In early April, the European Union agreed to new regulations that would require oil, gas, mining, and forestry companies to provide additional detail on payments they make to foreign governments. From attorney Raymond Banoun at Cadwalader:
“The proposal follows guidelines developed by the Extractive Industry Transparency Initiative (EITI) and requires all extractive and forestry industry companies listed on EU exchanges to report payments made to governments and local authorities in each country and for each project. Importantly, large unlisted companies registered in the EU also are required to comply. The extractive industry consists of all companies with activities involving the exploration, discovery, development and extraction of minerals, oil and natural gas deposits, while the forestry industry covers companies with activities involving the clear-cutting, selective logging or thinning of primary forests.
Companies in these industries will need to report taxes, royalties, signature bonuses, licenses, concessions, leases, and any other payments made to government and local authorities in the countries where the companies operate. ‘Other payments’ subject to reporting requirements may include rental fees, transit fees, and dividends. This level of disclosure is required for each project the company has undertaken in each country. The threshold for the disclosure of payments related to each project is set at €100,000 (approximately $130,000).”
Read the full update, European Union Pending Legislation Requiring Additional Transparency from Extractive Industries - Cadwalader, Wickersham & Taft LLP»