LegalizeRegulation (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 and tungsten, their ores, and gold originating from conflict-affected and high-risk areas
Article 1
Subject matter and scope
All volume thresholds are set at a level that ensures that the vast majority, but no less than 95 %, of the total volumes imported into the Union of each mineral and metal under the Combined Nomenclature code is subject to the obligations of Union importers set out in this Regulation.
Article 2
Definitions
For the purpose of this Regulation, the following definitions apply:
(a) ‘minerals’ means the following, as listed in Part A of Annex I: — ores and concentrates containing tin, tantalum or tungsten, and — gold;
(b) ‘metals’ means metals containing or consisting of tin, tantalum, tungsten or gold, as listed in Part B of Annex I;
(c) ‘mineral supply chain’ means the system of activities, organisations, actors, technology, information, resources and services involved in moving and processing the minerals from the extraction site to their incorporation in the final product;
(d) ‘supply chain due diligence’ means the obligations of Union importers of tin, tantalum and tungsten, their ores, and gold in relation to their management systems, risk management, independent third-party audits and disclosure of information with a view to identifying and addressing actual and potential risks linked to conflict-affected and high-risk areas to prevent or mitigate adverse impacts associated with their sourcing activities;
(e) ‘chain of custody or supply chain traceability system’ means a record of the sequence of economic operators which have custody of minerals and metals as they move through a supply chain;
(f) ‘conflict-affected and high-risk areas’ means areas in a state of armed conflict or fragile post-conflict as well as areas witnessing weak or non-existent governance and security, such as failed states, and widespread and systematic violations of international law, including human rights abuses;
(g) ‘armed groups and security forces’ means groups referred to in Annex II to the OECD Due Diligence Guidance;
(h) ‘smelter and refiner’ means any natural or legal person performing forms of extractive metallurgy involving processing steps with the aim to produce a metal from a mineral;
(i) ‘global responsible smelters and refiners’ means smelters and refiners located inside or outside the Union that are deemed to fulfil the requirements of this Regulation;
(j) ‘upstream’ means the mineral supply chain from the extraction sites to the smelters and refiners, inclusive;
(k) ‘downstream’ means the metal supply chain from the stage following the smelters and refiners to the final product;
(l) ‘Union importer’ means any natural or legal person declaring minerals or metals for release for free circulation within the meaning of Article 201 of Regulation (EU) No 952/2013 of the European Parliament and of the Council (1) or any natural or legal person on whose behalf such declaration is made, as indicated in data elements 3/15 and 3/16 in accordance with Annex B to Commission Delegated Regulation (EU) 2015/2446 (2);
(m) ‘supply chain due diligence scheme’ or ‘due diligence scheme’ means a combination of voluntary supply chain due diligence procedures, tools and mechanisms, including independent third-party audits, developed and overseen by governments, industry associations or groupings of interested organisations;
(n) ‘Member State competent authorities’ means authorities designated by Member States in accordance with Article 10 with expertise as regards raw materials, industrial processes and auditing;
(o) ‘OECD Due Diligence Guidance’ means the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas (Second Edition, OECD 2013), including all its Annexes and Supplements;
(p) ‘grievance mechanism’ means an early-warning risk awareness mechanism allowing any interested party, including whistle-blowers, to voice concerns regarding the circumstances of extraction, trade and handling of minerals in and export of minerals from conflict-affected and high-risk areas;
(q) ‘model supply chain policy’ means a supply chain policy that conforms to Annex II to the OECD Due Diligence Guidance outlining the risks of significant adverse impacts which may be associated with the extraction, trade, and handling of minerals in and export of minerals from conflict-affected and high-risk areas;
(r) ‘risk management plan’ means the written response of a Union importer to the identified supply chain risks based on Annex III to the OECD Due Diligence Guidance;
(s) ‘recycled metals’ means reclaimed end-user or post-consumer products, or scrap processed metals created during product manufacturing, including excess, obsolete, defective, and scrap metal materials which contain refined or processed metals that are appropriate for recycling in the production of tin, tantalum, tungsten or gold. For the purposes of this definition, minerals partially processed, unprocessed or a by-product from another ore are not considered to be recycled metals;
(t) ‘by-product’ means a mineral or metal falling within the scope of this Regulation that has been obtained from the processing of a mineral or metal falling outside the scope of this Regulation, and which would not have been obtained without the processing of the primary mineral or metal falling outside the scope of this Regulation;
(u) ‘verifiable date’ means a date which can be verified by the inspection of physical date stamps on products or of inventory lists.
