A U.S. district court has found fault with a rule that would force oil and mining companies to disclose payments to foreign governments.
The Judge cited “two substantial errors,” vacated the rule and sent it back to the Securities and Exchange Commission. The 2012 rule, mandated by Congress, had been challenged by the American Petroleum Institute and other business groups.
The agency should not have required public disclosure of the full reports, according to a July 2 ruling by Judge John Bates. The judge also called it a “serious error” for the SEC not to create exemptions for issuers operating in countries that bar payment disclosures.
“The court has vacated the SEC’s requirement that U.S. companies report competitive information that can be used against them by global competitors,” said Harry Ng, API’s general counsel, in a statement.
Litigation is ongoing concerning an SEC rule concerning “conflict minerals.”
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