The U.S. Senate voted in February to repeal an SEC rule that would have required oil and gas and mining companies to disclose each year all of their payments to foreign governments for exploration and production rights, permits, taxes, and other things.
The disclosure rule was set to go into effect in 2018.
Nearly all natural resource deals involve foreign governments, which typically control their country’s resources directly or through state-owned enterprises.
Energy companies, for example, usually pay foreign governments for the right to explore for oil and gas, and then they pay royalties on the eventual production. Those payments, as well as taxes and other fees, would have been disclosed each year under the SEC rule.
Although the United States has opted out of an extractive industries disclosure regime, 77 other countries adhere to some sort of payment standard in the extractive industries.
The requirements arise in various ways — in some cases under legislation, or through tax rules, accounting standards, and treaties.
Fifty-one of the countries are members of the Extractive Industry Transparency Initiative.
Here are the 77 countries that adhere to some sort of payment transparency standard in the extractive industries:
7. Burkina Faso
12. Côte d’Ivoire
15. Czech Republic
16. Democratic Republic of Congo
18. Dominican Republic
35. Kyrgyz Republic
52. Papua New Guinea
57. Republic of the Congo
59. Sao Tome and Principe
62. Sierra Leone
63. Slovak Republic
65. Solomon Islands
72. Trinidad and Tobago
74. United Kingdom
75. United States of America
This extraordinary list was developed during research for a paper for the OECD written by Selva Ozelli and Roger Russell.
They’re tax attorneys and legal and accounting analysts, with special expertise on the extraterritorial application of the FCPA via international tax rules.
Their OECD paper is here.
A table they created showing each of the 77 countries and the basis for its extractive industries disclosure regime is here (the OECD didn’t publish the table).
Our thanks to the authors for generously sharing their research with the FCPA Blog’s readers.
Richard L. Cassin is the publisher and editor of the FCPA Blog.