Article 3
Compliance of Union importers with supply chain due diligence obligations
Article 4
Management system obligations
Union importers of minerals or metals shall:
(a) adopt, and clearly communicate to suppliers and the public up-to-date information on, their supply chain policy for the minerals and metals potentially originating from conflict-affected and high-risk areas;
(b) incorporate in their supply chain policy standards against which supply chain due diligence is to be conducted consistent with the standards set out in the model supply chain policy in Annex II to the OECD Due Diligence Guidance;
(c) structure their respective internal management systems to support supply chain due diligence by assigning responsibility to senior management, in cases where the Union importer is not a natural person, to oversee the supply chain due diligence process as well as maintain records of those systems for a minimum of five years;
(d) strengthen their engagement with suppliers by incorporating their supply chain policy into contracts and agreements with suppliers consistent with Annex II to the OECD Due Diligence Guidance;
(e) establish a grievance mechanism as an early-warning risk-awareness system or provide such mechanism through collaborative arrangements with other economic operators or organisations, or by facilitating recourse to an external expert or body, such as an ombudsman;
(f) as regards minerals, operate a chain of custody or supply chain traceability system that provides, supported by documentation, the following information: (i) description of the mineral, including its trade name and type; (ii) name and address of the supplier to the Union importer; (iii) country of origin of the minerals; (iv) quantities and dates of extraction, if available, expressed in volume or weight; (v) where minerals originate from conflict-affected and high-risk areas or, where other supply chain risks as listed in the OECD Due Diligence Guidance have been ascertained by the Union importer, additional information in accordance with the specific recommendations for upstream economic operators, as set out in the OECD Due Diligence Guidance, such as the mine of mineral origin, locations where minerals are consolidated, traded and processed, and taxes, fees and royalties paid;
(g) as regards metals, operate a chain of custody or supply chain traceability system that provides, supported by documentation, the following information: (i) description of the metal, including its trade name and type; (ii) name and address of the supplier to the Union importer; (iii) name and address of the smelters and refiners in the supply chain of the Union importer; (iv) if available, records of the third-party audit reports of the smelters and refiners, or evidence of conformity with a supply chain due diligence scheme recognised by the Commission pursuant to Article 8; (v) if the records referred to in point (iv) are not available: — countries of origin of the minerals in the supply chain of the smelters and refiners, — where metals are based on minerals originating from conflict-affected and high-risk areas, or other supply chain risks as listed in the OECD Due Diligence Guidance have been ascertained by the Union importer, additional information in accordance with the specific recommendations for downstream economic operators set out in that Guidance;
(h) as regards by-products, provide information supported by documentation as from the point of origin of those by-products, namely the point where the by-product is first separated from its primary mineral or metal falling outside the scope of this Regulation.
Article 5
Risk management obligations
Union importers of minerals shall:
(a) identify and assess the risks of adverse impacts in their mineral supply chain on the basis of the information provided pursuant to Article 4 against the standards of their supply chain policy, consistent with Annex II to, and the due diligence recommendations set out in, the OECD Due Diligence Guidance;
(b) implement a strategy to respond to the identified risks designed so as to prevent or mitigate adverse impacts by: (i) reporting findings of the supply chain risk assessment to senior management designated for that purpose, in cases where the Union importer is not a natural person; (ii) adopting risk management measures consistent with Annex II to, and the due diligence recommendations set out in, the OECD Due Diligence Guidance, considering their ability to influence, and where necessary take steps to exert pressure on suppliers who can most effectively prevent or mitigate the identified risk, by making it possible either to: — continue trade while simultaneously implementing measurable risk mitigation efforts, — suspend trade temporarily while pursuing ongoing measurable risk mitigation efforts, or — disengage with a supplier after failed attempts at risk mitigation; (iii) implementing the risk management plan; monitoring and tracking performance of risk mitigation efforts; reporting back to senior management designated for this purpose, in cases where the Union importer is not a natural person; and considering suspending or discontinuing engagement with a supplier after failed attempts at mitigation; (iv) undertaking additional fact and risk assessments for risks requiring mitigation, or after a change of circumstances.
