ISRAEL	0- 30862	N/A
(State or other jurisdiction of incorporation or organization)	(Commission File Number)	(I.R.S. Employer Identification No.)
24 Raoul Wallenberg St., Tel- Aviv 69719, Israel
(Address of principal executive offices) (Zip Code)

Michal Lavee Machlav, VP General Counsel Tel: +972-3-543-1284

((Name and telephone number, including area code, of person to contact in connection with this)

☒	Rule 13p-1 under the Securities Exchange Act (17 CFR 240.13p-1) for the reporting period from January 1 to December 31, 2018.

                    

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CERAGON NETWORKS LTD.

Conflict Minerals Report

For The Year Ended December 31, 2018

A.  OVERVIEW

This report has been prepared by Ceragon Networks Ltd. (herein referred to as “Ceragon,” the “Company,” “we,” “us,” or “our”) pursuant to Rule 13p-1 (the “Rule”) promulgated under the Securities Exchange Act of 1934, as amended. According to the Rule, if a SEC registrant has reason to believe that any of the conflict minerals in its supply chain may have originated in the Democratic Republic of the Congo (“DRC”) or an adjoining country (collectively referred to as the “Covered Countries”), or if the registrant is unable to determine the country of origin of those conflict minerals, then the registrant must exercise due diligence on the conflict minerals’ source and chain of custody, and submit a Conflict Minerals Report that includes a description of those due diligence measures.

As part of Ceragon’s commitment to corporate responsibility and respecting human rights in our own operations and global supply chain, Ceragon is committed to complying with the legislation and supports responsible conflict mineral sourcing. Furthermore, due to the potential negative economic and social impacts on the economies of the Covered Countries, Ceragon does not seek to completely eliminate sourcing from the Covered Countries, but rather is dedicated to the responsible sourcing of such minerals. In addition, it is important to note that like many other companies, Ceragon does not directly purchase minerals from smelters or other mineral processors, and is several layers removed from these processors within the supply chain. Ceragon also fully recognizes that the metals supply chain is global and complex, and many component suppliers thus far lack the resources and commercial strength to trace minerals all the way back to the sources of the ores.  Notwithstanding these issues and realities, Ceragon is committed to using internal (and, where necessary, external) resources and its influence as a company to comply with the applicable Conflict Minerals regulations.

Our Solutions

Ceragon Networks Ltd. (NASDAQ: CRNT) is the #1 wireless hauling specialist. We help operators and other service providers worldwide increase operational efficiency and enhance end customers’ quality of experience with innovative wireless backhaul solutions. Our customers include wireless service providers, public safety organizations, government agencies and utility companies, which use our solutions to deliver 4G, mission-critical multimedia services and other applications at high reliability and speed. Ceragon’s unique multicore technology provides a highly reliable, high-capacity 4G wireless backhaul with minimal use of spectrum, power and other resources. It enables increased productivity, as well as simple and quick network modernization. We deliver a range of professional services that ensure efficient network rollout and optimization to achieve the highest value for our customers. Our solutions are deployed by more than 460 service providers, as well as hundreds of private network owners, in more than 130 countries.

Supply Chain

The products that we manufacture are highly complex, typically containing thousands of parts from many suppliers. We have relationships with a vast network of suppliers throughout the world and there are generally multiple tiers in the chain of custody between the 3TG mines, where tungsten, tantalum, tin and gold are extracted, and Ceragon. Therefore, we must rely on our suppliers to work with their upstream suppliers in order that they may provide us with accurate information about the origin of 3TG in the components we purchase.

Due to the complexity and size of our supply chain, we developed a risk-based approach that focuses on our most significant suppliers. The suppliers identified pursuant to this risk-based approach received approximately 90% of the volume of purchases we made for components and raw materials in 2018. We believe this to be a reasonable approach because the aforementioned risk factors allow us to focus on the overwhelming majority of our supply chain, given that complete identification for every supplier in our supply chain is extremely unlikely and mostly out of our control.

Reasonable Country of Origin Inquiry (RCOI)

Based on the aforementioned risk-based approach, we surveyed sixty six (66) suppliers, out of which we received fifty one (51) responses. Out of these 51 responses we received to our supply chain inquiry, we identified forty eight (48) suppliers whose products may contain 3TG. We requested that all identified suppliers provide information to us regarding 3TG and smelters using the Conflict Minerals Reporting Template (“CMRT”) developed by the Responsible Minerals Initiative (“RMI”), formerly the Conflict-Free Sourcing Initiative (“CFSI”).

