August 5, 2010
These comments are addressed to section 1502 of the Dodd-Frank Law (Conflict Minerals). I believe that the SEC will have to clearly define which "persons" are required to file conflict minerals reports as the law itself is ambiguous. Paragraph (p)(1)(A) refers to person described in paragraph 2 as being required to file reports. Paragraph (p)(2) refers back to (1)(A). This is not the usual SEC "issuer" requirement and appears to be much broader. One of the original bills applied to companies controling an issuer. Another one only applied to importers.
The second area that needs clarification is the geographical coverage of the named conflict minerals. As I read the definition, the named minerals are covered, regardless of where they are mined or produced. Thus, since "gold" is a conflict mineral, a company using gold from Canada, South america or Asia would be required to file annual reports. To restrict the geographical area to DRC and adjoining countries would defeat the purpose of the provision by encouraging transshipment through third countries since the minerals can be melted into ingots and easily conceal their origin (unlike conflict diamonds which retain their sold identity and can be traced).