Ms. Abdelhady addressed how the CFTC's current investigation of Glencore and its broader anti-corruption plans might fit with the Trump Administration's wider anti-corruption strategy targeting the extractives industry globally, as well as the how the CFTC, which lacks direct FCPA enforcement authority, might take a page from the NYDFS' playbook and indirectly enforce an anti-corruption agenda under the Commodities Exchange Act.
China might take a targeted approach to any restrictions on rare earth elements that echoes, or effectively duplicates, the approach of the United States, which is to control exports based on "end use" and "end user" where one or both conflict with or potentially undermine U.S. national security interests (which include technological leadership and economic security).
Listen to the program on Critical Minerals, National Security, & Supply Chains featuring MassPoint's Hdeel Abdelhady, Dr. Roderick Eggert. and Jared Wessel. The program was hosted by the American Bar Association and developed and co-sponsored by MassPoint PLLC.
Now that the Trump Administration has declared a policy to reduce dependency on foreign sources for critical minerals, how will the Administration go about achieving its stated objective? What legal consequences—including in the areas of national security, trade, anti-corruption, and environmental law—might flow? Our multi-disciplinary panel will discuss the science and practical importance of “critical minerals,” recent and potential U.S. legal and policy developments, and the potential impacts of U.S. actions on minerals on manufacturing, supply chains, and the markets.
Against the Trump Administration's ideological backdrop, a range of conventional and unconventional trade, economic and other measures have been and likely will continue to be taken on "national security" grounds, including domestically. These include measures to increase domestic production of "critical minerals" (among them rare earth elements)--essential to the production of consumer electronics, electric vehicles, defense articles, medical devices, and other manufactured articles. Such actions can be seen on the horizon, if one connects the dots between national security authorities under trade laws, the Administration’s stated goals and actions favoring increased domestic mining of critical minerals, and environmental laws that contain national security/national defense exceptions and are viewed by the Administration and extractives industry interests as prohibitive to domestic production of critical minerals and commercially viable terms.
At this point, one or few reported new incidents of cobalt (or other critical minerals) thefts/security risks are insufficient to make any reasonable predictions as to what action would be reasonable. However, news of such incidents should be closely monitored by suppliers/exporters, buyers/importers, finance intermediaries, and logistics services providers. Related storage, transit and insurance practices and terms should be noted for review if and when circumstances appear to warrant such action.
Thinking beyond the parameters of standard "international development" and industry playbooks, the lack of progress (or, in some cases, regression) in developing Afghanistan's mining sector should induce interested government, industry and nongovernmental actors to consider if and how laws, policies and technical assistance can be formulated, modified and implemented in ways that might enhance their effectiveness in practice, rather than just on paper. Afghanistan, as is well known, is a Muslim majority nation in which Islamic law (as locally interpreted and implemented formally and informally) plays a significant role. Islamic law (Shari'ah), provides rules and precedents applicable not only to family matters and ritual worship, but also to business transactions, public governance, market regulation, and limitations on government dominion over private property. in these areas, and others, Islamic law and historical practices provide rules and precedents applicable to the regulation, administration and conduct of mining and other extractives businesses. These laws and precedents are just as robust, and more so in some cases, as international and foreign laws and standards.
The U.S. arm of Glencore, the global commodities trading and mining giant, has been served a subpoena by the U.S. Department of Justice, according to news accounts. The DOJ's subpoena reportedly seeks documents and information pertaining Glencore's business in the Democratic Republic of Congo (DRC), Nigeria and Venezuela to assess potential violations of U.S. anti-money laundering laws and the Foreign Corrupt Practices Act (FCPA), the principal U.S. law essentially prohibiting the bribery of foreign officials for business gain by U.S. companies and others subject to United States' jurisdiction (broadly construed and applied).The Glencore subpoena may not be a one-off and it should be viewed-- at least for risk assessment and compliance improvement purposes-- as potentially part of a larger U.S. strategy to proactively target corruption and, by extension, money laundering, in Africa and Africa's extractives industries. (The wider context is that the Trump Administration views U.S. anti-corruption, anti-money laundering and sanctions laws and their enforcement as "tools of economic diplomacy", including to advance trade and other policy objectives).
Notably, in the two pages of the NSS that are devoted to the National Security Strategy in the Africa context, none of Africa’s 54 nations are mentioned, but China is named twice. The NSS notes with concern China’s “expanding . . . economic military presence in Africa, growing from a small investor in the continent two decades ago into Africa’s largest trading partner today.” China’s methods and influence in Africa are described unflatteringly. “Some Chinese practices,” the NSS states bluntly, “undermine Africa’s long-term development by corrupting elites, dominating extractive industries, and locking countries into unsustainable and opaque debts and commitments.”