On Tuesday, July 2, 2013, the U.S. District Court for the District of Columbia vacated a Securities and Exchange Commission (SEC) rule requiring oil, gas and mining companies to report payments in excess of $100,000 to foreign governments. The rule originated as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act’s (Dodd-Frank) amendments to the Securities Exchange Act of 1943, 157 U.S.C. § 78m(q).
The rule was advanced largely by human rights and anti-corruption interests targeting corruption in developing countries with significant oil and mining resources and proved a costly compliance burden for extractive companies with global operations. Indeed, a coalition of oil industry associations led by the American Petroleum Institute, U.S. Chamber of Commerce and the National Foreign Trade Council filed the lawsuit challenging the rule, American Petroleum Institute v SEC, No. 12-1668 (D.D.C.). The lawsuit asserted that the SEC misinterpreted Dodd-Frank by forcing public disclosure of detailed data on payments, and failed to consider associated competitive effects, including risks associated with revealing trade secrets and pricing strategies.
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