Press Release: Jewelers of America (JA), the national trade association for businesses serving the fine jewelry retail marketplace, is reviewing the Securities and Exchange Commission's (SEC) final rule to implement the conflict minerals provision within the Dodd-Frank Wall Street Reform and Consumer Protection Act. The Commission voted to adopt the rule yesterday.
"Jewelers of America is in the process of reviewing the SEC's final conflict minerals rule," said Matthew A. Runci, JA's president. "While we must study the rule more closely in the coming days, we are initially encouraged by the commission's decision to not include automatic reporting of recycled minerals and to adopt a phased-in approach for determining whether or not minerals come from conflict sources."
JA strongly believes in the goals of the law and fully condemns the use of any minerals to fund conflict in the Democratic Republic of the Congo (DRC), in its adjoining countries or anywhere in the world.
The rule requires certain companies to disclose their use of conflict minerals, including gold, from the DR or an adjoining country. While the rule directly applies to publicly traded companies, JA believes its impact will be felt throughout the gold jewelry supply chain and beyond.
While compliance is still expected to be difficult and costly, the SEC did respond to input from JA and other industry associations, who had jointly submitted comments to the commission.
Some key points from the final rule:
Companies must file their first report on May 31, 2014, for the 2013 calendar year and annually on May 31 every year thereafter.
Companies that use recycled or scrap metals are not automatically required to conduct due diligence or file a conflict minerals report. They will have to perform a reasonable inquiry to assure it is in fact recyclable and therefore "DRC conflict free."
The regulation applies to companies that "contract to manufacture" a product and has some actual influence over the manufacturing of that product. Companies that merely attach their brand or label to a generic product manufactured by another company are not covered.
There is a phase-in period of two-to-four years (depending on the size of a company), where firms will be able to use the determination "DRC conflict undeterminable" if they cannot determine whether or not the minerals in their products came from one of the covered countries or contributed to conflict in those countries. No audits would be required for products with this determination.
Existing stocks of refined gold are exempt from the rule if they are "outside the supply chain" prior to January 31, 2013. Gold is considered "outside the supply chain" if it "has been fully refined" or after, even if not yet refined, it is located outside the DRC and adjoining countries.
The full rule is now available on the SEC website by visiting www.sec.gov/rules/final.shtml. The SEC also released a statement and fact sheet on the rule, available at www.sec.gov/news/press/2012/2012-163.htm .
Jewelers of America will review the rule and provide updated guidance to JA Members on its website, www.jewelers.org.
About Jewelers of America
Jewelers of America (JA) is the national trade association for businesses serving the fine jewelry retail marketplace, with the primary purpose of improving consumer confidence in the jewelry industry. JA's consumer education arm, Jewelry Information Center (JIC), provides public relations and marketing services on behalf of the fine jewelry and watch industry. Visit www.jewelers.org and www.JIC.org for more information.