Dodd-Frank

H. R. 4173　‘‘Dodd-Frank Wall Street Reform and Consumer Protection Act’’

TITLE XV–MISCELLANEOUS PROVISIONS

Title XV of the conference report includes:

Restrictions on use of U.S. Funds for Foreign Governments

The conference report requires the Administration to 
evaluate any proposed loan by the IMF to a middle-income 
country if that country’s public debt exceeds its annual Gross 
Domestic Product, and to oppose the loan if it cannot certify 
to Congress that the loan is likely to be repaid.

Extractive Industries Transparency

The conference report requires public disclosure to the 
SEC of any payment relating to the commercial development of 
oil, natural gas, and minerals made by any person to the U.S. 
or a foreign government, and includes as a “payment” taxes, 
royalties, fees, licenses, production entitlements, bonuses, 
and other material benefits, as determined by the Securities 
and Exchange Commission.

The conference report amends the Securities Exchange 
Act of 1934 to require the SEC to issue rules requiring each 
resource extraction issuer (an issuer that engages in the 
commercial development of oil, natural gas, or minerals) to 
include in an annual report information relating to any payment 
made by the issuer, a subsidiary or partner, or an entity under 
its control to the U.S. or a foreign government for the purpose 
of such commercial development. Requires such rules, to the 
extent practicable, to support the U.S. commitment to 
international transparency promotion efforts relating to such 
commercial development.

Conflict Minerals

The conference report requires disclosure to the SEC by 
all persons otherwise required to file with the SEC for whom 
minerals originating in the Democratic Republic of Congo and 
adjoining countries are necessary to the functionality or 
production of a product manufactured by such person. Such a 
public disclosure report by the person must describe the 
measures taken to exercise due diligence on the source and 
chain of custody of such materials, the products manufactured, 
and other matters; requires an independent audit of the report.
The conference report requires that the Department of 
State, in consultation with others, submit to Congress a 
strategy to address the illicit minerals trade in the region, 
and a map to address linkages between conflict minerals and 
armed groups.

Section 1503 requires mining companies to disclose 
mining safety violations that are material to investors.

