to publicly disclose their use of conflict minerals that originated in the Democratic Republic of the Congo (DRC) or an adjoining country.
The SEC final rule applies to all products manufactured on or after January 31, 2013. The first report, covering calendar year 2013, is due to the SEC by May 31, 2014.
This page is intended as resource for the apparel, footwear, and related fashion industry as they work to comply with the SEC final rule on conflict minerals.
AAFA Conflict Minerals Guidance
On January 31, 2013, the date of implementation of the SEC final rule on conflict minerals, AAFA released the AAFA Conflict Minerals Guidance for use by the apparel, footwear, and related fashion industry to comply with the SEC final rule on conflict minerals. AAFA continues to update the guidance to reflect the most up-to-date information and knowledge. The latest revision, 2.0, was released on May 28, 2013.
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The guidance is intended to be used in conjunction with the final rule, as promulgated by the SEC.
This guidance is comprised of four sections:
Background / Summary of Final Rule
Complying with the Final Rule - Exercising reasonable standard of care.
Step 1: Determination if Your Company is Subject to the Final Rule
Step 2: Do I Have Conflict Minerals?: Determination of Whether Conflict Minerals Are in Your Products
Step 3: Determination of Whether Conflict Minerals Originated in the Democratic Republic of Congo (DRC) or an adjoining country – Recommended Steps
Reasonable Country of Origin Inquiry (RCOI)
Results of RCOI
Step 4: Supply Chain Due Diligence and Conflict Minerals Report
Industry Interpretation of Key Provisions in the Final Rule
Annexes and Additional Resources Relating to Section 1502 of the Dodd-Frank Act
Conflict Minerals Resource Center
AAFA has been working with a group of other industry associations along with Schulte Roth & Zabel and Source Intelligence to develop a web-based Conflict Minerals compliance training and resource center. We encourage all of our members to take advantage of this valuable resource and to share it with their vendors throughout their supply chain. It is made available to AAFA members at the nominal fee of $65 annually per company.
The goal of this joint initiative is to deploy understandable conflict minerals compliance tools across our membership. By providing our member companies and their vendors and contractors with the information needed to understand the complex and costly compliance requirements of the SEC Conflict Minerals regulations, all companies along the supply chain will improve their efficiency in responding to supply chain inquiries. The tools available on this website are intended to help companies like yours understand the extremely complicated requirements laid out by the SEC given the real challenges that manufacturers, retailers and other players up and down the supply chain are facing.
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The Law and the Final Rule
The OEC Due Diligence Guidance
SEC-Accepted Auditing Standards