Exhibit 1.01
Conflict Minerals Report of Sequans Communications S.A.
in Accordance with Rule 13p-1 under the Securities Exchange Act of 1934
This is the Conflict Minerals Report of Sequans Communications S.A. (“Sequans” or the “Company”) for calendar year 2016 in accordance with Rule 13p-1 (“Rule 13p-1”) under the Securities Exchange Act of 1934 (the “1934 Act”). Please refer to Rule 13p-1, Form SD and the 1934 Act Release No. 34-67716 for definitions of the terms used in this Report, unless otherwise defined herein.
Sequans Communications S.A. is a leader in fabless semiconductor business and a developer and supplier of integrated circuits supporting single-mode LTE chipset solutions and certain system-in-package modules.
Due Diligence (Instructions 1.01(c)(1))
Overview: Conflict minerals are necessary to the functionality or production of semiconductor and module products that Sequans contracts to be manufactured (“In-Scope Products”). For calendar year 2016, Sequans completed due diligence that encompassed:
• | establishing the extent to which gold, columbite-tantalite (coltan), cassiterite or wolframite, including their derivatives tantalum, tin, and tungsten, ("3TG") are present in some or all of its products. |
• | a reasonable country of origin inquiry (“RCOI”) regarding conflict minerals in the In-Scope Products that was reasonably designed to determine whether any of the conflict minerals originated in the Democratic Republic of Congo or an adjoining country (“Covered Country”) or are from recycled or scrap sources; and |
• | measures to exercise due diligence on the source and chain of custody of those conflict minerals. |
The Company’s due diligence exercise was based on the Organization for Economic Cooperation and Development’s Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas.
Central elements of our due diligence exercise included:
• | Maintenance of an internal Sequans team to execute the exercise, including the Quality Assurance Director, CFO, other members of the Company's Risk Committee and specialists, as required; |
• | The continuing development of a conflict minerals policy and processes designed to assure initial and continuing compliance with Rule 13p-1. Our processes are designed to respond to current, and new, risks in the supply chain; |
• | Identification of the In-Scope Products; |
• | Identification of suppliers of the In-Scope Products; and |
• | Completion of a survey of those suppliers. |
To strengthen the above elements, additional personnel were made aware, in more detail, of the requirements of the legislation, Sequans’ policies and the necessary due diligence. Following staff changes, compliance work is managed by a combination of two employees and an external, specialist, contractor. Sequans plan to hire more staff, including someone who will bring compliance activity fully in-house. In addition, Sequans is aware that the European Union will be implementing new Conflict Minerals legislation. Our received advice is that such legislation may require Sequans to start compliance activity and the collecting of information during 2018. Although the SEC does not directly concern itself with EU policy, we are taking actions to ensure that we continue a proactive approach to controlling the sources and chain of custody of 3TG in our supply network.
Work with Suppliers: Sequans is several levels removed from the actual mining of conflict minerals. The Company does not make purchases of raw ore or unrefined conflict minerals and generally makes no purchases in the Covered Countries.
Sequans adopted the Electronic Industry Citizenship Coalition and Global e-Sustainability Initiative’s (“EICC/GeSI”) Conflict Minerals Reporting template (the “Template”) in 2012 and continues using the Template. Sequans and suppliers used CMRT version 4.20 for the compilation of this report. The Company worked with direct suppliers of materials containing conflict minerals, using the Template as a supply chain survey, to identify the smelters and refiners ("SOR") that provide those conflict minerals to our suppliers. Initial work and enquiries in respect of calendar year 2016 commenced during the fourth calendar quarter of 2015 and continue to date. Upon determination that all of our products do, or might, contain 3TG, Sequans asked all direct suppliers of materials for such products and related services to complete the Template or provide declarations regarding their use and the sources of 3TG. All suppliers responded. Sequans maintained communications with all suppliers in its efforts to ensure that valid, up-to-date information was used to complete this report and to comply with Sequans' obligations. If any inconsistencies were identified, Sequans requested clarification from the suppliers concerned. Based on suppliers’ responses, Sequans was able to determine the country of origin of the conflict minerals used in some but not all of the In-Scope Products.
In this context Sequans notes that, due to the increasing uptake of the CFS program, and to changes in the detail of reporting downstream from SOR's, it is becoming less common to receive mine location information. Knowledge of mine location is integral to the auditing and certification of SOR's.
