EUROPEAN COMMISSION Brussels, 17.2.2022 COM(2022) 52 final REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL on the exercise of the power to adopt delegated acts conferred on the Commission pursuant to Regulation (EU) 2017/821 of the European Parliament and of the Council of 17 May 2017 laying down supply chain due diligence obligations for Union importers of tin, tantalum and tungsten, their ores, and gold originating from conflict-affected and high-risk areas EN EN I. Introduction In 2017, the European Union (EU) adopted Regulation (EU) 2017/821 of the European Parliament and of the Council of 17 May 2017 laying down supply chain due diligence obligations for Union importers of tin, tantalum and tungsten, their ores, and gold originating from conflict-affected and high-risk areas1 (“the EU Regulation” hereinafter). The EU Regulation entered into force on 8 June 2017 and its key requirements apply to EU importers since 1 January 2021. The EU Regulation establishes a Union system for supply chain due diligence (‘Union system’) in order to curtail opportunities for armed groups and security forces to trade in tin, tantalum and tungsten, their ores, and gold. It is designed to provide transparency and certainty as regards the supply practices of Union importers, and of smelters and refiners sourcing from conflict-affected and high-risk areas. In its Article 19(2), the EU Regulation confers powers upon the Commission to adopt delegated acts in respect of: (1) establishing and amending the import volume thresholds of minerals and metals, and (2) establishing the methodology and criteria for the recognition of supply chain due diligence schemes. The EU Regulation lays down supply chain due diligence obligations in accordance with the OECD Due Diligence Guidance2 including its Annex II. These obligations apply to Union importers of minerals and metals as set out in Annex I of the EU Regulation. To ensure the proper functioning of the Union system, the power to adopt acts in accordance with Article 290 of the Treaty on the Functioning of the European Union is delegated to the Commission in respect of amending Annex I by establishing and amending the volume thresholds of minerals and metals. The EU Regulation further stipulates that owners of supply chain due diligence schemes may apply to the Commission to have their schemes recognised as equivalent to the requirements of the EU Regulation. Such schemes should be aligned to the specific recommendations of the OECD Due Diligence Guidance. To facilitate the assessment of due diligence schemes that might be recognised under the EU Regulation, the power to adopt acts in accordance with Article 290 of the Treaty on the Functioning of the European Union is delegated to the Commission in respect of establishing the methodology and criteria for that assessment for recognition. II. Legal Basis In line with Article 19(2) of Regulation (EU) 2017/821 of the European Parliament and of the Council of 17 May 2017, the Commission shall draw up a report to the Council and the European Parliament in respect of the delegation of power. III. Exercise of the Delegation The EU Regulation, through its Article 19(2), confers powers upon the Commission in order to implement the following provisions of this Regulation: - as regards the amendment of Annex I, by establishing the volume thresholds for tantalum or niobium ores and concentrates, gold ores and concentrates, tin oxides and 1 OJ L 130, 19.5.2017, p. 1. 2 http://www.oecd.org/daf/inv/mne/mining.htm 1 hydroxides, tantalates and carbides of tantalum, if feasible by 1 April 2020 but no later than 1 July 2020 (Article 1(4) of the EU Regulation); - as regards the amendment of existing thresholds listed in Annex I every three years after 1 January 2021 (Article 1(5) of the EU Regulation); - as regards supplementing this Regulation by setting out the methodology and criteria allowing the Commission to assess whether supply chain due diligence schemes facilitate the fulfilment of the requirements of this Regulation by economic operators and allowing the Commission to recognise schemes (Article 8(2) of the EU Regulation). The Commission has adopted two (2) delegated acts based on the EU Regulation as follows: - Commission Delegated Regulation (EU) 2019/429 of 11 January 2019 supplementing Regulation (EU) 2017/821 of the European Parliament and of the Council as regards the methodology and criteria for the assessment and recognition of supply chain due diligence schemes concerning tin, tantalum, tungsten and gold.3 - Commission Delegated Regulation (EU) 2020/1588 of 25 June 2020 amending Annex I to Regulation (EU) 2017/821 of the European Parliament and of the Council by establishing volume thresholds for tantalum or niobium ores and concentrates, gold ores and concentrates, tin oxides and hydroxides, tantalates and carbides of tantalum.4 Delegated acts to amend the existing thresholds listed in Annex I of the EU Regulation have not been adopted so far, as the Commission is empowered to adopt them every three years after 1 January 2021, pursuant to Article 1(5) of the EU Regulation. IV. Conclusions The Commission invites the European Parliament and the Council to take note of this report in the context of proper exercise by the Commission of the powers delegated by the EU Regulation. 3 OJ L 75, 19.3.2019, p. 59. 4 OJ L 360, 30.10.2020, p. 1. 2