In brief: SEC issues guidance on conflict minerals disclosures


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The SEC has reduced some of the conflict mineral disclosures, but the filing deadline remains June 2, 2014.

What happened?

The SEC’s Division of Corporation Finance issued a statement confirming the existing filing deadline for SEC issuers subject to Exchange Act 13p-1 (the “Conflict Minerals Rule”). The statement also explained that, due to a recent court decision, issuers are not required to disclose the conflict status of conflict minerals in their products, but the majority of the Conflict Minerals Rule’s other disclosure requirements remain intact.

Court ruling

The Conflict Minerals Rule, as written, requires issuers to disclose, among other things, whether conflict minerals in their products are “DRC conflict free,” have “not been found to be ‘DRC conflict free,’” or are “DRC conflict undeterminable.” On April 14, 2014, the United States Court of Appeals for the District of Columbia Circuit (the Court) ruled that the requirement for issuers to report whether any of their products have “not been found to be ‘DRC conflict free’” violated the First Amendment. However, the Court upheld the remainder of the Conflict Minerals Rule.

SEC guidance

Form SD (accompanied by a Conflict Minerals Report, if required) is still required to be filed with the SEC by the original due date of June 2, 2014.

Issuers that are required to file a Conflict Minerals Report must describe the due diligence procedures they performed. Issuers that do not need to file a Conflict Minerals Report should disclose their reasonable country of origin inquiry and briefly describe the inquiry they undertook in their Form SD.

Issuers that conclude that their products are “DRC conflict free” may still make that assertion voluntarily in their SEC filing, but disclosing that conclusion is no longer required. Any issuer electing to make such a statement would be permitted to do so provided it had obtained an independent private sector audit as required by the Conflict Minerals Rule.

Issuers that conclude that their products have “not been found to be ‘DRC conflict free’” or that their products are “DRC conflict undeterminable” are no longer required to disclose that conclusion in their Conflict Minerals Report. However, such issuers are still required to provide other disclosures for those products related to the conflict minerals’ country of origin (if known), facilities used to process the conflict minerals (if known), and the issuer’s efforts to determine mine or location of origin.

Why is this important?

The June 2, 2014 filing deadline is quickly approaching. The Court ruling and subsequent guidance from the SEC provides affected issuers the information they need to finalize their SEC filings.

What's next?

Issuers should proceed with finalizing their SEC filings in accordance with the approaching deadline. It is possible that the plaintiffs in the original litigation may file a motion with the Court to issue a stay of the rule in its entirety, or that the SEC or lower courts may take further action in the future. In the meantime, issuers should move forward and prepare their filings for the June 2nd deadline.


PwC clients who have questions about this In brief should contact their engagement partner. Engagement teams who have questions should contact the authors.

Authored by:

Sara DeSmith
Phone: 1-973-236-4084

Kathleen Bauman
Phone: 1-973-236-5118