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Anited States Senate ‘WASHINGTON, DC 20510 April 26,2017 The Honorable Michael, Piwowar ‘Acting Chairman United States Securities and Exchange Commission 100 F Street, NE Washington, DC 20549 Dear Acting Chairman Piwowat: We write to express our degp concern about your recent instruction to halt enforcement of Key parts ofthe Conflict Minerals rule (Rule 13p-1 ofthe Securities Exchange Act) required hy Section 1502 of the Dodi-Frank Wall Street Reform and Consumer Protection Act (Pub. 1 111-203), As you know, this law required companies using conflict mineral in thei produets— including gold, tn, tantalum, and tungsten (77) obtained from the Democratic Republic ofthe Congo (DRC) and other “Covered Countries” in the region—to conduet a due diligence review to ensure their supply chain isnot funding armed groups inthe region. The bipartisan law was enacted to help stem the flow of financial support tha iliit mining has provided to armed groups operating in an area slagued by violence, in which the use of rape as an instrument of war has become so commonplace that it has heeame known asthe “rape eapital ofthe world.” We see no legal basis for your unilateral move to halt its enforcement. Any steps to repeal or modi the requirements ofthe law require action by Congress. Any attempt to modify the rule requires a transparent, formal review and opportunity to comment by all stakcholders. An irreguler, ad hoe process inviting comment on an Acting Chairman's statement is no substitute fr this formal process. As Acting Chairman, you do not have the authority to direct a halt to enforcement. And yet, you have repeatedly taken aim at this bipartisan measure. As described in a March 29, 2017, Senate letter to the Securities and Exchange Commission (SEC) Inspector Genera, we are concerned that your ongoing actions ith regard to the conflict mrnerals rule lack adequate justification, undermine the mission ofthe SEC, exceed your authority as Acting Chairman, and raise questions about whether you may have violated other procedural requirements. Further, we note the dangerous precedent set when ‘an Acting Chairman decide: which laws the SEC should enforee, and we are concemed about ‘your intention to direct the sgency o ignore other laws. Since the mid~1990s, a series of inter-related armed conflicts involving multiple armed rebel ‘eroups, lacal militias, and armed criminal groups in the easter provinces af the DRC have displaced communities, crested humanitarian emergencies, and resulted in extensive human rights abuses. This deep-rooted conflict is funded, in pat, tough illicit mineral extraction ‘The congressionally-mandated directive requiring supply chain due diligence has had important positive effets forthe secuity forthe people of Eastern Congo and has bolstered the confidence ‘of investors in companies using minerals from the region. Nosth Kivu province, the most 3T ‘minerals-rich provinee in Congo, reported record-high, eonflct-free exports for both tin and tantalum in 2016, and 220 mines have now been certified as conilit-free. In addition, as of April 2017, 77 percent of smelters worldwide (249 out of 323 total) fr the four conflict minerals have passed aul Werbelieve your April 7, 2017, statement, as well asthe recommendation by the Division of Corporation Finance questioning enforcement of due diligence requirements, conflates distinct clement ofthe requirements and process under the statute andthe rule and incorrectly interprets the 2015 court ruling. While your statement effectively suspends enforeement ofall ue diligence requirements under Section 1502, the court's decision invalidated only one specific, severable component of the Conflict Minerals rule. The inquiry and due diligence measures on source and chain of custody are soparate and distinct, and they must each be enforced. Infact, ‘when the National Associaton of Manufacturers requested a stay ofthe law, the court explicitly denied the request to affirm that the rest ofthe rule's requirements were nor severable from the requirement found to be unconstitutional. The confliet minerals report i a entra part ofthe law, ‘even if companies are ultimately not required to describe the status oftheir products, nd there is ‘no question about whether the due diligence disclosure requirements must be enforced. Supply chain due diligence under the Conflict Mineral rule has allowed companies to better “understand and create efficiencies in their own supply chain, while choking off revenue for ‘violent militia groups. Seveal companies, including Intel, Apple, Richline, and Tiffany & Co. hhave publicly expressed surpor for the conflit minerals rule. These companies and others like them have embraced the la’ and its underlying objectives. Enforcing the Conflict Minerals rule is required by law. A failure to do so could place these companies a a competitive disadvantage and is beyond the scope of your authority. We urge you immediately to rescind your directive, and allow full enforcement of the Conflict Minerals law and rule. Ghristopher A. Coons Cie Leahy United States Senator United States Senator