During 2016, a small quantity of In-Scope products, manufactured in 2014 and or 2015, were sold. One of the supplier companies no longer exists. The products concerned were covered in Sequans' report regarding products sold in 2015, and are not considered to materially affect this report.
Sequans engages in business with one company which is both a supplier of goods and a customer for Sequans' finished In-Scope product. As to conflict minerals reporting, this creates a circularity situation. The supplier/customer cannot send Sequans a complete declaration until it receives one from Sequans. Sequans cannot send the company a completed declaration until it receives one from the supplier/customer. Following discussions, Sequans therefore accepts an incomplete declaration from the company, in which Sequans' data are the only data missing - consequently, for the purposes of this report, information on Sequans’ suppliers is complete.
Sequans compared the SOR's identified in the supply-chain survey against the list of smelter facilities which have been identified as “conflict free” by programs such as the EICC/GeSI Conflict Free Smelter (CFS) program for conflict minerals, during the reporting period. Fully compliant SOR’s were validated against the list issued by the CFSI on April 6th, 2017.
Sequans has determined in good faith that for calendar year 2016 its conflict minerals status is uncertain. Sequans makes this determination due to a lack of information from some of its suppliers.
Product Description and Related Matters (Instructions 1.01(c)(2))
Description of In-Scope Products: The In-Scope Products are integrated circuits (semiconductors) supporting single-mode LTE chipset solutions and certain system-in-package modules.
Facilities Used to Process Necessary Conflict Minerals in In-Scope Products:
Sequans has identified in its supply chain:
85 facilities for the SOR of Gold. All are fully CFSI compliant or being re-audited.
32 facilities for the SOR of Tantalum. All are fully CFSI compliant or being re-audited.
66 facilities for the SOR of Tin. 63 are fully CFSI compliant or being re-audited.
27 facilities for the SOR of Tungsten. All are fully CFSI compliant or being re-audited.
This is the list of SOR’s which have been reported to Sequans:
Smelter Identification number | Metal | Smelter Name |
CID000019 | Gold | Aida Chemical Industries Co., Ltd. |
CID000035 | Gold | Allgemeine Gold-und Silberscheideanstalt A.G. |
CID000041 | Gold | Almalyk Mining and Metallurgical Complex (AMMC) |
CID000058 | Gold | AngloGold Ashanti Córrego do Sítio Mineração |
CID000077 | Gold | Argor-Heraeus S.A. |
CID000082 | Gold | Asahi Pretec Corp. |
CID000090 | Gold | Asaka Riken Co., Ltd. |
CID000113 | Gold | Aurubis AG |
CID000128 | Gold | Bangko Sentral ng Pilipinas (Central Bank of the Philippines) |
CID000157 | Gold | Boliden AB |
CID000176 | Gold | C. Hafner GmbH + Co. KG |
CID000185 | Gold | CCR Refinery - Glencore Canada Corporation |
CID000233 | Gold | Chimet S.p.A. |
CID000362 | Gold | DODUCO GmbH |
CID000401 | Gold | Dowa |
CID000425 | Gold | Eco-System Recycling Co., Ltd. |
CID000493 | Gold | OJSC Novosibirsk Refinery |
CID000694 | Gold | Heimerle + Meule GmbH |
CID000707 | Gold | Heraeus Ltd. Hong Kong |
CID000711 | Gold | Heraeus Precious Metals GmbH & Co. KG |
CID000801 | Gold | Inner Mongolia Qiankun Gold and Silver Refinery Share Co., Ltd. |
CID000807 | Gold | Ishifuku Metal Industry Co., Ltd. |
CID000814 | Gold | Istanbul Gold Refinery |
