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The US Securities and Exchange Commission on Wednesday passed in a 2 to 1 vote a requirement for American oil and mining companies to disclose taxes and fees paid to foreign governments with the objective of fighting corruption.
Tied to the Dodd-Frank financial reform law and lauded by human rights and transparency groups, the requirement applies to over 1,000 companies doing business overseas.
Specifically, companies doing business with foreign governments will be required to disclose any payment over $100,000, including dividends and construction improvements, beginning in fiscal year 2014.
US companies affected by the requirement are balking, saying it will give the advantage to foreign companies who are not under the same disclosure regime. They claim this will stifle their operations in East Asia and Africa, for instance.
Industry lobbying efforts, however, have been in vain.
The Commission also passed another ruling in a 3-to-2 vote, which will require companies to disclose the use in manufacturing of “conflict” minerals such as tin, gold and tungsten mined in the Democratic Republic of Congo (DRC) to shareholders and the Commission.
Industry majors are uncertain whether these new requirements would be retroactive in any way, or whether they would mean revealing past secrets.
By. Jen Alic of Oilprice.com