The American Petroleum Institute submitted a letter to the US Securities and Exchange Commission suggesting ways the SEC can rewrite its foreign-payments disclosure rule so it will support transparency without harming US companies’ ability to compete overseas or undermine US job growth.
The SEC issued a rule under Sect. 1504 of the Dodd-Frank Wall Street Reform and Consumer Protection Act requiring US publicly traded companies to disclose commercially sensitive information about payments to foreign governments, according to API. The group said that when a federal district court invalidated that rule on July 2, it ordered the commission to issue a new rule (OGJ Online, July 2, 2013).
Stephen Comstock, API’s tax and accounting policy director, said the Nov. 7 letter highlights the SEC’s flexibility in complying with Section 1504's mandated disclosures, as outlined by the court case, and 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, Comstock said.
“The SEC can issue rules that meet their legal obligations to promote transparency while also protecting firms’ international competitiveness,” he maintained.
API recommends that SEC compile data before disclosure to prevent reporting of payments by individual companies and that it standardize its definition of “project” to facilitate compilation.
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