CID000823 | Gold | Japan Mint |
CID000855 | Gold | Jiangxi Copper Co., Ltd. |
CID000920 | Gold | Asahi Refining USA Inc. |
CID000924 | Gold | Asahi Refining Canada Ltd. |
CID000927 | Gold | JSC Ekaterinburg Non-Ferrous Metal Processing Plant |
CID000929 | Gold | JSC Uralelectromed |
CID000937 | Gold | JX Nippon Mining & Metals Co., Ltd. |
CID000957 | Gold | Kazzinc |
CID000969 | Gold | Kennecott Utah Copper LLC |
CID000981 | Gold | Kojima Chemicals Co., Ltd. |
CID001029 | Gold | Kyrgyzaltyn JSC |
CID001078 | Gold | LS-NIKKO Copper Inc. |
CID001113 | Gold | Materion |
CID001119 | Gold | Matsuda Sangyo Co., Ltd. |
CID001149 | Gold | Metalor Technologies (Hong Kong) Ltd. |
CID001152 | Gold | Metalor Technologies (Singapore) Pte., Ltd. |
CID001153 | Gold | Metalor Technologies S.A. |
CID001157 | Gold | Metalor USA Refining Corporation |
CID001161 | Gold | Metalúrgica Met-Mex Peñoles S.A. De C.V. |
CID001188 | Gold | Mitsubishi Materials Corporation |
CID001193 | Gold | Mitsui Mining and Smelting Co., Ltd. |
CID001204 | Gold | Moscow Special Alloys Processing Plant |
CID001220 | Gold | Nadir Metal Rafineri San. Ve Tic. A.ª. |
CID001259 | Gold | Nihon Material Co., Ltd. |
CID001322 | Gold | Elemetal Refining, LLC |
CID001325 | Gold | Ohura Precious Metal Industry Co., Ltd. |
CID001352 | Gold | PAMP S.A. |
CID001386 | Gold | Prioksky Plant of Non-Ferrous Metals |
CID001397 | Gold | PT Aneka Tambang (Persero) Tbk |
CID001498 | Gold | PX Précinox S.A. |
CID001512 | Gold | Rand Refinery (Pty) Ltd. |
CID001534 | Gold | Royal Canadian Mint |
CID001555 | Gold | Samduck Precious Metals |
CID001573 | Gold | Schone Edelmetaal B.V. |
CID001585 | Gold | SEMPSA Joyería Platería S.A. |
CID001622 | Gold | Shandong Zhaojin Gold & Silver Refinery Co., Ltd. |
CID001736 | Gold | Sichuan Tianze Precious Metals Co., Ltd. |
CID001756 | Gold | SOE Shyolkovsky Factory of Secondary Precious Metals |
CID001761 | Gold | Solar Applied Materials Technology Corp. |
CID001798 | Gold | Sumitomo Metal Mining Co., Ltd. |
CID001875 | Gold | Tanaka Kikinzoku Kogyo K.K. |
CID001916 | Gold | The Refinery of Shandong Gold Mining Co., Ltd. |
CID001938 | Gold | Tokuriki Honten Co., Ltd. |
CID001955 | Gold | Torecom |
CID001977 | Gold | Umicore Brasil Ltda. |
CID001980 | Gold | Umicore S.A. Business Unit Precious Metals Refining |
CID001993 | Gold | United Precious Metal Refining, Inc. |
CID002003 | Gold | Valcambi S.A. |
CID002030 | Gold | Western Australian Mint trading as The Perth Mint |
CID002100 | Gold | Yamamoto Precious Metal Co., Ltd. |
CID002129 | Gold | Yokohama Metal Co., Ltd. |
CID002224 | Gold | Zhongyuan Gold Smelter of Zhongjin Gold Corporation |
CID002243 | Gold | Zijin Mining Group Co., Ltd. Gold Refinery |
CID002314 | Gold | Umicore Precious Metals Thailand |
CID002509 | Gold | MMTC-PAMP India Pvt., Ltd. |
CID002510 | Gold | Republic Metals Corporation |
CID002516 | Gold | Singway Technology Co., Ltd. |
CID002561 | Gold | Emirates Gold DMCC |
CID002580 | Gold | T.C.A S.p.A |
CID002777 | Gold | SAXONIA Edelmetalle GmbH |
CID002778 | Gold | WIELAND Edelmetalle GmbH |
CID002779 | Gold | Ögussa Österreichische Gold- und Silber-Scheideanstalt GmbH |
CID000228 | Tin | Chenzhou Yunxiang Mining and Metallurgy Co., Ltd. |
CID000244 | Tin | Jiangxi Ketai Advanced Material Co., Ltd. |
CID000292 | Tin | Alpha |
CID000295 | Tin | Cooperativa Metalurgica de Rondônia Ltda. |
CID000306 | Tin | CV Gita Pesona |
