Following the recent US Court decision regarding the Conflict Minerals Rule, and the guidance released by the SEC on 29th April stating that the remainder of the Rule aside from the DRC conflict-free/not conflict-free labelling would remain in place, the US trade groups have now filed an emergency motion for stay (or freezing) of the Rule with the Court until “the implications of the decision are clear to all parties.” NAM’s motion requests an expedited review schedule that would result in a ruling by 26th May 2014. They argue that with the disclosure component ruled unconstitutional, the rest of the Rule cannot function as intended and should also come into question, and with a 2nd June deadline for reports approaching, they are hoping for a court ruling sooner rather than later.
The SEC Chairwoman has noted that while the court struck down one part of the rule, they specifically left the rest standing, and feels that given that Congress ordered the SEC to establish the rules under Dodd-Frank, the rest should be put into place. The SEC partial stay on disclosure is available here. The SEC’s two Republican commissioners (out of the total five) issued a statement last week urging colleagues to halt the rules saying that the requirement has been “profoundly counterproductive” and resulted in an “effective embargo” on minerals from the region. A future court decision tossing out the rule could give Congress a chance to revisit the provision, but in the meantime, the SEC should conserve its resources and freeze the rule, they argued.