http://www.gpo.gov/fdsys/pkg/CRPT-111hrpt517/html/CRPT-111hrpt517.htm

Title XV–MISCELLANEOUS PROVISIONS
SEC. 1502. CONFLICT MINERALS.
(a) Sense of Congress on Exploitation and Trade of Conflict
Minerals Originating in the Democratic Republic of the Congo.–It is
the sense of Congress that the exploitation and trade of conflict
minerals originating in the Democratic Republic of the Congo is helping
to finance conflict characterized by extreme levels of violence in the
eastern Democratic Republic of the Congo, particularly sexual- and
gender-based violence, and contributing to an emergency humanitarian
situation therein, warranting the provisions of section 13(p) of the
Securities Exchange Act of 1934, as added by subsection (b).
(b) Disclosure Relating to Conflict Minerals Originating in the
Democratic Republic of the Congo.–Section 13 of the Securities
Exchange Act of 1934 (15 U.S.C. 78m), as amended by this Act, is
amended by adding at the end the following new subsection:
“(p) Disclosures Relating to Conflict Minerals Originating in the
Democratic Republic of the Congo.–
“(1) Regulations.–
“(A) In general.–Not later than 270 days after the date
of the enactment of this subsection, the Commission shall
promulgate regulations requiring any person described in
paragraph (2) to disclose annually, beginning with the person’s
first full fiscal year that begins after the date of
promulgation of such regulations, whether conflict minerals
that are necessary as described in paragraph (2)(B), in the
year for which such reporting is required, did originate in the
Democratic Republic of the Congo or an adjoining country and,
in cases in which such conflict minerals did originate in any
such country, submit to the Commission a report that includes,
with respect to the period covered by the report–
“(i) a description of the measures taken by the person
to exercise due diligence on the source and chain of
custody of such minerals, which measures shall include an
independent private sector audit of such report submitted
through the Commission that is conducted in accordance with
standards established by the Comptroller General of the
United States, in accordance with rules promulgated by the
Commission, in consultation with the Secretary of State;
and
“(ii) a description of the products manufactured or
contracted to be manufactured that are not DRC conflict
free (`DRC conflict free’ is defined to mean the products
that do not contain minerals that directly or indirectly
finance or benefit armed groups in the Democratic Republic
of the Congo or an adjoining country), the entity that
conducted the independent private sector audit in
accordance with clause (i), the facilities used to process
the conflict minerals, the country of origin of the
conflict minerals, and the efforts to determine the mine or
location of origin with the greatest possible specificity.
“(B) Certification.–The person submitting a report under
subparagraph (A) shall certify the audit described in clause
(i) of such subparagraph that is included in such report. Such
a certified audit shall constitute a critical component of due
diligence in establishing the source and chain of custody of
such minerals.
“(C) Unreliable determination.–If a report required to be
submitted by a person under subparagraph (A) relies on a
determination of an independent private sector audit, as
described under subparagraph (A)(i), or other due diligence
processes previously determined by the Commission to be
unreliable, the report shall not satisfy the requirements of
the regulations promulgated under subparagraph (A)(i).
“(D) DRC conflict free.–For purposes of this paragraph, a
product may be labeled as `DRC conflict free’ if the product
does not contain conflict minerals that directly or indirectly
finance or benefit armed groups in the Democratic Republic of
the Congo or an adjoining country.
“(E) Information available to the public.–Each person
described under paragraph (2) shall make available to the
public on the Internet website of such person the information
disclosed by such person under subparagraph (A).
“(2) Person described.–A person is described in this
paragraph if–
“(A) the person is required to file reports with the
Commission pursuant to paragraph (1)(A); and
“(B) conflict minerals are necessary to the functionality
or production of a product manufactured by such person.
“(3) Revisions and waivers.–The Commission shall revise or
temporarily waive the requirements described in paragraph (1) if
the President transmits to the Commission a determination that–
“(A) such revision or waiver is in the national security
interest of the United States and the President includes the
reasons therefor; and
“(B) establishes a date, not later than 2 years after the
initial publication of such exemption, on which such exemption
shall expire.
“(4) Termination of disclosure requirements.–The requirements
of paragraph (1) shall terminate on the date on which the President
determines and certifies to the appropriate congressional
committees, but in no case earlier than the date that is one day
after the end of the 5-year period beginning on the date of the
enactment of this subsection, that no armed groups continue to be
directly involved and benefitting from commercial activity
involving conflict minerals.
“(5) Definitions.–For purposes of this subsection, the terms
`adjoining country’, `appropriate congressional committees’, `armed
group’, and `conflict mineral’ have the meaning given those terms
under section 1502 of the Dodd-Frank Wall Street Reform and
Consumer Protection Act.”.
(c) Strategy and Map to Address Linkages Between Conflict Minerals
and Armed Groups.–
(1) Strategy.–
(A) In general.–Not later than 180 days after the date of
the enactment of this Act, the Secretary of State, in
consultation with the Administrator of the United States Agency
for International Development, shall submit to the appropriate
congressional committees a strategy to address the linkages
between human rights abuses, armed groups, mining of conflict
minerals, and commercial products.
(B) Contents.–The strategy required by subparagraph (A)
shall include the following:
(i) A plan to promote peace and security in the
Democratic Republic of the Congo by supporting efforts of
the Government of the Democratic Republic of the Congo,
including the Ministry of Mines and other relevant
agencies, adjoining countries, and the international
community, in particular the United Nations Group of
Experts on the Democratic Republic of Congo, to–

(I) monitor and stop commercial activities
involving the natural resources of the Democratic
Republic of the Congo that contribute to the activities
of armed groups and human rights violations in the
Democratic Republic of the Congo; and
(II) develop stronger governance and economic
institutions that can facilitate and improve
transparency in the cross-border trade involving the
natural resources of the Democratic Republic of the
Congo to reduce exploitation by armed groups and
promote local and regional development.

(ii) A plan to provide guidance to commercial entities
seeking to exercise due diligence on and formalize the
origin and chain of custody of conflict minerals used in
their products and on their suppliers to ensure that
conflict minerals used in the products of such suppliers do
not directly or indirectly finance armed conflict or result
in labor or human rights violations.
(iii) A description of punitive measures that could be
taken against individuals or entities whose commercial
activities are supporting armed groups and human rights
violations in the Democratic Republic of the Congo.
(2) Map.–
(A) In general.–Not later than 180 days after the date of
the enactment of this Act, the Secretary of State shall, in
accordance with the recommendation of the United Nations Group
of Experts on the Democratic Republic of the Congo in their
December 2008 report–
(i) produce a map of mineral-rich zones, trade routes,
and areas under the control of armed groups in the
Democratic Republic of the Congo and adjoining countries
based on data from multiple sources, including–

(I) the United Nations Group of Experts on the
Democratic Republic of the Congo;
(II) the Government of the Democratic Republic of
the Congo, the governments of adjoining countries, and
the governments of other Member States of the United
Nations; and
(III) local and international nongovernmental
organizations;