CID000307 | Tin | PT Justindo. Used by one supplier during 2016. The supplier has been requested to stop using this smelter. |
CID000309 | Tin | PT Aries Kencana Sejahtera |
CID000313 | Tin | CV Serumpun Sebalai |
CID000315 | Tin | CV United Smelting |
CID000402 | Tin | Dowa |
CID000438 | Tin | EM Vinto |
CID000468 | Tin | Fenix Metals |
CID000538 | Tin | Gejiu Non-Ferrous Metal Processing Co., Ltd. |
CID001070 | Tin | China Tin Group Co., Ltd. |
CID001105 | Tin | Malaysia Smelting Corporation (MSC) |
CID001142 | Tin | Metallic Resources, Inc. |
CID001143 | Tin | Metallo-Chimique N.V. |
CID001173 | Tin | Mineração Taboca S.A. |
CID001182 | Tin | Minsur |
CID001191 | Tin | Mitsubishi Materials Corporation |
CID001314 | Tin | O.M. Manufacturing (Thailand) Co., Ltd. |
CID001337 | Tin | Operaciones Metalurgical S.A. |
CID001399 | Tin | PT Artha Cipta Langgeng |
CID001402 | Tin | PT Babel Inti Perkasa |
CID001412 | Tin | PT Bangka Putra Karya. Removed from the list of smelters by CFSI on 16 Nov 2015. They no longer operate as smelters/refiners of tin. Tin used in 2016 is residual material in Sequans' supply chain, from a supplier which no longer exists. The quantities of tin involved are insignificant and do not impact this report. Sequans does not expect this material to be in the supply chain in 2017. |
CID001419 | Tin | PT Bangka Tin Industry |
CID001421 | Tin | PT Belitung Industri Sejahtera |
CID001428 | Tin | PT Bukit Timah |
CID001434 | Tin | PT DS Jaya Abadi |
CID001438 | Tin | PT Eunindo Usaha Mandiri |
CID001453 | Tin | PT Mitra Stania Prima |
CID001457 | Tin | PT Panca Mega Persada |
CID001458 | Tin | PT Prima Timah Utama |
CID001460 | Tin | PT Refined Bangka Tin |
CID001463 | Tin | PT Sariwiguna Binasentosa |
CID001468 | Tin | PT Stanindo Inti Perkasa |
CID001471 | Tin | PT Sumber Jaya Indah |
CID001477 | Tin | PT Timah (Persero) Tbk Kundur |
CID001482 | Tin | PT Timah (Persero) Tbk Mentok |
CID001490 | Tin | PT Tinindo Inter Nusa |
CID001493 | Tin | PT Tommy Utama |
CID001539 | Tin | Rui Da Hung |
CID001758 | Tin | Soft Metais Ltda. |
CID001898 | Tin | Thaisarco |
CID002015 | Tin | VQB Mineral and Trading Group JSC |
CID002036 | Tin | White Solder Metalurgia e Mineração Ltda. |
CID002158 | Tin | Yunnan Chengfeng Non-ferrous Metals Co., Ltd. Used by one supplier in 2016. They are “Active”, but were not audited as compliant in 2016. The supplier has been requested to stop using this SOR, if the SOR is not certified in 2017. |
CID002180 | Tin | Yunnan Tin Company Limited |
CID002455 | Tin | CV Venus Inti Perkasa |
CID002468 | Tin | Magnu's Minerais Metais e Ligas Ltda. |
CID002479 | Tin | PT Wahana Perkit Jaya. Used by two suppliers in 2016. The suppliers have been requested to stop using this SOR. To date, one supplier has confirmed that this SOR is no longer being used to supply tin. |
CID002500 | Tin | Melt Metais e Ligas S.A. |
CID002503 | Tin | PT ATD Makmur Mandiri Jaya |
CID002517 | Tin | O.M. Manufacturing Philippines, Inc. |
CID002530 | Tin | PT Inti Stania Prima |
CID002570 | Tin | CV Ayi Jaya |
CID002592 | Tin | CV Dua Sekawan |
CID002593 | Tin | CV Tiga Sekawan |
CID002696 | Tin | PT Cipta Persada Mulia |
CID002706 | Tin | Resind Indústria e Comércio Ltda. |
CID002773 | Tin | Metallo-Chimique N.V. |
CID002774 | Tin | Elmet S.L.U. |
CID002776 | Tin | PT Bangka Prima Tin |
CID002829 | Tin | PT Kijang Jaya Mandiri |
CID002835 | Tin | PT Menara Cipta Mulia |
CID002844 | Tin | HuiChang Hill Tin Industry Co., Ltd. |
