Article

EU REGULATION 2017/821 – New due diligence obligations of EU based importers of tin, tantalum, tungsten and gold.

03/11/2021

Commerce international, douanes et concurrence

On January 1, 2021, the EU “conflict minerals” Regulation 2017/821 related to 3 TGs i.e. tin, tantalum, tungsten and gold came in force in the EU. The aim is to ensure that European importers of these materials source them from conflict-affected or high-risk areas responsibly, by establishing due diligence obligations according to supply chain.

Which minerals are concerned and which EU importers are subject to EU Regulation?

The new EU regulation covers 3TGs sourced from conflict-affected and high-risk areas defined as “areas in a state of armed conflict or fragile post-conflict as well as areas witnessing weak or non-existent governance and security, such as failed states, and widespread and systematic violations of international law, including human rights abuses”.

Conditions of enforcement of the text are provided in its Annex 1 :

(i) annual imported volumes above which EU importers are subject to the Regulation (e.g. 5.000kgs/year for tin),

(ii) details of the minerals currently covered, their ores and other forms, as well as products containing them with combined nomenclature codes.

The EU regulation directly applies to firms when they import the targeted minerals or metals into the EU. Indirectly, companies from outside of the EU will also be impacted, as the EU importers subject to the new obligation of due diligence will cascade down the responsible sourcing requirements to refiners by assessing their due diligence schemes.

New obligations for EU Importers

EU importers of minerals and metals are now required to follow a five-step due diligence framework:

  • Establish strong company management systems.
  • Identify and assess risks in the supply chain.
  • Design and implement a strategy to respond to identified risks.
  • Carry out an independent third-party audit of supply chain due diligence.
  • Report annually on supply chain due diligence efforts.

Enforceability in France and future assessments

Regulation 2017/821 does not need to be transposed into national law. Nevertheless, EU Commission requested member States to adapt in their national law the process of control of the enforcement by EU importers of their due diligence obligation in the supply chain. The draft law is currently under discussion in front of French Parliament (adopted by French national assembly on 28th September 2021).

French Authorities should start their controls in France as from 1st January 2022.

Regulation 2017/821 provides also for a planned review of the legislation effectiveness by January 2023 to assess whether the member states should be given the competence to impose penalties “in the event of persistent failure to comply with the obligations set out in the Regulation” (clause de revoyure).

What to do?

In case you import one or several of 3TGs minerals their ores, concentrates and other forms, as well as products containing them with combined nomenclature codes, we invite you to:

  1. Determine if the new regulation applies to your company by mapping your supply chain to understand the origin and the volume of minerals you import,
  2. In case you are concerned by the Regulation 2017/821, set-up a strong management system (e.g. set-up senior management monitoring and supply chain policy, incorporate supply chain policies into agreements with suppliers, establish a whistleblowers procedure).
  3. Identify, assess and respond to supply chain risks by designing and implementing a strategy to respond to the identified risks by setting up a dedicated compliance program.

For more information, do not hesitate to contact our team, Freddy Desplanques or Anne-Cécile Bannier-Mathieu, should you need further information.

Commerce international, douanes et concurrence

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