In order to assist with facilitating our risk-based approach, Ceragon utilizes a third party service provider, that assisted with sending letters to our suppliers to explain the Rule and to refer the suppliers to online training materials and instructions. We solicited information from suppliers using the CMRT version 5.01 or higher, according to the company's policy, and we received a response rate of X% and we received a response rate of 77%. We reviewed the responses that we received and followed up on inconsistent, incomplete, and inaccurate responses, and we sent reminders to suppliers who did not respond to our requests for information. We compared the smelters and refiners identified in the surveys against the lists of facilities which have received a conflict free designation by the Responsible Minerals Assurance Process (“RMAP”), formerly the Conflict Free Smelter Program (“CFSP”). Ceragon does not directly source 3TG. We source products and components from suppliers, which source materials from their sub-tier suppliers. Our supply chain is extensive and complex with many layers of suppliers positioned between ourselves and 3TG smelters and refiners. Due to our extended supply chain, we rely on suppliers to provide us with accurate information concerning the sources and chains of custody of 3TG necessary to the functionality or production of our products.

We have determined that requesting our suppliers to complete the most up-to-date CMRT (i.e., 5.01 and above) represents our reasonable best efforts to determine the mines or locations of origin of 3TG in our supply chain.

The Company’s efforts to determine the origin of the Conflict Minerals with the greatest possible accuracy consisted of the due diligence measures described in this Conflict Minerals Report.

The vast majority of suppliers from which we requested information indicated in their response that the information provided was through version 5.01 or higher of the RMI's CMRT, according to the company's policy..

Despite receiving responses from manufacturers listing smelter or refiner names in their supply chain, the manufacturers were unable to accurately report which specific smelters were part of the supply chain applicable to the components that were sold to us in 2018.

Currently, we do not have sufficient information from our suppliers to determine the country of origin of the conflict minerals used in our products or the facilities used to process those conflict minerals. Therefore, we cannot exclude the possibility that some of these conflict minerals may have originated in the Covered Countries, and are not from recycled or scrap sources.

Based on this result, the Company conducted due diligence activities and details these in this Conflict Minerals Report.

B.  DUE DILIGENCE

Design of Due Diligence

Our due diligence measures have been designed to conform, in all material respects, with the due diligence framework presented by The Organisation for Economic Co-operation and Development (OECD) in the publication OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas (“OECD Guidance”) and its related supplements for gold, tin, tantalum and tungsten. We designed our due diligence measures according to the recommendations of the OECD Guidance for downstream companies that have no direct relationships to smelters or refiners.

Due Diligence Performed

Strong Company Management Systems

 

Conflict Minerals Policy

We have adopted a conflict minerals policy related to our sourcing of 3TG which is publicly available on our website at: https://www.ceragon.com/wp-content/uploads/2016/09/Conflict-Minerals-Policy-Statement.pdf 

To the extent required by the SEC, we support greater transparency with regard to the supply chain, in particular the sourcing of conflict minerals, and we expect that our suppliers will adopt  similar policies and meet our expectations.  Our supply chain is highly complex and our manufacturing process is significantly removed from the mining, smelting and refining of conflict minerals.  As a result, we expect that all of our suppliers will partner with us to (i) provide appropriate information and conduct necessary due diligence in order to facilitate our compliance with the Conflict Minerals rule and (ii) adopt appropriate practices to reasonably assure that the conflict minerals in the products that they manufacture are responsibly sourced.

In addition, our ethical commitment is reflected not only in our Conflict Minerals Policy, but also in our Code of Conduct, which outlines expected behaviors for all Company employees, as well as our suppliers’ Standards of Business Conduct that includes our specific approach regarding supplier behavior such as: human rights, bribery, conflict of interests, insider trading etc.

Internal Team

We have established an internal team led by the Global Director of Procurement and VP General Counsel of the Company who are responsible for implementing our Conflict Minerals compliance strategy, as well as other team members from our Procurement, Operations & Legal departments. The team assesses progress and discusses further steps regarding implementation of our Conflict Minerals strategy.