Article 6
Third-party audit obligations
That third-party audit shall:
(a) include in its scope all of the Union importer's activities, processes and systems used to implement supply chain due diligence regarding minerals or metals, including the Union importer's management system, risk management, and disclosure of information in accordance with Articles 4, 5 and 7 respectively;
(b) have as its objective the determination of conformity of the Union importer's supply chain due diligence practices with Articles 4, 5 and 7;
(c) make recommendations to the Union importer on how to improve its supply chain due diligence practices; and
(d) respect the audit principles of independence, competence and accountability, as set out in the OECD Due Diligence Guidance.
The requirement of substantive evidence shall be deemed to be fulfilled where Union importers of metals demonstrate that they are sourcing exclusively from smelters and refiners listed by the Commission pursuant to Article 9.
Article 7
Disclosure obligations
Where a Union importer can reasonably conclude that metals are derived only from recycled or scrap sources, it shall, with due regard for business confidentiality and other competitive concerns:
(a) publicly disclose its conclusion; and
(b) describe in reasonable detail the supply chain due diligence measures it exercised in reaching that conclusion.
Article 8
Recognition of supply chain due diligence schemes
When making a determination on the recognition of a due diligence scheme, the Commission shall take into account the diverse industry practices covered by that scheme and shall also have regard to the risk-based approach and method used by that scheme to identify conflict-affected and high-risk areas, and the listed results thereof. Those listed results shall be disclosed by the scheme owner.
The implementing acts referred to in the first subparagraph of this paragraph shall be adopted in accordance with the advisory procedure referred to in Article 15(2).
Where the scheme owner fails or refuses to take the necessary remedial action, and where the Commission has determined that the failure or deficiencies referred to in the first subparagraph of this paragraph compromise the ability of the Union importer implementing a scheme to comply with this Regulation or where repeated or significant cases of non-compliance by economic operators implementing a scheme are due to deficiencies in the scheme, the Commission shall adopt an implementing act in accordance with the advisory procedure referred to in Article 15(2), withdrawing the recognition of the scheme.
Article 9
List of global responsible smelters and refiners
That list shall be drawn up taking into account global responsible smelters and refiners covered by supply chain due diligence schemes recognised by the Commission pursuant to Article 8 and the information submitted by Member States pursuant to Article 17(1).
Article 10
Member State competent authorities
Member States shall inform the Commission of the names and addresses of the competent authorities by 9 December 2017. Member States shall inform the Commission of any changes to the names or addresses of the competent authorities.
Article 11
Ex-post checks on Union importers
The ex-post checks referred to in paragraph 1 shall include, inter alia:
(a) examination of the Union importer's implementation of supply chain due diligence obligations under this Regulation, including regarding the management system, risk management, independent third-party audit and disclosure;
(b) examination of documentation and records that demonstrate the proper compliance with the obligations referred to in point (a);
(c) examination of audit obligations in accordance with the scope, objective and principles set out in Article 6.
The ex-post checks referred to in paragraph 1 should include on-the-spot inspections, including at the premises of the Union importer.
Article 12
Records of ex-post checks on Union importers
Member State competent authorities shall keep records of the ex-post checks referred to in Article 11(1), indicating in particular the nature and results of such checks, as well as records of any notice of remedial action issued under Article 16(3).
Records of the ex-post checks referred to in Article 11(1) shall be kept for at least five years.
Article 13
Cooperation and information exchange
Article 14
Guidelines
Article 15
Committee procedure
Where the opinion of the committee is to be obtained by written procedure, that procedure shall be terminated without result when, within the time-limit for delivery of the opinion, the chair of the committee so decides or a simple majority of committee members so request.
