What is Conflict Minerals Reporting?

by Source Intelligence

on August 11, 2022

Find Out if Your Business is in the Scope of the EU Conflict Minerals Regulation or Dodd-Frank Section 1502 and Requires Conflict Minerals Reporting


To prove ethical sourcing of conflict minerals - otherwise referred to as 3TG - companies in the scope of Section 1502 of the Dodd-Frank Act and importers in the scope of the EU Conflict Minerals Regulation are required to meet conflict minerals reporting requirements. This includes demonstrating due diligence and (if 3TG is sourced from the DRC or CAHRAs) reporting on smelters and refiners in their supply chains.

The U.S. and the EU have their own specific conflict mineral reporting requirements. The U.S. requirements apply to publicly-traded companies that use 3TG at any point in their manufacturing process while the EU requirements apply to EU-based importers of 3TG.

Tracking the source of 3TG to ensure they are not funding armed conflict is a complex, resource-intensive task. When tracing sources throughout a supply chain, it’s common to find several suppliers behind a primary supplier. Contacting each of these upstream suppliers can be difficult depending on the scale of their operations, language barriers, and their willingness to comply with requests for sourcing information.

Once the necessary information is gathered from suppliers, companies need to demonstrate that they’ve conducted due diligence to validate the information and, in some cases, file a Conflict Minerals Report.


Conflict Minerals Reporting Requirements

While conflict mineral reporting is required for both the U.S. Dodd-Frank Act and the EU Conflict Minerals Regulation, as previously mentioned, the reporting requirements vary between the two. The U.S. has an established 3TG reporting process and format, while the EU regulation currently does not.

U.S. Conflict Minerals Reporting

Dodd-Frank 1502 requires publicly-traded companies to report on their use of conflict minerals via Form SD and a Conflict Minerals Report (CMR). If a company’s use of 3TG is considered “necessary to the functionality or production” of a product manufactured (or contracted to be manufactured) by the company, the company is required to file a report with the U.S. Securities and Exchange Commission (SEC) under the Exchange Act.

Companies with products that fall under the scope of Dodd-Frank 1502 are required to conduct a Reasonable Country of Origin Inquiry (RCOI) for the 3TG minerals in their supply chain. This inquiry involves contacting suppliers and tracing the 3TG back to its mine or smelter of origin.

If the RCOI determines that the 3TG was not sourced from the DRC and its adjoining countries, the company must disclose its determination and include a description, along with supporting documents and correspondence, on Form SD.

If the RCOI determines that the 3TG may have originated from one of the areas covered under Dodd-Frank 1502 (and were not made from scrap or recycled resources), the company must file a Conflict Miners Report as an exhibit to the Form SD and conduct due diligence on the source of the 3TG. The company must also publish its Conflict Minerals Report on its website for public consumption.

EU Conflict Minerals Reporting

Currently, there is not an established reporting format for the EU Conflict Minerals Regulation. However, EU-based importers of 3TG are required to follow the Organization for Economic Co-operation and Development (OECD) Guidance process.

3TG importers are also required to publicly share their supply chain due diligence policies and practices, including details about their risk management approach, steps taken to implement their compliance management system, and a summary report of annual third-party audits.

Conflict Minerals Reporting Template

Developed by the Responsible Minerals Initiative (RMI), the Conflict Minerals Reporting Template (CMRT) is a free, standardized template designed to facilitate the transfer of supply chain information including the mineral country of origin and the utilized smelters and refiners.

The CMRT is considered the industry-standard template for gathering information from suppliers and reporting on conflict minerals. It guides downstream companies through the process of collecting information from their suppliers and disclosing information about their supply chains to their customers and investors. It also helps identify the new smelters and refiners for potential audits via the RMI’s Responsible Minerals Assurance Process (RMAP).

For U.S. conflict minerals compliance, the purpose of the CMRT is to gather the supplier data required to file Form SD. Examples of data requested from suppliers include country of origin, conflict-free sourcing policies, and information on the smelter that produced the 3TG.

The CMRT is also used globally across all industries to engage with suppliers and gather conflict minerals supply chain information. It was recently modified to serve the additional geographic scope of the EU Conflict Minerals Regulation.

In May 2022, the RMI released the newest version of the CMRT - version 6.22. Updates to the template include bug and error corrections, translation improvements, and an updated Smelter Reference List and Standard Smelter List.


Download CMRT 6.22


OECD Due Diligence Guidance

While the CMRT is intended to help gather supplier data, another guide exists to help companies document their due diligence in investigating their supply chain - the OECD Guidance. The OECD Due Diligence Guidance is the most widely used due diligence framework for conflict minerals.

The OECD Guidance was developed by governments, international organizations, industry leaders, and civil society. Its purpose is to ensure that companies are respecting human rights in their operations and do not contribute to armed conflict through the sourcing decisions within their supply chains.

Although the OECD Guidance is used globally, EU-based importers of 3TG and public U.S. companies required to report to the SEC must follow the five steps of the guidance to remain compliant.

Conflict Minerals Compliance Software

Conflict minerals regulations are constantly changing, making compliance and due diligence a challenge in any industry. The team of experts at Source Intelligence closely monitors the evolution of Dodd-Frank 1502 and the EU Conflict Minerals Regulation to help our clients identify the origin of 3TG in their supply chain and reduce risk.

Our customizable, industry-leading conflict minerals compliance solution collects CMRTs from suppliers, completes a comprehensive smelter analysis and RCOI due diligence, and monitors supplier responses. The gathered information is then compiled into one concise, comprehensive report for data analysis.

Managing conflict minerals compliance is complex but, by partnering with Source Intelligence, it doesn’t have to be. Eliminate the guesswork and uncertainty around conflict minerals reporting - request a demo today to discover how we can help.


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