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Why Conflict Minerals Disclosure is Serious Business
August 23, 2013
There are two important sections of the Dodd-Frank Act that absolutely must be on every CFO’s radar screen: Section 1502 for conflict minerals and Section 1504 for resource extractions (how much a firm may pay governments for access to minerals, oil and gas), both of which require complex disclosures if companies meet the criteria.
Why are these so important? According to the SEC, approximately 6,000 issuers will be required to perform some level of due diligence to determine if they are required to comply with the disclosure, and an estimated 4,500 companies ultimately will be required to file disclosures. The SEC’s Conflict Minerals filing requirement is based on the calendar year, with the initial period for the calendar year ended December 31, 2013. The effective date for the filing is 150 days later on May 31, 2014, when Form SD (Specialized Disclosure) is filed as an electronically tagged XBRL schedule. While the initial filing due date is more than nine months away, affected companies must understand what is involved now to meet this requirement and organize the processes and resources to comply.
And what’s more, in cases where a company has used conflict minerals sourced from certain countries, the SEC has a zero-tolerance policy for reporting errors, opening up companies to serious exposure...Read More