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API offers guidelines on SEC

Hydrocarbon Engineering,

On 7th November the API submitted a letter to the US SEC suggesting ways the SEC could rewrite its foreign payments disclosure rule that will support transparency without harming the competitiveness of US companies or undermine job creation.

Comments from the API

Stephen Comstock, API director of tax and accounting policy said, ‘US oil and natural gas companies have been leading the way to increase transparency in payments to foreign governments for a decade. The SEC can issue rules that meet their legal obligations to promote transparency while also protecting firms’ international competitiveness. The timely development of a new rule following our suggestions could be a win/win for payment transparency and American jobs.’

SEC details

Under Section 1504 of the Dodd-Frank Act, which the SEC issued in August last year, a disclosure rule is required. However, a federal court recently invalidated the rule and ordered the SEC to issue a new one. The previous rule required publically traded energy companies to release commercially sensitive payment information about foreign and US projects, giving firms not subject to the rule an upper hand when bidding for energy contracts, according to Comstock.

The letter

The letter highlights the SEC’s flexibility in complying with Section 1504’s mandated disclosures, as outlined by the court case. It also describes a proposal for detailed disclosure of payments received by governments. This data would be easily accessible to local populations to help them understand how revenues are used by their governments, according to Comstock.

Extracts from the letter can be found here.

Adapted from press release by Claira Lloyd

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