On September 30 the Securities and Exchange Commission will implement a new disclosure rule arising from the Cardin-Lugar amendment that requires firms operating in the extractive industries that file a yearly report with the SEC to disclose all payments, including taxes, made to all foreign governments and the U.S. federal government.
Jackson writes that “the reports must separately list each project and the type and total payments made in relation to each project; the type and total amount paid to each government, including a list of the governments that received payment and the country in which they are located; total payments by category; the currency in which the payment was made; the relevant financial period; and the business segment of the firm that made the payment.”
Also, the U.S. Department of the Interior announced its efforts to bring the U.S. into compliance with the Extractive Industries Transparency Initiative (EITI), which requires governments to publicly disclose payments received from the extractive industries sector. Similarly, companies operating in that sector must report all payments made to the government. All that information is then reviewed by a mutually agreed-upon third party.
Jackson notes that “while a U.S. EITI report would require reporting of all payments involving the U.S. government, both those made by firms and those received by the U.S. government, the SEC report requires reporting of all payments involving U.S. listed companies, regardless of where the payments are made. Cardin-Lugar focuses on payments by listed firms, while EITI focuses on payments made to governments by firms operating in the country.”
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