Control Systems

We do not typically have a direct relationship with 3TG smelters and refiners. We do, however, use the RMI Standard Smelter Lists to verify our findings.

We utilize the RMI's CMRT reporting template, accepting versions 5.01 or higher for the RY2018 reporting year, to collect data and information from our suppliers in order to identify the origins of the 3TG in our supply chain. As mentioned previously in this report, we also engage a third-party service provider to assist us in the identification of the smelters and refiners that process the minerals that may ultimately be assimilated into our products.

We communicate the Company’s due diligence efforts to our customers upon request and to senior management on a periodic basis.

Maintenance of Records

We generally retain records and relevant materials for a period of five years.

Supplier Engagement

As part of the process of engaging with the supply chain, Ceragon sent notifications to relevant suppliers in 2018 requesting them to complete version 5.01 or higher of the CMRT, according to our Conflict Minerals Policy. Ceragon also provides training materials and instructions for completing  to its relevant suppliers. As stated in our Conflict Minerals Policy, suppliers are expected to implement and communicate policies that are consistent with our Conflict Minerals Policy and we require their direct and indirect suppliers do the same. In addition, our suppliers are expected to establish procedures that facilitate the traceability of conflict minerals within our supply chain.

Many of our supplier purchase contracts have terms of three to five years or more, and we may not be able to unilaterally impose new contract terms or flow-down requirements that would otherwise compel these suppliers to support our due diligence efforts with respect to 3TG content. However, as we enter into new contracts or renew existing contracts, we have added relevant Conflict Minerals language that requires suppliers to identify the source of the source of 3TG in their supply chain..

Grievance Mechanism

We have internal processes in place that allow all relevant stakeholders to express their concerns about possible improper or unethical business practices or violations of company policies, laws, or regulations. Our Conflict Minerals Policy is available to the public on our website and includes a grievance procedure for suppliers and other external parties to contact us should they wish to seek guidance or report concerns regarding Conflict Minerals.

Identifying and Assessing Potential Risks in the Supply Chain

 

We surveyed approximately 66 suppliers that received approximately 90% of the volume of purchases we made for components and raw materials in 2018. We surveyed those suppliers to identify the 3TG contained in the products they supply us with, the smelters and refiners that process the 3TG and reasonable country of origin of the 3TG. The survey was conducted by utilizing version 5.01 or higher of the CMRT and the services of a third party service provider.

Our suppliers' responses were provided using version 5.01 or higher of the CMRT. We reviewed the responses against criteria developed by our internal team to determine which responses required further engagement. The criteria included incomplete responses as well as inconsistencies within the data reported by those suppliers and we worked with them in an effort to secure revised responses.

Smelters or refiners identified by the Company’s suppliers were compared against the list of smelters or refiners that have received a conflict-free designation from the RMAP.

1.

Design and Implement a Strategy to Respond to Risks

·

Our senior management is briefed about our due diligence efforts on a periodic basis.

·

We adopted a risk management plan that is aimed at encouraging the most responsible sourcing practicable, and is primarily focused on suppliers that may source or process 3TG originating in the Covered Countries.

·

The goal of the risk management plan is not to eliminate sourcing from the DRC, but to encourage suppliers to engage in responsible mineral sourcing, as per the Company's policy.

·

We found no instance where it was necessary to implement risk mitigation efforts, temporarily suspend trade or disengage with a supplier. However, certain suppliers, that were identified as possibly processing 3TG that originated in Covered Countries and were not identified as compliant with RMAP or if their sourcing facilities are unknown, were contacted and required to submit their corrective action plan to the Company.

·

We engage in regular ongoing risk assessment through our suppliers’ annual data submissions, as well as by documenting our SORs and Countries of Origin (“COO”).

·

Our internal team, led by the Company’s VP General Counsel and Global Director of Procurement, assesses identified risks and determines follow-up actions, if any.

2.

Carry Out Independent Third Party Audit of Supply Chain Due Diligence at Identified Points in the Supply Chain

We do not typically have a direct relationship with 3TG smelters and refiners and therefore do not perform direct audits of these entities. We rely on independent industry initiatives such as the RMI and other independent third party audit programs that conduct validation audits of smelter and/or refiners.

