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Final deal on conflict minerals expected next week

Following a political compromise reached in June, final agreement on a set of new rules to combat trade in so-called conflict minerals such as tantalum, tungsten, tin and gold (also called 3TG) is expected at the next trilogue meeting on 22 November in Strasbourg, according to sources.

The meeting will be attended by EU Trade Commissioner Cecilia Malmström, who has been closely involved in the negotiations.

“An agreement is within reach, but not guaranteed. There are still hurdles that might trip the whole deal. We count on the Council and Commission to work together with us in finding solutions,” a European Parliament (EP) source told this website.

In June, the EP, the Council and the Commission reached a ‘political understanding’ on the main elements of the draft regulation with the aim of reaching a final deal by the end of the year (see article).

The negotiators are now close to reaching a compromise on the key outstanding issues, including the annual thresholds under which importers of the 3TG minerals will not be obliged to comply with the mandatory due diligence rules on their supply chain. According to sources, a threshold for refined gold, for example, has been proposed at 100 kg. It means that all companies, whose annual import exceeds 100kg, will be subject to the mandatory due diligence system.

The limit was set based on a compromise between those who wanted it to be higher and those who were pushing for a less than 100kg-threshold.

Some member states wanted the threshold to be at least twice as high, due to the high value of gold imports (100kg of gold is worth some $4 million). The EP was insisting on a lower limit in order to include more importers under the system. “The outcome is not satisfactory for either side,” a source said, noting that this also means that it is a “true compromise.”

But Amnesty International argues that a decision to relieve the smallest importers of gold and other 3TGs from the obligations will prevent breaking the link between trade in minerals and funding conflicts and human rights violations.

“Excluding small volumes of minerals from requirements is particularly problematic as small volumes are more likely to be linked to conflict. The US House of Representatives was informed that Al Qaeda training manuals contained instructions on smuggling small amounts of gold.” said Nele Meyer, Senior Executive Officer on Business and Human Rights at Amnesty International.

“Allowing small amounts to go unscreened could therefore be completely counterproductive to the aims of the legislation”, she added in a statement issued on 17 November.

The organisation estimates that the “current proposals would exempt minerals worth millions of euros and up to 90% of gold importers from the new law.”

It is also concerned that the so-called ‘White List’ of responsible smelters and refiners “could allow conflict minerals in to Europe through the back door.”

When sourcing from smelters and refiners on the list, which will be drawn up by the European Commission, companies will be allowed to apply less scrutiny, the organisation explains.

The Council and the EP are also expected to reach an agreement on a transitional period and the review of the new rules. According to sources, the transition period may range from two to four years. The problem of when to revise the new rules is likely to be sorted out through a declaration by the European Commission, EU Trade Insights was told.

Next steps

Once reached, the final agreement will need to be approved by the EP plenary and the Council before being signed into law.

By Joanna Sopinska