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Julie DiMauro Contributing Editor

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Marc Alain Bohn Contributing Editor

Bill Waite Contributing Editor

Shruti J. Shah Contributing Editor

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« Global Contagion Report: Portugal Telecom | Main | Yesterday's 'Polaroid compliance' gives way to new era »
Wednesday
Apr102013

EU adopts extractive industries disclosure rules

The European Union Tuesday adopted rules to force natural resource companies to disclose payments to governments.

Member countries still need to enact the rules into their domestic laws. But little opposition is expected.

Oil and gas, mining, and logging companies must report all payments to governments of €100,000 or more.

The resource companies had campaigned unsuccessfully for a higher threshold of €1 million and some exemptions.

Last yar, the U.S. Securities and Exchange Commission adopted extractive industry-disclosure rules.

The SEC rules cover all public mining and oil and gas companies and require disclosure of payments to governments of $100,000 or more.

The U.S. and EU rules were pushed by a coalition of NGOs that included Christian Aid, Global Financial Integrity, Global Witness, and Transparency International.

Porter McConnell, a spokesman for the coalition, said: 'Roughly a trillion dollars of illicit money leaves developing countries each year, and many of these countries are highly dependent on natural resources. Making public what extractive companies pay to governments is a big step forward in curtailing these illicit financial flows.'

The coalition wants the EU to go further. All companies should be required to 'report their sales, profits, employees, and taxes paid on a country by country basis,' McConnell said.

The U.S. and EU rules will cover 90 percent of the world's major international extractive companies, Transparency International said.

Final EU accounting rules are expected to be ready by June.

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