5. Report On Supply Chain Due Diligence

This Conflict Minerals Report constitutes our annual report on our 3TG due diligence, is available on our website https://www.ceragon.com/about-ceragofn/corporate-governance/  and is filed with the SEC.

 C. RESULTS OF ASSESSMENT

The Company sent out 66 survey requests and received 51 responses, amounting to a 77% response rate.

Currently, we do not have sufficient information from our suppliers to determine the complete list of country of origin of the conflict minerals used in our products or the facilities used to process those conflict minerals.

Based on the information provided by the Company’s suppliers and its own due diligence efforts with known smelters and refiners through December 31, 2018, the Company believes that the facilities that may have been used to process the 3TG in the Company products include the smelters and refiners listed in Annex I below.

Based on these due diligence efforts, the Company does not have sufficient information to conclusively determine the countries of origin of the 3TG in its products or whether the 3TG in its products are from recycled or scrap sources. However, based on the information provided by the Company’s suppliers, smelters, and refiners, as well as from the RMI and other sources, the Company believes that the countries of origin of the 3TG contained in its products may include the countries listed in Annex II below, including recycled and scrap sources.

The charts below summarize the 315 operational smelters and/or refiners and their participation status in the RMAP, as indicated in the compiled data from our due diligence efforts:

In regards to the chart below, please note that:

 

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“Compliant” refers to SORs that have received a “conflict-free” designation from an independent third party audit program;

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“Active” refers to SORs that have begun participating in an independent third party audit program;

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“Not Active” refers to SORs that have not begun participating in an independent third party audit program.

Please note that information gathered from Ceragon's suppliers is not collected on a continuous, real-time basis, and that, since the information comes from direct and secondary suppliers and independent third party audit programs, Ceragon can only provide reasonable (not absolute) assurance regarding the source and chain of custody of the necessary conflict minerals. Nonetheless, the Company continuously strives to improve its processes on an annual basis.

D. ONGOING MITIGATION EFFORTS

Subject to the Rule, we intend to take the following steps to improve the due diligence conducted to further mitigate the risk that the 3TG in that could potentially finance or benefit armed groups in the Covered Countries:

·	Ensure that new or renewed supplier contracts adhere to the Conflict Minerals requirement in such contracts.

·	Continue to send follow-up letters to non-responsive suppliers and to suppliers with conflict minerals from the Covered Countries originating from smelters or refiners that are not compliant with RMAP or other independent third party audit programs.

·	Send surveys to suppliers as early as possible in the calendar year in order to allow suppliers more time to provide a complete response.

·	Continue to validate supplier responses using information collected via independent conflict free smelter validation programs such as the Responsible Minerals Initiative (RMI).

·	Strengthen communications with suppliers in order to improve the number of suppliers that respond to the company's supply chain surveys, and continue to emphasize the importance of this initiative to Ceragon and to encourage their participation.

Caution Concerning Forward- Looking Statements

 

Certain statements in this report may be “forward-looking” within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as “expects,” “intends,” “plans,” “projects,” “believes,” and “estimates,” “targets,” “anticipates,” and similar expressions are used to identify these forward-looking statements. Examples of forward-looking statements include statements relating to our future plans, and any other statement that does not directly relate to any historical or current fact. Forward-looking statements are based on our current expectations and assumptions, which may not prove to be accurate. These statements are not guarantees and are subject to risks, uncertainties and changes in circumstances that are difficult to predict. Actual outcomes and results may differ materially from these forward-looking statements. As a result, these statements speak only as of the date they are made and we undertake no obligation to update or revise any forward- looking statement, except as required by federal securities laws.

 

 

 

 

 

 

 

 

 

 

Based on our due diligence, the above smelters and refiners may process Conflict Minerals from one or more of the following countries of origin:

 

Argentina Australia Azerbaijan Bolivia Brazil Bulgaria Burkina Faso Burundi Canada Chile China Democratic Republic of Congo Dominican Republic Ecuador Ethiopia Germany Ghana Guinea Guyana India Indonesia Italy Japan Kenya Kyrgyz Republic Laos Liberia

Malaysia Mauritania Mexico Mozambique Namibia Netherlands Nigeria Peru Philippines Portugal Russia Rwanda Sierra Leone Singapore South Africa Spain Sweden Switzerland Taiwan Tanzania Thailand Turkey Uganda United States of America Uzbekistan Zambia Zimbabwe

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