National Defense Authorization Act

Country / jurisdiction: United States · Year: 2023 · Status: In force · Level: National · Type: Voluntary

Section 857(a) of the National Defense Authorization Act 2023 establishes mandatory disclosure requirements for Department of Defense contractors regarding the provenance of permanent magnets containing rare earth elements and strategic and critical materials, with implementation beginning in June 2025. The provision addresses supply chain security concerns regarding critical materials used in defence systems. The law was enacted as part of the National Defense Authorization Act 2023, with a deliberate 30-month implementation period to allow industry preparation, setting the effective date for June 2025.

The legislation mandates that contractors providing systems with permanent magnets to the Department of Defense must disclose the complete supply chain provenance of rare earth elements and strategic materials starting June 2025. This includes identifying the countries where materials were mined, refined into oxides, processed into metals and alloys, and where the magnets were manufactured. If contractors cannot immediately provide this information, they must implement a supply chain tracking system within 180 days. The Secretary of Defense may grant 180-day waivers in cases of national emergency or when contractors demonstrate significant efforts towards compliance. The requirements take effect following certification that information collection poses no national security risks.

The provision creates new compliance obligations for defence contractors and their supply chains. It establishes a framework for tracking and reporting the origins of critical materials in defence systems. The requirements:

Necessitate detailed supply chain documentation and tracking systems for contractors by June 2025

Enable the Department of Defense to assess dependence on foreign sources

Create mechanisms for identifying supply chain vulnerabilities

Establish reporting requirements to Congress on supply chain risks and mitigation strategies

Official source: https://www.congress.gov/117/plaws/publ263/PLAW-117publ263.pdf