(ii) make such map available to the public; and
(iii) provide to the appropriate congressional
committees an explanatory note describing the sources of
information from which such map is based and the
identification, where possible, of the armed groups or
other forces in control of the mines depicted.
(B) Designation.–The map required under subparagraph (A)
shall be known as the “Conflict Minerals Map”, and mines
located in areas under the control of armed groups in the
Democratic Republic of the Congo and adjoining countries, as
depicted on such Conflict Minerals Map, shall be known as
“Conflict Zone Mines”.
(C) Updates.–The Secretary of State shall update the map
required under subparagraph (A) not less frequently than once
every 180 days until the date on which the disclosure
requirements under paragraph (1) of section 13(p) of the
Securities Exchange Act of 1934, as added by subsection (b),
terminate in accordance with the provisions of paragraph (4) of
such section 13(p).
(D) Publication in federal register.–The Secretary of
State shall add minerals to the list of minerals in the
definition of conflict minerals under section 1502, as
appropriate. The Secretary shall publish in the Federal
Register notice of intent to declare a mineral as a conflict
mineral included in such definition not later than one year
before such declaration.
(d) Reports.–
(1) Baseline report.–Not later than 1 year after the date of
the enactment of this Act and annually thereafter until the
termination of the disclosure requirements under section 13(p) of
the Securities Exchange Act of 1934, the Comptroller General of the
United States shall submit to appropriate congressional committees
a report that includes an assessment of the rate of sexual- and
gender-based violence in war-torn areas of the Democratic Republic
of the Congo and adjoining countries.
(2) Regular report on effectiveness.–Not later than 2 years
after the date of the enactment of this Act and annually
thereafter, the Comptroller General of the United States shall
submit to the appropriate congressional committees a report that
includes the following:
(A) An assessment of the effectiveness of section 13(p) of
the Securities Exchange Act of 1934, as added by subsection
(b), in promoting peace and security in the Democratic Republic
of the Congo and adjoining countries.
(B) A description of issues encountered by the Securities
and Exchange Commission in carrying out the provisions of such
section 13(p).
(C)(i) A general review of persons described in clause (ii)
and whether information is publicly available about–
(I) the use of conflict minerals by such persons; and
(II) whether such conflict minerals originate from the
Democratic Republic of the Congo or an adjoining country.
(ii) A person is described in this clause if–
(I) the person is not required to file reports with the
Securities and Exchange Commission pursuant to section
13(p)(1)(A) of the Securities Exchange Act of 1934, as
added by subsection (b); and
(II) conflict minerals are necessary to the
functionality or production of a product manufactured by
such person.
(3) Report on private sector auditing.–Not later than 30
months after the date of the enactment of this Act, and annually
thereafter, the Secretary of Commerce shall submit to the
appropriate congressional committees a report that includes the
following:
(A) An assessment of the accuracy of the independent
private sector audits and other due diligence processes
described under section 13(p) of the Securities Exchange Act of
1934.
(B) Recommendations for the processes used to carry out
such audits, including ways to–
(i) improve the accuracy of such audits; and
(ii) establish standards of best practices.
(C) A listing of all known conflict mineral processing
facilities worldwide.
(e) Definitions.–For purposes of this section:
(1) Adjoining country.–The term “adjoining country”, with
respect to the Democratic Republic of the Congo, means a country
that shares an internationally recognized border with the
Democratic Republic of the Congo.
(2) Appropriate congressional committees.–The term
“appropriate congressional committees” means–
(A) the Committee on Appropriations, the Committee on
Foreign Affairs, the Committee on Ways and Means, and the
Committee on Financial Services of the House of
Representatives; and
(B) the Committee on Appropriations, the Committee on
Foreign Relations, the Committee on Finance, and the Committee
on Banking, Housing, and Urban Affairs of the Senate.
(3) Armed group.–The term “armed group” means an armed group
that is identified as perpetrators of serious human rights abuses
in the annual Country Reports on Human Rights Practices under
sections 116(d) and 502B(b) of the Foreign Assistance Act of 1961
(22 U.S.C. 2151n(d) and 2304(b)) relating to the Democratic
Republic of the Congo or an adjoining country.
(4) Conflict mineral.–The term “conflict mineral” means–
(A) columbite-tantalite (coltan), cassiterite, gold,
wolframite, or their derivatives; or
(B) any other mineral or its derivatives determined by the
Secretary of State to be financing conflict in the Democratic
Republic of the Congo or an adjoining country.
(5) Under the control of armed groups.–The term “under the
control of armed groups” means areas within the Democratic
Republic of the Congo or adjoining countries in which armed
groups–
(A) physically control mines or force labor of civilians to
mine, transport, or sell conflict minerals;
(B) tax, extort, or control any part of trade routes for
conflict minerals, including the entire trade route from a
Conflict Zone Mine to the point of export from the Democratic
Republic of the Congo or an adjoining country; or
(C) tax, extort, or control trading facilities, in whole or
in part, including the point of export from the Democratic
Republic of the Congo or an adjoining country.

http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=111_cong_bills&docid=f:h4173enr.txt.pdf