As of 1 January 2021, Regulation (EU) 2017/821 will require supply chain due diligence to be conducted concerning the import of the 3TG (tin, tantalum/niobium and tungsten, and gold – metals, ores and concentrates) arising from Conflict-Affected and High-Risk areas (CAHRAs). But what is a CAHRA?
Whilst the US’s Dodd Frank Act, Section 1502, focused solely on sourcing from the Democratic Republic of Congo and its immediate neighbors, the Regulation (EU) 2017/821 has an intentionally broader but also more granular geographic scope as explained below.
In 2018 the European Commission delivered on its obligation to publish non-legally binding guidelines to assist in identifying CAHRAs. Subsequently, the Commission contracted a third party, RAND Europe, to draw up and maintain an indicative, non-exhaustive list of CAHRAs as required by Article 14 of the Regulation. The crucial point to emphasize is that this list is indeed only indicative and not prescriptive. A fundamental aspect of the EU Regulation is that it is always the responsibility of the EU importer to assess what constitutes a CAHRA and to ensure this assessment takes account of changes in its supply chain.
The first indicative list of CAHRAs has recently been announced by RAND Europe. The scope of regions covered is broad, comprising areas in:
- The Americas: Mexico, Colombia and Venezuela;
- Europe: Ukraine;
- The Middle East: Yemen;
- Africa: Burkina Faso, Burundi*, Cameroon, Central African Republic*, Chad, Democratic Republic of Congo*, Egypt, Eritrea, Libya, Mali, Mozambique, Niger, Nigeria, Somalia, South Sudan*, Sudan, and Zimbabwe;
- Asia: Afghanistan, India, Myanmar, Pakistan and The Philippines.
Countries also in scope of the Dodd-Frank Act are marked with an * above. It is notable that 5 of the 10 countries in scope of this Act - Angola, Tanzania, Rwanda, Uganda, and Zambia – are NOT on the CAHRA indicative list. This is probably reflective of a number of factors including changes in the regional context and supply chain practice, much of which may have changed since Dodd-Frank was drawn up, and also the methodology used to define CAHRAs.
A particular requirement in drawing up this indicative list was that CAHRAs would be identified and assessed down to a ”subnational” level. The granularity of these assessment varies but in Afghanistan, for example, this comprises over 30 regions whereas Burundi is treated in just one assessment. The assessment of Colombia identifies only two areas of the country (Antioquia and Cauca) as being a CAHRA - not the whole country. A report is provided for each region identifying which of the covered “commodities” are relevant, an assessment of the local context (e.g. in terms of political stability) and how this relates to scope of the EU Regulation, and key references which support the assessment.
EU-based importers of the 3TGs should take due note of the CAHRA indicative list and find it a useful reference in developing and maintaining their own due diligence practice, but should realize it is not an exhaustive list and is “not official”.
Note also that EU countries are not considered. The list will be updated quarterly, and the methodology used to create the list is also subject to annual review. It is for each 3TG importer within the EU to assess the risk in its own supply chains which may possibly extend to regions or countries not on the present CAHRA indicative list.
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