Presidential Memorandum: Suspension of the Con?ict Minerals Rule
EXPLANATORY STATEMENT

Section 1502 of the Dodd?Frank Wall Street Reform and Consumer Protection Act of 2010  (the
Dodd?Frank Act) amended the Exchange Act to require the Securities and Exchange
Commission to promulgate a rule requiring that companies that ?le reports with the SEC
undertake due diligence to determine whether any materials in the products they manufacture
include con?ict minerals that originated in the Democratic Republic of the Congo (DRC) or an
adjoining country. in 2012, the Commission adopted Rule l3p-1 (the Con?ict Minerals Rule).2
Section 1502 of the Dodd?Frank Act and the Con?ict Minerals Rule were intended to discourage
public companies from using those materials in their products. Backers of the legislation hoped it
would thereby eliminate a source of ?nancing for armed groups in the Congo involved in human
rights violations.

While the Con?ict Minerals Rule has discourage some American companies from purchasing
materials sourced in the DRC and adjoining countries, there have been both positive and
negative unintended consequences, including some job loss and an increase in the pro?ts of
certified con?ict-?ee minerals as a result of the Con?ict Minerals Rule. In addition to lost
livelihoods associated with the Conflict Minerals Rule, the SEC also estimated in 2014 that
American companies would be forced to incur upfront compliance costs of $3 to $4 billion, with
$200 million per year thereafter.

To respond to these unintended consequences, a more effective means of addressing the
problems of the DRC and adjoining countries would be a targeted approach that focuses on
speci?c companies known to be engaging in illegal activities that contribute to the ?nancing of
armed groups violating human rights abuses in Central Africa. Section 1502(b) of the Dodd-
Frank Act permits the President ofthe United States to order the Commission to temporarily
waive the requirements of the Con?ict Minerals Rule for a period of up to two years upon a
reasoned determination that the waiver is in the national security interest of the United States.
During this two-year waiver period, the President will immediately direct the Secretaries ol'State
and Treasury to propose an alternative plan utilizing existing and proposed authorities to address
such problems in the DRC and adjoining countries. The proposal should take a targeted approach
that focuses on breaking the link between commodities and armed groups in the DRC and
adjoining countries.

 

?Pub. L. No, I 11-203, I24 Stat. 1376,2213-18.
2 Con?ict Minerals, Fed. Reg. 56, 274 (Sept. 12, 2012). codi?ed at can. 24D.l3p-l.

THE WHITE HOUSE
WASHINGTON

February 2Dl 7
MEMORANDUM
MEMORANDUM FOR THE SECURITIES AND EXCHANGE 

SUBJECT: Suspension of the Con?ict Minerals Rule

By the authority vested in me as President by the Constitution and laws of the United States of
America, and in particular section l3(p)(3) ofthe Exchange Act, 15 U.S.C. it is
hereby ordered as follows:

_S_ehction_l_. Poir?cy. Section ISUZ of the Budd-Frank Wall Street Reform and Consumer
Protection Act of2010 (the Dodd-Frank Act) amended the Exchange Act to require the
Securities and Exchange Commission (the Commission) to promulgate a rule requiring that
companies that ?le reports with the SEC undertake due diligence to determine whether any
materials in the products they sell include minerals mined in the Democratic Republic of the
Congo or an adjoining country. In 2012, the Commission adopted Rule 13p-l (the Con?ict
Minerals Rule} pursuant to this requirement. The disclosure regime for the use of minerals
sourced in the Democratic Republic of the Congo, as re?ected in the Con?ict Minerals Rule, was
originally intended to address a humanitarian crisis in the region by limiting a means of
?nancing the ongoing con?ict. Mounting evidence shows that the disclosure requirements
contained in the Con?ict Minerals Rule have instead caused harm to some parties in the
Democratic Republic of the Congo and have thereby contributed to instability in the region and
threatened the national security interest of the United States.

This Executive Order recognizes that humanitarian missions play an important role in the
President?s responsibility to defend the national security interests of the United States. This order
requires the Commission to institute a two-year waiver of Rule l3p-l and all other reporting and
disclosure requirements promulgated by the Commission pursuant to Section 2502 of the Dodd-
Frank Act and Section 13(1)} ofthe Exchange Act.

See. 2. Waiver ofthe Con?ict Minerals Rule. Under Section 13(p)(3) of the Securities
Exchange Act, codi?ed at 15 U.S.C. 78m(p)(3), the Commission shall temporarily waive the
requirements of the Con?ict Minerals Rule if the President transmits to the Commission a

determination that it is in the national security interest ofthe United States to waive the rule, and
includes ?the reasons therefor?.

Pursuant to [5 U.S.C. 78m(p)(3), it is my determination that it is in the national security interests
of the United States to waive the requirements of the Con?ict Minerals Rule for the reasons set
forth in Section I of this Order. The Commission shall therefore waive the requirements of the
Con?ict Minerals Rule From the earlier of two years from the date of this Order or until such
time as the Commission has proposed a rule that I determine is not contrary to the national
security interests of the United States.

Sign}, Secretaries" Plan. The Secretary of State and the Secretary of the Treasury shall propose
to the President a plan for addressing human rights violations and funding of armed groups in the
Democratic Republic of the Congo or an adjoining country. The plan could include targeting
persons and entities engaged in violations of law and negative human rights impacts, consistent
with Section 13 of the Exchange Act. The Secretaries shall submit their plan to the President
within 180 days of the date of this Order.

Egg. A. Duration. This memorandum shall remain in effect for a period of two years from the
date ofthis memorandum.

General Provisions. This memorandum shall be implemented consistent with
applicable law and subject to the availability of appropriations.

Nothing in this memorandum shall be construed to impair or otherwise affect the authority
granted by law to any executive department or agency or any head thereof, or (ii) the functions of
the Director of the Of?ce of Management and Budget relating to budgetary. administrative, or
legislative proposals.

The memorandum does not purport to, and does not. create any right or bene?l, substantive

or procedural, enforceable at law or in equity by any party against the United States ot?America,
its departments, agencies, of?cers, employees, or agents, or any other person.

DONALD J. TRUMP