Article 16
Rules applicable to infringement
Article 17
Reporting and review
Article 18
Methodology for calculation of thresholds
Unless otherwise provided in this Regulation, on the basis of customs information that shall be provided upon request of the Commission by the Member States on the annual import volumes by Union importer and by Combined Nomenclature code as listed in Annex I in their respective territories, the Commission shall select the highest annual import volume per Union importer and per Combined Nomenclature code corresponding to no less than 95 % of the total annual volume of imports into the Union for that Combined Nomenclature code as the new threshold to be inserted in Annex I. The Commission shall rely in doing so on the import information for each Union importer provided by the Member States for the previous two years.
Article 19
Exercise of the delegation
Article 20
Entry into force and date of application
This Regulation shall be binding in its entirety and directly applicable in all Member States.
ANNEX I
List of minerals and metals within the scope of Regulation (EU) 2017/821 classified under the Combined Nomenclature
Part A: Minerals
| Description | CN code | TARIC subdivision | Volume threshold (kg) |
|---|---|---|---|
| Tin ores and concentrates | 2609 00 00 | 5 000 | |
| Tungsten ores and concentrates | 2611 00 00 | 250 000 | |
| Tantalum or niobium ores and concentrates | Ex 2615 90 00 | 10 | 100 000 |
| Gold ores and concentrates | Ex 2616 90 00 | 10 | 4 000 000 |
| Gold, unwrought or in semi-manufactured forms, or in powder with a gold concentration lower than 99,5 % that has not passed the refining stage | ex 71 08 (*1) | 100 | |
| (*1) For the purpose of amending this threshold, the imported volume obtained by applying the methodology and criteria of Article 18 shall be set as the threshold for both ex 71 08 tariff lines included in Annex I. |
Part B: Metals
| Description | CN code | TARIC subdivision | Volume threshold (kg) |
|---|---|---|---|
| Tungsten oxides and hydroxides | 2825 90 40 | 100 000 | |
| Tin oxides and hydroxides | Ex 2825 90 85 | 10 | 3 600 |
| Tin chlorides | 2827 39 10 | 10 000 | |
| Tungstates | 2841 80 00 | 100 000 | |
| Tantalates | Ex 2841 90 85 | 30 | 30 |
| Carbides of tungsten | 2849 90 30 | 10 000 | |
| Carbides of tantalum | Ex 2849 90 50 | 10 | 770 |
| Gold, unwrought or in semi-manufactured forms, or in powder form with a gold concentration of 99,5 % or higher that has passed the refining stage | ex 71 08 (*1) | 100 | |
| Ferrotungsten and ferro-silico-tungsten | 7202 80 00 | 25 000 | |
| Tin, unwrought | 8001 | 100 000 | |
| Tin bars, rods, profiles and wires | 8003 00 00 | 1 400 | |
| Tin, other articles | 8007 00 | 2 100 | |
| Tungsten, powders | 8101 10 00 | 2 500 | |
| Tungsten, unwrought, including bars and rods obtained simply by sintering | 8101 94 00 | 500 | |
| Tungsten wire | 8101 96 00 | 250 | |
| Tungsten bars and rods, other than those obtained simply by sintering, profiles, plates, sheets, strip and foil, and other | 8101 99 | 350 | |
| Tantalum, unwrought including bars and rods, obtained simply by sintering; powders | 8103 20 00 | 2 500 | |
| Tantalum bars and rods, other than those obtained simply by sintering, profiles, wire, plates, sheets, strip and foil, and other | 8103 90 | 150 | |
| (*1) For the purpose of amending this threshold, the imported volume obtained by applying the methodology and criteria of Article 18 shall be set as the threshold for both ex 71 08 tariff lines included in Annex I. |
ANNEX II
List of global responsible smelters and refiners' template referred to in Article 9
| Column A: | Name of smelters and refiners in alphabetical order |
|---|---|
| Column B: | Address of the smelter or refiner |
| Column C: | * indicator, if the smelter or refiner sources minerals originating from conflict-affected and high-risk areas |
| A | B |
| --- | --- |
ANNEX III
List of Member State competent authorities template referred to in Article 10
| Column A: | Name of Member States in alphabetical order |
|---|---|
| Column B: | Name of the competent authority |
| Column C: | Address of the competent authority |
| A | B |
| --- | --- |