EU Announces New Rules on Disclosure Requirements for Extractive and Forestry Industries
By BRUNO COVA, FRANCESCA PETRONIO, ANTEO PICELLO, & ROBERTO PERONI
The EU Commission proposed, in October 2011, the adoption of legislative measures (in the form of a EU Directive) requiring companies listed on EU stock exchanges and large private companies based in EU member states to disclose their payments to governments for oil, gas, minerals and timber, with a country-by-country and project-by-project split. From a formal standpoint, the new disclosure requirements will be incorporated in the proposals to revise the accounting directives (78/660/EEC and 83/349/EEC) and the transparency directive (2004/109/EC).
On April 9, 2013, EU Institutions reached an agreement on the content of such legislative measures providing for, inter alia, a Euro 100,000.00 threshold for payments to be disclosed by those entities. The EU Parliament is about to go through the final discussion stage and, once approved, the directives would be implemented by EU member states and become regulatory requirements for those entities and, according to the ultimate discussion, the deadline for implementing the new regulation would be July 2014. Such measures would be similar to the ones introduced in the USA.
The new directive will be of interest for companies and multinationals active in extractive industry and loggers of primary forests to evaluate as soon as possible the impact of the proposed measures on their accounting and internal control procedures and prepare appropriate internal policies, in order to be ready when the new legislative measures will become binding.