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About the Author

J. Anthony Hardenburgh
Vice President, Global Trade Content
Amber Road


J. Anthony Hardenburgh brings over 12 years of international trade experience to Amber Road where he manages a global team of international trade professionals who monitor and maintain the company’s vast amount of trade compliance content. Prior to joining Amber Road, Anthony served as Vice President of Global Trade Content for JPMorgan Chase Vastera. During his six years with the company he managed a global team of trade professionals responsible for supporting both its software and managed services operations. Previously, Anthony served as a Director for From2, a global trade management company located in Miami, FL. Prior to From2, Anthony served as an International Trade Specialist for the US Department of Commerce. As an International Trade Specialist he was responsible for counseling small to medium size exporters on exporting their goods and services. Anthony has a Bachelor in International Business from Virginia Polytechnic Institute & State University and an MBA from Marymount University.

For more information, please visit www.amberroad.com
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Supply Chain Comment

By J. Anthony Hardenburgh, Vice President, Global Trade Content, Amber Road

September 6 , 2012



Understanding the Recent Ruling on Conflict Minerals

Existing Global Trade Management and Supply Chain Technology will need to Adapt to these Regulations


The US Securities and Exchange Commission (SEC) has proposed regulations that require US and certain foreign companies to report the use of “conflict minerals” from the Democratic Republic of the Congo (DRC) or adjoining countries in their products.

Conflict minerals are mined under conditions of armed conflict and human rights abuse. Areas notably affected are in the eastern parts of Africa, where various armed rebel groups within the DRC are largely responsible for using these natural resources to finance continued fighting, but neighboring countries such as Burundi, Rwanda and Uganda have also profited significantly. Conflict minerals mined in the DRC are typically passed through various intermediaries before being finally purchased.

Hardenburgh Says:

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Existing global trade management and supply chain technology will need to adapt to these regulations.
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At present, four minerals are listed as conflict minerals:

 

Columbite-tantalite, or commonly known as Coltan – used primarily in the production of capacitors, hearing aids, pacemakers, airbags, GPS, ignition systems, anti-lock braking systems, laptop computers, mobile phones, video game consoles, cameras, etc.

Cassiterite – used in production of tin, a common component of biocides, fungicides, high performance paint manufacturing, etc.

Wolframite – an important source of tungsten, used in fishing weights, dart tips and golf club heads, in addition to use in other metalworking tools.

Gold – used in jewelry, electronics and dental products.

 

In practical terms, what does this ruling mean for companies whose products use these minerals? According to the National Retail Federation, the regulations will apply not only to manufacturers but also to retailers considered to be “contracting to manufacture” private-label merchandise.


A retailer simply placing its brand on a generic product would not be covered, but those that have "some actual influence over the manufacturing of that product" would be covered, NRF explained. Retailers selling only third-party merchandise under the product's own brand rather than the store's brand are not affected. Companies are able to avoid the disclosure rules if they use recycled or scrap minerals.


Companies will have until May 31, 2014, to make their first disclosures about whether the minerals they use are "conflict free," meaning they did not finance or benefit armed groups in Central Africa. And for two years — four years for smaller firms — companies will be able to disclose simply that they could not determine whether the minerals were helping to finance fighting in the DRC.

Final Thoughts

Existing global trade management and supply chain technology will need to adapt to these regulations. Here are some initial steps companies can take to ensure they are ready for compliance in 2014:

 

Ensure that your source of global trade content lists sanctions against the conflict mineral countries and the minerals themselves.

Consider using questionnaires or surveys to determine whether your product suppliers are obtaining minerals from conflicted areas. Much the same way that suppliers certify eligibility for preferential duty treatment, they can also certify that their products do not contain conflict minerals.

Perform admissibility reviews on transactions that contain the minerals or products made with the minerals.

Update your standard operating procedures to include processes for requesting and capturing declarations from suppliers and for performing transaction reviews.


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