- Environmental law Overview: Conflict Minerals Regulation Regulations for the MedTech industry

Name of the legal act

Regulation (EU) 2017/821 of the European Parliament and of the Council of 17 May 2017 laying down obligations for Union importers of tin, tantalum, tungsten, their ores, and gold, regarding the fulfillment of supply chain due diligence requirements to prevent the financing of armed conflicts and to promote responsible sourcing from conflict and high-risk areas.

Status

Consolidated version of 19 November 2020Externer Link. Öffnet im neuen Fenster/Tab..

Background information

The few national implementing provisions in Germany are set out in the Act for the Implementation of Regulation (EU) 2017/821 of the European Parliament and of the Council of 17 May 2017 laying down supply chain due diligence obligations for Union importers of tin, tantalum, tungsten, their ores, and gold originating from conflict-affected and high-risk areas (Mineral Raw Materials Due Diligence Act – MinRohSorgGExterner Link. Öffnet im neuen Fenster/Tab.), and primarily concern the organization of the authorities and inspection rights.

Scope of application

The material scope covers the minerals tin, tantalum, tungsten, and gold (the so-called 3TG minerals) as listed in Annex I of the Conflict Minerals Regulation, as well as certain metals derived from or containing these minerals. This aligns with the material scope of the U.S. Dodd-Frank Act.

The territorial scope covers countries and regions classified as "conflict and high-risk areas" according to Art. 2 lit. (f) of the Conflict Minerals Regulation. These are defined as "areas where armed conflicts are taking place or where, following conflicts, the region remains in a fragile situation, as well as areas where governance and security are weak or non-existent, such as failed states, and where widespread and systematic violations of international law, including human rights abuses, occur." Since this classification is difficult for an individual company to determine on its own, there are various forms of assistance available to help including the following guidance:

• Commission Recommendation (EU) 2018/1149Externer Link. Öffnet im neuen Fenster/Tab. of 10 August 2018 on non-binding guidelines for the identification of conflict-affected and high-risk areas and other supply chain risks in accordance with Regulation (EU) 2017/821 of the European Parliament and of the Council.
• A non-binding and publicly available online list by the European Commission with current conflict-affected and high-risk areas (CAHRAsExterner Link. Öffnet im neuen Fenster/Tab.).
• OECD Due Diligence GuidanceExterner Link. Öffnet im neuen Fenster/Tab. for Responsible supply Chains of Minerals from Conflict-Affected and High-Risk Areas

In contrast, the U.S. Dodd-Frank Act defines conflict regions territorially and exhaustively, covering only the Democratic Republic of the Congo and its neighboring states (Angola, Burundi, Republic of the Congo, Rwanda, Zambia, South Sudan, Tanzania, Uganda, Central African Republic).

Roles

According to Art. 2 lit. (l) of the Conflict Minerals Regulation, the personal scope of application includes the "Union importer”, meaning “a natural or legal person declaring minerals or metals for release for free circulation within the meaning of Art. 201 of Regulation (EU) No 952/2013 [..] or a natural or legal person on whose behalf such a declaration is made […]”.

Companies that only import the aforementioned metals into the EU in semi-finished and finished products, or are further downstream in the supply chain after the Union importer, are generally not directly affected. In contrast, the requirements of the U.S. Dodd-Frank Act apply much more broadly, covering all companies listed in the USA (regardless of the location of their registered office or production) for which the regulated conflict minerals are necessary for the manufacture or function of their products.

Duties in bullet points

Union importers must fulfill due diligence obligations in five steps:

1. Introduction and publication of robust corporate governance strategies (management system), including obtaining information on any affected supply chains
2. Identification and assessment of risks in the supply chain by evaluating the information obtained
3. Design and implementation of a risk mitigation strategy if risks are actually identified in the second step
4. Independent audit of due diligence compliance - not required if it can be demonstrated that all smelters and refiners in the respective supply chain comply with the requirements of Regulation (EU) 2017/821
5. Certain publications on the fulfilment of due diligence obligations in the supply chain and reporting obligations to the Federal Institute for Geosciences and Natural Resources (BGR)

The voluntary participation in a recognized system for fulfilling the due diligence obligations in the supply chain according to Art. 8 of Regulation (EU) 2017/821 (in connection with the Delegated Regulation (EU) 2019/429) is possible.

The Conflict Minerals Regulation does not include a ban on the use of minerals and metals from conflict and high-risk areas, even if corresponding risks have been identified.

Latest news

As the regulation of due diligence obligations in the supply chain continues to increase (for example, in the LkSG and the recently enacted EU Due Diligence Directive (CSDDD)), practice shows that customer inquiries regarding these obligations are also on the rise. These inquiries often ask for a wide range of information, so even actors who are not Union importers in the sense of the Conflict Minerals Regulation may still be asked to provide relevant confirmations. It is important to carefully assess whether such confirmations can actually be provided.

In addition to the Conflict Minerals Regulation, the Battery Regulation (EU) 2023/1542 also includes resource-related due diligence obligations for cobalt, natural graphite, lithium, and nickel. These obligations must be fulfilled according to Articles 47 et seq. of the Battery Regulation and are independent of the Conflict Minerals Regulation.

Imprint

© Bundesverband Medizintechnologie e.V. (BVMed), the German MedTech Association, in cooperation with the law firm "Ahlhaus Handorn Niermeier Schucht Rechtsanwaltsgesellschaft mbH" („Produktkanzlei“).

This overview does not replace an individual case assessment.