CID000004 | Tungsten | A.L.M.T. TUNGSTEN Corp. |
CID000105 | Tungsten | Kennametal Huntsville |
CID000218 | Tungsten | Guangdong Xianglu Tungsten Co., Ltd. |
CID000258 | Tungsten | Chongyi Zhangyuan Tungsten Co., Ltd. |
CID000499 | Tungsten | Fujian Jinxin Tungsten Co., Ltd. |
CID000568 | Tungsten | Global Tungsten & Powders Corp. |
CID000766 | Tungsten | Hunan Chenzhou Mining Co., Ltd. |
CID000769 | Tungsten | Hunan Chunchang Nonferrous Metals Co., Ltd. |
CID000825 | Tungsten | Japan New Metals Co., Ltd. |
CID000875 | Tungsten | Ganzhou Huaxing Tungsten Products Co., Ltd. |
CID001889 | Tungsten | Tejing (Vietnam) Tungsten Co., Ltd. |
CID002044 | Tungsten | Wolfram Bergbau und Hütten AG |
CID002082 | Tungsten | Xiamen Tungsten Co., Ltd. |
CID002315 | Tungsten | Ganzhou Jiangwu Ferrotungsten Co., Ltd. |
CID002317 | Tungsten | Jiangxi Xinsheng Tungsten Industry Co., Ltd. |
CID002318 | Tungsten | Jiangxi Tonggu Non-ferrous Metallurgical & Chemical Co., Ltd. |
CID002320 | Tungsten | Xiamen Tungsten (H.C.) Co., Ltd. |
CID002321 | Tungsten | Jiangxi Gan Bei Tungsten Co., Ltd. |
CID002494 | Tungsten | Ganzhou Seadragon W & Mo Co., Ltd. |
CID002513 | Tungsten | Chenzhou Diamond Tungsten Products Co., Ltd. |
CID002541 | Tungsten | H.C. Starck GmbH |
CID002542 | Tungsten | H.C. Starck Smelting GmbH & Co.KG |
CID002543 | Tungsten | Nui Phao H.C. Starck Tungsten Chemicals Manufacturing LLC |
CID002551 | Tungsten | Jiangwu H.C. Starck Tungsten Products Co., Ltd. |
CID002579 | Tungsten | Hunan Chuangda Vanadium Tungsten Co., Ltd. Wuji |
CID002589 | Tungsten | Niagara Refining LLC |
CID002649 | Tungsten | Hydrometallurg, JSC |
CID000211 | Tantalum | Changsha South Tantalum Niobium Co., Ltd. |
CID000291 | Tantalum | Conghua Tantalum and Niobium Smeltry |
CID000410 | Tantalum | Duoluoshan |
CID000456 | Tantalum | Exotech Inc. |
CID000460 | Tantalum | F&X Electro-Materials Ltd. |
CID000616 | Tantalum | Guangdong Zhiyuan New Material Co., Ltd. |
CID000731 | Tantalum | Hi-Temp Specialty Metals, Inc. |
CID000914 | Tantalum | JiuJiang JinXin Nonferrous Metals Co., Ltd. |
CID000917 | Tantalum | Jiujiang Tanbre Co., Ltd. |
CID001076 | Tantalum | LSM Brasil S.A. |
CID001175 | Tantalum | Mineração Taboca S.A. |
CID001192 | Tantalum | Mitsui Mining and Smelting Co., Ltd. |
CID001277 | Tantalum | Ningxia Orient Tantalum Industry Co., Ltd. |
CID001769 | Tantalum | Solikamsk Magnesium Works OAO |
CID001869 | Tantalum | Taki Chemical Co., Ltd. |
CID001891 | Tantalum | Telex Metals |
CID001969 | Tantalum | Ulba Metallurgical Plant JSC |
CID002232 | Tantalum | Zhuzhou Cemented Carbide Group Co., Ltd. |
CID002307 | Tantalum | Yichun Jin Yang Rare Metal Co., Ltd. |
CID002492 | Tantalum | Hengyang King Xing Lifeng New Materials Co., Ltd. |
CID002504 | Tantalum | D Block Metals, LLC |
CID002540 | Tantalum | Plansee SE Liezen |
CID002544 | Tantalum | H.C. Starck Co., Ltd. |
CID002545 | Tantalum | H.C. Starck GmbH Goslar. Used by one supplier. Starck confirmed an organizational change in Aug 2016 and were audited and confirmed compliant in Nov 2016, as a single entity in Laufenburg. Starck previously declared as two entities, with two different smelter ID numbers. Following the reorganization, both smelting sites came under CID002546 (below) during 2016. |
CID002546 | Tantalum | H.C. Starck GmbH Laufenburg |
CID002547 | Tantalum | H.C. Starck Hermsdorf GmbH |
CID002548 | Tantalum | H.C. Starck Inc. |
CID002549 | Tantalum | H.C. Starck Ltd. |
CID002550 | Tantalum | H.C. Starck Smelting GmbH & Co. KG |
