On 22 August 2012, the U.S. Securities Exchange Commission (the “SEC”) adopted a final rule (the “Rule”) pursuant to the directives of the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”) compelling certain companies with U.S. securities reporting obligations (“Reporting Companies”) to assess and disclose their use of “conflict minerals,” consisting of certain metals (including tin, titanium, tungsten and gold) originating from certain targeted sources supporting conflict in the Democratic Republic of Congo (DRC) or adjoining countries (together with the DRC, the “Covered Countries”). This article evaluates the impact of the Rule on these Asian manufacturers.
While directly applicable to Reporting Companies, the Rule indirectly imposes obligations on manufacturers throughout the supply chain with customers that are Reporting Companies. We anticipate that such customers may make widely divergent requests of their Asian suppliers, especially given the lack of guidance regarding how compliance with the Rule will be determined. To prepare for such requests from its customers, a supplier should:
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