Conflict Minerals

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Trade of Gold, Tin, Tantalum, and Tungsten (3TG)

The European Union and its Member States have classified tin, tantalum, tungsten, and gold as minerals whose exploitation can be used to finance armed conflicts or involve forced labor. As a result, the European Parliament and Council adopted Regulation (EU) 2017/821 of 17 May 2017. This regulation establishes due diligence obligations for EU importers of these minerals, their ores, and gold sourced from conflict-affected or high-risk areas. Its goal is to ensure that the trade of these four minerals no longer contributes to armed conflicts or forced labour.

Thus, the regulation requires European companies involved in the supply chain to ensure that their imports of these minerals and metals into the European Union come exclusively from responsible sources and are not linked to conflicts. This imposes a so-called "due diligence" obligation on the relevant companies.

How does the EU's due diligence system work?

EU importers of tin, tantalum, tungsten, and gold must monitor their supply chains to ensure that the minerals and products they purchase are not used to finance conflicts or other illegal activities. It should be noted that the regulation and its associated obligations apply only to EU importers whose annual imports exceed the thresholds set out in Annex I of the regulation. The missing thresholds were set by the European Commission in the delegated regulation of 25 June 2020. Adjustments to these thresholds may occur every three years.

The regulation requires EU importers to adhere to a five-step framework outlined by the Organisation for Economic Co-operation and Development (OECD) in its "OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas" (OECD guidance).

These steps impose several obligations on EU importers, as reflected in Articles 4 to 7 of the regulation:

  • Establishing strong company management systems;
  • Identifying and assessing risks in the supply chain;
  • Designing and implementing a strategies to address identified risks;
  • Conducting independent third-party audits of due diligence practices;
  • Annually reporting on due diligence efforts.

EU importers may be exempted from third-party audit obligations if they can provide evidence that the smelters and refiners in their supply chain comply with the regulation. This requirement is considered fulfilled when EU importers source exclusively from entities listed on the European Commission's forthcoming register of responsible international smelters and refiners. However, until this list is published, importers must provide alternative evidence.

How can you ensure a mineral is responsibly sourced?

EU importers must implement systems and procedures to collect and verify key information, including, for example:

  • The country of origin of the minerals,
  • The quantities imported and their date of extraction.

For minerals and metals, importers must:

  • Identify the imported minerals by commercial name and type,
  • Provide the names and addresses of their suppliers.

They are required to do this as part of their internal management systems and provide supporting documentation.

In cases where minerals originate from conflict-affected or high-risk areas, additional documentation is required, such as:

  • The origin mine of the minerals,
  • The locations where minerals are gathered, traded, and processed,
  • The taxes, fees, and royalties paid.

To assist companies in identifying conflict-affected or high-risk regions, the European Commission has mandated external experts to maintain an indicative, non-exhaustive list, which is regularly updated. However, companies will still be required to comply with the regulation even for activities in conflict zones not included in the list. Consequently, the European Commission has adopted a recommendation outlining non-binding guidelines for identifying conflict-affected or high-risk areas and other risks to the supply chain under Regulation (EU) 2017/821 of the European Parliament and Council.

How will authorities ensure compliance (post-factum controls)?

Useful information and tools for companies

Each Member State is required to verify compliance with the regulation by EU importers. With the adoption of the Law of 26 July 2023 regarding the implementation of Regulation (EU) 2017/821 of the European Parliament and Council of 17 May 2017, setting out supply chain due diligence obligations for EU importers of tin, tantalum, tungsten, their ores, and gold from conflict-affected or high-risk areas, it has been formalized that the minister in charge of Foreign and European Affairs is the competent authority to conduct post-factum checks, in close cooperation with the Customs and Excise Administration. These checks include reviewing documents, audit reports, and conducting on-site inspections at EU importers' premises.

However, it is important to note that since the EU regulation is directly applicable, EU importers have been required to comply with its requirements since 1 January 2021.

The European Affairs and International Economic Relations Directorate of the MFA is the point of contact for any questions related to the implementation of the regulation.

Any requests for information on Responsible Business Conduct (RBC), particularly regarding the implementation of the aforementioned regulation, can be sent to cre.d2@mae.etat.lu.

Further resources are available on: