What SEC’s ruling on conflict materials means for distributors

The Securities & Exchange Commission (SEC) has issued its final rule regarding conflict materials (tin, tantalum, tungsten and gold). The rule is now in effect and applies to certain publicly-traded companies that “manufacture,” or “contract to manufacture,” products that contain conflict minerals that are necessary to the functionality or production of a product.

In a legal notice, the National Association of Wholesalers (NAW) notes that distributors may fall within the scope of the rule by qualifying as a manufacturer, or a company that contracts to manufacture, one or more of the product it sells.

However, the more likely practical impact to distributors is that customers may need compliance assistance, much like what many distributors experienced with the Buy American provisions of the stimulus package.

While distributors may not be directly accountable to the regulations, they may still have to put in the time to help customers make certain they’re using compliant materials. The National Association of Electrical Distributors (NAED) is currently researching tools to help distributors more efficiently answer these requests.

The NAW Legal Advisory provides a basic outline of the conflict minerals rule’s overarching provisions. Please note that this Legal Advisory is not intended to provide legal advice and should not be relied upon as such. Consult with legal and other professional advisors to determine whether and how the rule applies in each specific instance. Any distributors that have received requests from customers on complying with these rules and have advice to share with the industry, can let NAED know.

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