Saturday, April 13, 2013

E.U. Legislation Would Require Disclosure of Resource Extraction Payments Similar to Dodd-Frank Act Mandate

The European Parliament and the E.U. Council have reached agreement on legislation requiring resource extraction companies to disclose payments to governments on a country and project basis. The vehicle to require disclosure of such payments was legislation amending the Accounting Directive. According to Commissioner for the Internal Market Michel Barnier, this change to the Directive puts the E.U. on a level playing field with the U.S., which mandated such disclosure in Section 1504 of the Dodd-Frank Act.

While the E.U. legislation is broadly similar to the Dodd-Frank Act requirements, they go further in two respects. First, the E.U.logging industry is within the scope of the reporting requirement in addition to the oil, gas and mining industries. Section 1504 of Dodd-Frank targets only the oil, gas and mining sectors. Second, the E.U. regulations would apply to large unlisted companies, as well as to listed companies, while the Dodd-Frank Act requirements are restricted to listed extractive companies. The legislation defines a large company as one that exceeds two of the following three criteria: Total assets of €20 million, turnover of €40 million and 250 employees.

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