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1.By 30 June each year, Member States shall submit to the Commission a report on the implementation of this Regulation and, in particular, on notices of remedial action issued by their competent authorities pursuant to Article 16(3) and on the third-party audit reports made available pursuant to Article 7(1).
2.By 1 January 2023 and every three years thereafter, the Commission shall review the functioning and effectiveness of this Regulation. That review shall take into account the impact of this Regulation on the ground, including on the promotion and cost of responsible sourcing of the minerals within its scope from conflict-affected and high-risk areas and the impact of this Regulation on Union economic operators, including SMEs, as well as the accompanying measures outlined in the Joint Communication of 5 March 2014. The Commission shall discuss the review report with the European Parliament and with the Council. The review shall include an independent assessment of the proportion of total downstream Union economic operators with tin, tantalum, tungsten or gold in their supply chain, which have due diligence schemes in place. The review shall assess the adequacy and implementation of these due diligence schemes and the impact of the Union system on the ground as well as the need for additional mandatory measures in order to ensure sufficient leverage of the total Union market on the responsible global supply chain of minerals.
3.Based on the findings of the review under paragraph 2, the Commission shall assess whether Member State competent authorities should have competence to impose penalties upon Union importers in the event of persistent failure to comply with the obligations set out in this Regulation. It may, as appropriate, submit a legislative proposal to the European Parliament and to the Council in this regard.