CID002556 | Tantalum | Plansee SE Reutte |
CID002557 | Tantalum | Global Advanced Metals Boyertown |
CID002558 | Tantalum | Global Advanced Metals Aizu |
More complete details are being posted to the publicly available Internet site www.sequans.com (follow the http://www.sequans.com/investors/corporate-governance/ link) upon the filing of the Form SD. Note that this information is often updated and is therefore not limited to this reporting period.
Information About Country of Origin of Necessary Conflict Minerals Used in In-Scope Products:
Mines have been identified in the following countries as being sources of 3TG used in In-Scope Products;
Australia, Bolivia, Brazil, Canada, PR China, DRC, Ethiopia,
Indonesia, Japan, Laos, Morocco, Mozambique, Myanmar, Peru,
Portugal, Russian Federation, Rwanda, Singapore, Spain, Vietnam.
In addition, certain suppliers have indicated sources in “Level 1, Level 2 and or Level 3”1 countries, not specifically identifying the countries.
Information About Efforts to Determine Mine or Location of Origin: The description of our due diligence exercise set forth above under the heading “Due Diligence” covers Sequans’ efforts to determine the mine or location of origin with the greatest possible specificity.
1 Classification of countries is based on the Conflict-Free Sourcing Initiative’s Conflict-Free Smelter Program Supply Chain Transparency Smelter Audit Protocol for Tungsten (Annex 1 “Materials Classifications”).
Level 1 countries are defined as “countries with known active tungsten ore production that are not identified as conflict regions or plausible areas of smuggling”.
Level 2 countries are defined as “countries with known or plausible countries for the smuggling, export or transit of tungsten containing minerals out of conflict affected regions (Kenya, Mozambique, South Africa)”.
Level 3 countries are defined as “countries outlined in Section 1502 of the Dodd-Frank Act as those affected or bordering conflict affected regions currently defined as the DRC and its nine adjoining countries (Angola, Burundi, Central African Republic, Democratic Republic of the Congo (DRC), Republic of the Congo, Rwanda, South Sudan, Tanzania, Uganda, Zambia)". These are also commonly referred to as "covered countries”. The definition of "Level 3" is expanded to include:
• | A country where 3TG material is mined in a Conflict-affected and high-risk area (CAHRA) as defined by the mineral origin and/or supplier red flags of the OECD Due Diligence Guide: |
◦ | The minerals originate from or have been transported via a CAHRA (as defined by the OECD). |
◦ | The minerals are claimed to originate from a country that has limited known reserves, likely resources, or expected production levels of the mineral in question (i.e., the declared volumes of mineral from that country are out of keeping with its known reserves or expected production levels). |
◦ | The minerals are claimed to originate from a country where materials from CAHRAs areas are known to transit, legally or illegally. |
◦ | The company’s suppliers or other known upstream companies have shareholder or other interests in companies that supply minerals from or operate in one of the above-mentioned red flag locations of mineral origin and transit. |
◦ | The company’s suppliers’ and/or other upstream companies are known to have sourced minerals from a red flag location of mineral origin and transit in the last 12 months. |