A new law in the United States will require oil, gas, and mining companies to disclose their payments to foreign governments and the U.S. government.
Added to the financial regulatory reform bill is a provision that will require the U.S. Securities and Exchange Commission to write within nine months mandating disclosure of payments in their annual reports.
“Each resource extraction issuer” will be told to disclose payments they or their subsidiaries make “to a foreign government or the Federal Government for the purpose of the commercial development of oil, natural gas, or minerals.”
The information should include “(i) the type and total amount of such payments made for each project of the resource extraction issuer relating to the commercial development of oil, natural gas, or minerals; and (ii) the type and total amount of such payments made to each government.” To make the disclosure more useful, the information in the annual report is to be submitted in an interactive data format, following standards from the SEC.
The standards would include “electronic tags” to identify at least six particulars about the payments, such as “the project of the resource extraction issuer to which the payments relate.”
To make the material more accessible, “electronic tags” would be attached to the material to identify various details of disclosures. In addition, the U.S. agency will make the information online.
Disclosures would be required about payments “made to further the commercial development of oil, natural gas, or minerals” that are not de minimis, including “taxes, royalties, fees (including license fees), production entitlements, bonuses, and other material benefits.”
“This disclosure will have a big impact in developing countries where secrecy is the norm,” according to overview of the provision by Stephen Yeboah at ModernGhana.com.
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